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Bill No.: Summary Actions Committee&nbspVotes Floor&nbspVotes Memo Text LFIN Chamber&nbspVideo/Transcript S08578 Summary: BILL NO S08578 &nbsp SAME AS SAME AS A09346

&nbsp SPONSOR LANZA &nbsp COSPNSR &nbsp MLTSPNSR &nbsp Amd Various Laws, generally &nbsp Incorporates the city of Staten Island; enacts a city charter; provides for all necessary technical changes for the establishment of such city; provides for a transition period prior to such establishment.

Go to top S08578 Text:

STATE OF NEW YORK ________________________________________________________________________

8578

2025-2026 Regular Sessions

IN SENATE

November 14, 2025 ___________

Introduced by Sen. LANZA -- read twice and ordered printed, and when printed to be committed to the Committee on Rules

AN ACT to incorporate the city of Staten Island; to enact a charter for the city of Staten Island; to provide a period of transition prior to the establishment of the city of Staten Island; to amend the education law, in relation to the establishment of the city school district of the city of Staten Island; to amend the education law, in relation to the transfer of the college of Staten Island of the city university of New York to the state university of New York; to amend the judiciary law, in relation to providing for the judiciary within the city of Staten Island; to amend the public housing law, the education law, the public authorities law and the private housing finance law, in relation to providing membership on certain authorities for the city of Staten Island; to amend the executive law, the elder law and the social services law, in relation to probation and social services within the city of Staten Island; to amend the county law, in relation to the treatment of the county of Richmond in similar fashion to coun- ties within a city having a population of one million or more; to amend the election law, the state finance law and the surrogate's court procedure act, in relation to making conforming changes relating to the establishment of the city of Staten Island; to amend the gener- al municipal law, in relation to the city of Staten Island industrial development agency; to amend the local emergency housing rent control act, the emergency tenant protection act of nineteen seventy-four, the general business law and the real property tax law, in relation to the continuation of existing housing regulations for the city of Staten Island; to amend the tax law, the state finance law, the public authorities law and the New York state financial emergency act for the city of New York, in relation to applicability of the authority of the financial control board; to amend the general city law, chapter 772 of the laws of 1966 relating to imposition of a city business tax and the tax law, in relation to providing authority for the city of Staten Island to continue presently applicable taxes within such city; to enact the administrative code of the city of Staten Island, in

EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD14063-03-5

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relation to procedures and administration of essential city services and the authority of such city to impose taxes; and making appropri- ations to advance moneys for the establishment of the city of Staten Island and the city school district of the city of Staten Island

The People of the State of New York, represented in Senate and Assem- bly, do enact as follows:

1 THE CITY OF STATEN ISLAND ACT

2 CONTENTS

3 SECTION(S) SUBJECT

4 1-001 Short title. 5 1-002 Legislative history, findings and intent and statement of 6 purposes. 7 1-003 Definitions. 8 1-004 Incorporation. 9 2-001 Charter of the city of Staten Island. 10 3-001 Legislative findings and declaration of purposes. 11 3-002 Elections. 12 3-003 Staten Island city government-transition. 13 3-004 Employees of the city of Staten Island. 14 3-005 Assistance to the city of Staten Island. 15 3-006 Provision of municipal services on the city of Staten 16 Island. 17 3-007 Debt, property, obligations and other allocations. 18 3-008 Continuance of municipal services. 19 3-009 Powers of the city of Staten Island to adopt and amend 20 local laws. 21 3-010 Powers of the city of Staten Island relating to home 22 rule powers. 23 4-001-4-020 City school district of the city of Staten Island. 24 5-001-5-003 Transfer of The College of Staten Island. 25 6-001 Interim court structure for the city of Staten Island. 26 7-001-7-002 New York city housing authority. 27 7-003-7-005 New York city construction fund. 28 7-006-7-008 New York city municipal water finance authority. 29 7-009 New York city housing development corporation. 30 7-010 Dormitory authority act; court facilities and combined 31 occupancy structures. 32 7-011 New York city school construction authority. 33 8-001-8-023 Municipal powers; authority of the county of Richmond 34 and the city of Staten Island. 35 9-001-9-017 Municipal services; city of Staten Island. 36 10-001-10-008 Landlord-tenant relationships. 37 11-001 Constitutional real property tax limitations; city of 38 Staten Island. 39 12-001-12-020 Municipal assistance corporation for the city of New York; 40 revenues. 41 13-001 Taxes; tax collection authority. 42 14-001 Administrative code of the city of Staten Island. 43 15-001 Appropriations; transition government and establishment of

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1 the city of Staten Island. 2 15-002 Appropriation; city school district of the city of Staten 3 Island. 4 16-001 Severability. 5 17-001 Effective date. 6 Section 1-001. Short title. This act shall be known and may be cited 7 as "The City of Staten Island Act". 8 § 1-002. Legislative history, findings and intent and statement of 9 purposes. 1. The legislature hereby finds, determines and declares: 10 (a) that Article IX, section 1 of the New York State Constitution 11 states that "effective local self-government and intergovernmental coop- 12 eration are purposes of the people of the state" and subdivision (a) of 13 section 2 of Article IX, further declares that "the legislature shall 14 provide for the creation and organization of local government;" 15 (b) that consistent with these constitutional provisions and in order 16 to provide for an effective republican form of government in accordance 17 with the constitution of the United States of America, the people of the 18 state of New York, represented in the senate and assembly, did enact 19 chapter 773 of the laws of 1989, as amended by chapter 17 of the laws of 20 1990, which authorized the borough of Staten Island, upon approval by 21 referendum to consider formally separating from its existing municipal 22 government, authorized the creation of a charter commission for the city 23 of Staten Island, authorized, upon approval of a subsequent referendum, 24 the adoption of a charter, and most importantly, required that within 25 three months of adoption of the charter by the voters of Staten Island, 26 the charter commission submit to the governor and the legislature, 27 proposed legislation enabling the borough of Staten Island to disengage 28 and separate from its existing municipal government, and that only upon 29 enactment of such enabling legislation, could the charter for the city 30 of Staten Island take effect; 31 (c) that the legislature, in requiring the subsequent enactment of 32 enabling legislation before a charter for the city of Staten Island 33 could take effect, reaffirmed its paramount constitutional authority to 34 distribute the powers of local government, as between city and county 35 governments, as it deems best; 36 (d) that preserving historical and natural boundaries, as well as the 37 integrity of political subdivisions of the state, and providing meaning- 38 ful representation of the smaller boroughs in the city of New York 39 affairs, are among those legitimate state interests and policies which 40 have been validated by the federal courts; 41 (e) that the people of the state of New York enacted chapter 773 of 42 the laws of 1989, as subsequently amended, to provide a process by which 43 the people of Staten Island could carefully study and consider the legal 44 disengagement and separation of the borough of Staten Island from the 45 city of New York as an acceptable means of implementing the substantial 46 state interest in providing effective local self-government for the 47 citizens of Staten Island; and 48 (f) that the issues of legal disengagement and separation of the 49 borough of Staten Island from the city of New York raise concerns of 50 statewide importance, not limited to Staten Island residents or New York 51 city residents. 52 2. The legislature further finds, determines and declares: 53 (a) that the New York State Constitution entitles the people of Staten 54 Island to "effective local self-government;"

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1 (b) that the existing charter of the city of New York does not provide 2 meaningful representation to the borough of Staten Island, therefore 3 precluding "effective local self-government;" 4 (c) that given the constraints of the United States Supreme Court 5 articulated in Board of Estimate of the City of New York v. Beverly 6 Morris , 489 US 103 (1989), the only viable alternative to providing 7 "effective local self-government" is legal disengagement and separation 8 from the city of New York and the creation of the new city of Staten 9 Island; 10 (d) that such legal separation of Staten Island from the city of New 11 York is economically feasible, with minimal fiscal impact on the state 12 of New York; 13 (e) that the city of New York should have a meaningful role and the 14 opportunity to provide significant input in the process by which Staten 15 Island legally disengages and separates from the city of New York, 16 including participation in a transition period, but the city of New York 17 should not in the exercise of the aforesaid role, be permitted to unila- 18 terally prevent the legal disengagement and separation of Staten Island; 19 and 20 (f) that in connection with the process of legal disengagement and 21 separation, there is hereby specifically delegated to a group of repre- 22 sentatives from both the city of New York and the proposed city of 23 Staten Island the task of evaluating and accounting for the allocation 24 of all assets and liabilities, as well as the provision of municipal 25 services during the transition period, all of which shall be determined 26 in the context of the overall best interest of the state of New York. 27 3. The legislature further finds, determines and declares: 28 (a) that by virtue of the authority vested in the legislature by the 29 New York State Constitution to provide for the "creation and organiza- 30 tion of local governments" as well as for "effective local self-govern- 31 ment" and "intergovernmental cooperation," the interests of the people 32 of the state would be served and promoted by the separation and creation 33 of a new municipality to be called the city of Staten Island; and 34 (b) that in furtherance of such purposes, the recommendations of the 35 charter commission shall be implemented in connection with the creation 36 of the city of Staten Island. 37 4. The legislature further finds, determines and declares that the 38 establishment of the city of Staten Island is authorized by the New York 39 State Constitution, constitutes a state purpose for the benefit of the 40 people of the state of New York and therefore the city of Staten Island 41 Act is hereby enacted. 42 § 1-003. Definitions. As used in this act, the following terms shall 43 have the following meanings: 44 1. "Effective date of this charter" shall mean the first of November 45 next succeeding the date on which this act shall have become a law. 46 2. "Date of incorporation of the city of Staten Island" or "date of 47 incorporation" shall mean the date on which the city of Staten Island is 48 incorporated, the first of January next succeeding the date on which 49 this act shall have become a law. 50 3. "Date of establishment of the city of Staten Island" or "date of 51 establishment" shall mean the date on which the city of Staten Island is 52 first authorized to exercise full municipal authority, except for judi- 53 cial authority, over the citizens and territory of the city of Staten 54 Island, the first of July in the second year next succeeding the year in 55 which this act shall have become a law.

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1 4. "Transition period" shall mean the period of time between the date 2 of incorporation and the first of July in the second year next succeed- 3 ing the year in which this act shall have become a law from and includ- 4 ing the date of incorporation until the date of establishment. 5 5. "Preceding municipality" shall mean the city government for the 6 geographical area of the city of Staten Island existing immediately 7 prior to the incorporation of the city of Staten Island and which shall 8 exercise full municipal powers and duties for such area during the tran- 9 sition period. 10 6. "Judiciary transition period" shall mean the period of time between 11 the date of incorporation of the city of Staten Island and December 12 thirty-first in the fifth year following such incorporation or until the 13 provisions of article 5-C of the judiciary law are specifically super- 14 seded by state law. At the conclusion of the judiciary transition peri- 15 od, the city of Staten Island shall be authorized to exercise full judi- 16 cial authority over the citizens and territory of the city of Staten 17 Island. 18 § 1-004. Incorporation. The city of Staten Island is hereby incorpo- 19 rated on the first of January next succeeding the date on which this act 20 shall have become a law. The boundaries of such city shall be as 21 described in section 1-02 of the charter of the city of Staten Island as 22 set forth in section 2-001 of this act. During the transition period 23 such city shall not have the powers or duties of a municipality except 24 those which are provided for pursuant to this act to provide for the 25 transition of government and the establishment of such city. During the 26 transition period, the preceding municipality shall possess and exercise 27 full municipal powers and duties for the area to become the city of 28 Staten Island except for those powers and duties as may be provided by 29 the provisions of this act. Powers and duties of the city of Staten 30 Island not yet in effect shall remain with the preceding municipality 31 until such time as those powers and duties are transferred to the city 32 of Staten Island pursuant to the provisions of this act. Except as 33 otherwise provided by this act, full powers and duties shall devolve to 34 the city of Staten Island on the first of July in the second year next 35 succeeding the date on which this act shall have become a law. The 36 following powers, duties and functions regarding the judiciary during 37 the judicial transition period and other matters as jointly determined 38 by the city of Staten Island and the preceding municipality in accord- 39 ance with the provisions as outlined elsewhere in this act, will be 40 shared by both municipalities. The city of Staten Island shall be estab- 41 lished on the first of July in the second year next succeeding the date 42 on which this act shall have become a law, on which date the city of 43 Staten Island shall possess full municipal powers and duties as are 44 provided under law and the preceding municipality shall cease to possess 45 municipal powers and duties regarding the city of Staten Island. 46 § 2-001. Charter of the city of Staten Island. The city charter of 47 the city of Staten Island is enacted to read as follows: 48 Charter of the City of Staten Island

49 Table of Contents 50 Preamble 51 Chapter 1 General Provisions 52 Chapter 2 Powers of the City 53 Chapter 3 Mayor 54 Chapter 4 Common Council 55 Chapter 5 Comptroller

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1 Chapter 6 The Budgetary Process: Expense and Capital 2 Chapter 7 Planning Department 3 Chapter 8 Franchises 4 Chapter 9 Contracting 5 Chapter 10 Referendum and Amendment 6 Chapter 11 Property of the City 7 Chapter 12 Personnel Management 8 Chapter 13 Equal Employment Practices Commission 9 Chapter 14 Collective Bargaining 10 Chapter 15 Transitory Provisions 11 Chapter 16 Labor Relations

12 CHARTER OF THE CITY OF STATEN ISLAND

13 Preamble 14 The People of Staten Island, exercising their right to propose a 15 government of their choosing through which all people can be effectively 16 represented, do hereby adopt this Charter. 17 The birth of a city, must, of necessity, take place in an aura of 18 excitement and great expectations. When it occurs at a time when society 19 is experiencing strong institutional challenges in a climate of skepti- 20 cism, it places heavy burdens on those responsible for leadership to 21 sustain a commitment by the people to live and function together as a 22 community. 23 The provision of a structure of governance at the local level is an 24 extraordinary and crucial responsibility. Sophocles wisely observed that 25 "the city is the people." The City of Staten Island must place a high 26 premium on assuring meaningful participation of its citizenry in the 27 governmental decisions affecting their lives. 28 We must respect the principles of equality and of the social dignity 29 of all of our residents and provide for the complete development of the 30 individual, promoting actions which favor the advancement of men and 31 women in realizing their fullest potential. We must embrace policies 32 that promote and give effectiveness to the rights of every person, with 33 particular attention to those who face special challenges, in striving 34 for a full life. 35 We must assert a policy of favoring equal opportunity employment for 36 all women and men. We must foster a culture that is peaceful and non- 37 violent and that safeguards the rights of all inhabitants to carry out 38 their lawful activities on Staten Island. 39 We should give strong supportive efforts for the conservation and 40 defense of the environment along with the advancement of the cultural 41 and natural values that sustain them. We consent to be governed by the 42 new municipality in the belief that a smaller, localized city government 43 may effectively and responsibly balance the needs of the people with the 44 cost of providing municipal services. 45 The City of Staten Island can serve as a model for the promotion of 46 the common welfare, the guarantor of individual liberties and the guard- 47 ian of the social, spiritual, economic and cultural concerns of its 48 inhabitants. 49 We believe this act of self determination to be in the best interests 50 of the people of Staten Island and the people of the City of New York 51 and we hope that together, as sister cities, we can work cooperatively 52 in efforts of regional concern and for the betterment of New York State. 53 Chapter 1 54 General Provisions

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1 § 1-01. Incorporation. 2 The citizens of the State of New York from time to time inhabitants of 3 the territory in the County of Richmond, included in the boundaries set 4 forth in section 1-02 of this chapter, shall be known as the City of 5 Staten Island, and shall be a municipal corporation in perpetuity under 6 the name of "The City of Staten Island." 7 § 1-02. Boundaries. 8 The City of Staten Island shall consist of all the territory known as 9 Richmond county, which shall contain all that part of the state, bounded 10 on the north by the center line of the Kill Van Kull which center line 11 would extend easterly to the extension of the center line of North River 12 and Upper New York Bay, then on the east by the extension of the afore- 13 mentioned center line of Upper New York Bay running southerly through 14 the Narrows between Richmond county and Kings county and continuing 15 through Lower New York Bay to the Atlantic Ocean, and bounded on the 16 south east by the Atlantic Ocean to the boundary of the state of New 17 York and the state of New Jersey at Raritan Bay, and on the west follow- 18 ing the center line of the Kill Van Kull and the center line of the 19 Arthur Kill which is the boundary between the state of New York and the 20 state of New Jersey, including Staten Island, Island of Meadows, Pralls 21 Island, Hoffman Island, Swinburne Island, that part of Shooters Island 22 within the state of New York, and all other islands or parts thereof 23 situated within the aforedescribed bounds. 24 Chapter 2 25 Powers of the City 26 § 2-01. Powers. 27 The city shall have and may exercise all powers necessary for local 28 self-government and any additional powers and authority which are now or 29 may be hereafter granted to it under the Constitution or laws of this 30 State, as fully and completely as though such powers were specifically 31 enumerated in this Charter and no enumerations of particular powers in 32 this Charter shall be held to be exclusive but shall be held to be in 33 addition to this general grant of powers. 34 § 2-02. Purposes. 35 All city powers shall be used to serve and advance the general 36 welfare, health, happiness, safety and aspirations of its inhabitants, 37 present and future, and to encourage their full participation in the 38 process of governance. 39 Chapter 3 40 Mayor 41 § 3-01. Executive power. 42 The executive power of the city shall be vested in and exercised by 43 the mayor as chief executive officer. 44 § 3-02. Election; term. 45 The mayor shall be elected at the first general election following the 46 effective date of this charter and every fourth year thereafter. The 47 mayor shall hold office for a term of four years commencing on the first 48 of January after each such election. 49 § 3-03. Qualifications. 50 The mayor shall be a citizen of the United States, a qualified elector 51 of the city, and shall have been a resident of the city for at least one 52 year immediately preceding his/her election. 53 § 3-04. Deputy mayor. 54 The mayor shall appoint and at pleasure remove a deputy mayor who 55 shall have such powers and duties as may be assigned by the mayor and

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1 who shall act temporarily as mayor in case of the mayor's temporary 2 inability, absence or illness as is provided by this charter. 3 § 3-05. Removal of the mayor. 4 The mayor may be removed from office by the governor upon charges and 5 after service upon him or her of a copy of the charges and an opportu- 6 nity to be heard in his or her defense. Pending the preparation and 7 disposition of charges, the governor may suspend the mayor for a period 8 not exceeding thirty days. 9 § 3-06. Succession. 10 (a) In case of the suspension of the mayor from office, the mayor's 11 temporary inability to discharge the powers and duties of the office of 12 mayor by reason of sickness or otherwise, or the mayor's absence from 13 the city, the powers and duties of the office of mayor shall devolve 14 upon the deputy mayor or an acting mayor in case of a vacancy in the 15 office of deputy mayor pending a special election to fill the vacancy in 16 the office of mayor as provided in subdivision (c) of this section. 17 While so acting temporarily as mayor the deputy mayor or acting mayor 18 shall not exercise any power of appointment to or removal from office; 19 and shall not, until such suspension, inability or absence shall have 20 continued nine days, sign, approve or disapprove any local law or resol- 21 ution, unless the period during which the mayor can act thereon would 22 expire during said nine days in which case the deputy mayor or acting 23 mayor in case of a vacancy in the office of deputy mayor shall have the 24 power to disapprove the same within forty-eight hours before the time to 25 act expires. 26 (b) In case of a failure of a person elected as mayor to qualify, or a 27 vacancy in the office caused by the mayor's resignation, removal, death 28 or permanent inability to discharge the powers and duties of the office 29 of mayor, such powers shall devolve upon the deputy mayor or acting 30 mayor in case of a vacancy in the office of deputy mayor pending a 31 special election to fill the vacancy for the remainder of the unexpired 32 term in the office of mayor as provided in subdivision (c) of this 33 section, such special election to take place thirty days after the proc- 34 lamation that such vacancy exists. 35 (c) Within seven days of the occurrence of a vacancy in the office of 36 mayor, the council shall proclaim the date for the special election to 37 fill the vacancy required by this subdivision and such election shall 38 take place thirty days after said proclamation. The council shall 39 provide notice of such proclamation to the city clerk and board of 40 elections and publish notice thereof, and the board of elections shall 41 mail notice of such election to all registered voters within the city 42 and shall conduct such special election thirty days after the proclama- 43 tion. 44 (d) A party nomination of a candidate for the special election to fill 45 a vacancy in the office of mayor for the remainder of the unexpired term 46 shall be made in the manner prescribed by the rules of the party. 47 (e) An independent nominating petition for the nomination of candi- 48 dates to fill the vacancy must be signed by registered voters numbering 49 five per centum of the total number of votes cast for governor at the 50 last gubernatorial election in the city of Staten Island, excluding 51 blank and void votes, except that not more than two thousand signatures 52 shall be required upon any such petition. 53 (f) Any vacancy in the office of mayor that occurs after July tenth 54 and on or before September nineteenth in any year shall be filled at the 55 general election held in such year.

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1 (g) Any vacancy that occurs on or after September twentieth in any 2 year and not later than thirty-seven days before the first Tuesday in 3 December shall be filled at a special election to be held on the first 4 Tuesday in December in such year. 5 A person elected to fill a vacancy in the office of mayor at a special 6 election shall take office immediately upon qualification and fill the 7 vacancy for the remainder of the unexpired term. 8 § 3-07. Appointment and removal of officers and employees. 9 (a) The mayor shall appoint the heads of administrations, departments, 10 all commissioners, and all other officers not elected by the people 11 including a city clerk, except as otherwise provided in this charter or 12 by law. 13 (b) The mayor, whenever in his or her judgment the public interest 14 shall so require, may remove from office any public officer holding 15 office by appointment from a mayor of the city, except officers for 16 whose removal other provision is made by law. No public officer shall 17 hold his or her office for any specific term, except as otherwise 18 provided by law. 19 § 3-08. General Powers. 20 (a) The mayor, subject to this charter, shall exercise all the powers 21 vested in the city, except as otherwise provided by law. 22 (b) The mayor shall have the power: 23 1. to supervise, direct and control, subject to law, the administra- 24 tive services and departments of government; 25 2. to see that the ordinances of the city and laws of the city and 26 state are properly administered and enforced; 27 3. to prepare and submit to the council an annual report of his or her 28 work, which shall be made public and which shall include a summary of 29 agency service goals, performance measures and actual performance rela- 30 tive to goals for each service delivery program and an appendix of those 31 programs which provide abatements or reductions of taxes for businesses 32 in the city; 33 4. to prepare and submit a budget message and an expense budget and 34 capital budget annually to the council for its consideration and neces- 35 sary action in accordance with this charter and the city code; 36 5. to call special sessions of the council; 37 6. to approve or to veto acts of the council in the manner prescribed 38 by this charter; 39 7. to inquire into the conduct of any city department, agency, board 40 or commission, except elected officials and their offices; and to make 41 investigation as to municipal affairs and, for that purpose, may subpoe- 42 na witnesses, administer oaths and compel production of books, papers 43 and other evidence. Failure to obey such subpoena or to produce books, 44 papers or evidence as ordered under this section shall be punishable as 45 a misdemeanor; 46 8. to create or abolish bureaus, divisions or positions within the 47 executive office of the mayor or city departments as he or she may deem 48 necessary to fulfill mayoral duties; 49 9. to delegate to or withdraw from any member of said office, speci- 50 fied functions, powers and duties, except the mayor's power to act on 51 local laws or resolutions of the council or to appoint or remove offi- 52 cials; 53 10. to perform all such duties as may be presented for the mayor in 54 this charter, or other law, or by act of the council. 55 (c) Notwithstanding any other provision of law, the mayor shall have 56 the powers of a finance board under the local finance law and may exer-

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1 cise such powers without regard to any provision of law prescribing the 2 voting strength required for a resolution or action of such finance 3 board, provided, however, that whenever the mayor determines that obli- 4 gations should be issued and the amount thereof, the mayor shall certify 5 such determination to the comptroller who shall thereupon determine the 6 nature and term of such obligations and shall arrange for the issuance 7 thereof. 8 Chapter 4 9 Common Council 10 § 4-01. Legislative power. 11 The legislative power of the city shall be vested in and exercised by 12 the common council, hereinafter referred to as the council, except as 13 otherwise provided by this charter. 14 § 4-02. Number, election and terms of office of council members. 15 (a) The council shall consist of fifteen members each elected from 16 separate council districts. Eight council members shall be elected from 17 districts denominated "A" districts and seven council members shall be 18 elected from districts denominated "B" districts. The eight council 19 members who represent "A" districts shall be elected at the general 20 election to be held in the years ending in seven, one and five. The 21 seven council members who represent "B" districts shall be elected at 22 the general election to be held in the years ending in seven, nine and 23 three. 24 (b) The boundaries and designations of the council districts shall be 25 drawn and specified pursuant to section 5 of chapter 773 of the laws of 26 1989 and shall remain in effect until altered or changed in accordance 27 with the provisions of this charter. Council members shall be elected at 28 the first general election following the effective date of this charter, 29 except as otherwise provided by transition provisions. The term of 30 office of a council member shall begin on January first following such 31 election and shall be for either a four-year or two-year period as 32 provided in subdivision (a) of this section or until a successor is duly 33 elected and qualified. 34 § 4-03. Qualifications. 35 Each council member shall be a citizen of the United States and shall 36 have been resident of the city for one year immediately preceding his or 37 her election and shall reside in the district from which elected while 38 serving as a council member. Removal of residence from the city or from 39 the council district following election or during the term of office 40 shall constitute immediate forfeiture of office and a vacancy shall 41 exist in the district from which the council member was elected. 42 § 4-04. Organization. 43 The council shall determine the rules of its own proceedings at the 44 first stated meeting of the council in each year. The council by majori- 45 ty vote of all its members shall elect one member as speaker and such 46 other officers as it deems appropriate. 47 § 4-05. Vacancy. 48 (a) The office of a council member shall become vacant upon the 49 member's death, resignation, removal from office or forfeiture of office 50 in any manner authorized by law. A council member shall forfeit that 51 office if the council member violates any express prohibition of this 52 charter or lacks at any time during the term of office for which he or 53 she was elected any qualification for the office prescribed by the char- 54 ter or by law. 55 (b) Within seven days of the occurrence of a vacancy in the council, 56 the mayor shall proclaim the date for a special election to fill the

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1 vacancy required by this subdivision and such election shall take place 2 thirty days after said proclamation. The mayor shall provide notice of 3 such proclamation to the city clerk and board of elections and publish 4 notice thereof, and the board of elections shall mail notice of such 5 election to all registered voters within the district in which the 6 vacancy has occurred and shall conduct such special election thirty days 7 after the proclamation. 8 (c) A party nomination of a candidate for the special election to fill 9 a vacancy in the council for the remainder of the unexpired term shall 10 be made in the manner prescribed by the rules of the party. 11 (d) An independent nominating petition for the nomination of candi- 12 dates to fill the vacancy must be signed by voters numbering five per 13 centum of the total number of votes cast in the district for governor at 14 the last gubernatorial election in the city, excluding blank and void 15 votes, or as provided by the New York state election law. 16 (e) Any vacancy that occurs in the council after July tenth and on or 17 before September nineteenth in any year shall be filled at the general 18 election held in such year. 19 (f) Any vacancy that occurs on or after September twentieth in any 20 year and not later than thirty-seven days before the first Tuesday in 21 December shall be filled at a special election to be held on the first 22 Tuesday in December in such year. 23 A person elected to fill a vacancy in the council at a special 24 election shall take office immediately upon qualification and fill the 25 vacancy for the remainder of the unexpired term. 26 § 4-06. Powers. 27 (a) All legislative power shall be vested in a council. 28 (b) The council shall have the following additional powers: 29 1. to employ or retain its own staff and consultants including a clerk 30 of the council; 31 2. to conduct investigations in accordance with the provisions of this 32 charter; 33 3. to designate an acting mayor within seventy-two hours of the occur- 34 rence of a vacancy in both the office of mayor and the office of deputy 35 mayor; 36 4. to approve appointments as provided in this charter, except as 37 otherwise mandated by law; 38 5. to exercise the power of removal as provided in this charter; 39 6. to override the veto of a mayor by a two-thirds vote of all the 40 members; 41 7. to disapprove within thirty days any proposed designation by the 42 department of city planning of a landmark, landmark site, interior land- 43 mark, scenic landmark or historic district, provided however, that in 44 the absence of any such disapproval the proposed designation shall 45 become effective thirty days after having been referred to the council 46 by the department of city planning; 47 8. to call a meeting at any time between the council and the mayor 48 jointly to discuss legislation or business of the city in general, and 49 by a two-thirds vote of all the members to compel the attendance of the 50 mayor at a council hearing; and 51 9. to exercise other powers conferred by this charter. 52 § 4-07. Clerk of the council. 53 (a) The council shall appoint a clerk who shall perform such duties as 54 may be prescribed by law. The clerk so appointed shall be the clerk of 55 the council and shall serve at the pleasure of the council. The clerk 56 shall attend the meetings of the council, keep a journal of its

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1 proceedings and discharge such other duties as may be prescribed by this 2 charter or other law. 3 (b) The clerk shall keep each local law passed in a book provided for 4 that purpose, with proper indices, which book shall be deemed a public 5 record of such local laws, and each local law shall be attested by said 6 clerk. The clerk shall cause to be published all notices, advertising 7 matters or proceedings as required by the provisions of this charter or 8 by other law. It shall be the duty of the clerk to keep open for 9 inspection at all reasonable times the records and minutes of the 10 proceedings of the council. 11 § 4-08. Investigations. 12 The council shall have the power to investigate any matters within its 13 jurisdiction relating to the property, affairs, or government of the 14 city, or to any other powers of the council, or to the effectuation of 15 the purposes or provisions of this charter or any laws relating to the 16 city, and to incur expenses therefor which shall be a general city 17 charge in the absence of an appropriation. The council shall have the 18 power to require the attendance and examine and take testimony under 19 oath of such persons as it may deem necessary and to require the 20 production of books, accounts, papers and other evidence relative to the 21 inquiry kept by any person which may relate to such investigation or the 22 attendance of any person having knowledge of the subject matter of the 23 investigation. 24 § 4-09. Local laws. 25 (a) Except as otherwise provided by law, all legislative action by the 26 council shall be by local law. Every local law shall contain only one 27 subject. The title shall clearly refer to the subject matter. 28 (b) The council shall take no final action on any legislation until a 29 minimum of three days, exclusive of Sundays, has elapsed from the date 30 of its introduction, unless the mayor shall have certified as to the 31 necessity for its immediate passage and such local law be passed by the 32 affirmative vote of two-thirds of all the council members; provided 33 however that general plans, development plans and amendments and 34 revisions thereto shall not be so certified. 35 (c) Every local law passed by the council shall be certified by the 36 clerk of the council and shall be presented to the mayor for approval 37 prior to its effective date. The mayor shall sign the legislation within 38 ten days if approved, but, if not, shall return it to the council 39 together with a written statement of his or her objections. The council, 40 within thirty days may reconsider any legislation disapproved by the 41 mayor and may pass it by a two-thirds vote of all the members. If the 42 mayor fails to sign or return legislation to the council with reasons 43 for disapproval, it shall become law as of its effective date, thirty 44 days after submission to the mayor. 45 (d) No proposed local law or budget modification shall be voted on by 46 a council committee or the council unless it is accompanied by a fiscal 47 impact statement containing the following information: 48 1. the fiscal year in which the proposed law or modification would 49 first become effective and the first fiscal year in which the full 50 fiscal impact of the law or modification is expected to occur; 51 2. an estimate of the fiscal impact of the law or modification on the 52 revenues and expenditures of the city during the fiscal year in which 53 the law or modification is to first become effective, during the 54 succeeding fiscal year, and during the first fiscal year in which the 55 full fiscal impact of the law or modification is expected to occur; and 56 3. a list of sources of information used in its preparation.

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1 (e) All agency heads shall promptly provide to any council committee 2 any information that it requests to assist it in preparing a fiscal 3 impact statement. 4 § 4-10. Districting commission. 5 (a) There shall be a districting commission consisting of seven 6 members appointed as provided in this section. 7 (b) Each member of the commission shall be a citizen of the United 8 States and shall have been a resident of the city for one year imme- 9 diately preceding his or her appointment. 10 (c) The majority leader in the council shall appoint three members of 11 the commission. 12 (d) The minority leader in the council shall appoint two members of 13 the commission. 14 (e) If only one political party has a council delegation, then the 15 chairpersons of the county committees of the political party with no 16 council delegation which, at the time of the last general election for 17 council preceding the time at which such appointments are required to be 18 made, had the second and third highest number of votes cast in that 19 election, shall each appoint one member of the commission. 20 (f) The mayor shall appoint two additional members who shall not be 21 members of the same political party. 22 (g) In the event of a vacancy by death, resignation or otherwise, a 23 new member enrolled in the same political party from which his or her 24 predecessor was selected shall be appointed in the same manner as the 25 member whose departure from the commission created the vacancy and shall 26 serve for the balance of the term remaining. 27 (h) The members of the commission shall elect one of the seven members 28 to serve as the chair of the commission. 29 § 4-11. Powers of the districting commission. 30 (a) Following each decennial census, the commission shall prepare a 31 plan for dividing the city into districts for the election of council 32 members. 33 (b) The commission shall submit its plan to the council for its final 34 adoption and such plan shall not be subject to any mayoral action in 35 order to become effective. 36 § 4-12. Community advisory boards. 37 (a) The common council is hereby authorized to create, by local law, 38 one or more community advisory board districts and corresponding commu- 39 nity advisory boards to consider the needs of such districts, and to 40 cooperate with, consult, assist and advise members of the common coun- 41 cil, as well as any public officer, agency, and local administrators of 42 such agencies, with respect to any matter relating to the welfare of the 43 residents of such districts. 44 (b) The number of community advisory boards and the number of members 45 appointed to serve on such board or boards shall be determined by the 46 common council as it deems appropriate. 47 (c) In addition, the boundary lines of the community advisory board 48 districts created hereunder shall be coterminous with the boundary lines 49 of one or more council districts so that no council district shall be 50 included in more than one community advisory board district. 51 (d) Members of the community advisory boards shall serve without 52 compensation and shall serve for not more than two (2) consecutive two- 53 year terms so as to maximize the opportunities for meaningful partic- 54 ipation in local government for all city residents, and to preserve the 55 spirit and long-standing tradition of excellent voluntarism on Staten 56 Island.

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1 Chapter 5 2 Comptroller 3 § 5-01. Election; term. 4 The comptroller shall be elected by the electors of the city at the 5 same time and for the same term as this charter prescribes for the 6 mayor. The comptroller shall serve for a term of four years commencing 7 on the first of January following such election and until a successor is 8 elected and qualified. 9 § 5-02. Powers and duties. 10 (a) The comptroller shall have the following powers and duties: 11 1. to advise the mayor and the council on the financial condition of 12 the city or any phase thereof; 13 2. to make recommendations, comments and criticisms in regard to the 14 operations, fiscal policies and financial transactions of the city as he 15 or she may deem advisable; 16 3. to audit and investigate all matters relating to or affecting the 17 finances of the city, including without limitation the performance of 18 contracts and the receipt and expenditure of city funds, and for such 19 purpose shall have the power to require the attendance and examine and 20 take the testimony under oath of such persons as the comptroller may 21 deem necessary; 22 4. to submit an annual report to the mayor and the council showing 23 revenues, receipts and expenditures, the sources from which the revenues 24 and funds are derived and how they have been disbursed; 25 5. to inspect, revise and prescribe the form of reports and accounts 26 of the agencies, trusts, the council and units of government; 27 6. to audit all agencies, trusts, the council and units of government 28 whenever the comptroller decides it is necessary or is directed to 29 conduct such an audit either by the mayor or by the council. The comp- 30 troller shall be entitled to obtain access to agency records required by 31 law to be kept confidential, other than records which are protected by 32 the privileges for attorney-client communications, attorney work 33 products, or material prepared for litigation, upon a representation by 34 the comptroller that necessary and appropriate steps will be taken to 35 protect the confidentiality of such records. 36 (b) The comptroller shall establish a regular auditing cycle to ensure 37 that one or more of the programs or activities of each city agency, or 38 one or more aspects of each agency's operations, is audited at least 39 once every four years. The audits conducted by the comptroller shall 40 comply with generally accepted government auditing standards. In accord- 41 ance with such standards, and before any draft or final audit or audit 42 report, or portion thereof, may be made public, the comptroller shall 43 send a copy of the draft audit or audit report to the head of the audit- 44 ed agency and provide the agency, in writing, with a reasonable deadline 45 for its review and response. The comptroller shall include copies of any 46 such agency response in any draft or final audit or audit report, or 47 portion thereof, which is made public. The comptroller shall send copies 48 of all final audits and audit reports to the mayor and the council. 49 (c) The comptroller shall establish for his or her office and for all 50 city agencies a uniform system of accounting and reporting based on 51 generally accepted accounting principles. 52 (d) The comptroller shall perform such other functions and duties as 53 may be required by other provisions of this charter or by law. 54 § 5-03. Qualifications.

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1 The comptroller shall be a citizen of the United States, a qualified 2 elector of the city, and shall have been a resident of the city for at 3 least one year immediately preceding his or her election. 4 § 5-04. Deputy comptroller. 5 The comptroller shall appoint and at pleasure remove a deputy comp- 6 troller who in case of a vacancy in the office or in case of the illness 7 or inability of the comptroller to act shall have the same powers and 8 perform the same duties as the comptroller. The qualifications of the 9 nominee for the position of deputy comptroller shall be submitted to the 10 council by the comptroller and the nominee may be requested to appear in 11 person before the council to respond to questions concerning those qual- 12 ifications. 13 § 5-05. Vacancy. 14 (a) Any vacancy in the office of comptroller shall be filled by 15 special election in accordance with the provisions of this charter. In 16 the event of a vacancy in the office of the comptroller or whenever by 17 reason of sickness, absence from the city or suspension from office, the 18 comptroller shall be prevented from attending to the duties of the 19 office, the deputy comptroller shall act as comptroller. 20 (b) Within seven days of the occurrence of a vacancy in the office of 21 comptroller, the mayor shall proclaim the date for the special election 22 required by this subdivision and such election shall take place thirty 23 days after said proclamation. The mayor shall provide notice of such 24 proclamation to the city clerk and board of elections and publish notice 25 thereof, and the board of elections shall mail notice of such election 26 to all registered voters within the city and shall conduct such special 27 election thirty days after the proclamation. 28 (c) A party nomination of a candidate for the special election to fill 29 a vacancy in the office of comptroller for the remainder of the unex- 30 pired term shall be made in the manner prescribed by the rules of the 31 party. 32 (d) An independent nominating petition for the nomination of candi- 33 dates to fill the vacancy must be signed by registered voters numbering 34 five per centum of the total number of votes cast for governor at the 35 last gubernatorial election in the city, excluding blank and void votes, 36 except that not more than two thousand signatures shall be required upon 37 any such petition. 38 (e) Any vacancy in the office of comptroller that occurs after July 39 tenth and on or before September nineteenth in any year shall be filled 40 at the general election held in such year. 41 (f) Any vacancy that occurs on or after September twentieth in any 42 year and not later than thirty-seven days before the first Tuesday in 43 December shall be filled at a special election to be held on the first 44 Tuesday in December in such year. 45 A person elected to fill a vacancy in the office of comptroller at a 46 special election shall take office immediately upon qualification and 47 fill the vacancy for the remainder of the unexpired term.

48 Chapter 6 49 The Budgetary Process: 50 Expense and Capital 51 § 6-01. Budgetary responsibilities of the mayor. 52 (a) The mayor shall annually prepare and submit to the council prelim- 53 inary and executive budgets, each of which shall present a complete 54 financial plan for the city and its agencies for the ensuing fiscal year 55 and the three succeeding fiscal years. Each such budget shall consist of

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1 three parts: the expense budget, which shall set forth proposed appro- 2 priations for the operating expenses of the city including debt service, 3 and interfund transfers; the capital budget and program, which shall set 4 forth proposed appropriations for capital projects; and the revenue 5 budget, which shall set forth the estimated and anticipated revenues and 6 receipts of the city, as well as any other anticipated sources and uses 7 of funds. 8 (b) The mayor shall appoint the director of the budget who shall 9 assist the mayor in the preparation and the administration of the budg- 10 et. The director shall perform all such duties in regard to the budget 11 and related matters as the mayor may direct. The director shall have the 12 power personally or through representatives, to survey each agency for 13 the purpose of ascertaining its budgetary requirements. The director may 14 require any agency, or any officer or employee, to furnish data and 15 information and to answer inquiries pertinent to the exercise of any of 16 the director's duties in regard to the budget and related matters. 17 § 6-02. Spending pursuant to appropriations. 18 (a) No money, except for grants or gifts from private entities, shall 19 be paid from any fund under the management of the city, or any fund 20 under the management of any agency or officer of the city, or any other 21 entity the majority of the members of whose board are city officials or 22 are appointed directly or indirectly by city officials, except in 23 pursuance of an appropriation by the council or other specific legal 24 authorization provided, however, that: 25 1. if at any time the council shall fail to make an appropriation for 26 the payment of debt service on any debts of the city as they fall due, 27 or for the payments to the several sinking funds, the officer responsi- 28 ble for the collection of taxes shall set apart, from the first revenues 29 thereafter received applicable to the general fund of the city, a sum 30 sufficient to pay such amounts and shall so apply such sum; and 31 2. money, the ownership and equitable title of which belongs to an 32 individual, corporation, organization or government other than the city 33 and which is being held by any agency or officer of the city pending 34 transfer of such money to such individual, corporation, organization or 35 government in accordance with the terms and conditions pursuant to which 36 it was placed in the custody of such agency or officer, may be trans- 37 ferred to such individual, corporation, organization or government by 38 such agency or officer without an appropriation by law provided such 39 transfers are made in accordance with such terms and conditions; and 40 3. money or other financial resources may only be transferred from one 41 fund to another without specific statutory authorization for such a 42 transfer if that money or those other financial resources are being 43 loaned temporarily to such other fund and an accurate accounting and 44 reporting of the balance of financial resources in each fund and of the 45 amount due by each fund to each other fund is made at the end of each 46 month; and 47 4. grants or gifts from private entities exempt from the requirements 48 of this section, and expenditures of such funds, shall be subject to 49 disclosure, at least annually, by the responsible agency, officer or 50 entity in a form and containing such information as the mayor shall 51 prescribe for this purpose by rule. 52 (b) The head of each agency of the city, and each entity the majority 53 of the members of whose board are city officials or individuals 54 appointed directly or indirectly by city officials, shall, on or before 55 the fifteenth of October in each year, submit to the mayor and the coun- 56 cil, in such form as the mayor shall prescribe, a statement of the

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1 sources, amounts and disposition of all money received by such agency or 2 entity, or by a unit or officer of such agency during the preceding 3 fiscal year, other than money appropriated for the use of such agency or 4 entity by the council, or money paid by such agency or entity into the 5 city treasury and reported in the annual report of the comptroller for 6 such fiscal year. The mayor shall ensure that copies of such statements 7 are available for public inspection, and shall designate a city officer 8 to maintain copies of such statements for such purpose. 9 § 6-03. Fiscal year. 10 The fiscal year of the city shall commence on July first in each year 11 and shall terminate at midnight on the ensuing June thirtieth. 12 § 6-04. Budgetary process and timeline. 13 Except where noted otherwise, each step should be taken not later than 14 the dates indicated below. 15 (a) Ten-year capital strategy. 16 1. Draft: November first in each even-numbered year. 17 2. Report and hearing on the first draft: January sixteenth in each 18 odd numbered year. 19 3. Mayor's issuance: April twenty-sixth in each odd numbered year. 20 4. Comparison of adopted budget and ten-year capital strategy: thirty 21 days after the budget is adopted in each year. 22 (b) Revenue estimation report of the comptroller and mayor. 23 1. The comptroller shall certify to the mayor the actual revenues for 24 the previous fiscal year: October thirty-first. 25 2. The mayor shall report comparing actual revenues to estimated 26 revenues in the budget as adopted for the previous fiscal year: November 27 fifteenth. 28 (c) Departmental estimates and the mayor's preliminary budget public 29 hearings: such date as the mayor may direct. 30 (d) Report of the comptroller on capital debt and obligations: Decem- 31 ber first. 32 (e) Report of the comptroller on the state of the city's finances to 33 the council: December fifteenth. 34 (f) Preliminary certificate of the mayor on capital debt and obli- 35 gations to the council and comptroller: January sixteenth. At any time 36 up to the submission of the executive capital budget to the council, the 37 mayor may amend such preliminary certificate. 38 (g) Preliminary budget submitted to the council: January sixteenth. 39 (h) Finance commissioner's estimate of assessed valuation, and state- 40 ment of taxes due and uncollected submitted to the mayor and council: 41 February fifteenth. 42 (i) Comptroller's statement of debt service: March first. 43 (j) The council's operating budget. March tenth: the council shall 44 approve and submit to the mayor estimates of its financial needs for the 45 ensuing fiscal year. 46 (k) Council committees' preliminary budget hearings on: 47 1. program objectives and fiscal implications of preliminary budget, 48 draft ten year capital strategy, city planning director's report on the 49 draft strategy, and the status of capital projects and expense appropri- 50 ations previously authorized; and 51 2. recommendations for any changes in the unit of appropriation struc- 52 ture, or any change in the memorandum of understanding of the terms and 53 conditions regarding such units of appropriations; and 54 3. the council's findings and the net effect of the changes recom- 55 mended on the preliminary capital budget shall not exceed the maximum 56 amount set forth in the preliminary certificate: March twenty-fifth.

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1 (l) Executive budget, the four-year financial plan and budget message 2 with any accompanying reports and schedules submission for the ensuing 3 fiscal year: April twenty-sixth. 4 (m) Proposed local laws and home rule requests necessary to implement 5 the recommendations made in the executive budget: as soon after April 6 twenty-sixth as is practicable. 7 (n) Executive budget hearings: the council shall hold public hearings 8 on the budget as presented by the mayor between May sixth and twenty- 9 fifth. 10 (o) Amendment and adoption of the executive budget: by June fifth. 11 1. The council may alter the contents of the budget within the total 12 revenues estimated by the mayor and the maximum debt for capital, except 13 for the amounts set aside for the repayment of debt. 14 2. The budget when adopted by the council shall become effective imme- 15 diately, except appropriations for the council or appropriations added 16 to the mayor's executive budget by the council or any changes in terms 17 and conditions or in the memorandum of understanding regarding such 18 terms and conditions shall be subject to the mayor's veto. 19 3. If an expense budget has not been adopted by the fifth of June, the 20 expense budget and tax rate adopted as modified for the current fiscal 21 year shall be deemed to have been extended for the new fiscal year until 22 such time as a new expense budget has been adopted. 23 4. If a capital budget and a capital program have not been adopted by 24 the fifth of June the unutilized portion of all prior capital appropri- 25 ations shall be deemed reappropriated. 26 (p) Veto of the mayor. 27 1. The mayor, not later than the fifth day after the council has acted 28 upon the budget or capital program submitted with the executive budget, 29 may disapprove: 30 (i) any increase or addition to any such bill or program; 31 (ii) any change in any term or condition of the budget; 32 (iii) any change in a memorandum of understanding regarding the terms 33 and conditions; or 34 (iv) any item, term, condition, or provision of a memorandum included 35 in the budget. The mayor's objections shall be returned in writing to 36 the council by such date. 37 2. The council by a two-thirds vote of all the members may override 38 any disapproval of the mayor; however, if no action by the council is 39 taken within ten days of such disapproval, the expense budget shall be 40 deemed adopted as modified by the mayor's disapprovals. 41 (q) Statement of the amount of the budget and estimate by the mayor. 42 1. The mayor shall submit to the council, immediately upon the 43 adoption of a budget, a statement of the amount of the budget as 44 approved by the council for the ensuing fiscal year and the mayor shall 45 prepare and submit to the council not later than the fifth of June an 46 estimate of the probable amount of: 47 (i) receipts into the city treasury during the ensuing fiscal year 48 from all the sources of revenue of the general fund; and 49 (ii) all receipts other than those of the general fund and taxes on 50 real property. The mayor may include in the statement of the amount of 51 the budget as approved by the council a confirmation of such amount, and 52 thereby waive mayoral veto power. 53 2. If, as a result of the exercise of the mayor's veto, the amount of 54 the budget for the ensuing fiscal year differs from the amount of the 55 budget approved by the council, not later than two days after the budget 56 is finally adopted the mayor shall prepare and submit to the council a

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1 statement setting forth the amount of the budget for the ensuing fiscal 2 year, and the council shall, if necessary, fix new annual tax rates. 3 3. The mayor, prior to establishing the final estimate of revenues for 4 the ensuing fiscal year as required by this section, shall consider any 5 alternative estimate of revenues and which is accompanied by a statement 6 of the methodologies and assumptions upon which such estimate is based 7 in such detail as is necessary to facilitate official and public under- 8 standing of such estimates. 9 4. Any person or organization may, prior to May fifteenth, submit to 10 the mayor an official alternative estimate of revenues for consideration 11 by the mayor. Such estimate shall be in a form prescribed by the mayor. 12 (r) Fixing of tax rates. 13 1. The council shall fix the annual tax rates immediately upon the 14 approval of the budget. The council shall deduct the total amount of 15 receipts as estimated by the mayor from the amount of the budget, for 16 the ensuing fiscal year, and shall cause to be raised by tax on real 17 property such sum as shall be as nearly as possible but not less than, 18 the balance so arrived at, by fixing tax rates in cents and thousandths 19 of a cent upon each dollar of assessed valuation. The tax rates shall be 20 such as to produce a balanced budget within generally accepted account- 21 ing principles for municipalities. 22 2. If a budget has not been adopted by the fifth of June, the tax 23 rates adopted for the current fiscal year shall be deemed to have been 24 extended for the new fiscal year until such time as a new budget is 25 adopted. 26 3. In the event the mayor exercises the veto power, the council shall, 27 if necessary, fix new annual rates not later than the date the budget is 28 finally adopted, in accordance with the requirements of paragraph one of 29 subdivision (s) of this section. 30 (s) Completing the assessment rolls and fixing of tax rates. 31 Notwithstanding the provisions of the above subdivisions or any other 32 provisions of law to the contrary: 33 1. if the city council has not fixed the tax rates for the ensuing 34 fiscal year on or before the fifth of June, the commissioner of finance 35 shall be authorized to complete the assessment rolls using estimated 36 rates and to collect the sums therein mentioned according to law. The 37 estimated rates shall equal the tax rates for the current fiscal year; 38 2. if, subsequent to the fifth of June, the council shall, fix the tax 39 rates for the ensuing fiscal year at percentages differing from the 40 estimated rates, real estate tax payments shall nevertheless be payable 41 in accordance with paragraph one of this subdivision at the estimated 42 rates. However, in such event, prior to the first of January in such 43 fiscal year, the commissioner of finance shall cause the completed 44 assessment rolls to be revised to reflect the tax rates fixed by the 45 council, and an amended bill for the installment or installments for 46 such fiscal year due and payable on or after the first of January shall 47 be submitted to each taxpayer in which whatever adjustment may be 48 required as a result of the estimated bill previously submitted to the 49 taxpayer shall be reflected. 50 (t) Appropriation, certification and publication. 51 Not later than the day after the budget is finally adopted the budget 52 and the several amounts therein specified as appropriations or units of 53 appropriation shall be and become appropriated to the several purposes 54 therein named. The budget shall thereupon be filed in the offices of the 55 comptroller and the city clerk, and shall be published forthwith. 56 (u) Council completion of assessment rolls.

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1 At such annual meeting to adopt the budget the council shall cause to 2 be set down in the assessment rolls, opposite to the several sums set 3 down as the valuation of real property, the respective sums, in dollars 4 and cents, to be paid as tax thereon, rejecting the fractions of a cent. 5 It shall also cause to be added and set down the aggregate valuations of 6 the real property, and shall transmit to the comptroller of the state by 7 mail a certificate of such aggregate valuation. 8 (v) Collection of real property tax. 9 1. Immediately upon the completion of the assessment rolls, the city 10 clerk shall produce the proper warrants authorizing and requiring the 11 commissioner to collect the several sums therein mentioned according to 12 law. Such warrants need be signed only by the speaker of the council and 13 countersigned by the city clerk. Immediately thereafter and on or 14 before the thirtieth of June, the assessment rolls of the city as 15 corrected according to law and finally completed, or a fair copy there- 16 of, shall be delivered by the speaker to the commissioner with the prop- 17 er warrants, so signed and counter signed, annexed thereto. At the same 18 time the speaker shall notify the comptroller of the amount of taxes in 19 each book of the assessment rolls so delivered. 20 2. The commissioner upon receiving the assessment rolls and warrants 21 shall immediately cause the assessment rolls and warrants to be filed 22 with the city clerk. 23 (w) Mayor's financial plan update: thirty days after budget adopted. 24 § 6-05. Format of expense budget departmental estimates, preliminary 25 expense budget, and executive expense budget. 26 (a) The expense budget departmental estimates, the preliminary expense 27 budget, and the executive expense budget for each year shall consist of 28 proposed units of appropriation for personal service and proposed units 29 of appropriation for other than personal service for the ensuing fiscal 30 year. 31 (b) Each agency head, for the departmental estimates, and the mayor, 32 for the executive budget, shall submit: 33 1. a statement of the impact of the proposed units of appropriation on 34 the level of services to be provided during the ensuing fiscal year; and 35 2. for each community within the city as identified in the council's 36 hearings on local and neighborhood budget needs, a written response to 37 each of the expense budget priorities included in the committee's recom- 38 mendations of budget priorities submitted in accordance with provisions 39 of this charter, including the disposition of each such priority and a 40 meaningful explanation of any disapprovals contained in such estimates 41 or budget. 42 (c) Each proposed unit of appropriation shall represent the amount 43 requested for personal service or for other than personal service for a 44 particular program, purpose, or activity within an agency, department, 45 organization or institution; provided, however, that a single unit of 46 appropriation for personal service or a single unit of appropriation for 47 other than personal service may represent the amount requested for more 48 than one particular program, purpose, or activity for an agency, depart- 49 ment, organization or institution if the council has adopted, on the 50 recommendation of the mayor, or if the council has adopted on its own 51 initiative and the mayor has approved, a resolution setting forth the 52 names, and a statement of the programmatic objectives, of each program, 53 purpose, or activity for an agency, department, organization, or insti- 54 tution to be included in such a single unit of appropriation. Copies of 55 such resolutions must be included as an appendix to any preliminary 56 budget, executive budget, and adopted budget to which they apply. If,

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1 in accordance with such a resolution, a proposed unit of appropriation 2 for other than personal service shall represent the total amount 3 requested for other than personal service for more than one proposed 4 unit of appropriation for personal service, the amount of such unit of 5 appropriation for other than personal service which is allocable to each 6 unit of appropriation for personal service shall be set forth for infor- 7 mational purposes at the end of each such unit of appropriation for 8 personal service. If, in accordance with such a resolution, a proposed 9 unit of appropriation for personal service shall represent the total 10 amount requested for personal service for more than one proposed unit of 11 appropriation for other than personal service, the amount of such unit 12 of appropriation for personal service which is allocable to each unit of 13 appropriation for other than personal service shall be set forth for 14 informational purposes at the end of each such unit of appropriation for 15 other than personal service. 16 (d) Each proposed unit of appropriation contained in the departmental 17 estimates, the preliminary expense budget and the executive expense 18 budget shall be accompanied by a statement of the programmatic objec- 19 tives of the program, purpose, activity for the agency, department, 20 organization or institution involved. 21 (e) Each proposed unit of appropriation contained in the departmental 22 estimates and the executive budget shall be supported by line items 23 showing how the total amount of such unit is determined. 24 (f) The departmental estimates shall be in such form and contain such 25 further information as may be required by the mayor or by law. Such 26 departmental estimates shall be public records and which shall at all 27 reasonable times be open to public inspection. 28 (g) For each city agency that has local service districts within 29 communities as defined by local law, where practicable, shall contain a 30 statement of proposed direct expenditures in meaningful categories of 31 information, in each such service district. 32 § 6-06. Preliminary expense budget. 33 The preliminary expense budget shall contain proposed expenditures and 34 a forecast of revenues for the ensuing fiscal year, including, for each 35 tax revenue source which represents five percent or more of the total 36 forecast of tax revenues, a detailed statement of the methodology and 37 assumptions used to determine the forecast of revenues estimated to be 38 received from such source in sufficient detail to facilitate official 39 and public understanding of the manner in which such forecasts are made, 40 shall indicate proposed units of appropriations for personal service and 41 for other than personal service, shall include a financial plan covering 42 estimates of expenditures and revenues for the four ensuing fiscal years 43 in such years, shall include the departmental estimates of agency 44 expenditures for the ensuing fiscal year together with proposed sources 45 of revenue for each unit of appropriation specified therein and shall 46 present a plan to ensure balance between the expense and revenue budgets 47 during the ensuing fiscal year. 48 § 6-07. Contents of the executive expense budget. 49 (a) There shall be included in the budget: 50 1. Units of appropriation, prepared according to this chapter, in such 51 amounts and upon such terms and conditions as may be determined by the 52 mayor. Such appropriations shall include: 53 (i) the amounts required by law to be appropriated to the several 54 sinking funds as certified by the comptroller; 55 (ii) the amount required to pay the interest and principal of city 56 obligations as certified by the comptroller;

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1 (iii) an amount, as certified by the comptroller, equal to the average 2 of all expenditures during each of the five preceding fiscal years for 3 the payment of the expense of the removal of snow and ice, exclusive of 4 salaries and wages of regular employees of the city except for overtime 5 work and for work on Sundays and holidays, and exclusive of the purchase 6 of equipment; 7 (iv) the several amounts which are payable from sources other than the 8 real estate tax levy, provided however that amounts appropriated pursu- 9 ant to chapter nine of this charter which are allocable to a particular 10 program, purpose, activity or institution, shall be included for infor- 11 mational purposes only; 12 (v) such other amounts as may be required by law; 13 (vi) such amounts as shall be determined in the manner provided in 14 this chapter to be necessary to pay the expenses of conducting the busi- 15 ness of the city for the ensuing fiscal year and for other lawful public 16 purposes; and 17 (vii) a reserve for unanticipated contingencies. 18 2. An identification of the proposed appropriations, being proposed by 19 agency and project type and, within project type, by personal service 20 and other than personal service, for the maintenance of all major 21 portions of the capital plant, as such terms are defined in section 6-16 22 of this chapter. 23 3. The terms and conditions under which appropriations shall be admin- 24 istered. 25 (b) All such units of appropriation and other amounts shall be set 26 forth without deduction of revenues from any source except as otherwise 27 provided by law. 28 (c) The budget message, which shall not be deemed a part of the budg- 29 et, shall include: 30 1. an explanation; 31 2. itemized information and supporting schedules; 32 3. recommendations for any changes in revenue sources and fiscal oper- 33 ations; 34 4. an itemized statement of the actual revenues and receipts and 35 accruals of the general fund and of all other revenue sources; 36 5. a listing of the sources and amounts of all revenues and other 37 monies of a nonrecurring nature; 38 6. a four-year financial plan, containing: 39 (i) for each agency, for all existing programs, forecasts of expendi- 40 tures for the ensuing fiscal year and the succeeding three fiscal years 41 at existing levels of service; 42 (ii) forecasts of revenue by source from existing sources of revenue 43 for the ensuing fiscal year and the succeeding three fiscal years; and 44 (iii) for each new or expanded program, an indication of when such 45 program is projected to be fully implemented and a forecast of the annu- 46 al recurring costs for such program or program expansion after it is 47 fully implemented; 48 7. for each agency, a comparison of the proposed appropriations for 49 the ensuing fiscal year; 50 8. an explanation of principal changes in performance goals and indi- 51 cators; 52 9. an itemized statement, covering the city's entire capital plant, 53 except for those portions of the capital plant which have been committed 54 to the care and control of the board of education; 55 10. a presentation of the maintenance activities proposed by the mayor 56 to be completed during the ensuing fiscal year;

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1 11. a statement of any substantive changes in the methodology and 2 assumptions used to determine the revenue estimates; 3 12. a statement of the implications for the orderly development of the 4 city; and 5 13. a certificate setting forth the maximum amount of debt and 6 reserves. 7 § 6-08. Adoption of expense budget and memorandum of understanding. 8 Adoption of expense budget with regard to a memorandum of understand- 9 ing contained in the terms and conditions. 10 (a) The council may increase, decrease, add or omit any amount in the 11 expense budget as submitted by the mayor, or change any terms and condi- 12 tions of the amount in that category, as stipulated in this chapter; the 13 mayor may disapprove any increase or addition to the amounts in the 14 categories, or any change in any term and condition of the budget, as 15 stipulated in this chapter, the mayor's disapproval may be overridden by 16 a two-thirds vote of all of the members of the council. As part of these 17 procedures the final adopted budget shall have within its terms and 18 conditions a memorandum of understanding, the final format and/or the 19 actual character of which shall be determined jointly by the actions of 20 the council and mayor consistent with the provisions for adopting a 21 local law. Such memorandum of understanding may include the provisions 22 by which the executive may have to schedule the timing and amounts of 23 expenditure or delay of expenditure and in what ways those expenditures 24 may be scheduled or delayed and if agreed to through the normal 25 provisions of adopting the budget, the priority of re-scheduling and or 26 delaying those appropriated expenditures or any part thereof those units 27 of appropriations. These details of the memorandum of understanding are 28 not to preclude or substitute for normal budget modification procedures 29 as detailed below; they are intended to deal with those circumstances 30 not covered by budget modification and/or normal impoundment procedures 31 as detailed below. 32 (b) All spending for services shall be in accordance with the terms 33 and conditions of the expense budget as adopted; provided, however, that 34 during any fiscal year the mayor shall notify the council of any 35 proposed modification of such a term or condition, at least thirty days 36 before the intended effective date of the modification in the term or 37 condition. These provisions are not to affect, hinder or substitute for 38 the normal procedures regarding budget modification or impoundment as 39 stipulated elsewhere in this chapter. 40 § 6-09. Appropriations for goods, services or construction. 41 Appropriations for the procurement of goods, services or construction 42 or the provision of services, utilities, or facilities by a department 43 responsible for general services for other agencies and institutions in 44 accordance with the authority of a department responsible for general 45 services under the provisions of this charter shall be made to a depart- 46 ment responsible for general services but shall be segregated under the 47 name of the agency or institution for which they are intended and shall 48 be considered and accounted for as appropriated for such agency or 49 institution. Nothing herein contained shall prevent the designation of 50 part of such appropriations as a general stores account or under other 51 appropriate designation to enable a department responsible for general 52 services to maintain a stock in anticipation of requirements or to 53 provide services, utilities or facilities for joint use by more than one 54 agency or institution. 55 § 6-10. Expense budget administration.

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1 (a) Except as otherwise provided by law, no unit of appropriation 2 shall be available for expenditure by any city agency until schedules 3 fixing positions and salaries and setting forth other expenses within 4 the units of appropriation are established pursuant to the adopted budg- 5 et, the administration of which is subject to the provisions of this 6 chapter, the state civil service law, and other applicable law. 7 (b) The mayor shall establish and may modify for each agency: 8 1. quarterly spending allotments for each unit of appropriation and 9 2. aggregate position and salary limits for each unit of appropri- 10 ation, which shall be made available for public review upon adequate 11 notice. No agency shall expend any sum in excess of such quarterly 12 spending allotments, or exceed aggregate position and salary limits. The 13 mayor may set aside specified sums as necessary reserves which shall not 14 be included in the quarterly spending allotments until released by the 15 mayor. Each agency shall administer all monies appropriated or available 16 for programs and purposes of the agency in accordance with quarterly 17 allotment plans proposed by the agency and approved or modified by the 18 mayor. Each such plan shall set forth by units of appropriation for the 19 quarter of the fiscal year during which it is to remain in effect: 20 (i) rates of expenditures for personal services and other than 21 personal services; 22 (ii) ceilings on the total number of uniformed, civilian and pedagog- 23 ical employees; and 24 (iii) the total amount of funds to be spent or committed by the agency 25 during such quarter. 26 (c) The mayor shall keep informed during the course of each fiscal 27 year, of the progress of expenditures and the receipt of revenues, and 28 it shall be the duty of all agencies, when requested by the mayor, to 29 supply all information needed for this purpose. 30 (d) The mayor may assume direct responsibility for the administration 31 of the schedule required to be filed by the agency head pursuant to 32 subdivision (a) of this section when in the mayor's judgment the fiscal 33 condition of the city so requires or when an agency: 34 1. is expending funds in excess of the quarterly spending allotments; 35 2. is otherwise not complying with spending allotments or aggregate 36 position and salary limits; or 37 3. is not maintaining adequate accounts pursuant to requirements of 38 this charter. 39 (e) Whenever the mayor determines, pursuant to the provisions of this 40 charter or other relevant statutes, that the full amount of any appro- 41 priation should not be available for expenditure during the fiscal year, 42 the mayor shall notify the council of such determination and the impli- 43 cations and consequences of those impoundments for service levels and 44 programmatic goals affected. The mayor shall respond in writing to a 45 request by the council for an explanation of why an appropriation should 46 not be expended. 47 (f) The head of each agency shall establish the procedure by which 48 charges and liabilities may be incurred on behalf of the agency. Such 49 procedures shall ensure that no officer or employee, on behalf of or in 50 the name of the agency, shall incur a liability or an expense for any 51 purpose in excess of the amount appropriated or otherwise authorized 52 therefor, and no charge, claim or liability shall exist or arise against 53 the city for any sum in excess of the amount appropriated or otherwise 54 authorized for the particular purpose. 55 § 6-11. Budget modification.

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1 (a) Subject to the quarterly spending allotments and aggregate posi- 2 tion and salary limits established pursuant to applicable provisions of 3 this charter, of the state civil service law and of other law, changes 4 in schedules, within units of appropriation, may be made by the head of 5 each agency. Any such changes shall be reported to the mayor and the 6 comptroller not more than ten days after the effective date thereof, and 7 shall be made available for public review upon adequate notice. 8 (b) The mayor during any fiscal year may transfer part or all of any 9 unit of appropriation to another unit of appropriation, except that when 10 any such transfer: 11 1. shall be from one agency to another; or 12 2. shall result in any unit of appropriation having been increased or 13 decreased by more than five per centum or fifty thousand dollars, which- 14 ever is greater, from the budget as adopted for such unit of appropri- 15 ation, the mayor shall notify the council of the proposed action. Within 16 thirty days after the first stated meeting of the council following the 17 receipt of such notice, the council may disapprove the proposed action. 18 Written notice of any transfer pursuant to this subdivision shall be 19 given to the comptroller and shall be published as soon as possible 20 after such transfer. 21 (c) The provisions of this section shall not be deemed to authorize 22 any transfer from appropriations required by law. 23 (d) The council may during any fiscal year transfer part or all of any 24 unit of appropriation within the council appropriation to any other 25 council unit of appropriation for any of its programs or projects or for 26 any other purpose, solely by adoption of a council resolution. Each such 27 transfer shall be published and written notice thereof shall be given to 28 the mayor and to the comptroller not less than ten days before the 29 effective date thereof. 30 (e) The procedures and required approvals pursuant to the amendment, 31 adoption of the budget, veto of the mayor and appropriation, certif- 32 ication and publication of the budget, without regard to the dates spec- 33 ified therein, shall be followed in the case of: 34 1. any proposed amendment to the budget respecting the creation of new 35 units of appropriation, 36 2. the appropriation of new revenues from any source except for reven- 37 ues from federal, state or private sources in regard to the use of which 38 the city has no discretion provided, however, that the mayor shall give 39 notice to the council of the receipt and proposed utilization of any 40 such revenues, or 41 3. the proposed use by the city of previously unappropriated funds 42 received from any source. Any request by the mayor respecting an amend- 43 ment to the budget that involves an increase in the budget shall be 44 accompanied by a statement of the source of current revenues or other 45 identifiable and currently available funds required for the payment of 46 such additional amounts. 47 § 6-12. Quarterly account of council budget. 48 The council shall be required to publish quarterly accounting of its 49 actual and planned expenditures, in sufficient detail to indicate the 50 positions and their purposes which have been funded, as well as the 51 activities and categories of materials and supplies purchased. 52 § 6-13. General fund. 53 All revenues of the city, of every administration, department, board, 54 office and commission thereof, and of every other division of government 55 within the city, from whatsoever source except taxes on real estate, not

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1 required by law to be paid into any other fund or account shall be paid 2 into a fund to be termed the "general fund." 3 § 6-14. Expenditure reports. 4 Any public or private agency, authority, corporation, board or commis- 5 sion which receives city funds and is not otherwise subject to the 6 requirements of section 6-10 of this chapter shall submit quarterly 7 reports of the expenditure of such funds to the mayor in such form and 8 detail as the mayor may prescribe. 9 § 6-15. Self-dealing among members of the governing boards of charita- 10 ble institutions. 11 (a) Any charitable institution which receives any payment from the 12 city of Staten Island charitable institutions budget shall pass and 13 implement by-laws which will: 14 1. require disclosure to the agency responsible for the administration 15 of charitable institutions budget and approval by such agency of the 16 material terms of any contract or transaction, direct or indirect, 17 between an institution and any member of its governing board, any part- 18 nership of which he or she is a member or any corporation in which he or 19 she holds ten per centum or more of the outstanding common stock; 20 2. preclude any member of the governing board of any institution from 21 sharing, participating or benefiting, directly or indirectly, in the 22 proceeds from any contract or transaction entered into between the 23 institution and any third party unless such participation or benefit has 24 been approved in advance by the agency and the governing board of the 25 institution has approved the transaction by a two-thirds majority 26 excluding the vote of member to be benefitted; 27 3. require each member of its governing board to submit to the agency 28 each year a disclosure statement including such member's name, home 29 address, principal occupation and business interests from which such 30 member or such member's spouse received income equal to or greater than 31 ten percent of their aggregate gross income during the previous year. 32 (b) At the discretion of the agency, any payment or any portion of any 33 payment may be withheld from any institution which has failed to pass 34 and implement such by-laws. 35 § 6-16. Definitions of capital projects and budget terms. 36 As used in this charter: 37 (a) The term "capital project" shall mean: 38 1. a project which provides for the construction, reconstruction, 39 acquisition or installation of a physical public betterment or improve- 40 ment which would be classified as a capital asset under generally 41 accepted accounting principles for municipalities or any preliminary 42 studies and surveys relative thereto or any underwriting or other costs 43 incurred in connection with the financing thereof; 44 2. the acquisition of property of a permanent nature including wharf 45 property; 46 3. the acquisition of any furnishings, machinery, apparatus or equip- 47 ment for any public betterment or improvement when such betterment or 48 improvement is first constructed or acquired; 49 4. any public betterment involving either a physical improvement or 50 the acquisition of real property for a physical improvement consisting 51 in, including or affecting: 52 (i) streets and parks; 53 (ii) bridges and tunnels; 54 (iii) receiving basins, inlets and sewers, including intercepting 55 sewers, plants or structures for the treatment, disposal or filtration

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1 of sewage, including grit chambers, sewer tunnels and all necessary 2 accessories thereof; 3 (iv) the fencing of vacant lots and the filling of sunken lots; 4 (v) any other project allowed to be financed by the local finance law, 5 with the approval of the mayor and the comptroller; or 6 (vi) any combination of the above. 7 (b) The term "pending" shall mean not yet completed. 8 (c) The term "standards" for each category of capital projects to 9 which they apply shall include: maximum gross and net areas allowed; 10 types of programs which may be operated in the facility; performance 11 requirements for environmental systems; allowable materials and 12 finishes; maximum areas allowed for different functions and activities; 13 approximate cost limits per square foot of construction; and such other 14 items designated by the mayor or by resolution of the council. 15 (d) The term "scope of project" or "proposed scope of project" shall 16 mean a description of a capital project included in the capital budget 17 that contains specific guidelines for the design and implementation of 18 such project consistent with the standards for the appropriate category 19 of capital projects and includes each of the following items of informa- 20 tion which are relevant to the capital project involved: 21 1. purposes and public to be served; 22 2. programs to be conducted in the facility; 23 3. gross and net amounts of space and bulk for any building or struc- 24 ture and for areas for different functions and activities; 25 4. identification of required architectural, engineering or other 26 consultants and estimated fees for such consultants; 27 5. estimated completion dates for scope, design and construction; 28 6. total estimated project costs, including costs for site acquisi- 29 tion, preparation and tenant relocation, design, construction and equip- 30 ment; 31 7. estimated expenditures for the project for each fiscal year until 32 its completion; 33 8. estimated annual costs to operate programs within the facility when 34 fully staffed and to maintain the facility; and 35 9. such other information as shall be required by the mayor or by 36 resolution of the council. 37 (e) The term "cost" shall include the contract liabilities and expend- 38 iture incurred for work in carrying out the physical improvement and 39 interest thereon, and the compensation to be made to the owner of any 40 real property acquired for the improvement as determined by a court or 41 by agreement, and interest thereon. 42 (f) The term "expenses" shall mean any expenses incurred in relation 43 to an assessable improvement exclusive of cost and of damages assessed 44 by the board of assessors. 45 (g) The term "street," as used in this chapter, shall include street, 46 avenue, road, alley, lane, highway, boulevard, concourse, parkway, 47 driveway, culvert, sidewalk, crosswalk, boardwalk, and viaduct, and 48 every class of public road, square and place, except marginal streets. 49 (h) The term "real property" shall include all lands and improvements, 50 lands under water, waterfront property, the water of any lake, pond or 51 stream, all easements and hereditament, corporeal or incorporeal, and 52 every estate, interest and right, legal or equitable, in lands or water, 53 and right, interest, privilege, easement and franchise relating to the 54 same, including terms for years and liens by way of judgment, mortgage 55 or otherwise.

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1 (i) The terms "maintenance" or "maintain" shall denote those activ- 2 ities necessary to keep the relevant portion of the capital plant in 3 good repair so as to preserve its structural integrity and to prevent 4 its deterioration. 5 (j) The term "major portion of the capital plant" shall mean: 6 1. any capital asset 7 (i) which is a capital facility or system comprising a component of 8 the public domain or infrastructure general fixed assets of the city or 9 a building comprising a component of the general fixed assets of the 10 city; and 11 (ii) which, as of the effective date of this charter, or, as a result 12 of any reconstruction or expansion after such date, has a replacement 13 cost of at least ten million dollars and a useful life of at least ten 14 years, or if purchased or constructed after such date has an original 15 cost of at least ten million dollars and an original useful life of at 16 least ten years; and 17 2. any other capital asset of the city designated by the mayor for the 18 purposes of this section; provided, however, that it shall not include 19 any asset which is leased to or otherwise under the cognizance and 20 control of a public benefit corporation or which is otherwise covered, 21 pursuant to state law, by requirements which are substantially similar 22 to the requirements of this section. 23 § 6-17. Format of departmental estimates for capital projects, prelim- 24 inary capital budget and executive capital budget. 25 The departmental estimates for capital projects and the executive 26 capital budget shall consist of a detailed estimate of all capital 27 projects pending or which the agency head, for departmental estimates, 28 or the mayor, for the executive budget, believes should be undertaken 29 within the ensuing fiscal year and the three succeeding fiscal years. 30 Each agency head, and the mayor, for the executive budgets, shall submit 31 a written response to each of the capital budget priorities included in 32 the council's recommendation of budget priorities for local and neigh- 33 borhood needs submitted in accordance with the section on preliminary 34 budget hearings of this chapter. Such responses shall include the 35 response of the agency head and the mayor, as appropriate, regarding the 36 disposition of each such priority and meaningful explanations of any 37 disapprovals contained in such estimates or budget. 38 § 6-18. Preliminary capital budget. 39 The preliminary capital budget statements shall consist of: 40 (a) a financial plan covering estimates of capital expenditures for 41 the four ensuing fiscal years; 42 (b) departmental estimates for capital projects as provided in section 43 6-19 of this chapter together with the cash flow requirements and 44 proposed sources of funding for each project included in such estimates; 45 (c) a capital program status report which sets forth the appropri- 46 ations for each project included in the capital budget for the current 47 fiscal year together with the expenditures to date; and 48 (d) a summary description of the purpose of each capital project and 49 the needs it will fulfill, the schedule for beginning and constructing 50 the project, its period of probable usefulness and an appropriate main- 51 tenance schedule. 52 § 6-19. Executive capital budget. 53 (a) The executive capital budget shall set forth separately each capi- 54 tal project, and shall include: 55 1. a brief description and the location of each project; the total 56 estimated cost of the project; the appropriations which have been previ-

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1 ously adopted for this project; the amount of appropriations recommended 2 to be adopted for the ensuing fiscal year the aggregate amount of which 3 shall not exceed the amount in the mayor's certificate; the amount of 4 appropriations required thereafter to complete the project; the sources 5 of funds for the project including state, federal, private and other 6 funds; the period of probable usefulness; the estimated additional annu- 7 al maintenance and operation costs; and any terms and conditions of the 8 project; the estimated dates of completion of final scope, final design 9 and final construction; and 10 2. a listing of all pending projects; and any recommendations that any 11 pending projects be modified, rescinded or postponed accompanied by a 12 statement of the budgetary impact of any such action. 13 (b) The executive capital program shall set forth for both program 14 categories and individual projects: 15 1. a statement for each of the three succeeding fiscal years of the 16 total dollar amounts necessary to complete projects initiated in prior 17 years and projects proposed in the executive budget the amounts neces- 18 sary for projects proposed to be initiated in future years and the 19 amounts necessary for amendments and contingencies; and 20 2. a statement of the likely impact on the expense budget of staffing, 21 maintaining and operating the capital projects included in or contem- 22 plated by the capital program. 23 § 6-20. Amendment. 24 (a) Upon receipt of a recommendation in writing from the mayor in 25 manner specified herein, the council may amend the capital budget or 26 capital program in the same manner as the adoption of the capital budget 27 and capital program including the right to approve the proposed amend- 28 ment as submitted or to increase or decrease the amounts of funds 29 proposed to be appropriated thereby, but only if funds are available 30 within the capital budget and the applicable program category of the 31 capital program, provided, however that the mayor may only recommend 32 such an amendment relating to an appropriation included in the capital 33 budget pursuant to this charter. 34 (b) Upon the adoption of any such amendment by the council, it shall 35 be certified by the mayor, the speaker of the council and the city clerk 36 and the capital budget shall be amended accordingly. 37 (c) Not later than five days after such certification such amendment 38 shall be filed in the office of the comptroller and shall be published 39 forthwith. 40 § 6-21. Restrictions on capital projects. 41 (a) No obligations of the city shall be issued or authorized for or on 42 account of any capital project not included in a capital budget, or for 43 which funds have not been reserved in an appropriate program category of 44 the capital program for any year of such program in which it is project- 45 ed that funds will be expended for the completion of the project, or in 46 excess of the maximum amount of obligations which may be issued on 47 account of such project as fixed in such capital budget; and no amount 48 may be expended on account of any capital project in excess of the 49 amount appropriated for such purposes in a capital budget, except that 50 the amount appropriated for such purposes may be increased by the mayor 51 by not more than fifteen per centum thereof in order to meet any costs 52 required to advance such project. Notice of any such increase shall be 53 provided to the council together with a statement of identifiable funds 54 available for payment of the increase. 55 (b) Funds included in the capital budget for a capital project that 56 are not obligated or committed during the fiscal year in which appropri-

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1 ated shall not be obligated or committed in the subsequent fiscal year 2 unless reappropriated in a subsequent capital budget or an amendment 3 thereto. A capital project included in a capital budget that is not 4 initiated by the expenditure of funds within two years after its inclu- 5 sion in the budget shall be eliminated from the budget. 6 (c) The city may issue capital debt only to finance capital projects 7 as defined in this charter. The capital budget may not include expense 8 items that are properly includable only in the expense budget, as deter- 9 mined in accordance with the accounting principles set forth in the 10 state comptroller's uniform system of accounts for municipalities, as 11 the same may be modified by the state comptroller, in consultation with 12 the city comptroller, for application to the city. 13 (d) No capital project shall be included in the proposed executive 14 capital budget or otherwise adopted as part of the capital budget or as 15 an amendment thereto unless sufficient funds are available within the 16 appropriate general program category of the capital program for any year 17 of such program in which it is projected that additional appropriations 18 will be necessary for the completion of the project. 19 § 6-22. Site selection. 20 (a) The selection of sites for capital projects shall be pursuant to 21 local law. 22 (b) To the maximum extent feasible, final approval of a site for a 23 capital project shall occur prior to or simultaneously with the approval 24 of the scope of the project pursuant to this chapter. 25 § 6-23. Project initiation; commitment plan. 26 (a) The inclusion of a capital project in the capital budget as 27 adopted or amended shall constitute a direction and order to the agency 28 to proceed with the preparation of a scope of project pursuant to this 29 chapter unless sufficient planning funds for such purpose have not been 30 appropriated in the capital budget. The head of the agency shall notify 31 the comptroller of the amount of appropriated planning funds to be 32 encumbered for such purpose. 33 (b) The approval of a scope of project for a capital project pursuant 34 to this chapter, including the amount of obligations necessary to 35 finance the design and construction of the project, shall constitute a 36 direction and order to the agency to design the project, unless suffi- 37 cient funds for such purpose have not been appropriated in the capital 38 budget or are otherwise not available within the appropriate program 39 category of the capital program. Such approval shall constitute notifi- 40 cation to the comptroller of the comptroller's authorization to expend 41 appropriated design funds. 42 (c) The approval of the final design for a capital project pursuant to 43 this chapter shall constitute a direction and order to the agency 44 responsible for construction to prepare bid and award documents and to 45 proceed to bid, unless sufficient funds for such purpose have not been 46 appropriated in the capital budget or are otherwise not available within 47 each year of the capital program in which it is projected that funds 48 will be expended for the completion of the project. Such approval shall 49 constitute notification to the comptroller of the comptroller's authori- 50 zation to expend appropriated construction funds. 51 (d) The mayor shall require each agency to prepare and submit periodic 52 reports, in regard to the progress of its capital projects, including 53 schedules and clear explanations of any delays for particular projects 54 and summary information on each agency's record on such matters. Such 55 reports shall be published at least three times each year: within ninety 56 days of the adoption of the capital budget; with the preliminary capital

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1 budget; and with the executive capital budget, copies of such reports 2 shall be transmitted by the mayor to the council. Such reports shall 3 include, for each project, the dates set in the adopted capital budget 4 for the completion of scope, design, and construction and any changes in 5 such dates. 6 1. The report issued with the executive budget shall include, for each 7 new capital project being proposed in the executive budget, a 8 description of the project including, to the extent practicable, the 9 information required to be included in a scope of project. 10 2. The report issued following the adoption of the budget shall 11 include, for each capital project added to the budget, a description of 12 the project including, to the extent practicable, the information 13 required to be included in a scope of project. 14 3. The report issued following the adoption of the budget shall 15 include, for each capital project for which a substantial change was 16 made, a revised description of the project including, to the extent 17 practicable, the information required to be included in a scope of 18 project. 19 (e) Any capital project which results in the acquisition or 20 construction of a capital asset which will be subject to the require- 21 ments of this charter shall contain a provision requiring a comprehen- 22 sive manual setting forth the useful life of the asset and explaining 23 the activities necessary to maintain the asset throughout such useful 24 life. 25 (f) The mayor may issue directives and adopt rules and regulations in 26 regard to the execution of capital projects, consistent with the 27 requirements of subdivisions (a), (b), (c) and (d) of this section, 28 which shall be binding upon all agencies. 29 § 6-24. Improvements payable other than by city. 30 Any owner of real property or any other person interested may apply to 31 the council to authorize an improvement referred to in paragraph one of 32 subdivision (a) of section 6-16 of this chapter, not included in the 33 capital budget. The council may authorize such improvement to be made by 34 the city or by such owner or other person interested upon compliance 35 with the following conditions: 36 (a) such owner or group or other persons interested shall enter into 37 an agreement with the city, whereby they will either authorize the city, 38 or themselves agree, to perform such work in accordance with such plans 39 and specifications approved by the agencies having jurisdiction there- 40 over and under their supervision; 41 (b) all of such work shall be done for the account of or at the sole 42 cost and expense of the person or persons applying for permission to do 43 the same, who shall furnish to the city such security and in such amount 44 as may be required to secure the payment of such cost and expense or the 45 proper performance of the said work in the time and in the manner agreed 46 upon, and shall further secure the city, in the latter case, against 47 latent defects in such work for a period of two years; 48 (c) such improvement shall be approved by the city planning department 49 and reviewed pursuant to local law and charter provisions; and 50 (d) any agreement providing for the performance of such work and the 51 furnishing of such security, shall be first approved by the council 52 before the same shall become effective. 53 § 6-25. Standards for capital projects. 54 The mayor shall prepare general standards and cost limits for catego- 55 ries of capital projects and standards for the preparation of the scope 56 of project for capital projects of various types. Such standards and

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1 limits shall be submitted by the mayor to the council for review. The 2 proposed standards shall become effective thirty days after they have 3 been filed with the council unless within that time the council modifies 4 or disapproves them or part of them, after conducting a public hearing. 5 Any modification by the council shall be subject to disapproval by the 6 mayor in accordance with provisions of this charter and any such disap- 7 proval shall be subject to override by the council in accordance with 8 this charter. 9 § 6-26. Scope of project. 10 (a) Each agency, with respect to a capital project under its jurisdic- 11 tion included in a capital budget, shall prepare a proposed scope of 12 project within appropriated planning funds. The proposed scope of 13 project, or, in the case of a delay, an explanation for such delay along 14 with a revised schedule, shall be submitted to the mayor and the coun- 15 cil, by the date specified in the adopted capital budget in which the 16 capital project is included. Such proposed scope shall identify all 17 substantial differences between the guidelines for the capital project 18 as contained in such scope and the description of the capital project 19 contained in the report issued pursuant to this charter at the time such 20 project was proposed in the executive budget or following the budget 21 adoption in which such project was added to the capital budget. 22 (b) Not later than sixty days after receipt of the proposed scope of 23 project from an agency pursuant to subdivision (a) of this section, the 24 mayor shall approve, modify, or disapprove the proposed scope of project 25 and notify the agency and the council. In the case of a scope approved 26 by the mayor with modifications, such notification shall include a copy 27 of the scope as approved. 28 (c) No scope of project shall be approved by the mayor unless: 29 1. it contains the information required by paragraph four of subdivi- 30 sion (d) of section 6-16 of this chapter and it conforms to the applica- 31 ble standards for the type of project adopted pursuant to this chapter, 32 and 33 2. funds are available within the appropriate program category of the 34 capital program that can be reserved for each fiscal year required to 35 complete the project. 36 § 6-27. Design of capital project. 37 (a) The proposed design and final design for a capital project shall 38 be made available for review by the council. The mayor or the mayor's 39 representative shall review the final design to determine its conform- 40 ance with the approved scope of project pursuant to this chapter. 41 (b) Works of art may be provided for each capital project which 42 involves the construction or the substantial reconstruction of a city- 43 owned public building or structure the intended use of which requires 44 that it be accessible to the public generally or to members of the 45 public participating in, requiring or receiving programs, services or 46 benefits provided thereat. For the purposes of this section a police 47 precinct house and a firehouse shall be deemed to be such buildings.

48 Chapter 7 49 Planning Department 50 § 7-01. Planning department. 51 There shall be a department of city planning consisting of a planning 52 director and such subordinate employees as are required to administer 53 the planning program described herein. 54 § 7-02. Planning director.

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1 The mayor shall appoint and shall have the power to remove the plan- 2 ning director, who shall have had at least five years of appropriate 3 professional land use experience. The planning director shall be the 4 head of the planning department, and shall be responsible for the proper 5 conduct of the affairs of the department and for the execution of the 6 planning program prescribed in this charter and in local laws and rules 7 consistent herewith. 8 § 7-03. Powers, duties and functions. 9 (a) The planning director, through the planning department, shall: 10 1. advise and assist the mayor and the council in regard to the phys- 11 ical planning and public improvement aspects of the development of the 12 city and on all matters related to the planning program prescribed in 13 this charter and in local law and rules consistent herewith; 14 2. prepare the general plan and revisions thereof, and development 15 plans at least every four years in the year following the mayoral 16 election and annual reviews thereof, for the improvement and development 17 of the city; 18 3. establish procedures for processing revisions to the general plan 19 and to the four-year and one-year development plans; 20 4. hold public hearings on such plans and revisions thereof and trans- 21 mit them, with findings and recommendations thereon, through the mayor 22 to the council for its consideration and action; 23 5. prepare zoning resolutions, maps and rules and regulations and any 24 revision or amendments thereto in accordance with the general plan; 25 6. prepare local laws or resolutions and rules and regulations govern- 26 ing the subdivision of lands within the city and any revisions or amend- 27 ments thereto; 28 7. administer the zoning and subdivision local laws or resolutions and 29 rules and regulations adopted thereunder and any regulatory laws or 30 resolutions which may be adopted to supplement or replace such resol- 31 utions; 32 8. recommend periodic amendments to zoning resolutions and subdivision 33 laws or regulations, and provide opportunity for taxpayers to recommend 34 periodic amendments to zoning resolutions and subdivision laws or regu- 35 lations; 36 9. hold public hearings on land subdivision and zoning resolutions and 37 amendments thereto, transmit such proposed resolutions, with findings 38 and recommendations thereon, through the mayor to the council for its 39 consideration and action; 40 10. establish procedures for the review of land utilization applica- 41 tions; 42 11. review subdivision plats and zoning petitions; 43 12. approve applications for special permits and variances within the 44 jurisdiction of the department of city planning under the zoning resol- 45 ution; 46 13. collect data on population, housing and other relevant social and 47 economic indicators to serve as a basis for planning recommendations; 48 and may conduct continuous studies and policy analyses on economic 49 development, urban design, capital improvements, environmental impact 50 assessment and such other subjects as the mayor or council may from time 51 to time request; 52 14. be custodian of the city map and thereon record all changes legal- 53 ly authorized; 54 15. administer the program prescribed by law with respect to the 55 establishment and regulation of landmarks, portions of landmarks, land- 56 mark sites, interior landmarks, scenic landmarks and historic districts;

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1 16. hold public hearings on a proposed designation of a landmark, 2 landmark site, interior landmark, scenic landmark or historic district, 3 after notice of the proposed designation, notice of the hearing, and an 4 opportunity for comment to the affected property owner or owners; 5 17. submit to the council a report on the impact of any such desig- 6 nation whether of a district or a landmark to the zoning resolution, 7 projected public improvements, and any plans for the development, 8 growth, improvement or renewal of the area involved, and a recommenda- 9 tion for council action with respect to any such designation; 10 18. review the executive capital program and budget for conformance to 11 the purposes of the general plan and development plans prior to 12 submission of the executive capital program and budget to the council 13 and make a written report of his or her findings to the mayor and coun- 14 cil at the time of submission of such executive capital program and 15 budget; 16 19. prepare, in consultation with the director of the budget, the 17 draft ten-year capital strategy, and hold hearings on such draft, and 18 report his or her findings to the mayor and to the council; 19 20. consult with the appropriate State officials concerned with plan- 20 ning and environmental quality to assure compliance with State guide- 21 lines and oversee implementation of laws that require environmental 22 reviews of actions taken by the city; and 23 21. perform such other functions as are assigned by the mayor or other 24 provisions of law. 25 § 7-04. General plan. 26 The general plan shall set forth the city's broad policies for the 27 long range development of the city. It shall contain statements of the 28 general social, economic, environmental and design objectives to be 29 achieved for the general welfare and prosperity of the people of the 30 city through government action, city, state or federal. The statements 31 shall include, but not be limited to, policy and development objectives 32 to be achieved with respect to the distribution of social benefits, the 33 most desirable uses of land within the city, the overall circulation 34 pattern and the most desirable population densities within the several 35 areas of the city. In conformance with such development objectives and 36 policies the plan shall identify the general location, character, and 37 extent of streets and thoroughfares, parks, recreation facilities, sites 38 for public buildings and structures, city and privately owned utilities, 39 transportation systems and facilities, housing, community facilities, 40 future land use for all classifications and such other elements, 41 features and policies as will provide for the improvement of the city 42 over the next ten years. 43 § 7-05. Development plans. 44 Development plans shall present detailed means for implementing and 45 accomplishing the development objectives and policies of the general 46 plan within the several parts of the city. The mayor shall have a 47 comprehensive four-year development plan which shall recommend a gener- 48 alized land use development pattern to guide the growth of the city over 49 the succeeding four-year period and a one-year development plan that 50 delineates the city's proposed land use development pattern for a 51 succeeding twelve month period and is based upon the development goals 52 and objectives specified in the city's four-year development plan. 53 § 7-06. Adoption of the general plan and development plans. 54 (a) The mayor shall submit annually to the council such plans that 55 will include a general plan, four-year and one-year development plans 56 for all property within the city limits. The council shall adopt the

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1 general plan or revisions thereof and development plans or amendments 2 thereto by local law. Any local law or resolution adopting or revising 3 the general plan shall be laid over for at least two weeks after intro- 4 duction. The mayor shall not certify as to the necessity for the immedi- 5 ate consideration of any general plan, development plans, or revisions 6 or amendments thereto. Public notice shall be provided at least ten days 7 before adoption by the council. Upon adoption, every local law or 8 resolution shall be presented to the mayor, and the mayor may approve or 9 disapprove it pursuant to applicable provisions governing the approval 10 or disapproval of a local law or resolution. If the mayor approves the 11 local law, the mayor shall sign it and return it to the clerk; it shall 12 then be deemed to have been adopted. If the mayor disapproves it, he or 13 she shall return it to the council with his or her objections stated in 14 writing. The council at its next regular meeting may reconsider the same 15 and if the votes of two-thirds of all the council members be cast in 16 favor of repassing such local law, it shall be deemed adopted, notwith- 17 standing the objections of the mayor. 18 (b) The general plan and all development plans shall be kept on file 19 in the department of city planning. 20 (c) The approved general plan and development plans shall be used as a 21 guide for the preparation of the city's capital improvement program and 22 capital budget. 23 (d) The mayor shall maintain an up-to-date zoning map of all proper- 24 ties within the city limits. 25 (e) Following the annual updating and adoption of the city's develop- 26 ment plans, the council shall amend the city's zoning ordinance to 27 conform it to the updated development plans in accordance with proce- 28 dures prescribed by general law. 29 § 7-07. Board of Appeals. 30 (a) There shall be a board of appeals which shall consist of five 31 members to be termed commissioners, three of whom shall be appointed by 32 the mayor and two appointed by the council. Members shall serve a stag- 33 gered term of five years. 34 (b) Commissioners shall be chosen for their independence, integrity 35 and civic commitment and for their professional competence in such areas 36 as planning, architecture, and engineering. The mayor shall designate 37 one of the members to serve as chair and one of the members to serve as 38 vice-chair who shall act as chair in the absence of the chair or in the 39 event that a vacancy exists in the office of chair. 40 (c) Every member of the board shall receive a salary, which shall not 41 be reduced during his or her term of office except in case of a general 42 reduction of salaries and in proportion to reductions of salaries of 43 other officers with similar salaries. A member shall not engage in any 44 other occupation, profession or employment. Members shall attend the 45 hearings and executive sessions of the board, and shall perform such 46 other duties as may be required by the chair. 47 (d) Vacancies shall be filled in the same manner as for an original 48 appointment for the unexpired term of the member whose place has become 49 vacant and with a person having his or her qualifications. 50 (e) Any member may be removed by the mayor on proof of official 51 misconduct, or of negligence in official duties, inability to perform 52 his or her duties; but before removal he or she shall receive a copy of 53 the charges and shall be entitled to a hearing before the mayor and to 54 the assistance of counsel at such hearing. 55 § 7-08. Meetings.

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1 Meetings of the board shall be held at the call of the chair and at 2 such other times as the board may determine. The chair, or in his or her 3 absence the acting chair, may administer oaths and compel the attendance 4 of witnesses. All hearings before the board shall be open to the public 5 and shall be before at least three members of the board, and a concur- 6 ring vote of at least three members shall be necessary to a decision to 7 grant an application or an appeal, to revoke or modify a variance, 8 special permit or other decision of the board, or to make, amend or 9 repeal a rule or regulation. The board shall keep minutes of its 10 proceedings, showing the vote of each member upon every question, or if 11 absent or failing to vote, indicating such fact, and shall also keep 12 records of its examinations and other official action. Such minutes and 13 such records shall be public records. 14 § 7-09. Powers and duties. 15 The board shall have the power: 16 (a) to hear and determine appeals from the actions of the planning 17 director in the administration of the zoning and subdivision resolutions 18 and any rules and regulations adopted pursuant thereto, which appeal 19 shall be sustained only if the board finds that the director's action 20 was based on an erroneous finding of a material fact, or that the direc- 21 tor had acted in an arbitrary or capricious manner or had manifestly 22 abused discretion; 23 (b) to hear and determine appeals from the actions of the planning 24 director on petitions for varying the application of the zoning resol- 25 ution with respect to a specific parcel of land and may grant such a 26 variance upon the ground of unnecessary hardship if the record shows 27 that: 28 1. the applicant would be deprived of the reasonable use of such land 29 or building if it were used only for the purpose allowed in that zone; 30 2. the request of the applicant is due to unique circumstances and not 31 the general conditions in the neighborhood, so that the reasonableness 32 of the neighborhood zoning is not drawn into question; and 33 3. the use sought to be authorized by the variance will not alter the 34 essential character of the locality, provided however that the board 35 shall specify the particular evidence which supports the granting of a 36 variance; 37 (c) to hear and determine appeals from and review any recommendation 38 by the planning director to designate a landmark, landmark site, interi- 39 or landmark, scenic landmark or historic district; 40 (d) to make, amend and repeal rules and regulations for carrying into 41 effect the provisions of the laws, resolutions, rules and regulations in 42 respect to any subject-matter jurisdiction whereof is conferred by law 43 upon the board, and to include in such rules and regulations provisions 44 applying to specific conditions and prescribing means and methods of 45 practice to effectuate such provisions and for carrying into effect the 46 powers of the board; 47 (e) to review, upon motion of any member of the board, any rule, regu- 48 lation, amendment or repeal thereof, and any order, requirement, deci- 49 sion or determination from which an appeal may be taken to the board 50 under the provisions of this chapter or of any law, or of any rule, 51 regulation or decision of the board; but no such review shall prejudice 52 the rights of any person who has in good faith acted thereon before it 53 is reversed or modified; and 54 (f) to revoke or modify, upon due notice and hearing, variances and 55 special permits previously granted under the zoning resolution if the 56 terms and conditions of such grants have been violated.

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1 § 7-10. Procedure on appeals. 2 (a) An appeal may be taken by an aggrieved party. 3 (b) Such appeal may be taken within such time as shall be prescribed 4 by the board by general rule, by filing with the officer from whom the 5 appeal is taken and with the board a notice of appeal, specifying the 6 grounds thereof. The officer from whom the appeal is taken shall forth- 7 with transmit to the board all the papers constituting the record upon 8 which the action appealed from was taken. 9 (c) The board shall fix a reasonable time for the hearing of appeals, 10 and give due notice thereof to the parties, and decide the same within a 11 reasonable time. If the appeal is from an order revoking a permit or 12 approval, the hearing shall be no later than at the third scheduled 13 hearing of the board following the date of filing of the appeal, or five 14 weeks following such date, whichever is sooner, and the decision of the 15 board shall be rendered expeditiously. Upon the hearing any party may 16 appear in person or by agent and/or attorney. 17 (d) Any decision of the board under this section may be reviewed as 18 provided by law.

19 Chapter 8 20 Franchises 21 § 8-01. Franchises. 22 All franchises, revocable consents and concessions shall be awarded in 23 accordance with the following procedures: 24 (a) The council shall have the power to grant, renew or extend any 25 franchise, revocable consent or concession which extends for a period of 26 three or more years, provided, however, that any franchise, revocable 27 consent or concession which extends for a period of ten years or more 28 shall require the approval of two-thirds of all the members; and 29 (b) The mayor shall have the power to enter into an agreement to 30 grant, renew or extend a franchise, revocable consent or concession 31 which extends for a period of less than thirty-six months.

32 Chapter 9 33 Contracting 34 § 9-01. Procurement. 35 Except as otherwise provided in this charter or by statute, all goods, 36 services or construction to be paid for out of the city treasury or out 37 of monies under the control of or assessed or collected by the city 38 shall be procured as prescribed in this chapter. 39 § 9-02. Conditions. 40 The circumstances under which procurement may be used for the 41 provision of technical, consultant or personal services, shall include 42 circumstances where the use of procurement is: 43 (a) cost effective or necessary to obtain special expertise; 44 (b) necessary to provide a service not needed on a long-term basis; 45 (c) necessary to avoid a conflict of interest; or 46 (d) where personnel or expertise is not available in city government. 47 § 9-03. Procedures. 48 All contracts shall be awarded in accordance with the following proce- 49 dures: 50 (a) The mayor as the chief elected executive shall through his or her 51 appointees have the power to enter into contracts on behalf of the city 52 of Staten Island. 53 (b) The comptroller shall, in accordance with provisions of this char- 54 ter and with practices promulgated by state law, certify all contracts,

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1 within thirty days of receipt of such contract, provided there is no 2 cause not to certify. If the comptroller determines that a contract 3 cannot be certified, he or she shall so notify the mayor and the common 4 council within thirty days of receipt of such contract. Reasons not to 5 certify shall include but not be limited to debarment of 6 vendors/contractors, unreasonable and/or onerous terms and conditions, 7 financial problems or inconsistencies, and any other major cause not 8 advantageous to the city that the comptroller can identify and justify 9 through appropriate documentation. 10 (c) All contracts above ten thousand dollars, shall be let by compet- 11 itive bidding, in compliance with current rules, regulations, guidelines 12 and practices set forth by an appropriate national government procure- 13 ment officers professional association or the conventions set forth in 14 the generally accepted accounting practices or procedures as promulgated 15 by the New York State comptroller's office, as agreed to by the mayor, 16 the comptroller and approved by the common council; except that, when an 17 emergency as defined by local law is declared by the mayor to exist and 18 is certified by the comptroller, expedited rules as promulgated by the 19 mayor or the mayor's designee shall apply. 20 (d) Contracts of ten thousand dollars or less may be let by sole 21 source bid when an agency by rule determines that there is only one 22 source for the required good, service or construction. The agency 23 contract file shall contain a written determination that only one source 24 is available for the required good, service or construction, including 25 the process by which the agency made such determination. The agency 26 shall provide to the comptroller written documentation to support its 27 intention to let a sole source contract. This documentation shall 28 include, but not be limited to, the qualifications of the vendor and the 29 specific requirements of the contract. 30 (e) If, for any contract above ten thousand dollars, there is an 31 alteration, renewal, or change in the terms and conditions or the scope 32 of work which results in an increase or decrease of greater than five 33 per centum of the original contract amount, then those contract changes 34 must be certified by the comptroller. 35 § 9-04. Notification of contract opportunities and awards. 36 Each agency shall publish in the appropriate publication and in news- 37 papers of city, state or national distribution and trade publications, 38 notice of: 39 (a) the solicitation of bids or proposals pursuant to this chapter 40 where the value of a contract for goods, services or construction is 41 estimated to be above ten thousand dollars; 42 (b) the award of a contract for goods, services or construction 43 exceeding ten thousand dollars in value. Each such notice of award shall 44 indicate the name of the contractor, the dollar value of the contract, 45 the procurement method by which the contract was let; 46 (c) the comptroller shall promulgate rules providing for the publica- 47 tion and content of notices of contract actions required by this chap- 48 ter. Such rules shall include but not be limited to provisions regarding 49 the timing and frequency of notices, the required duration of solicita- 50 tion periods, and the form and content of notices. 51 § 9-05. Agency contract files. 52 Each agency shall maintain files containing all information pertaining 53 to the solicitation, award and management of each contract of the agen- 54 cy. The agency contract files shall contain copies of each determi- 55 nation, writing or filing required by this chapter pertaining to a 56 contract including the circumstances under which the procurement was let

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1 in accordance with section 9-02 of this chapter, and copies of all costs 2 effectiveness analyses. Agency contract files shall be open to public 3 inspection with adequate protection for information which is confiden- 4 tial. 5 § 9-06. Centralized contract and contractor information. 6 The mayor shall ensure that copies of all city contracts and other 7 standard information regarding city contracts and contractors are 8 located in a central place which is accessible to the public. Such 9 information shall include: 10 (a) a copy of the contract; 11 (b) information regarding the method by which the contract was let; 12 (c) such standard documents as the contractor is required to submit, 13 which shall be updated regularly; 14 (d) information regarding the contractor's qualifications and perform- 15 ance; 16 (e) any evaluations of the contractor and any contractor responses to 17 such evaluation; 18 (f) any audits of the contract and any contractor responses to such 19 audits; 20 (g) any decisions regarding the suspension or debarment of the 21 contractor; and 22 (h) any analysis and determination of cost effectiveness. 23 The mayor shall ensure adequate public access to the information on 24 contracts and contractors which shall be maintained in a manner to 25 facilitate public review, with due consideration for the need to 26 protect, where appropriate, the confidentiality of any such information. 27 § 9-07. Adverse impact on public employees. 28 In the event that a proposed contract for goods, services or 29 construction may adversely affect public employees, the public employees 30 union, if any, shall be advised no later than three months in advance of 31 the contract being let of the nature, scope, and approximate dates, of 32 the contract, and the reasons therefor. Except that, when an emergency 33 as defined in subdivision (c) of section 9-03 of this chapter is in 34 effect, some or all of the provisions of this section may be omitted or 35 suspended for the period of the emergency, but only for those contracts 36 directly relevant to the management of that emergency or as a result of 37 the emergency. 38 The public employer will provide such union as soon as practicable, 39 with information, in sufficient detail, so that the union may prepare a 40 proposal designed to demonstrate the cost effectiveness of keeping the 41 work in-house. Such information shall include, but not be limited to, 42 applicable solicitation to vendors, winning bids, descriptions of 43 services to be provided by vendors, and the agency's estimated direct 44 operating and administrative costs of contracting out the work. 45 Not less than thirty days prior to the award of the contract, the 46 union shall have the opportunity to make a formal proposal to the public 47 employer demonstrating that it is cost effective or that it is in the 48 best interest of the public employer to continue to perform such work 49 in-house. The public employer shall consider such proposal before making 50 a final determination.

51 Chapter 10 52 Referendum and Amendment 53 § 10-01. Referendum on pending legislation.

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1 (a) The people of the city of Staten Island reserve to themselves the 2 right to require the council to vote on proposed laws and amendments to 3 the local laws as hereinafter provided. 4 (b) The people shall have the power to require the council to vote on 5 proposed bills and resolutions by initiative petition. Each initiative 6 petition shall support a bill or resolution which has been introduced in 7 the council and shall be signed by five per centum of the total votes 8 cast on Staten Island at the previous general election. 9 (c) An initiative petition when signed by the requisite number of 10 voters shall be submitted to the Staten Island board of elections which 11 shall promptly determine whether the petition meets the requirements of 12 subdivision (b) of this section. If the Staten Island board of elections 13 determines those requirements are satisfied it shall certify to the 14 speaker of the council that the bill or resolution supported by the 15 petition is required to be considered in the council with the vote of 16 each member present recorded. 17 (d) No petition shall be certified to the council after May first in 18 any year. A petition which is not certified by the Staten Island board 19 of elections before May first shall be certified to the council on the 20 first day of the next legislative session. 21 (e) The council shall have sixty days from receipt of a certified 22 petition to vote on the bill or resolution which is the subject of the 23 petition. If the council fails to vote on such bill or resolution within 24 sixty days, such bill or resolution shall be deemed to have passed. 25 (f) City funds, facilities or employees may not be used to solicit 26 signatures on an initiative petition or to support or oppose the signing 27 of such a petition provided, however, that elected officials may solicit 28 such signatures or oppose the signing of such a petition. 29 (g) The council shall, by local law, prescribe the form and content 30 of, and the procedures for, initiative petitions consistent with this 31 section. The council may, by local law, provide for the reporting of the 32 identity of any person who expends money to affect any initiative peti- 33 tion and the amount of any money so expended. 34 § 10-02. Charter amendment. 35 (a) Amendments to this charter shall be adopted by referendum only, 36 except for those changes that are syntax and/or spelling changes which 37 may be effected, altered or amended by local law as adopted by the coun- 38 cil and the mayor as provided for in this charter. The council may 39 place an amendment on the ballot by a vote of two-thirds of all the 40 members. 41 (b) Referendum in order to amend the charter shall take place as a 42 ballot issue to be decided by affirmative vote of the majority of the 43 qualified electors of the city voting thereon, it shall take effect as 44 prescribed in such referendum. 45 (c) The referendum shall be placed on the ballot by petition of quali- 46 fied electors of not less than five per centum of the total vote cast in 47 the city of Staten Island at the last gubernatorial general election. 48 The petition shall be filed in the office of the clerk of the city of 49 Staten Island for the submission to the electors of the city at the next 50 general election therein held not less than sixty days after such 51 filing. The proposed amendment shall be set forth in full in such peti- 52 tion which may be made upon separate sheets and the signatures of each 53 shall be authenticated in the manner provided by the New York state 54 election law. If within ten days after the filing of such petition a 55 written objection thereto be filed with the office of the city clerk and 56 the board of elections, the Supreme Court or any justice thereof of the

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1 appropriate judicial district shall determine any question arising ther- 2 eunder and make such order as justice may require as prescribed in the 3 state election law.

4 Chapter 11 5 Property of the City 6 § 11-01. Inalienable property. 7 The rights of the city in and to its water front, ferries, wharf prop- 8 erty, bridges, land under water, public landings, wharves, docks, 9 streets, avenues, highways, parks, waters, waterways and all other 10 public places are hereby declared to be inalienable; but upon closing or 11 discontinuance of any street, avenue, park or other public place, the 12 property may be sold or otherwise disposed of as may be provided by law, 13 and leases of land under water, wharf property, wharves, docks and piers 14 may be made as may be provided by law. 15 § 11-02. Authority to acquire real property. 16 (a) The city may acquire title in fee to real property or any interest 17 therein whenever required for any public or municipal use or purpose or 18 for the promotion of public utility, comfort, health, enjoyment or 19 adornment. Such title or interest shall be acquired according to law by 20 purchase, gift, devise, lease, condemnation or otherwise, and, subject 21 to the provisions of this charter or other law may sell, lease, mort- 22 gage, hold, manage, and control such property as may now or hereafter be 23 owned by it. 24 (b) The council by local law shall prescribe the procedures for all 25 acquisitions of real and personal property by the city, including proce- 26 dures for determining compensation and for appealing from such determi- 27 nation without prejudice to the appellant. In addition to all other 28 requirements of law, written notice of the application to have compen- 29 sation for real property ascertained in any proceeding brought by the 30 city to acquire title to real property shall be given to the owners of 31 all property affected by the proceeding to such application. Such notice 32 shall state the purpose for which the property is to be acquired and the 33 date when such application will be presented and shall be made public 34 not less than ten days prior to such proceeding. Any owner whose proper- 35 ty has been taken in any such proceeding which has not been used for the 36 purpose stated in the proceeding for acquisition shall have the right of 37 first refusal to repurchase such property from the city after the expi- 38 ration of a five-year period from the date of the entry of the final 39 decree in the proceeding for the price paid plus simple interest. 40 § 11-03. Disposal of property of the city. 41 No real property of the city may be sold, leased, exchanged or other- 42 wise disposed of except as specifically provided by law.

43 Chapter 12 44 Personnel Management 45 § 12-01. Declaration of intent. 46 (a) The personnel policies and practices of the city government in 47 furtherance of this charter, the state civil service law and rules and 48 other applicable law shall: 49 1. preserve and promote merit and fitness in city employment; 50 2. ensure that appointments and promotions in city service are made, 51 and that wages are set, without regard to political affiliation, and 52 without unlawful discrimination based on sex, race, color, religion, 53 religious observance, national origin, disability, age, marital status,

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1 citizenship status or sexual orientation; and promote and support the 2 efficient and effective delivery of services to the public. 3 (b) Consistent with subdivision (a) of this section, the heads of city 4 agencies shall have such powers, duties and responsibilities for person- 5 nel management as they shall require to administer their agencies effec- 6 tively and to supervise, evaluate, motivate, discipline, provide incen- 7 tives for and improve the skills of employees of the city. 8 § 12-02. Department; personnel director. 9 There shall be a department of personnel, the head of which shall be 10 the personnel director. The personnel director shall have all the powers 11 and duties of a municipal civil service commission provided in the state 12 civil service law or in any other statute or local law other than such 13 powers and duties as are by this chapter assigned to the mayor, the city 14 civil service commission or the heads of city agencies. 15 § 12-03. City civil service commission. 16 (a) There shall be a city civil service commission, consisting of 17 three members, not more than two of whom shall be members of the same 18 political party. Members shall be appointed by the mayor, from a list of 19 nominations provided by the screening committee established pursuant to 20 subdivision (b) of this section, for overlapping terms of six years. Of 21 the members first appointed, one shall serve for two years and one for 22 four years and one for six years. The members shall be removable in the 23 manner provided for members of a municipal civil service commission in 24 the state civil service law. A vacancy in such commission shall be 25 filled in the same manner as regular appointments for the balance of the 26 unexpired term. The mayor shall designate a member as chair and vice 27 chair, respectively, for one-year terms. Within appropriations for such 28 purposes, the members of the commission shall be reimbursed on a per 29 diem basis for attendance at regularly scheduled meetings and hearings 30 of the commission. 31 (b) There shall be a screening committee which shall submit to the 32 mayor a list of nominees, which shall include persons with knowledge or 33 experience of the state civil service system, or personnel management, 34 or compensation practices, from which the mayor shall make appointments 35 to the city civil service commission. Such screening committee shall 36 consist of six members, of whom three shall be appointed by the mayor 37 and three shall be appointed by the municipal labor committee. The 38 screening committee shall submit the list of nominees upon the occur- 39 rence of any vacancy on the commission or at least three months prior to 40 the expiration of the term of any incumbent member. 41 (c) The commission shall appoint a counsel, who shall not be employed 42 or retained by any other city agency, and may appoint a secretary and 43 such other subordinates as may be necessary within the appropriation 44 therefor. 45 (d) The civil service commission shall have the power to hear and 46 determine appeals by any person aggrieved by any action or determination 47 of the personnel director made pursuant to section 12-04 of this chapter 48 and may order such relief as it deems appropriate or necessary in 49 accordance with this charter or the state civil service law. Any such 50 appeal shall be taken by application in writing to the commission within 51 thirty days after the action or determination appealed from. The commis- 52 sion shall also have the powers and responsibilities of a municipal 53 civil service commission under section seventy-six of the state civil 54 service law. In accordance with the requirements of this charter, the 55 commission shall promulgate rules of procedure, including rules estab-

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1 lishing time schedules, for the hearings and determinations authorized 2 by this section. 3 (e) The commission shall have the power and duty to conduct reviews, 4 studies, or analyses of the administration of personnel in the city, 5 including the classification of titles by the personnel director. 6 (f) The commission shall prepare and transmit directly to the mayor 7 departmental estimates as required by this charter. The mayor shall 8 include such proposed appropriations for the commission as a separate 9 agency in the preliminary and executive budgets as are sufficient for 10 the commission to fulfill the obligations assigned to it by this charter 11 or other law. 12 § 12-04. Personnel director; powers and duties. 13 (a) The personnel director shall have the following powers and duties 14 in addition to the powers and duties of a municipal civil service 15 commission provided in the state civil service law, and those vested in 16 the personnel director as the head of the department, except where any 17 specific power or duty is assigned to the mayor, heads of city agencies 18 or the civil service commission pursuant to this chapter: 19 1. to recruit personnel; 20 2. to make studies in regard to the grading and classifying of posi- 21 tions in the civil service, establish criteria and guidelines for allo- 22 cating positions to an existing class of positions, and grade and estab- 23 lish classes of positions; 24 3. to schedule and conduct examinations for positions in the civil 25 service; 26 4. to establish, promulgate and certify eligible lists in the manner 27 provided in the state civil service law, and the rules of the personnel 28 director; 29 5. to determine the appropriateness of eligible lists for the filling 30 of vacancies in the manner provided in the state civil service law and 31 the rules of the personnel director; 32 6. to investigate applicants for positions in the civil service; to 33 review their qualifications, and to revoke or rescind any certification 34 or appointment by reason of the disqualification of the applicant or 35 appointee under the provisions of the state civil service law, and the 36 rules of the personnel director or any other law; 37 7. to review any appointment of persons as provisional employees with- 38 in sixty days after appointment to assure compliance with this charter, 39 the state civil service law, and any rule or regulation issued pursuant 40 to this charter or state civil service law; 41 8. to certify payrolls in accordance with the provisions of the state 42 civil service law and the rules of the personnel director; 43 9. to keep records regarding candidates for appointment to the civil 44 service and officers and employees in the civil service; 45 10. to develop and recommend to the mayor standard rules governing 46 working conditions, vacations and leaves of absence; and career, salary 47 and wage plans providing for the creation, abolition and modification of 48 positions and grades and fixing salaries of persons paid from the city 49 treasury, subject to the provisions of this charter, the state civil 50 service law, other applicable statutes and collective bargaining agree- 51 ments; 52 11. to administer the city-wide incentive, training and development, 53 and other such personnel programs of the city; 54 12. to establish and enforce uniform procedures and standards to be 55 utilized by city agencies in establishing measures, programs and plans 56 to ensure a fair and effective affirmative employment plan for equal

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1 employment opportunity for minority group members and women who are 2 employed by, or who seek employment with, city agencies. Such procedures 3 shall include a time schedule for the development of such plans which 4 provides for the preparation by each agency of a draft plan, the review 5 of such draft plan by the department of personnel, the equal employment 6 practices commission, and such other agency as the mayor requires, and 7 the consideration by the agency of any comments received on such draft 8 plans prior to the adoption of a final plan as required by section 12-05 9 of this chapter; 10 13. to establish a uniform format to be utilized by all city agencies 11 in the preparation of the quarterly reports required by section 12-05 of 12 this chapter. Such format shall provide for the presentation of statis- 13 tical information regarding total employment, new hiring and promotions 14 in a manner which facilitates understanding of an agency's efforts to 15 provide fair and effective equal opportunity employment for minority 16 group members, women and members of other groups who are employed by, or 17 who seek employment with, city agencies; 18 14. to develop, in conjunction with other city agencies, a clearing- 19 house for information on employment and educational programs and 20 services for minority group members and women; and 21 15. to provide assistance to minority group members and women employed 22 by, or interested in being employed by, city agencies to ensure that 23 such minority group members and women benefit, to the maximum extent 24 possible, from city employment and educational assistance programs. 25 (b) The personnel director shall have the following powers and duties 26 with respect to the personnel management functions assigned to city 27 agencies pursuant to subdivisions (a), (b), (c), and (d) of section 28 12-05 of this chapter: 29 1. to aid in the development of effective and efficient personnel 30 programs and professional personnel staffs in the agencies of the city; 31 and to convene the personnel officers of the agencies from time to time 32 as a personnel council to consider personnel matters of inter-agency or 33 of city-wide concern; 34 2. to approve agency plans and programs pursuant to section 12-05 of 35 this chapter; 36 3. to establish and enforce standards, guidelines and criteria for the 37 personnel management functions assigned to the agencies and to audit 38 performance by the agencies of such personnel functions; 39 4. to reverse or rescind any agency personnel action or decision 40 pursuant to an assignment or delegation of authority in this chapter, 41 upon a finding of abuse after notification to the agency and an opportu- 42 nity to be heard; 43 5. to hear and determine appeals by any person aggrieved by any action 44 or determination of the head of an agency made pursuant to section 12-05 45 of this chapter, subject to review by the civil service commission as 46 provided in subdivision (e) of section 12-03 of this chapter; 47 6. to delegate to the head of an agency personnel management functions 48 assigned to the personnel director where such delegation is not other- 49 wise prohibited by the state civil service law, and pursuant to terms 50 and conditions prescribed by the director; 51 7. to administer personnel programs of a city-wide nature or common to 52 two or more departments where administration by separate agencies would 53 be impracticable and uneconomical; 54 8. to annually publish and submit to the mayor, council and the 55 commission on equal employment practices a report on the activities of 56 the department of personnel and city agencies to provide fair and effec-

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1 tive affirmative employment practices to ensure equal employment oppor- 2 tunity for minority group members and women who are employed by, or who 3 seek employment with, city agencies. Such report shall include, but not 4 be limited to, an analysis of the city government workforce and appli- 5 cants for such employment by agency, title and classification; a 6 description of each agency's employment practices, policies and 7 programs; an analysis of the effectiveness of the city's efforts to 8 provide fair and effective affirmative employment practices to ensure 9 equal employment opportunity for minority group members and women who 10 are employed by, or who seek employment with, city agencies; and such 11 legislative, programmatic and budgetary recommendations for the develop- 12 ment, implementation or improvement of such activities as the personnel 13 director deems appropriate. 14 (c) The personnel director shall promulgate rules and regulations 15 relating to the personnel policies, programs and activities of city 16 government in furtherance of and consistent with the state civil service 17 law and this chapter. The personnel director shall transmit to the state 18 civil service commission each proposed rule which must be submitted to 19 such commission, including any which establishes or reclassifies titles 20 in the non-competitive or exempt class, within sixty days after the 21 public hearing has been held on such rule. 22 (d) The personnel director shall, at the time requested by the city 23 civil service commission or the equal employment practices commission, 24 provide each commission with all the information which such commission 25 deems necessary to fulfill the duties assigned to it by the charter. The 26 provisions of this subdivision shall not apply to any information which 27 is required by law to be kept confidential or which is protected by the 28 privileges for attorney-client communications, attorney work products, 29 or material prepared for litigation. 30 (e) The personnel director shall submit a quarterly report to the 31 mayor, the council, the civil service commission and the equal employ- 32 ment practices commission. Such report shall specify, by agency and by 33 title, including temporary titles: 34 1. the number of provisional employees at the end of the second month 35 of the quarter; 36 2. the length of time such provisional employees have served in their 37 positions; and 38 3. the actions taken by the city to reduce the number of such provi- 39 sional employees and the length of their service in such positions. Such 40 reports shall be submitted by the last day of March, June, September, 41 and December of each year. 42 § 12-05. Agency heads; powers and duties. 43 (a) Subject to the state civil service law and applicable provisions 44 of this charter, heads of city agencies shall have the following powers 45 and duties essential for the management of their agencies in addition to 46 powers and duties vested in them pursuant to this charter or other 47 applicable law: 48 1. to recruit personnel; 49 2. to participate with the personnel department in job analyses for 50 the classification of positions; 51 3. to allocate individual positions to existing civil service titles; 52 4. to allocate individual managerial or executive positions to manage- 53 rial assignment levels; 54 5. to assist the personnel department in the determination of minimum 55 qualifications for classes of positions and to review and evaluate qual- 56 ifications of candidates for positions in the civil service;

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1 6. to assist the personnel director in the planning and preparation of 2 open competitive examinations; 3 7. to schedule and conduct tests other than written tests for 4 promotion to competitive class positions; 5 8. to determine whether to hold an open competitive or promotion exam- 6 ination to fill positions in the civil service subject to disapproval of 7 the personnel director within thirty days; 8 9. to plan and administer employee incentive and recognition programs; 9 10. to fill vacant positions within quarterly spending allotments and 10 personnel controls pursuant to this charter; 11 11. to administer and certify eligible lists for classes of positions 12 unique to the agency; 13 12. to make appointments to competitive positions from eligible lists 14 pursuant to subdivision one of section sixty-one of the state civil 15 service law, which authority shall not be abridged or modified by local 16 law or in any other manner; 17 13. to establish and administer performance evaluation programs to be 18 used during the probationary period and for promotions, assignments, 19 incentives and training; 20 14. to conduct training and development programs to improve the 21 skills, performance and career opportunities of employees; 22 15. to ensure and promote equal opportunity for all persons in 23 appointment, payment of wages, development and advancement; 24 16. to administer employee safety programs; 25 17. to maintain personnel records; 26 18. to perform such other personnel management functions as are deleg- 27 ated by the personnel director pursuant to this chapter or that are not 28 otherwise assigned by this chapter; 29 19. to establish measures and programs to ensure a fair and effective 30 affirmative employment plan to provide equal employment opportunity for 31 minority group members and women who are employed by, or who seek 32 employment with, the agency and, in accordance with the uniform proce- 33 dures and standards established by the department of personnel for this 34 purpose, to adopt and implement an annual plan to accomplish this objec- 35 tive. Copies of such plans shall be filed with the mayor, council, 36 department of personnel, equal employment practices commission, and city 37 civil service commission and shall be made available for reasonable 38 public inspection; and 39 20. to provide assistance to minority group members and women inter- 40 ested in being employed by city agencies to ensure that such minority 41 group members and women benefit, to the maximum extent possible, from 42 city employment and educational assistance programs. 43 (b) Within one year from the effective date of this charter, the head 44 of each agency shall prepare and submit to the mayor and the personnel 45 director a plan and schedule for the discharge of the powers and duties 46 assigned in this section. No such plan shall take effect until approved 47 by the mayor. 48 (c) The mayor may modify, suspend, or withdraw for cause any power or 49 duty assigned or delegated to the head of an agency pursuant to this 50 section. 51 (d) Notification prior to each action or decision of an agency pursu- 52 ant to this chapter which changes the status of an individual employee, 53 a position, or a class of positions shall be provided to the personnel 54 director. The head of each agency shall certify on each payroll that all 55 personnel actions and transactions of the agency conform with the

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1 provisions of the state civil service law and this chapter, the rules of 2 the personnel director and other applicable law. 3 (e) Before any new position in the city service shall be created, the 4 agency head shall furnish the commissioner of finance with a certificate 5 stating the title of the class of positions to which the position is to 6 be allocated. If the position is to be allocated to a new class of posi- 7 tions, the agency head shall request of the personnel director, and the 8 personnel director shall furnish to the agency head and the commissioner 9 of finance, a certificate stating the appropriate civil service title 10 for the proposed position, the range of salary of comparable civil 11 service positions and a statement of the class specifications and line 12 of promotion into which such new position will be placed and any such 13 new position shall be created only with the title approved by the 14 personnel director. 15 (f) The heads of all agencies shall, except as otherwise provided by 16 law, have power to appoint and remove, subject to the provisions of the 17 state civil service law, all chiefs of bureaus and all other officers, 18 employees and subordinates in their respective administrations, depart- 19 ments or offices, without reference to the tenure of office of any 20 appointee and to assign them their duties. Nothing herein shall be 21 construed to preclude the mayor from entering into a collective bargain- 22 ing agreement which provides for a procedure governing the discipline of 23 employees, including their removal. 24 (g) The heads of city agencies or their designated representatives 25 shall fulfill the requirements for agency participation in matters 26 affecting the management of the agency in advance of collective bargain- 27 ing negotiations affecting employees. 28 (h) The head of each city agency shall ensure that such agency does 29 not discriminate against employees or applicants for employment pursuant 30 to federal, state and local law. 31 (i) The head of each city agency shall quarterly publish and submit to 32 the mayor, council, department of personnel, and the equal employment 33 practices commission a report on the agency's efforts during the previ- 34 ous quarter to implement the plan adopted pursuant to this section. 35 (j) The head of each city agency shall include in all employment 36 retention, recruitment, training and promotional program literature, 37 advertisements, solicitations and job applications, such language as may 38 be necessary to effectuate the purpose of this chapter. 39 (k) The head of each city agency shall require each employment agency, 40 or authorized representative of workers with which it has a collective 41 bargaining or other agreement or understanding and which is involved in 42 the performance of recruitment and retention with the agency to furnish 43 a written statement that such employment agency, labor union or repre- 44 sentative shall not discriminate against employees or applicants for 45 employment pursuant to federal, state or local law and that such union 46 or representative will cooperate in the implementation of the agency's 47 obligations pursuant to this chapter. 48 § 12-06. Management service. 49 (a) The personnel director, in consultation with the heads of agen- 50 cies, shall develop and submit to the mayor a city-wide plan and sched- 51 ule for the development of qualified and competent technical, profes- 52 sional, management, administrative, and, supervisory personnel in the 53 civil service to meet the managerial needs of city government. The 54 mayor shall approve, disapprove or modify the plan within one year after 55 the effective date of this charter.

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1 (b) The city-wide plan shall establish a management service for city 2 agencies and shall provide for: 3 1. membership in the service of employees with significant policy, 4 administrative, supervisory, managerial or professional duties that 5 require the exercise of independent judgment in the scheduling and 6 assignment of work, program management or planning, evaluation of 7 performance or allocation of resources; 8 2. preference for appointment into management service shall be given 9 to qualified civil service employees pursuant to promotional examina- 10 tions administered in a manner consistent with the requirements of the 11 state civil service law; 12 3. assessments of capacity and potential to perform managerial duties 13 as part of competitive tests for entry into the service and assignments 14 within the service; 15 4. a single managerial class of positions for each occupational series 16 within the service with assignment levels within each such class; 17 5. a plan for achieving equitable pay scales for members of the 18 service consonant with their duties and responsibilities; 19 6. merit increases, incentive awards, and recognition programs for 20 members of the services; 21 7. performance evaluations for members of the service to be used for 22 assignments, incentive awards, probationary period review, and discipli- 23 nary action; 24 8. a probationary period not to exceed one year for members of the 25 service; 26 9. management intern programs; and 27 10. training and career development programs. 28 (c) The personnel director shall conduct city-wide programs and func- 29 tions related to the management service; assist agencies in the imple- 30 mentation of the management service plan; and review and evaluate agency 31 performance under the plan. 32 § 12-07. Appointments and promotions. 33 (a) All appointments, promotions and changes in status of persons in 34 the public service of the city shall be made in the manner prescribed by 35 the constitution of the state and in accordance with the provisions of 36 the state civil service law and other provisions of law not inconsistent 37 therewith nor with this charter. 38 (b) Whenever qualifications for the appointment of persons to public 39 office are prescribed by law, the appointing officer shall, upon making 40 such appointment, file with the civil service commission a certificate 41 that such appointment complies with such law. 42 § 12-08. Power of investigation. 43 The personnel director and the city civil service commission shall 44 have the power to make investigations concerning all matters touching 45 the enforcement and effect of the provisions of the state civil service 46 law insofar as it applies to the city and the rules and regulations 47 prescribed thereunder, or concerning the actions of any examiner or 48 subordinate of the department, or of any officer or employee of the city 49 or of any county within the city, in respect to the execution of the 50 state civil service law; and in the course of such investigations the 51 personnel director of the city civil service commission shall have the 52 power to administer oaths, to compel the attendance of witnesses, and to 53 examine such persons as deemed necessary. 54 § 12-09. No compensation to unauthorized employees. 55 No officer of the city whose duty is to sign or countersign warrants 56 shall draw, sign or issue, or authorize the drawing, signing or issuing

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1 of any warrant on the commissioner of finance or other disbursing offi- 2 cer of the city for payment of salary to any person in its service whose 3 appointment or retention has not been in accordance with the state civil 4 service law and the valid rules in force thereunder. 5 § 12-10. Examination for licenses. 6 The personnel director shall, unless otherwise provided by law, have 7 power, upon request of any person charged with the duty of issuing 8 licenses or permits, to conduct, under rules and regulations to be 9 established by the personnel director, examinations and tests to deter- 10 mine the qualifications of persons applying for such licenses or 11 permits. The personnel director shall certify to the person having power 12 to issue the license or permit the result of any such examination or 13 test. 14 § 12-11. Officers or employees designated to serve in exempt civil 15 service positions. 16 (a) Notwithstanding any provision in this charter to the contrary, the 17 mayor or head of an agency may designate any officer or employee occupy- 18 ing a position in the competitive class of the civil service to serve in 19 a position in the exempt class, and in such case, the officer or employ- 20 ee so designated shall thereupon enter upon and exercise all the powers 21 and duties and receive the salary of such exempt position, and shall 22 retain all the rights, privileges and status of such officer or employ- 23 ee's position in the competitive class. 24 (b) The appointment of any person chosen to fill the position thus 25 left vacant shall be temporary and shall terminate upon the return of 26 such officer or employee to such position as provided in subdivision (e) 27 of this section. 28 (c) Such designation shall be in writing and shall be filed and remain 29 of record in the office of such agency, in the office of the personnel 30 director and in the office of the mayor and shall remain in force until 31 revoked by the mayor or head of such agency, as the case may be. 32 (d) Service in such position in the exempt class shall be credited as 33 service in the competitive class and the status of such officer or 34 employee in respect to pensions or otherwise shall not be adversely 35 affected by such designation. 36 (e) Upon the termination of the officer or employee's services in such 37 exempt position, except by dismissal for cause in the manner provided in 38 section seventy-five of the state civil service law, such officer or 39 employee shall immediately and without further application return to the 40 position in the competitive class with the status, rights, privileges 41 and salary enjoyed immediately prior to the designation to the position 42 in the exempt class as if service in the competitive position had been 43 continuous. 44 § 12-12. Residency exemption. 45 Any employee who was previously employed by the city of New York, and 46 who is appointed, reassigned or transferred to city employment, without 47 a break in service shall be exempt from any residency requirement in 48 connection with his or her employment or subsequent promotion, demotion, 49 reassignment, transfer or other personnel change. For the purpose of 50 this section, a break in service shall be defined as a period of more 51 than one year. 52 Chapter 13 53 Equal Employment Practices Commission 54 § 13-01. Equal employment practices commission. 55 (a) There shall be an equal employment practices commission which 56 shall review, evaluate and monitor the employment procedures, practices

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1 and programs of any city agency and the department of personnel to main- 2 tain an effective affirmative employment program of equal employment 3 opportunity for minority group members and women who are employed by or 4 who seek employment with city agencies. 5 (b) The commission shall consist of three members who shall be compen- 6 sated on a per diem basis. The mayor, the council, and the comptroller 7 shall each appoint one member. The mayor shall appoint a member to serve 8 as the chair. 9 (c) Members shall be appointed for four-year terms. 10 (d) The commission may, within the appropriations available therefor, 11 appoint an executive director and such deputies, assistants, and other 12 employees as may be needed for the performance of the duties prescribed 13 herein. 14 (e) The commission may meet as necessary to implement the provisions 15 of this chapter provided that the commission shall meet at least once 16 every eight weeks. 17 § 13-02. Duties and powers of the equal employment practices commis- 18 sion. 19 (a) The commission: 20 1. shall monitor the employment policies, programs and practices of 21 each city agency; and 22 2. monitor the coordination and implementation of any city affirmative 23 employment program of equal employment opportunity for minority group 24 members and women who are employed by or who seek employment with city 25 agencies, including the activities of the department of personnel, and 26 the civil service commission, pursuant to chapter twelve of this char- 27 ter, and any other agency designated by the mayor to assist in the 28 implementation or coordination of such efforts, and all city agencies 29 required by section 12-05 of this charter to establish agency program. 30 (b) The commission may request and shall receive from any city agency 31 such information, other than information which is required by law to be 32 kept confidential or which is privileged as attorney client communi- 33 cations, attorney work products or material prepared for litigation, and 34 such assistance as may be necessary to carry out the provisions of this 35 chapter. 36 (c) The commission shall communicate to any appropriate authority any 37 information regarding suspected or alleged violations of this chapter. 38 (d) The commission shall have the following powers and duties: 39 1. to review the uniform standards, procedures, and programs of the 40 department of personnel pursuant to section 12-04 of this charter, and 41 to review the plans adopted by city agencies in accordance with the 42 provisions of section 12-05 of this charter, and to provide any such 43 agency or the department of personnel with such comments and suggestions 44 as the commission deems necessary and appropriate; 45 2. to recommend to the department of personnel, all city agencies, or 46 any one or more particular agencies, procedures, approaches, measures, 47 standards and programs to be utilized by such agencies in their efforts 48 to ensure a fair and effective affirmative employment program of equal 49 employment opportunity for minority group members and women who are 50 employed by or seek employment with city agencies; 51 3. to recommend to any city agency actions which such agency should 52 consider including in its next annual plan as required by section 12-05 53 of this charter; 54 4. to advise and, if requested, assist city agencies in their efforts 55 to increase employment of minority group members and women who are 56 employed by or who seek employment with city agencies;

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1 5. to audit and evaluate the employment practices and procedures of 2 each city agency and their efforts to ensure fair and effective equal 3 employment opportunity for minority group members and women at least 4 once every four years and whenever requested by the civil service 5 commission or the human rights commission or whenever otherwise deemed 6 necessary by this commission; 7 6. to make such policy, legislative and budgetary recommendations to 8 the mayor, council, the department of personnel or any city agency as 9 the commission deems necessary to ensure equal employment opportunity 10 for minority group members and women; 11 7. to publish by the fifteenth of February of each year a report to 12 the mayor and the council on the activities of the commission and the 13 effectiveness of each city agency's affirmative employment efforts and 14 the efforts by the department of personnel to ensure equal employment 15 opportunity for minority group members and women who are employed by or 16 seek to be employed by city agencies; 17 8. to establish appropriate advisory committees; 18 9. to serve with such other agencies or officials as shall be desig- 19 nated by the mayor as the city liaison to federal, state and local agen- 20 cies responsible for compliance with equal employment opportunity for 21 minority group members and women who are employed by or who seek to be 22 employed by city agencies; and 23 10. to take such other actions as are appropriate to effectuate the 24 provisions and purposes of this chapter. 25 § 13-03. Compliance procedures. 26 (a) The commission shall conduct such study or investigations and hold 27 such hearings as may be necessary to determine whether agencies are in 28 compliance with the equal employment opportunity requirements of this 29 chapter and chapter twelve of this charter. 30 (b) For the purpose of ascertaining facts in connection with any study 31 or investigation authorized by this chapter, the commission shall have 32 power to compel the attendance of witnesses, to administer oaths and to 33 examine such persons as they may deem necessary. The commission or any 34 agent or employee thereof duly designated in writing by them for such 35 purposes may administer oaths or affirmations, examine witnesses in 36 public or private hearing, receive evidence and preside at or conduct 37 any such study or investigation. 38 (c) If the commission makes a preliminary determination pursuant to 39 section 13-02 of this chapter, that any plan, program, procedure, 40 approach, measures or standard adopted or utilized by any city agency or 41 the department of personnel does not provide equal employment opportu- 42 nity; and/or if the commission makes a preliminary determination pursu- 43 ant to this chapter and chapter twelve of this charter, that an agency 44 has not provided equal employment opportunity the commission shall noti- 45 fy the agency in writing of this determination and provide an opportu- 46 nity for the agency to respond. If the commission, after consideration 47 of any such response and after consulting with the agency, concludes 48 that the corrective actions, if any, taken or planned by the agency are 49 not sufficient to correct the non-compliance identified in the prelimi- 50 nary determination, it should make a final determination in writing, 51 including such recommended corrective action as the commission may deem 52 appropriate. The agency shall within thirty days thereafter respond to 53 the commission on any corrective action it intends to make and shall 54 make monthly reports to such commission on the progress of such correc- 55 tive action. If the commission, after a period not to exceed six months, 56 determines that the agency has not taken appropriate and effective

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1 corrective action, the commission shall notify the agency in writing of 2 this determination and the commission may thereafter publish a report 3 and recommend to the mayor whatever appropriate corrective action the 4 commission deems necessary to ensure compliance with equal employment 5 opportunity pursuant to the requirements of this chapter and chapter 6 twelve of this charter. Within thirty days of such determination the 7 agency shall submit a written response to the commission and the mayor. 8 The mayor after reviewing the commission's findings and the agency's 9 response, if any, shall order and publish such action as he or she deems 10 appropriate. 11 Chapter 14 12 Collective Bargaining 13 § 14-01. Office of collective bargaining; director. 14 There shall be an office of collective bargaining, the head of which 15 shall be the director of such office, who shall be the person holding 16 the office of chairman of the board of collective bargaining. The 17 director may appoint, and at pleasure remove, two deputies. 18 § 14-02. Board of collective bargaining. 19 There shall be in the office of collective bargaining a board of 20 collective bargaining, which shall consist of five members. Two members 21 of the board shall be city members, two members of the board shall be 22 labor members, and one impartial member who shall be the chair. The 23 mayor shall have the power to appoint the city members of the board to 24 serve at the mayor's pleasure, and the labor members of the board from 25 designations by the municipal labor committee. Each labor and city 26 member shall have an alternate, who shall be appointed and removed in 27 the same manner as the member for whom he or she is the alternate. The 28 chair shall be elected by the unanimous vote of the city and labor 29 members, and shall serve for three year terms. 30 Notwithstanding any other provision of law, a labor member may not be 31 removed from the board except upon request of the municipal labor 32 committee, or except for cause, as hereinafter provided. Any member may 33 be removed for cause by a majority of the entire board, including at 34 least one city member and one labor member, after having been given a 35 copy of the charges against him and an opportunity to be heard in person 36 or by counsel in his or her defense upon not less than ten days notice. 37 Vacancies in the office of a city member or a labor member shall be 38 filled in the same manner as herein provided for appointment. Vacancies 39 in the office of an impartial member occurring otherwise than by expira- 40 tion of term shall be filled by unanimous vote of the city and labor 41 members for the unexpired balance of the term. 42 § 14-03. Bureau of certification. 43 There shall be in the office of collective bargaining a bureau of 44 certification, which shall be administered by the impartial member of 45 the board of collective bargaining. 46 § 14-04. Powers and duties. 47 The office of collective bargaining, the board of collective bargain- 48 ing and the bureau of certification shall have such powers and duties 49 with respect to labor relations and collective bargaining as shall be 50 prescribed by law and which shall be substantially equivalent to chapter 51 3 of title 12 of the New York city administrative code as it existed on 52 the date this charter was submitted pursuant to subdivision c of section 53 4 of chapter 773 of the laws of 1989 and shall also provide for a Staten 54 Island municipal labor committee. 55 § 14-05. Compensation.

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1 (a) Board of collective bargaining; bureau of certification director. 2 The city members and the labor members of the board of collective 3 bargaining and their alternates shall serve without compensation. The 4 director shall be salaried for his or her services as director, chair of 5 the board of collective bargaining, and administrator of the bureau 6 certification. The director and all members of both such boards and 7 their alternates shall be entitled to receive a per diem fee and 8 reimbursement for their actual and necessary expenses incurred in the 9 performance of their duties. Fifty percent of the salary, fees, and 10 expenses provided for in this subdivision shall be paid by the members 11 of the municipal labor committee, under rules and regulations issued by 12 the board of collective bargaining, which rules may provide how such 13 costs shall be distributed among such members. 14 (b) Members of mediation and impasse panels; arbitrators. Members of 15 mediation and impasse panels, and arbitrators, shall be paid a per diem 16 fee to be determined by the board of collective bargaining, unless the 17 parties to the particular dispute shall have agreed to a different fee, 18 and shall be reimbursed for their actual and necessary expenses incurred 19 in the performance of their duties. The public employer and public 20 employee organization which are parties to the particular negotiation or 21 grievance shall each pay fifty percent of such fees and expenses and 22 related expenses incidental to the handling of deadlocked negotiations 23 and unresolved grievances. 24 (c) Appointment of counsel and attorneys. The director may appoint a 25 counsel and attorneys, who, at the direction of the bureau of certif- 26 ication or the board of collective bargaining may appear for and repre- 27 sent the office of collective bargaining or either of the aforesaid 28 boards in any legal proceeding. 29 § 14-06. Publication of collective bargaining agreements. 30 Not later than sixty calendar days after the execution of a collective 31 bargaining agreement, a copy shall be published in a newspaper of gener- 32 al circulation in the city together with a statement by the mayor: 33 (a) of the total costs and current and future budgetary and economic 34 consequences of the agreement, and 35 (b) of the implications and likely impact of the agreement on the 36 efficient management of city agencies and the productivity of city 37 employees. 38 § 14-07. Budgeting for agreements. 39 (a) So far as practicable, each collective bargaining agreement cover- 40 ing city employees shall be executed prior to the commencement of the 41 fiscal year during which its provisions shall first be in effect. 42 (b) No part of any retroactive wage or salary settlement shall be 43 charged to the capital budget. 44 Chapter 15 45 Transitory Provisions 46 § 15-01. Rights of officers and employees of the city of New York 47 preserved. 48 (a) Nothing in this charter contained shall affect or impair the 49 rights or privileges of officers or employees of the city of New York 50 who are transferred, reassigned, appointed or otherwise employed by the 51 city in relation to the personnel, appointment, salaries, ranks, grades, 52 tenure of office, promotion, removal, pension and retirement rights, 53 civil rights or any other rights or privileges of officers or employees 54 of the city generally or officers or employees of any agency. 55 (b) There shall be no layoffs of officers or employees of the city of 56 New York classified municipal civil service as a result of transfer of

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1 functions or work currently being performed by employees or officers of 2 the city of New York to the city of Staten Island. The city shall guar- 3 antee the continued employment of all officers and employees of the city 4 of New York who are performing duties and functions related to any 5 municipal governmental operation affecting the city of Staten Island at 6 the time this charter takes effect. 7 § 15-02. Transfer of officers and employees in case of transfer of 8 functions. 9 Wherever by any provision of this charter functions, powers or duties 10 are assigned to any agency which have been heretofore exercised by the 11 city of New York, its agencies, boards, corporations or other related 12 entities, all officers and employees in the classified municipal civil 13 service who at the time when such charter provisions shall take effect 14 are engaged in the performance of such functions, powers or duties shall 15 be transferred to the agency to which such functions, powers or duties 16 are assigned by this charter, without examination and without affecting 17 existing compensation or pension or retirement rights, privileges or 18 obligations of such officers and employees. Furthermore, any employee to 19 be transferred to the city pursuant to this charter shall be given the 20 option to remain in the employ of the city of New York without diminu- 21 tion of rights, privileges, salary and benefits. Any employee not 22 included in such transfer shall be able to protest the decision pursuant 23 to the procedures set forth in section seventy of the civil service law. 24 § 15-03. Continuity of employee representation. 25 Employees transferred from the city of New York to the city except for 26 those designated managerial or confidential shall be included in employ- 27 er - employee negotiating units comparable to existing units in the city 28 of New York. With respect to employees to be placed in such negotiating 29 units, the public employee organization recognized or certified to 30 represent the employees in comparable city of New York negotiating units 31 shall be recognized as the city unit representative. 32 § 15-04. Continuity of collectively bargained benefits. 33 All rights, privileges and benefits provided by collectively bargained 34 agreements to city of New York employees shall be continued for such 35 employees transferred, reappointed or otherwise employed by the city 36 until such time as successor collective bargaining agreements are nego- 37 tiated. 38 § 15-05. Future alterations of the negotiating units. 39 Future alterations of the city negotiating units shall be made pursu- 40 ant to article fourteen of the state civil service law and office of 41 collective bargaining implementing legislation. 42 § 15-06. Establishment of new titles. 43 (a) The city shall consult and bargain on all terms and conditions of 44 employment with the appropriate public employee organization with 45 respect to the establishment of any new titles which are similar to or 46 reasonably related to titles already represented by such public employee 47 organizations in the city or in the city of New York. 48 (b) Any such titles for which terms and conditions are bargained 49 pursuant to subdivision (a) of this section shall be deemed to be 50 successor titles within the meaning of applicable law. So long as the 51 responsibilities of employees in these titles are reasonably related to 52 the responsibilities of employees currently represented by public 53 employee organizations, such titles shall be accredited or placed in a 54 negotiating unit represented by such public employee organizations. 55 § 15-07. Dispute resolution.

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1 If a dispute arises, the office of collective bargaining shall deter- 2 mine which public employee organization is appropriate to represent 3 transferees, other hires, or employees in a new title on the basis of 4 the title's community of interest with titles in the city and the city 5 of New York. 6 § 15-08. Existing rights and remedies preserved. 7 No existing right or remedy of any character shall be lost or impaired 8 or affected by reason of the adoption of this charter. 9 Chapter 16 10 Labor Relations 11 § 16-01. Department; commissioner. 12 (a) There is established a department of labor relations, the head of 13 which shall be the commissioner of labor relations. 14 (b) The commissioner of labor relations is hereby authorized to repre- 15 sent the mayor in the conduct of all relations between the city and 16 labor unions, associations, or other organizations representing employ- 17 ees of the city. The commissioner of labor relations shall be responsi- 18 ble for the conduct of all relations and she or he shall establish broad 19 city wide policy governing them. 20 (c) The appropriate city staff agencies shall render advice to the 21 commissioner of labor relations on questions of law, finance, personnel 22 policy, operations and management. 23 § 16-02. Powers and duties. 24 (a) The commissioner of labor relations is authorized to negotiate 25 labor agreements with the unions certified as representing the various 26 groups of city employees, and to prepare and sign labor agreements on 27 behalf of the mayor. 28 (b) The heads of all city departments and agencies and the staff of 29 the office of the mayor shall cooperate fully with the commissioner of 30 labor relations in carrying out his or her responsibilities. This coop- 31 eration shall include, but not be limited to the following: 32 1. notice and transmittal to the commissioner of labor relations of 33 all inquiries and requests from labor unions, associations or other 34 organizations representing employees of the city soliciting interpreta- 35 tion of any agreement; 36 2. actions by city departments or agencies based upon interpretations 37 of collective bargaining agreement shall not be taken without prior 38 consultation with the commissioner of labor relations; 39 3. agreements, contracts or understandings, verbal or written, shall 40 be consummated between the head of any city department or agency or one 41 of his or her subordinates, and a union or organization representing 42 employees of that agency, only after prior consultation and review by 43 the commissioner of labor relations; 44 4. grievance and dispute settlement procedures such as arbitration, 45 mediation, fact-finding and labor-management conference discussions 46 relating to city employee labor disputes or grievances, either advisory 47 or binding, shall be entered into by city departments or agencies only 48 after prior consultation and review of the commissioner of labor 49 relations. Such settlement procedures shall be processed through and 50 handled by the department of labor relations; 51 5. city departments and agencies shall not unilaterally change, in a 52 substantial way, the working conditions of their employees without prior 53 consultation with the commissioner of labor relations; 54 6. city departments and agencies shall not take disciplinary action 55 against any employee or group of employees involved in a labor relations

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1 dispute without prior consultation with the commissioner of labor 2 relations; 3 7. city departments and agencies shall provide the commissioner of 4 labor relations with all necessary information needed in the conduct of 5 labor negotiations affecting employees in their departments and shall 6 participate with the commissioner of labor relations in the negotiations 7 as, in the opinion of the commissioner of labor relations, may be neces- 8 sary from time to time; 9 8. heads of city departments and agencies and the staff of the office 10 of the mayor shall give notice to the commissioner of labor relations of 11 all meetings held with labor unions, associations, or other organiza- 12 tions representing city employees; 13 9. heads of city departments and agencies and the staff of the mayor 14 shall consult with the commissioner of labor relations prior to the 15 issuance of any public or press statement relating to labor relations 16 with city employees; 17 10. the labor relations officer of each city department and agency 18 shall act as liaison with the department of labor relations and shall 19 keep that department informed of employee relations problems in his or 20 her department or agency. In particular, he or she shall immediately 21 notify the department of labor relations of any threatened or actual 22 strike, work stoppage, job action, mass resignation or picketing by 23 employees of his or her department or agency. 24 § 3-001. Legislative findings and declaration of purposes. 25 The legislature hereby finds and declares that it is essential that a 26 municipal corporation of the city of Staten Island be authorized to 27 represent the interests of the city of Staten Island during the transi- 28 tion period prior to the date of establishment of the city, provide 29 preparation for the operations of the city and provide financing for 30 such transition period and initial funding for the city. 31 § 3-002. Elections. 32 1. The board of elections of the city of New York shall provide for 33 the election of a mayor, a city comptroller and a common council, as 34 provided for in chapter 773 of the laws of 1989, as amended, for a poli- 35 tical subdivision of the state to be known as the city of Staten Island, 36 at the general election to be held in November next succeeding the date 37 on which this section shall have become a law in the county of Richmond. 38 Such expenses for such election will be reimbursed by the state from 39 those moneys to be allocated as general state aid to a city of Staten 40 Island. Chapter 7 of title 3 of the administrative code of the city of 41 New York, known as the "New York City Campaign Finance Act", shall not 42 apply to such elections. 43 2. The Mayor elect and common council elect of the city of Staten 44 Island, upon the constitutional oath of office, are hereby authorized to 45 represent the interests of the city of Staten Island, and as govern- 46 mental officers of the city of Staten Island are authorized to enter 47 into negotiations as provided under this act and enter into such 48 purchase or employment contracts as would be authorized for such city 49 subsequent to the date of establishment. Any such contracts or agree- 50 ments from such negotiations shall be binding upon the city of Staten 51 Island. 52 3. The mayor elect, the comptroller elect and the common council elect 53 shall take the oath of office on the first of January next succeeding 54 the date on which this act shall have become a law, at which time the 55 city shall be incorporated. The mayor, city comptroller and common coun- 56 cil shall establish accounts according to the provisions of the charter

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1 of the city of Staten Island and appoint such other city officers as may 2 be necessary in accordance with the provisions of the city charter. 3 § 3-003. Staten Island city government-transition. 4 1. Short title. This section may be cited as the "Staten Island City 5 Government-Transition Act". 6 2. Definitions. For the purposes of this section: 7 (a) "City" means the city of Staten Island. 8 (b) "Director of management and budget" means the director of manage- 9 ment and budget of the city of Staten Island. 10 (c) "Corporation" means the municipal corporation as created by this 11 section. 12 (d) "Mayor" means the mayor of the city of Staten Island. 13 (e) "Comptroller" means the comptroller of the city of Staten Island. 14 (f) "State" means the state of New York. 15 (g) "Bonds" and "notes" means revenue bonds and notes respectively, 16 issued by the corporation pursuant to this section. 17 (h) "Revenues" means all aid, rents, fees, charges, payments and other 18 income and receipts paid or payable to the municipal corporation for the 19 account of the city of Staten Island, including any payment required to 20 be made to the corporation by this section. 21 (i) "Operating expenses" means all expenses incurred by the government 22 in the administration of the municipal corporation including but not 23 limited to salaries, administrative expenses, insurance premiums, audit- 24 ing and legal expenses and fees and expenses incurred for professional 25 consultants and fiduciaries. 26 (j) "Capital reserve fund requirement" means as of any particular date 27 of computation, an amount of money equal to the amount required, for the 28 then current fiscal year of the municipal corporation, to pay interest 29 during such fiscal year on all bonds of the corporation outstanding on 30 said date of computation, the principal amount of all bonds of the 31 corporation outstanding on said date of computation which matures during 32 such fiscal year and the amount of sinking fund payments payable during 33 such fiscal year with respect to any bonds of the corporation outstand- 34 ing on said date of computation. 35 (k) "Sinking fund payment" means the amount of money specified in the 36 resolution authorizing bonds as payable into a sinking fund during a 37 particular fiscal year for the retirement of term bonds which mature 38 after such fiscal year, but shall not include any amount payable by 39 reason only of the maturity of the bond. 40 3. General powers as a municipal corporation. The city shall have the 41 following powers in addition to those specially conferred elsewhere in 42 this act: (a) to sue and be sued; (b) to have a seal and alter the same 43 at pleasure; (c) to make and alter by-laws for its organization and 44 internal management and, subject to agreements with noteholders or bond- 45 holders, to make rules and regulations governing the use of its property 46 and facilities; (d) to make and execute contracts, leases, subleases and 47 all other instruments or agreements necessary or convenient for the 48 exercise of its powers and functions under this section; (e) to purchase 49 real or personal property necessary and convenient for its municipal 50 purposes; to execute and deliver deeds for real property held in its own 51 name; and to sell or otherwise to dispose of such real or personal prop- 52 erty that, in the judgment of the city, is no longer necessary for its 53 municipal purposes; (f) to appoint officers, agents and employees, 54 prescribe their duties and qualifications and fix their compensation; 55 (g) to commence any action to protect or enforce any right conferred 56 upon it by any law, contract or other agreement; (h) to borrow money and

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1 to issue negotiable notes or bonds or other obligations and to fund or 2 refund the same, and to provide for the rights of the holders of its 3 obligations; (i) subject to the provisions of any contract with note- 4 holders or bondholders, to invest any funds held in reserves or sinking 5 funds, or any funds not required for immediate use or disbursement, at 6 the discretion of the city, in obligations of the state or federal 7 government, obligations the principal of and interest on which are guar- 8 anteed by the state or federal government, or obligations of agencies of 9 the federal government which may, from time to time, be legally 10 purchased by savings banks of the state as investments of funds belong- 11 ing to them or in their control and which have been approved by the 12 state comptroller or in secured time deposits or other interest bearing 13 accounts secured by such obligations; (j) subject to the provisions of 14 any contract with noteholders or bondholders, to purchase notes or bonds 15 of the city; (k) to procure insurance against any loss in such amounts 16 and from such insurers as it deems desirable; (l) to engage the services 17 of consultants on a contract basis for rendering professional and tech- 18 nical assistance and advice; (m) to contract for and to accept any gifts 19 or grants or loans of funds or property or financial or other aid in any 20 form from the federal government or any agency or instrumentality there- 21 of, or from any other source and to comply with the terms and conditions 22 thereof; (n) as security for the payment of the principal of and inter- 23 est on any bonds so issued and any agreements made in connection there- 24 with, to pledge all or any part of its revenues; (o) to enact such local 25 laws to take effect on the date of establishment as shall be necessary 26 to provide for effective transition of government; and (p) to do any and 27 all things necessary or convenient to carry out its purposes and exer- 28 cise the powers expressly given and granted in this act. 29 4. Notes and bonds of the city. The city shall have power and is here- 30 by authorized from time to time to issue its negotiable notes and bonds 31 in conformity with applicable provisions of the uniform commercial code, 32 the local finance law and the state finance law. 33 § 3-004. Employees of the city of Staten Island. 34 1. Notwithstanding any inconsistent provisions of this act, the 35 appointment and promotion of all employees of and for the city shall be 36 made in accordance with the provisions of the state civil service law 37 and shall be subject to the jurisdiction of the state civil service 38 commission and the compensation for such employees shall be fixed by the 39 city. 40 2. Any municipality and the city shall have the power to agree to 41 provide for the transfer to the city of agents, employees and facilities 42 of such municipality to enable the city to fulfill its municipal 43 purposes. Employees of such municipality to be transferred to the city 44 pursuant to this act shall be automatically appointed and transferred to 45 the city in the same or equivalent classification and position they hold 46 at the time of the transfer. The city, its officers and employees, 47 shall be subject to article fourteen of the state civil service law and 48 for all purposes the city shall remain and be deemed "public employer". 49 Employees who are members or beneficiaries of any existing pension or 50 retirement system shall continue to have such rights, privileges, obli- 51 gations or status with respect to such system as are prescribed by law 52 on the date this act takes effect, and all such employees who have been 53 appointed to positions in municipal service in accordance with the 54 provisions of the state civil service law under the rules of the city 55 civil service commission shall have the same status with respect thereto 56 in the service of the city as they had in prior municipal service.

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1 3. Transfer rights. Notwithstanding any other provision of law, there 2 shall be no layoffs of officers or employees of the preceding munici- 3 pality, its agencies, authorities, boards, corporations or other related 4 entities as a result of the transfer of functions or work currently 5 performed by these officers and employees to the city of Staten Island. 6 All such employees who have been assigned to work on Staten Island or 7 who have been substantially engaged in the performance of a function to 8 be transferred to the city of Staten Island shall be transferred to 9 positions in employment by the city of Staten Island upon the establish- 10 ment of the city of Staten Island and shall retain all rights, privi- 11 leges, benefits and salaries to which any such employee was previously 12 entitled as an employee of the preceding municipality. Notice that an 13 employee is subject to transfer shall be given to an employee no less 14 than twenty days prior to the effective date of transfer. Any employee 15 so notified may opt to remain in his or her employment by the preceding 16 municipality rather than be transferred by so informing his or her 17 employer ten days prior to the transfer date. Such employee shall be 18 retained in employment by the preceding municipality and retain all 19 rights, privileges, benefits and salaries to which the employee was 20 entitled prior to the establishment of the city of Staten Island. 21 4. Transfer mechanism. The mechanism for the transfer of the employees 22 to the city of Staten Island shall be the subject of negotiations among 23 the preceding municipality, the city of Staten Island and the appropri- 24 ate public employee organizations. The parties shall negotiate an 25 appeals process for employees aggrieved by their exclusion from the 26 transfer. If the parties are unable to reach agreement as to transfer 27 issues, the parties shall submit such issues to mediation and, if neces- 28 sary, impasse panels to be appointed in accordance with the collective 29 bargaining provisions of the administrative code of the preceding muni- 30 cipality. Transferees represented by the public employee organizations 31 shall be entitled to all rights and benefits which they were entitled to 32 prior to transfer including, but not limited to, seniority and accrued 33 annual and sick leave time. 34 5. Vacancies. Any employee of the preceding municipality not subject 35 to the transfer set forth in subdivision three of this section shall be 36 eligible to transfer to a vacant position in a title in the city of 37 Staten Island requiring the same, similar or related duties to duties 38 actually performed in the preceding municipality title by submitting 39 written notice of intent to transfer to the city of Staten Island direc- 40 tor of personnel within six months of the establishment of the city of 41 Staten Island. The preceding municipality shall inform in writing 42 employees who are residents of Staten Island of their right to apply for 43 transfer. Immediately upon receipt of any notice to transfer, the direc- 44 tor of personnel shall establish for each city of Staten Island title 45 two lists of eligible employees who give timely notice in order of the 46 employees' preceding municipality seniority in the title requiring the 47 same, similar or related duties. The first list shall include the names 48 of transfer applicants who are domiciled in the city of Staten Island on 49 the date of the submission of the notice. The second list shall include 50 the names of transfer applicants not domiciled in the city of Staten 51 Island. Appointments to any vacant positions in these titles shall be 52 made from the Staten Island domicile list and, when that list is 53 exhausted, from the second list until such lists are exhausted or until 54 a period of four years from the date of the establishment of the indi- 55 vidual list has expired.

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1 6. Residency exemption. Any employee of the preceding municipality 2 appointed, reassigned or transferred to city of Staten Island employment 3 without a break in service shall be exempt from any residency require- 4 ment in connection with his or her employment or subsequent promotion, 5 demotion, reassignment, transfer or other personnel change. For the 6 purpose of this section, a break in service shall be defined as a period 7 of more than one year. Notwithstanding any other provision of law, any 8 Staten Island resident employed by the preceding municipality or on 9 leave of absence from such employment on the date of the establishment 10 of the city of Staten Island shall be exempt from any residency require- 11 ment in connection with his or her preceding municipality employment or 12 subsequent preceding municipality promotion, demotion, reassignment, 13 transfer or other personnel change. 14 7. Retirement. The city of Staten Island shall participate in the 15 State's retirement systems. 16 (a) On and after the date of the establishment of the city of Staten 17 Island, employees of the preceding municipality who are transferred to 18 employment in the city of Staten Island shall thereupon become members 19 of the appropriate state retirement system to the extent permitted or 20 required by the provisions of the retirement and social security law, 21 the education law or local law, as appropriate, and the employees' 22 reserves in any other retirement system shall be transferred to the 23 appropriate New York state retirement system without request by them or 24 notice to the retirement systems, except that any such employee who is a 25 member of one of the retirement systems of the preceding municipality 26 may elect to continue membership in such system. Any election pursuant 27 to this subdivision shall be made no later than the one hundred twenti- 28 eth day succeeding the date on which the provisions of this section 29 become effective, by filing a written notice thereof with the adminis- 30 trative head of the appropriate New York state, preceding municipality 31 and city of Staten Island retirement systems, as appropriate, and once 32 made and filed, shall be irrevocable. Upon the retirement of an employee 33 who has made such an election, the calculation of final average salary 34 by the retirement system of the preceding municipality shall be 35 performed as if the salary earned as a city of Staten Island employee on 36 and after the effective date of this section was earned in employment of 37 the preceding municipality. In the case of an employee who remains or 38 becomes a member of a New York state employees' retirement system pursu- 39 ant to this subdivision, the retirement system of the preceding munici- 40 pality shall make a transfer of reserves, contributions and credits to 41 such New York state employees' retirement system, in the manner required 42 by section 43 of the retirement and social security law. 43 (b) The comptroller of the preceding municipality shall certify to the 44 comptroller of the city of Staten Island and the state comptroller or 45 other chief officer of a state pension system the amount of money 46 required to be paid by the city of Staten Island for pension costs 47 resulting from elections made pursuant to paragraph (a) of this subdivi- 48 sion and the comptroller of the city of Staten Island shall pay to the 49 retirement system of the preceding municipality upon approval by the 50 state comptroller or other chief officer of a state pension system, the 51 amounts so certified by the comptroller of the preceding municipality. 52 The comptroller of the preceding municipality shall also certify to the 53 comptroller of the city of Staten Island and the state comptroller or 54 other chief officer of a state pension system the amount of money 55 required to be contributed by such employees. The comptroller of the 56 city of Staten Island shall be authorized to provide for the withholding

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1 or withhold the contribution of such employees and the payment of that 2 amount to the retirement system of the preceding municipality. The 3 amount so certified pursuant to this paragraph shall be the same as the 4 amounts required to be contributed for similarly situated city employees 5 by the preceding municipality and by employees of the preceding munici- 6 pality. 7 8. Health insurance coverage. Health insurance coverage for city of 8 Staten Island employees, persons retired from city of Staten Island 9 employment and dependents of such employees and retirees shall be 10 provided in accordance with the personnel and labor, health insurance 11 coverage for municipal employees, persons retired from municipal employ- 12 ment and dependents of such employees and retirees provisions of the 13 administrative code of the preceding municipality unless the duly recog- 14 nized public employee representative negotiates altered terms. 15 9. Quasi-public entities. Rights and benefits of employees currently 16 employed by public authorities, boards, corporations and other quasi- 17 public entities of the preceding municipality shall be preserved upon 18 any transfer of functions resulting from the establishment of the city 19 of Staten Island. 20 § 3-005. Assistance to the city of Staten Island. 21 With the consent of any municipality, the city of Staten Island may 22 use agents, employees and facilities of such municipality, paying to the 23 municipality its agreed proportion of the compensation or costs. 24 § 3-006. Provision of municipal services in the city of Staten Island. 25 During the transition period the mayor and comptroller of the city of 26 Staten Island and the mayor and comptroller of the preceding munici- 27 pality are authorized to enter into agreements as to the provision of 28 municipal services by the preceding municipality to the city of Staten 29 Island to be provided on or after the date of establishment of the city 30 of Staten Island and the terms and conditions thereof. 31 § 3-007. Debt, property, obligations and other allocations. 32 1. (a) Proportion of debt to be assumed by the city of Staten Island. 33 The proportion of the debt of the preceding municipality which shall be 34 assumed by the city of Staten Island, as constituted by this act, shall 35 be determined in the following manner: The mayor and the comptroller of 36 the city of Staten Island, as representing the city of Staten Island and 37 the mayor and the comptroller of the preceding municipality, are hereby 38 authorized and empowered to agree if they can, as to the amount of the 39 debt of the preceding municipality, which should equitably and properly 40 be assumed by the city of Staten Island. If the mayor and the comp- 41 troller of the city of Staten Island and the mayor and the comptroller 42 of the preceding municipality shall be unable to agree within six months 43 after this section takes effect as to the proportion of said debt of the 44 preceding municipality to be assumed by the city of Staten Island, the 45 supreme court of the third judicial district shall have power to deter- 46 mine the proportion of said debt of the preceding municipality to be 47 assumed by the city of Staten Island, and to enforce such award, deci- 48 sion and determination as shall be made in an action to be brought by 49 and in the name of either of said parties not less than six months nor 50 more than one year after this section takes effect. Nothing herein 51 contained shall impair the obligation of any contract; and the property 52 and inhabitants of such part of the preceding municipality as is by this 53 act included within the city of Staten Island, shall continue liable to 54 the existing creditors of the said preceding municipality, in like 55 manner, as if this act had not been passed. But from and after the 56 taking effect of this section, the preceding municipality shall have no

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1 power to issue any bond, obligation or other evidence of indebtedness 2 which shall bind or render liable the property or inhabitants of any 3 part of said municipality included within the city of Staten Island as 4 hereby constituted. The apportionment of the debt of the preceding muni- 5 cipality shall be determined according to the relative assessed valu- 6 ation of the real property included in, or remaining without the city of 7 Staten Island. 8 (b) Proportion of obligations other than debt to be assumed by the 9 city of Staten Island. The proportion of the obligations other than debt 10 of the preceding municipality which shall be assumed by the city of 11 Staten Island, as constituted by this act, shall be determined in the 12 following manner: The mayor and the comptroller of the city of Staten 13 Island, as representing the city of Staten Island and the mayor and the 14 comptroller of the preceding municipality, are hereby authorized and 15 empowered to agree if they can, as to the amount of the obligations 16 other than debt of the preceding municipality, which should equitably 17 and properly be assumed by the city of Staten Island. If the mayor and 18 the comptroller of the city of Staten Island and the mayor and the comp- 19 troller of the preceding municipality shall be unable to agree within 20 six months after this section takes effect as to the proportion of said 21 obligations other than debt of the preceding municipality to be assumed 22 by the city of Staten Island, the supreme court of the third judicial 23 district shall have power to determine the proportion of said obli- 24 gations other than debt of the preceding municipality to be assumed by 25 the city of Staten Island, and to enforce such award, decision and 26 determination as shall be made in an action to be brought by and in the 27 name of either of said parties not less than six months nor more than 28 one year after this section takes effect. Nothing herein contained shall 29 impair the obligation of any contract; and the property and inhabitants 30 of such part of the preceding municipality as is by this act included 31 within the city of Staten Island, shall continue liable to the existing 32 obligees of the said preceding municipality, in like manner, as if this 33 act had not been passed. But from and after the taking effect of this 34 section, the preceding municipality shall have no power to bind or 35 render liable the property or inhabitants of any part of said munici- 36 pality included within the city of Staten Island as hereby constituted. 37 (c) Disposition of real and personal property owned by or held in 38 trust for the preceding municipality. All the real property owned by the 39 preceding municipality and situated in that part of said municipality 40 included within the city of Staten Island, as constituted by this act, 41 is hereby vested in the said city of Staten Island and divested out of 42 the preceding municipality, and all of the real property owned by the 43 preceding municipality and situated elsewhere in said municipality is 44 hereby vested in the preceding municipality and divested out of the said 45 city of Staten Island. All of the property owned by the preceding muni- 46 cipality other than real property, including money, investments, securi- 47 ties on investments and money held in trust for the benefit of said 48 municipality, directly or indirectly, shall be divided between the 49 preceding municipality and the city of Staten Island, as constituted by 50 this act, and the proportion of the same to which each shall, in equity 51 and good conscience, be entitled to receive upon such division, shall be 52 ascertained and determined by agreement by and between the mayor and 53 comptroller of the preceding municipality, upon the one side, and the 54 mayor and the comptroller of the said city of Staten Island, upon the 55 other side, and in the case of their inability to agree upon such divi- 56 sion within six months after this section shall take effect, the supreme

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1 court in the third judicial district is hereby empowered to divide the 2 same between them and to ascertain and award to each its equitable 3 proportion thereof, and to enforce its determination thereon, and either 4 of the said municipalities may institute and prosecute, in its own name, 5 an action in said court for that purpose after the expiration of six 6 months and before the expiration of one year after this section takes 7 effect. 8 (d) Documents. The preceding municipality shall provide the city of 9 Staten Island with all books, papers, documents and files held by such 10 municipality which apply primarily to the area of the city of Staten 11 Island and shall make available for copying by the city of Staten Island 12 any other books, papers, documents and files which such city shall 13 request as pertaining to such city in any other manner. 14 2. (a) Proportion of debt to be assumed by the city school district of 15 the city of Staten Island. The proportion of the debt of the city school 16 district of the preceding municipality which shall be assumed by the 17 city school district of the city of Staten Island, as constituted by 18 this act, shall be determined in the following manner: The board of 19 education of the city school district of the city of Staten Island and 20 the board of education of the city school district of the preceding 21 municipality, are hereby authorized and empowered to agree if they can, 22 as to the amount of the debt of the city school district of the preced- 23 ing municipality, which should equitably and properly be assumed by the 24 city school district of the city of Staten Island. If the board of 25 education of the city school district of the city of Staten Island and 26 the board of education of the city school district of the preceding 27 municipality shall be unable to agree within six months after this 28 section takes effect as to the proportion of said debt of the city 29 school district of the preceding municipality to be assumed by the city 30 school district of the city of Staten Island, the supreme court of the 31 third judicial district shall have power to determine the proportion of 32 said debt of the city school district of the preceding municipality to 33 be assumed by the city school district of the city of Staten Island, and 34 to enforce such award, decision and determination as shall be made in an 35 action to be brought by and in the name of either of said parties not 36 less than six months nor more than one year after this section takes 37 effect. Nothing herein contained shall impair the obligation of any 38 contract; and the property and inhabitants of such part of the city 39 school district of the preceding municipality as is by this act included 40 within the city school district of the city of Staten Island, shall 41 continue liable to the existing creditors of the city school district of 42 the said preceding municipality, in like manner, as if this act had not 43 been passed. But from and after the taking effect of this section, the 44 city school district of said preceding municipality shall have no power 45 to issue any bond, obligation or other evidence of indebtedness which 46 shall bind or render liable the property or inhabitants of any part of 47 the city school district of said municipality included within the city 48 school district of the city of Staten Island as hereby constituted. The 49 apportionment of the debt of the city school district of the preceding 50 municipality shall be determined according to the relative assessed 51 valuation of the real property included in, or remaining without the 52 city school district of the city of Staten Island. 53 (b) Disposition of real and personal property owned by or held in 54 trust for the city school district of the preceding municipality. All 55 the real property owned by the city school district of the preceding 56 municipality and situated in that part of the city school district of

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1 said municipality included within the city school district of the city 2 of Staten Island, as constituted by this act, is hereby vested in the 3 city school district of the city of Staten Island and divested out of 4 the city school district of the preceding municipality, and all of the 5 real property owned by the city school district of the preceding munici- 6 pality and situated elsewhere in the city school district of the preced- 7 ing municipality is hereby vested in the city school district of the 8 preceding municipality and divested out of the city school district of 9 the city of Staten Island. All of the property owned by the city school 10 district of the preceding municipality other than real property, includ- 11 ing money, investments, securities on investments and money held in 12 trust for the benefit of the city school district of the preceding muni- 13 cipality, directly or indirectly, shall be divided between the city 14 school district of the preceding municipality and the city school 15 district of the city of Staten Island, as constituted by this act, and 16 the proportion of the same to which each shall, in equity and good 17 conscience, be entitled to receive upon such division, shall be ascer- 18 tained and determined by agreement by and between the board of education 19 of the city school district of the preceding municipality, upon the one 20 side, and the board of education of the city school district of the city 21 of Staten Island, upon the other side, and in the case of their inabili- 22 ty to agree upon such division within six months after this section 23 shall take effect, the supreme court in the third judicial district is 24 hereby empowered to divide the same between them and to ascertain and 25 award to each its equitable proportion thereof, and to enforce its 26 determination thereon, and either of the said school districts may 27 institute and prosecute, in its own name, an action in said court for 28 that purpose after the expiration of six months and before the expira- 29 tion of one year after this section takes effect. 30 (c) Documents. The city school district of the preceding municipality 31 shall provide the city school district of the city of Staten Island with 32 all books, papers, documents and files held by such school district 33 which apply primarily to the area of the city school district of the 34 city of Staten Island, including its property, faculty and students, and 35 shall make available for copying by the city school district of the city 36 of Staten Island any other books, papers, documents and files which the 37 city school district of the city of Staten Island shall request as 38 pertaining to the city school district of the city of Staten Island in 39 any other manner. 40 § 3-008. Continuance of municipal services. 41 The preceding municipality shall be obligated to continue to maintain 42 during the transition period all municipal services and related equip- 43 ment and supplies at a level materially equivalent to that level of 44 municipal services and related equipment and supplies for the geograph- 45 ical area of the city of Staten Island as existing on the first of July 46 in the year in which this act shall have become a law subject to exist- 47 ing budget restraints of the preceding municipality. 48 § 3-009. Powers of the city of Staten Island to adopt and amend local 49 laws. 50 Notwithstanding the provisions of any other law, the common council of 51 the city of Staten Island shall have the power to adopt local laws in 52 accordance with the provisions of section 10 of the municipal home rule 53 law; provided, however, that no such local law adopted during the tran- 54 sition period shall be effective until the date of establishment of the 55 city of Staten Island.

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1 § 3-010. Powers of the city of Staten Island relating to home rule 2 powers. 3 In accordance with the provisions of article IX of the constitution, 4 the city of Staten Island during the transition period shall have all of 5 the rights, powers, privileges and immunities granted to local govern- 6 ments with respect to the power of the legislature to act in relation to 7 the property or affairs of the city of Staten Island. 8 § 4-001. City school district of the city of Staten Island. 9 1. The territory of the city of Staten Island in the county of Rich- 10 mond, on the date when this act shall take effect, shall be and is here- 11 by constituted a city school district, and shall be known as the city 12 school district of the city of Staten Island and shall have and enjoy 13 all the powers and duties of a city school district under the provisions 14 of the education law. 15 2. Such district shall be under the control of a board of education, 16 which shall be composed pursuant to the provisions of article 52 of the 17 education law. 18 § 4-002. Section 2550 of the education law, as amended by chapter 65 19 of the laws of 1972, is amended to read as follows: 20 § 2550. Application of article. This article shall apply to the city 21 school districts of the following cities only: New York, Buffalo, 22 Rochester, Syracuse , Staten Island and Yonkers. 23 § 4-003. Section 2552 of the education law is amended by adding a new 24 subdivision e to read as follows: 25 e. City school district of the city of Staten Island: nine members. 26 § 4-004. Subdivisions 1, 2, 4, 5 and 6 of section 2553 of the educa- 27 tion law, subdivision 1 as separately amended by chapters 211 and 441 of 28 the laws of 1980, subdivisions 2, 4 and 5 as added by chapter 242 of the 29 laws of 1974 and subdivision 6 as amended by chapter 211 of the laws of 30 1980, are amended to read as follows: 31 1. No person shall be eligible to the office of member of a board of 32 education who is not a citizen of the United States, who is not quali- 33 fied to register for or vote at an election in accordance with the 34 provisions of section 5-106 of the election law, and who, in the case of 35 the city school district of the city of Yonkers, has not been a resident 36 of the city school district for which [ he ] such person is chosen for a 37 period of at least three years immediately preceding the date of [ his ] 38 such person's election or appointment and who, in the case of the city 39 school district of the city of Buffalo, in the case of a member to be 40 elected at large is not a qualified voter of such city school district 41 and who has not been a resident of such district for a period of at 42 least three years immediately preceding the date of [ his ] such person's 43 election and in the case of a member elected from a city school subdis- 44 trict is not a qualified voter of such city school subdistrict and has 45 not been a resident of the city school district for three years and a 46 resident of the city school subdistrict which [ he ] such person repres- 47 ents or seeks to represent for a period of one year immediately preced- 48 ing the date of [ his ] such person's election, and who, in the case of 49 the city school district of the city of Rochester, is not a qualified 50 voter under section 5-102 of the election law of such city school 51 district; and who, in the case of the city school district of the city 52 of Staten Island has been a qualified voter under section 5-102 of the 53 election law of such city school district for at least ninety days imme- 54 diately preceding the date of such person's election or appointment; and 55 who in the case of the city school district of the city of Syracuse has 56 not been a qualified voter under section 5-102 of the election law of

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1 such city school district for at least ninety days immediately preceding 2 the date of [ his ] such person's election or appointment. 3 2. In the city school districts of the cities of Rochester and Syra- 4 cuse the members of such board of education shall be chosen by the 5 voters at large at either a general or municipal election, or at both. 6 In the city school district of the city of Staten Island the members of 7 such board of education shall be chosen pursuant to the provisions of 8 subdivision twelve of this section. In the city school district of the 9 city of Buffalo the members of such board of education shall be chosen 10 pursuant to the provisions of subdivision ten of this section. 11 4. In the city school districts of the following cities, the terms of 12 such members shall be as follows: 13 a. Rochester: Four Years; 14 b. Syracuse: Four Years; 15 c. Yonkers: Five Years ; and 16 d. Staten Island: Three Years . 17 5. The terms of one-fifth of all the members of a board of education, 18 or of a fraction as close to one-fifth thereof as possible, shall expire 19 annually on the first Tuesday in May, except in the city school 20 districts of the cities of Buffalo, Rochester , Staten Island and Syra- 21 cuse. 22 6. If a vacancy occurs other than by expiration of term in the office 23 of a member of a board of education in a district in which such members 24 are elected at a general or municipal election, such vacancy shall be 25 filled by appointment by the mayor until the next general or municipal 26 election is held, and such vacancy shall then be filled at such election 27 for the unexpired portion of such term, except that in the city school 28 district of the city of Rochester any such vacancy shall be filled 29 pursuant to the provisions of subdivision nine of this section and 30 except further that any such vacancy on the board of education of the 31 city school district of the city of Buffalo shall be filled pursuant to 32 the provisions of subdivision ten of this section and except that any 33 vacancy on the board of education of the city school district of the 34 city of Staten Island shall be filled pursuant to the provisions of 35 subdivision twelve of this section . 36 § 4-005. Section 2553 of the education law is amended by adding a new 37 subdivision 12 to read as follows: 38 12. a. The members of the board of education of the city school 39 district of the city of Staten Island shall be elected by the qualified 40 voters of such city as provided in this subdivision. 41 b. The members of the board of education shall be elected at large 42 throughout the city as provided for in this subdivision. 43 c. (1) Every registered voter residing in the city school district of 44 the city of Staten Island and every parent of a child of school age 45 under the jurisdiction of such school district who is a resident of the 46 city of Staten Island for at least ninety days immediately preceding 47 such election and at least eighteen years of age shall be eligible to 48 vote at such election for members of the board of education. 49 (2) Each candidate for member of the board of education of the city 50 school district of the city of Staten Island shall be required to file 51 petitions containing at least five hundred signatures. No petition shall 52 contain any political party or independent body name or label. Each 53 petition shall contain the name of only one candidate and such petition 54 shall be filed with the clerk of the board of elections of the county of 55 Richmond not earlier than the fifth Tuesday and not later than the 56 fourth Tuesday preceding the date on which an election shall be held. A

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1 certificate of acceptance or declination of any individual so nominated 2 shall be filed not later than the third day after the fourth Tuesday 3 preceding the election. 4 d. No person shall be eligible for the office of member of such board 5 of education who is not a qualified voter under section 5-102 of the 6 election law of such city school district. No person shall hold at the 7 same time the office of member of the board of education and any other 8 elective office nor shall any holder of an elective office be a candi- 9 date for the office of member of such board of education. No employee of 10 the city school district of the city of Staten Island shall be a member 11 of the board of education. 12 e. The term of office of each member of the board of education of the 13 city school district of the city of Staten Island shall be three years. 14 Voting will be by means of cumulative voting. Each voter may cast up to 15 nine votes for the candidate or candidates of their choice by casting 16 all of their votes for a single candidate, by casting one vote for each 17 of nine candidates, or by allocating any combination of nine whole votes 18 among the candidates. The maximum number of votes each voter may cast 19 shall not exceed nine. Nothing in this paragraph requires that a voter 20 cast more than one vote for any one candidate. The nine candidates 21 receiving the greatest number of votes cast shall be elected. 22 f. (1) Such election for such office shall be governed by the 23 provisions of the election law in the same manner as candidates for 24 office generally to be elected by the voters of the city of Staten 25 Island except, as the case may be, as to the date of the election; and, 26 further provided, however, that each such candidate for election as a 27 member of such board of education shall be required to file a petition 28 containing signatures of at least five hundred voters of such city 29 school district. 30 (2) For the election held in May, in the year next succeeding the 31 date on which this subdivision shall have become a law, such petition 32 shall be deemed to be timely filed for such election if filed with the 33 clerk of the board of elections of Richmond county on or before April 34 ninth, in the year next succeeding the date on which this subdivision 35 shall have become a law. A petition sent by mail in an envelope post- 36 marked prior to midnight on April ninth, in the year next succeeding the 37 date on which this subdivision shall have become a law, shall be deemed 38 to be timely filed when received. Written objection to such petition 39 shall be filed within two days after the final date for filing of such 40 petition and specifications of the grounds of the objections shall be 41 filed with the board within one day after the filing of the objection 42 and institution of court proceedings relating thereto shall be commenced 43 not later than May second, in the year next succeeding the date on which 44 this subdivision shall have become a law. 45 g. Petitions for the nomination of members of such school board shall 46 be on white paper containing the required signatures of qualified voters 47 of the city of Staten Island. The sheets of such petition shall be 48 numbered consecutively, beginning with number one, at the foot of each 49 sheet. Such a petition must set forth in every instance the correct 50 date of signing, the full name of the signer and the signer's present 51 residence. A signer need not fill in the date or residence themself. 52 h. Each sheet of such a petition shall be signed in ink and shall be 53 substantially in the following form: 54 I, the undersigned, do hereby state that I am a duly qualified voter 55 of the city of Staten Island, that my present place of residence is 56 truly stated opposite my signature hereto, I intend to support at the

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1 ensuing election and I do hereby nominate the following named person as 2 a candidate for nomination (for the public office of member of the board 3 of education of the city school district of the city of Staten Island at 4 large..............day of....................,) (for the city school 5 district.............day of........,) 6 In witness whereof, I have hereunto set my hand the day and year 7 placed opposite my signature. 8 Assembly Election 9 Date Name of Signer Present Residence District District

10 ....... ................ ............. ... ... 11 ....... ................ ............. ... ... 12 ....... ................ ............. ... ...

13 The petition shall be authenticated by witnesses. Such statement 14 shall be accepted for all purposes as the equivalent of an affidavit, 15 and if false shall subject the witness to the same penalties as if such 16 witness had been duly sworn. The form of such statement shall be 17 substantially as follows: 18 STATEMENT OF WITNESS 19 I,...................., (name of witness), state: I am a duly quali- 20 fied voter of the state of New York, and now reside in the city, town or 21 village of..............., in such state, at ................(fill in 22 street and house number and post office) therein. I know each of the 23 voters whose names are subscribed to this petition sheet containing 24 (fill in number).............signatures and each of them subscribed the 25 same in my presence and upon so subscribing declared to me that the 26 foregoing statement, made and subscribed by them, was true. 27 ..................... 28 Signature of witness 29 Date....... 30 i. The board of elections shall refuse to accept such petitions 31 signed by an insufficient number of qualified voters, or petitions which 32 are not timely or petitions bearing a political party or independent 33 body, name or emblem or which contain the name of more than one candi- 34 date. 35 j. Except as it may be modified by the provisions of paragraph f of 36 this subdivision, the provisions of the election law with respect to 37 acceptances by candidates nominated by independent nominating petitions 38 shall apply to candidates nominated by petitions for members of such 39 board of education. 40 k. Objections to petitions for the nomination of members of such 41 board of education and procedures and remedies applicable to such 42 objections shall be the same as those applicable to independent nominat- 43 ing petitions under the election law, except as it may be modified by 44 the provisions of paragraph d of this subdivision. 45 l. The board of elections shall cause to be printed official ballots 46 containing the names of all candidates as above provided, except that 47 the board may refuse to have the names of ineligible candidates placed 48 on such ballots. The names of the candidates shall be arranged accord- 49 ing to lot, and shall not bear the designation of any political party or 50 independent body, name or emblem. Blank spaces shall be provided so 51 that voters may vote for candidates who have not been nominated for the 52 offices to be filled at such elections. The form of such ballots shall 53 conform substantially to the form of ballots used at general elections 54 as prescribed in the election law.

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1 m. Voting for the election of members of such board of education 2 shall be by voting machine, if practicable, and shall be governed by the 3 applicable provisions of the election law with respect to voting 4 machines. 5 n. If a candidate, after a petition in such candidate's behalf shall 6 have been duly filed with the clerk of the board of elections, and prior 7 to the date of the election, shall decline to accept the nomination, 8 die, remove from the school district, accept or be a candidate for 9 another elective office, or become otherwise disqualified for such city 10 school district office, a further petition may be filed with such clerk, 11 nominating another candidate in such candidate's place and stead. Such 12 further petition shall in all respects comply with the provisions of 13 paragraphs f, g and i of this subdivision, except that it may be filed 14 at any time up to and including the fifteenth day preceding the date of 15 the election pursuant to the provisions of this subdivision and the time 16 within which to accept or object to such further petition shall be 17 computed from the date of filing or said fifteenth day, whichever is 18 earlier. 19 o. Whenever a vacancy shall occur or exist in the office of member of 20 the board of education except by reason of expiration of term or 21 increase in the number of members of such board, the candidate who has 22 received the next highest total number of votes in the preceding school 23 board election as certified by the board of elections shall be selected 24 to fill the vacancy. In the event that no candidate is available, then 25 the mayor of the city of Staten Island shall appoint a person to fill 26 the vacancy for the remainder of the unexpired term. 27 p. The members so elected to the board of education shall convene on 28 the first business day in July of each year at the time of the commence- 29 ment of their term of office and select from their members a president 30 who shall serve for a term of one year or such other term, not exceeding 31 the term of such member's office, as may be fixed by the rules and regu- 32 lations of the board. 33 q. The election of members of the board of education of the city 34 school district of the city of Staten Island shall take place on May 35 second, two thousand twenty-seven and on the first Tuesday in May every 36 third year thereafter. Such election shall be conducted by the board of 37 elections of the county of Richmond in the same manner as general 38 elections are conducted by it. 39 r. Polls shall be open for voting for the hours prescribed by section 40 8-100 of the election law for primary elections. The results of such 41 elections, after canvassing, shall be certified and reported by the 42 board of elections to the city clerk and the board of education of such 43 city. 44 § 4-006. Subdivision 2 of section 2554 of the education law, as 45 amended by chapter 27 of the laws of 2012, is amended to read as 46 follows: 47 2. [ To ] Except as provided in subdivision one of section two thousand 48 five hundred seventy-three of this article, to create, abolish, maintain 49 and consolidate such positions, divisions, boards or bureaus as, in its 50 judgment, may be necessary for the proper and efficient administration 51 of its work; to appoint a superintendent of schools, such associate, 52 assistant, district and other superintendents, examiners, directors, 53 supervisors, principals, teachers, lecturers, special instructors, 54 medical inspectors, nurses, auditors, attendance officers, secretaries, 55 clerks, custodians, janitors and other employees and other persons or 56 experts in educational, social or recreational work or in the business

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1 management or direction of its affairs as said board shall determine 2 necessary for the efficient management of the schools and other educa- 3 tional, social, recreational and business activities; provided, however, 4 that in the city school districts of the cities of Buffalo, Rochester, 5 and Syracuse appointment of associate, assistant and district super- 6 intendents, and other supervising staff who are excluded from the right 7 to bargain collectively pursuant to article fourteen of the civil 8 service law shall, within the amounts budgeted for such positions, be by 9 the superintendent of such city school district; and to determine their 10 duties except as otherwise provided herein. 11 § 4-007. Subdivision 8 of section 2554 of the education law, as 12 amended by chapter 576 of the laws of 1964, is amended to read as 13 follows: 14 8. To dispose of, in the city of New York and the city of Staten 15 Island , to the best advantage of the city of New York or the city of 16 Staten Island , either by sale or on the basis of money allowance for 17 waste paper all books delivered to the several public schools of such 18 city that have been discarded either by reason of being obsolete, no 19 longer required by the course of study, worn by long usage or mutilated 20 by accident. If disposal is made by sale it shall be to the highest 21 bidder and the money realized shall be paid into the city treasury and 22 shall at once be appropriated by the city to the special school fund of 23 the board of education entitled "supplies". If disposal is made on the 24 basis of money allowance for waste paper, it shall be to the highest 25 bidder. Such discarded books may be disposed of without public adver- 26 tisement or entry into a formal contract. Should the discarded books be 27 in such condition that no sale or exchange can be made, or should there 28 be reason to believe that such discarded books have become infected 29 through disease among the pupils, or should the superintendent of 30 schools certify that such discarded books contain erroneous, inaccurate, 31 obsolete or antiquated subject matter, illustrations, maps, charts or 32 other material, the committee on supplies of the board of education, if 33 such books cannot be sold, given away or otherwise salvaged as waste 34 paper without danger to the public health, may authorize their 35 destruction by fire, in which event the superintendent of school 36 supplies shall obtain and file in [ his ] such person's office a certif- 37 icate that such books have been so destroyed, signed by the principal of 38 the school in which the books are located. 39 § 4-008. Subdivision 14 of section 2554 of the education law, such 40 section as renumbered by chapter 762 of the laws of 1950, is amended to 41 read as follows: 42 14. To provide in the schools administered by the board of education 43 of the city of New York or the city of Staten Island , the proper book or 44 books, in form as required by the by-laws of the board of education of 45 such city, in which it shall cause the class teachers under the direc- 46 tion and supervision of the principal to enter the names, ages and resi- 47 dences of the pupils attending the school, the name of the parent or 48 guardian of each pupil and the days on which the pupils shall have 49 attended respectively, and the aggregate attendance of each pupil during 50 the year, and also the day upon which the school shall have been visited 51 by the superintendent of schools or by an associate superintendent of 52 schools or by an assistant superintendent, or by members of the board of 53 education, or by members of the local school board, or by any of them, 54 which entry shall be verified by such oath or affirmation of the princi- 55 pal as may be prescribed by the board of education of such city. Such 56 books shall be preserved as the property of such board of education and

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1 shall at all times be open to inspection by members of such board of 2 education, by members of the local school boards and by the superinten- 3 dent of schools, or by any associate superintendent of schools, or by 4 the assistant superintendents. 5 § 4-009. Subdivision 15 of section 2554 of the education law is 6 amended by adding a new paragraph b-1 to read as follows: 7 b-1. In the city of Staten Island, the board of education shall make 8 rules and regulations for the conduct, operation and maintenance of 9 extra classroom activities and for the safeguarding, accounting and 10 audit of all moneys received and derived therefrom. In the case of any 11 extra classroom activity as it shall deem proper, and notwithstanding 12 the provisions of section twenty-five hundred thirty of this title, it 13 may direct that the moneys received or derived from the conduct, opera- 14 tion or maintenance of such an extra classroom activity be deposited 15 with the chief fiscal officer of the board of education, who in such 16 event shall be the treasurer of such an extra classroom activity, the 17 moneys of which are required to be so deposited. In the procurement of 18 articles and services for the conduct, operation and maintenance of a 19 cafeteria or restaurant service, the board of education shall be subject 20 to the provisions of subdivision ten of section twenty-five hundred 21 fifty-six of this article, except that said board of education need not 22 have duly advertised for estimates in order to contract for such arti- 23 cles or services in an amount exceeding one thousand dollars. In such 24 city, the board of education shall also have power to assign any of its 25 officers or employees to perform such duties as it may prescribe in 26 connection with an extra classroom activity and to designate such of its 27 officers and employees when so assigned from whom a bond shall be 28 required for faithful performance of their duties and to fix the sum in 29 which each such bond shall be given. 30 § 4-010. Section 2554 of the education law is amended by adding two 31 new subdivisions 29 and 30 to read as follows: 32 29. To assign, in its discretion, one or more employees of the board 33 in the city of Staten Island to serve as trial examiner with power to 34 conduct investigations and hearings on behalf of such board. Each trial 35 examiner shall report the result of any such investigation or hearing to 36 the board. 37 30. To employ a superintendent of the city of Staten Island school 38 district by contract for a four-year term of office, subject to removal 39 for cause, at a salary to be fixed within the budgetary allocation 40 therefor. 41 § 4-011. Subdivision 5 of section 2556 of the education law, as 42 amended by chapter 480 of the laws of 2014, is amended to read as 43 follows: 44 5. It shall be unlawful for a schoolhouse to be constructed in the 45 city of New York or the city of Staten Island without an open-air play- 46 ground attached to or used in connection with the same. Existing play- 47 grounds shall not be sold, leased or transferred, or permanently author- 48 ized for other uses such as school building construction, renovation, 49 placement or storage of building materials for such work that would 50 eliminate the use of such playground space for outdoor recreational 51 activities unless a plan is established and implemented to provide suit- 52 able and adequate physical activities or space to accommodate the phys- 53 ical and recreational needs of the pupils of such building. The 54 provisions of this subdivision shall not apply to school construction or 55 renovation activities that occur on or require the use of such play- 56 grounds for a duration of no more than one year.

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1 § 4-012. Section 2556 of the education law is amended by adding a new 2 subdivision 6-a to read as follows: 3 6-a. After a site has been selected and plans and specifications for a 4 building thereon have been approved as provided herein, the board of 5 education of the city school district of the city of Staten Island may, 6 in its discretion, by regulation deliver such plans and specifications 7 to the common council or other local legislative body which may thereup- 8 on, in its discretion, award a contract for the erection of such build- 9 ing in the same manner and in accordance with the provisions of law 10 regulating the awarding of contracts for the construction of municipal 11 buildings of such city. 12 § 4-013. Section 2556 of the education law is amended by adding three 13 new subdivisions 10-b, 11-a and 13-a to read as follows: 14 10-b. In the city of Staten Island if the several parts of the work or 15 labor to be done and/or the supplies, materials and equipment to be 16 furnished shall together involve an expenditure of not more than ten 17 thousand dollars, the same may be procured in compliance with the proce- 18 dures on contracting provided in chapter nine of the charter of the city 19 of Staten Island. 20 11-a. In all contracts by the board of education of the city school 21 district of the city of Staten Island, for the construction, repair, 22 alteration or remodeling of buildings or for the purchase of supplies, 23 furniture or equipment, a stipulation may be inserted for liquidated 24 damages for any breach, failure or delay in the performance thereof; and 25 such board of education is authorized and empowered to remit the whole 26 or any part of such damages as in its discretion may be just and equita- 27 ble; and in all suits commenced on any such contracts or on any bond 28 given in connection therewith it shall not be necessary for such board, 29 whether plaintiff or defendant, to prove actual or specific damages 30 sustained by reason of any such breach, failure or delay, but such stip- 31 ulation for liquidated damages shall be conclusive and binding upon all 32 parties. 33 13-a. The board of education of the city school district of the city 34 of Staten Island may through its duly designated officers, agents or 35 employees enter upon public or private property for the purpose of 36 making surveys, soundings or test borings necessary for the exercise of 37 the powers or the performance of the duties, of such board of education, 38 provided, however, that the mayor had formally approved the acquisition 39 of the real property as a school site. 40 § 4-014. The education law is amended by adding three new sections 41 2560-a, 2561-a, and 2562-a to read as follows: 42 § 2560-a. Liability of board of education of the city school district 43 of the city of Staten Island. 1. Notwithstanding any inconsistent 44 provision of law, general, special or local, or the limitation contained 45 in the provisions of any city charter, any duly appointed member of the 46 board of education of the city school district of the city of Staten 47 Island, the members of the school board of such city, the teaching or 48 supervising staff, officer, or employee of such board, member of a 49 committee on special education or subcommittee thereof or authorized 50 participant in the school volunteer program in such city shall be enti- 51 tled to legal representation and indemnification pursuant to the 52 provisions of, and subject to the conditions, procedures and limitations 53 contained in section fifty-k of the general municipal law, except that 54 any judgment or settlement pursuant to this section shall be payable 55 from the moneys of the board of education.

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1 2. Notwithstanding any inconsistent provision of law, general, special 2 or local, or limitations contained in the provision of any city charter, 3 it shall not be within the power of the board of education of the city 4 of Staten Island to require a volunteer participating in any school 5 activities to execute a waiver of responsibility in favor of that board 6 as a condition, either express or implied, of such participation. Such 7 waiver would include, but not be limited to, a release of any party 8 against whom the volunteer may have rights under any existing provision 9 of law for personal injuries incurred during the performance of author- 10 ized volunteer duties by an authorized participant in a school volunteer 11 program. 12 § 2561-a. Liability of certain officers and employees of the board of 13 education of the city school district of the city of Staten Island. If, 14 in order to furnish needy children or minors with food, shoes, clothing, 15 and other necessities to enable them to attend school as contemplated by 16 law and to benefit from instruction, such board of education shall have 17 required, imposed or permitted, the performance of duties by any of its 18 officers and employees, because of which it became necessary or expedi- 19 ent for any such officer or employee to act for such board of education, 20 or to act for or in cooperation with any other agency of government, 21 federal, state or municipal, then irrespective of the fact that the 22 authority to require, impose or permit the performance of such duties 23 may not have been specifically conferred upon said board of education by 24 provisions of this chapter, such board of education shall be liable for 25 and shall assume liability to the extent that it shall save harmless any 26 such officers or employees for damages arising out of the negligence of 27 any such officer or employee while actually engaged in the performance 28 of such required or permitted duties, provided the officer or employee 29 at the time was acting within the scope of such officer's duties or 30 employment. 31 § 2562-a. Presentation of claims against the board of education of 32 the city school district of the city of Staten Island to be pleaded. 1. 33 No action or special proceeding, for any cause whatever, shall be prose- 34 cuted or maintained against the board of education of the city school 35 district of the city of Staten Island, unless it shall appear by and as 36 an allegation in the complaint or necessary moving papers that at least 37 thirty days have elapsed since the demand, claim or claims upon which 38 such action or special proceeding is founded were presented to the said 39 board of education for adjustment, and that the officer or body having 40 the power to adjust or pay said claim has neglected or refused to make 41 an adjustment or payment thereof for thirty days after such presentment. 42 2. The said board of education may require any person presenting for 43 settlement an account or claim for any cause whatever against it to be 44 sworn before it or a committee thereof, or before the auditor, or before 45 any person designated by said board, touching such account or claim, and 46 when so sworn, to answer orally as to any facts relative to the justness 47 of such account or claim. A member of the board, the auditor, or any 48 other person designated as hereinbefore stated, shall have the power to 49 administer an oath to any person who shall give testimony to the just- 50 ness of such account or claim, and for the purpose of securing such 51 testimony may issue subpoenas for the attendance of witnesses. Wilful 52 false swearing before the said board of education, a committee thereof, 53 the auditor, or before any person designated as hereinbefore stated, is 54 perjury and punishable as such. 55 § 4-015. Section 2566 of the education law is amended by adding a new 56 subdivision 3-a to read as follows:

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1 3-a. In the city of Staten Island, to exercise the administrative and 2 ministerial powers of the board of education. 3 § 4-016. The education law is amended by adding two new sections 4 2567-a and 2568-a to read as follows: 5 § 2567-a. Protection of rights exercised under licenses issued by a 6 board of education in the city of Staten Island. No person shall 7 forfeit any right given to such person under a license issued by such 8 board of education, pursuant to this chapter, because of absence while 9 in service in the armed forces of the United States or in the service of 10 the American Red Cross. Any person may at any time within six months 11 after such person's discharge from service in the armed forces of the 12 United States or the American Red Cross make application to the license 13 issuing authority by affidavit setting forth that such person has been 14 in service in the armed forces of the United States or the American Red 15 Cross and has been discharged from such service and that such person 16 desires the license theretofore issued to them to be reissued as of the 17 date of such application, and it shall be the duty of the licensing 18 authority to reinstate such license as of the date on which application 19 is made. 20 § 2568-a. Superintendent of schools authorized to require medical 21 examination of certain employees of the board of education of the city 22 school district of the city of Staten Island. The superintendent of 23 schools shall be empowered to require any person employed by the board 24 of education of the city school district of the city of Staten Island to 25 submit to a medical examination by a physician or school medical inspec- 26 tor of the board, in order to determine the mental or physical capacity 27 of such person to perform their duties, whenever it has been recommended 28 in a report in writing that such examination should be made. Such 29 report to the superintendent may be made only by a person under whose 30 supervision or direction the person recommended for such medical exam- 31 ination is employed. The person required to submit to such medical exam- 32 ination shall be entitled to be accompanied by a physician or other 33 person of their own choice. The findings upon such examination shall be 34 reported to the superintendent of schools and may be referred to and 35 considered for the evaluation of service of the person examined or for 36 disability retirement. 37 § 4-017. Subdivision 1 of section 2573 of the education law, as 38 amended by section 3 of subpart D of part EE of chapter 56 of the laws 39 of 2015, subparagraphs i and ii of paragraph (a) as amended by chapter 40 143 of the laws of 2024 and subparagraph ii of paragraph (b) as amended 41 by chapter 345 of the laws of 2019, is amended to read as follows: 42 1. (a) i. [ Teachers ] Except as already provided for in paragraph (c) 43 of this subdivision, teachers and all other members of the teaching 44 staff, appointed prior to July first, two thousand fifteen and author- 45 ized by section twenty-five hundred fifty-four of this article, shall be 46 appointed by the board of education, upon the recommendation of the 47 superintendent of schools, for a probationary period of three years, 48 except that in the case of a teacher who has rendered satisfactory 49 service as a regular substitute for a period of two years or as a 50 seasonally licensed per session teacher of swimming in day schools who 51 has served in that capacity for a period of two years and has been 52 appointed to teach the same subject in day schools on an annual salary, 53 the probationary period shall be limited to one year; provided, however, 54 that in the case of a teacher who has been appointed on tenure in anoth- 55 er school district within the state, the school district where currently 56 employed, or a board of cooperative educational services, and who was

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1 not dismissed from such district or board as a result of charges brought 2 pursuant to subdivision one of section three thousand twenty-a of this 3 chapter, the probationary period shall not exceed two years; provided, 4 however, that in cities with a population of one million or more, a 5 teacher appointed under a newly created license, for teachers of reading 6 and of the emotionally handicapped, to a position which the teacher has 7 held for at least two years prior to such appointment while serving on 8 tenure in another license area who was not dismissed as a result of 9 charges brought pursuant to subdivision one of section three thousand 10 twenty-a of this chapter, the probationary period shall be one year. The 11 service of a person appointed to any of such positions may be discontin- 12 ued at any time during such probationary period, on the recommendation 13 of the superintendent of schools, by a majority vote of the board of 14 education. Each person who is not to be recommended for appointment on 15 tenure shall be so notified by the superintendent of schools in writing 16 not later than sixty days immediately preceding the expiration of such 17 person's probationary period. In city school districts having a popu- 18 lation of four hundred thousand or more, persons with licenses obtained 19 as a result of examinations announced subsequent to the twenty-second 20 day of May, nineteen hundred sixty-nine appointed upon conditions that 21 all announced requirements for the position be fulfilled within a speci- 22 fied period of time, shall not acquire tenure unless and until such 23 requirements have been completed within the time specified for the 24 fulfillment of such requirements, notwithstanding the expiration of any 25 probationary period. In all other city school districts subject to the 26 provisions of this article, failure to maintain certification as 27 required by this article and by the regulations of the commissioner 28 shall be cause for removal within the meaning of subdivision five of 29 this section. 30 ii. [ Teachers ] Except as otherwise provided for in paragraph (c) of 31 this subdivision, teachers and all other members of the teaching staff 32 appointed on or after July first, two thousand fifteen and authorized by 33 section twenty-five hundred fifty-four of this article, shall be 34 appointed by the board of education, upon the recommendation of the 35 superintendent of schools, for a probationary period of four years, 36 except that in the case of a teacher who has rendered satisfactory 37 service as a regular substitute for a period of up to two years, or such 38 teacher has rendered satisfactory service as a seasonally licensed per 39 session teacher of swimming in day schools who has served in that capac- 40 ity for a period of up to two years and has been appointed to teach the 41 same subject in day schools on an annual salary, the teacher shall be 42 appointed for a probationary period of a minimum of two years, depending 43 upon the length of the regular substitute service that shall shorten the 44 length of the probationary period; provided, however, that in the case 45 of a teacher who has been appointed on tenure in another school district 46 within the state, the school district where currently employed, or a 47 board of cooperative educational services, and who was not dismissed 48 from such district or board as a result of charges brought pursuant to 49 subdivision one of section three thousand twenty-a of this chapter, the 50 teacher shall be appointed for a probationary period of three years; 51 provided further, however, that in cities with a population of one 52 million or more, a teacher appointed under a newly created license, for 53 teachers of reading and of the emotionally handicapped, to a position 54 which the teacher has held for at least two years prior to such appoint- 55 ment while serving on tenure in another license area who was not 56 dismissed as a result of charges brought pursuant to subdivision one of

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1 section three thousand twenty-a of this chapter, the teacher shall be 2 appointed for a probationary period of two years. The service of a 3 person appointed to any of such positions may be discontinued at any 4 time during such probationary period, on the recommendation of the 5 superintendent of schools, by a majority vote of the board of education. 6 Each person who is not to be recommended for appointment on tenure shall 7 be so notified by the superintendent of schools in writing not later 8 than sixty days immediately preceding the expiration of such person's 9 probationary period. In all city school districts subject to the 10 provisions of this article, failure to maintain certification as 11 required by this article and by the regulations of the commissioner 12 shall be cause for removal within the meaning of subdivision five of 13 this section. 14 (b) i. [ Administrators ] Except as otherwise provided for in paragraph 15 (c) of this subdivision, administrators , directors, supervisors, princi- 16 pals and all other members of the supervising staff, except executive 17 directors, associate, assistant, district and community superintendents 18 and examiners, appointed prior to July first, two thousand fifteen and 19 authorized by section twenty-five hundred fifty-four of this article, 20 shall be appointed by the board of education, upon the recommendation of 21 the superintendent or chancellor of schools, for a probationary period 22 of three years. The service of a person appointed to any of such posi- 23 tions may be discontinued at any time during the probationary period on 24 the recommendation of the superintendent of schools, by a majority vote 25 of the board of education. 26 ii. [ Administrators ] Except as otherwise provided for in paragraph (c) 27 of this subdivision, administrators , directors, supervisors, principals 28 and all other members of the supervising staff, except executive direc- 29 tors, associate, assistant, district and community superintendents and 30 examiners, appointed on or after July first, two thousand fifteen and 31 authorized by section twenty-five hundred fifty-four of this article, 32 shall be appointed by the board of education, upon the recommendation of 33 the superintendent or chancellor of schools, for a probationary period 34 of four years provided that such probationary period may be extended in 35 accordance with paragraph (b) of subdivision five of this section; 36 provided, however, that in the case of a principal, administrator, 37 supervisor, or other member of the supervising staff who has been 38 appointed on tenure pursuant to this chapter as an administrator within 39 an authorized administrative tenure area in another school district 40 within the state, the school district where currently employed, or a 41 board of cooperative educational services, and who was not dismissed 42 from such district or board as a result of charges brought pursuant to 43 subdivision one of section three thousand twenty-a or section three 44 thousand twenty-b of this chapter, the principal, administrator, super- 45 visor or other member of the supervising staff shall be appointed for a 46 probationary period of three years. The service of a person appointed to 47 any of such positions may be discontinued at any time during the proba- 48 tionary period on the recommendation of the superintendent of schools, 49 by a majority vote of the board of education. 50 (c) Notwithstanding the provisions of paragraphs (a) and (b) of this 51 subdivision, the superintendent of the city school district of the city 52 of Staten Island shall have the authority to appoint, with the approval 53 of the school board, principals and city wide administrators. Such 54 superintendent may appoint assistant principals and other clerical and 55 administrative staff without the approval of the school board. Such 56 assistant principals, clerical and administrative staff shall serve in

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1 accordance with the provisions of paragraphs (a) and (b) of this subdi- 2 vision. 3 § 4-018. Section 2576 of the education law is amended by adding a new 4 subdivision 4-a to read as follows: 5 4-a. In the city of Staten Island such estimate shall be filed with 6 the officer authorized to receive other department estimates and the 7 same acted on by such officer and by the common council of such city in 8 the same manner and with the same effect as other department estimates. 9 The common council is also authorized, in its discretion, to include in 10 such budget a sum for any of the purposes enumerated in paragraph c of 11 subdivision one of this section, and any further amount for such 12 purposes as may be authorized by a tax election held in such city pursu- 13 ant to the provisions of this chapter. After the adoption of such budget 14 the common council shall cause the amount thereof to be included in the 15 tax and assessment roll of the city and the same shall be collected in 16 the same manner and at the same time as other taxes of the city are 17 collected, and placed to the credit of the board of education of the 18 city school district of such city. 19 § 4-019. Section 2579 of the education law is amended by adding a new 20 subdivision 4 to read as follows: 21 4. If the city of Staten Island shall issue obligations to defray, in 22 whole or in part, the expense of the construction, improvement and 23 equipment of school buildings or the purchase or acquisition of school 24 sites, the proceeds of the sale of such bonds shall be paid into the 25 treasury of the city and placed to the credit of the board of education 26 of the city school district of such city. As such obligations become 27 due the municipal authorities of the city shall include in the tax levy, 28 and assess upon the property of the city, the amount necessary to pay 29 such bonds and interest thereon. 30 § 4-020. Additional transitory provisions relating to the city school 31 district of the city of Staten Island. 1. The board of education of the 32 city school district of the city of Staten Island shall possess those 33 powers and duties as are authorized for a city school district pursuant 34 to article 52 of the education law, as amended by this act. In further- 35 ance of such powers and duties the board shall confer with the mayor, 36 the comptroller and the common council of the city of Staten Island and 37 the board of education of the preceding municipality for the purpose of 38 preparing for submission and implementation of a budget for the school 39 year commencing on the first of July in the second year next succeeding 40 the date on which this act shall have become a law and to take such 41 other actions as may be necessary and appropriate to provide for the 42 operation of the city school district of the city of Staten Island on 43 and after the date of establishment of the city of Staten Island. 44 2. Fiscal and regulatory authority pertaining to the public schools to 45 be contained within the city school district of the city of Staten 46 Island shall remain with the board of education of the city school 47 district of the preceding municipality until the date of establishment 48 of the city of Staten Island. 49 3. All employees of the board of education of the city school district 50 of the preceding municipality and such other employees of any other 51 public entity as may be transferred pursuant to the provisions of this 52 act shall retain all rights, privileges, benefits and salaries to which 53 the employee was previously entitled as an employee of the board of 54 education of the preceding municipality. Transfers of employment to the 55 city school district of the city of Staten Island shall be conducted in 56 the same manner as is provided by for the city of Staten Island as

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1 provided in this act. Such employees shall not suffer a loss of employ- 2 ment by reason of such transfer within a period of three years from the 3 effective date of such transfer nor shall any such employees be subject 4 to any additional employment probationary period by reason of such 5 transfer. 6 4. During the transition period as defined in section 1-003 of this 7 act, the city school district of the city of Staten Island may retain 8 the services of a superintendent of schools, a chief financial officer 9 and such other staff as to which funding shall have been provided by the 10 mayor and the common council of the city of Staten Island. 11 5. All actions deemed necessary and proper to implement the provisions 12 of sections 4-001 through 4-019 of this act are hereby authorized. 13 § 5-001. Transfer of the college of Staten Island. 1. The legislature 14 finds that due to the establishment of the city of Staten Island, the 15 transfer of the college of Staten Island from the city university of New 16 York to the state university of New York is a public purpose. Such 17 transfer shall not affect the title to the real property of the college 18 of Staten Island which shall continue to be held by the state of New 19 York, except that notwithstanding the provisions of paragraph b of 20 subdivision 1 of section 6219 of the education law if such real property 21 ceases to be used for college purposes, title to such property shall 22 revert to the city of Staten Island as successor in interest to the 23 prior municipal government of the geographical area of Staten Island. 24 The college of Staten Island is hereby transferred to the state univer- 25 sity of New York. Such transfers shall include all furnishings, equip- 26 ment, records and all other property normally allocated to the college 27 of Staten Island by the city university of New York. 28 2. The college of Staten Island is hereby transferred from the city 29 university of New York to the state university of New York. The college 30 of Staten Island shall continue to offer a full range of baccalaureate 31 degree programs and associate degree programs, selected masters degree 32 programs and provide faculty participation in research and doctoral 33 programs at the graduate center of the city university of New York. The 34 city of Staten Island shall serve as local sponsor for the two year 35 component of the college of Staten Island and such component shall be 36 subject to the provisions of section 6304 of the education law. Such two 37 year component shall be a part of the state university of New York and 38 shall not be governed by a community college board of trustees. 39 3. (a) Whenever the term "city university of New York" is referred to 40 or designated in any law, general, special or local, contract, lease, 41 judgment, decision or document pertaining to the functions, powers and 42 duties relating to the college of Staten Island hereby continued in, 43 transferred and assigned to, or devolved upon, the state university of 44 New York, such reference or designation shall be deemed to refer to and 45 include the state university of New York, so far as such law, contract, 46 lease, judgment, decision or document pertains to matters which are 47 within its jurisdiction by reason of the redesignation, continuation, 48 transfer, assignment and devolution of functions, powers and duties made 49 by this act. 50 (b) All contracts, leases and other agreements entered into by the 51 city university of New York relating to the college of Staten Island 52 before the effective date of this section shall be conducted and 53 completed by the state university of New York in the same manner and 54 under the same terms and conditions and with the same effect as if the 55 same had been conducted and completed by the state university of New 56 York. In addition, any contracts, leases and other agreements entered

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1 into by the state university of New York prior to the effective date of 2 this section shall remain in full force and effect and shall be 3 conducted and completed by the state university of New York. 4 (c) All rights, title and interest in personal property used for 5 educational or administrative purposes of the college of Staten Island 6 of the city university of New York vested in the city university of New 7 York on the effective date of this section are hereby transferred, 8 assigned and devolved upon the state university of New York. 9 (d) No existing right or remedy of any character shall be lost, 10 impaired or affected, nor shall any new right or remedy of any character 11 accrue to or for the benefit of any person by reason of the transfer of 12 the college of Staten Island pursuant to the provisions of this act. 13 (e) No action or proceeding based upon a cause of action which arose 14 prior to the effective date of this section brought by or against the 15 board of trustees of the city university of New York, the city universi- 16 ty construction fund, the board of trustees of the state university of 17 New York or the college of Staten Island shall be affected by any 18 provision of this act. 19 (f) Any lease entered into by the city university of New York for the 20 purposes of the college of Staten Island before the effective date of 21 this section is hereby transferred, assigned and devolved upon the state 22 university of New York, notwithstanding any provision that may be 23 contained therein providing for the nonassignability of such lease and 24 any such provision shall be deemed to be void as against the public 25 policy of the state and of no force and effect. 26 4. A council for the college of Staten Island is hereby established 27 pursuant to section 356 of the education law. It shall consist of ten 28 members, nine of whom shall be appointed by the governor and one of whom 29 shall be elected by and from among the students of the institution. Such 30 voting members shall be subject to every provision of any general, 31 special or local law, ordinance, charter, code, rule or regulation 32 applying to the voting members of such board with respect to the 33 discharge of their duties including, but not limited to those provisions 34 setting forth codes of ethics, disclosure requirements and prohibiting 35 business and professional activities. The election of the student member 36 shall be conducted in accordance with rules and regulations promulgated 37 by the respective representative campus student association in accord- 38 ance with guidelines established by the state university trustees. One 39 member shall be designated by the governor as chairman. Vacancies shall 40 be filled for the unexpired term in the same manner as original 41 selections. The term of office for each council member shall be seven 42 years. The term of office for the student member shall be one year. In 43 the event the student member ceases to be a student at the institution 44 such member shall be required to resign. Members appointed by the gover- 45 nor may be removed by the governor. Members elected by the students of 46 the institution may be removed by such students in accordance with rules 47 and regulations promulgated by the respective representative campus 48 student association in accordance with guidelines promulgated by the 49 state university trustees. Members of such council shall receive no 50 compensation for their services but shall be reimbursed for the expenses 51 actually and necessarily incurred by them in the performance of their 52 duties hereunder. 53 5. All employees of the college of Staten Island of the city universi- 54 ty of New York shall be transferred to employment in the state universi- 55 ty of New York and shall retain all rights, privileges, benefits and

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1 salaries to which the employee was previously entitled as an employee of 2 the city university of New York. 3 Employees of the college of Staten Island of the city university of 4 New York transferred to employment in the state university of New York 5 pursuant to the provisions of this act shall not be involuntarily 6 assigned to work outside the geographical boundaries of the city of 7 Staten Island nor shall any such employees suffer a loss of employment 8 by reason of such transfer within a period of three years from the 9 effective date of such transfer nor shall any such employees be subject 10 to any additional employment probationary period by reason of their 11 transfer. 12 Employees transferred from the college of Staten Island of the city 13 university of New York to employment in the state university of New 14 York except for those designated managerial or confidential shall be 15 included in employer - employee negotiating units comparable to existing 16 units in the city university of the city of New York. With respect to 17 employees to be placed in such negotiating units, the public employee 18 organization recognized or certified to represent the employees in 19 comparable city university of the city of New York negotiating units 20 shall be recognized as the unit representative. 21 All rights, privileges and benefits provided by collectively bargained 22 agreements to employees of the city university of the city of New York 23 shall be continued for such employees transferred, reappointed or other- 24 wise employed until such time as successor collective bargaining agree- 25 ments are negotiated. 26 The state university of New York shall consult and bargain on all 27 terms and conditions of employment with the appropriate public employee 28 organization with respect to the establishment of any new titles which 29 are similar to or reasonably related to titles already represented by 30 such public employee organizations in the city university of the city of 31 New York. 32 Any such titles for which terms and conditions are bargained pursuant 33 to this subdivision shall be deemed to be successor titles within the 34 meaning of applicable law. So long as the responsibilities of employees 35 in these titles are reasonably related to the responsibilities of 36 employees currently represented by public employee organizations, such 37 titles shall be accredited or placed in a negotiating unit represented 38 by such public employee organizations. 39 If a dispute arises, the office of collective bargaining shall deter- 40 mine which public employee organization is appropriate to represent 41 transferees, other hires, or employees in a new title on the basis of 42 the title's community of interest with titles in the state university of 43 New York and the city university of the city of New York. 44 No existing right or remedy of any character shall be lost or impaired 45 or affected by reason of the adoption of this charter. 46 6. On and after the first of July in the second year next succeeding 47 the date on which this act shall have become a law, officers and employ- 48 ees who become employees of the state pursuant to this act shall become 49 members of the New York state employees' retirement system to the extent 50 permitted or required by the provisions of the retirement and social 51 security law, except that any employee who is a member of the New York 52 city employees' retirement system may elect to continue membership in 53 the New York city employees' retirement system. Any election pursuant to 54 this section shall be made no later than the one hundred twentieth day 55 after the effective date of this section, by filing a written notice 56 thereof with the administrative head of the New York state employees'

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1 retirement system and the New York city employees' retirement system 2 and, once made and filed, shall be irrevocable. Upon the retirement of 3 an employee who has made such an election, the calculation of final 4 average salary by the New York city employees' retirement system shall 5 be performed as if the salary earned as a state employee on and after 6 such effective date were earned in New York city employment. In the case 7 of an employee who becomes a member of the New York state employees' 8 retirement system pursuant to this section, the New York city employees' 9 retirement system shall make a transfer of reserves, contributions and 10 credits to the New York state employees' retirement system, in the 11 manner required by section 43 of the retirement and social security law. 12 The comptroller of the city of New York shall certify to the state 13 administrator the amount of money required to be paid by the state of 14 New York for pension costs resulting from elections made pursuant to 15 this section. The comptroller of the state of New York shall pay to the 16 New York city employees' retirement system, upon approval by the state 17 administrator, the amounts so certified by the comptroller of the city 18 of New York. The comptroller of the city of New York shall also certify 19 to the state administrator the amount of money required to be contrib- 20 uted by each of such employees. The comptroller of the state of New 21 York shall be authorized to withhold the contributions of such employees 22 and pay that amount to the New York city employees' retirement system. 23 The amount so certified shall be the same as the amounts required to be 24 contributed for similarly situated city employees by the city of New 25 York and by employees of the city of New York. 26 § 5-002. Subdivision 3 of section 352 of the education law, as amended 27 by chapter 13 of the laws of 2021, is amended to read as follows: 28 3. The state university shall consist of the four university centers 29 at Albany, Binghamton, Buffalo and Stony Brook, the designated colleges 30 of arts and sciences at Brockport, Buffalo, Cortland, Fredonia, Geneseo, 31 New Paltz, Old Westbury, Oneonta, Oswego, Plattsburgh, Potsdam [ and ] , 32 Purchase and Staten Island , empire state college, the agricultural and 33 technical colleges at Alfred, Canton, Cobleskill, Delhi, Farmingdale and 34 Morrisville, downstate medical center, upstate medical center, the 35 college of optometry, the college of environmental science and forestry, 36 maritime college, the college of technology at Utica/Rome, the statutory 37 or contract colleges at Cornell university and Alfred university, and 38 such additional universities, colleges and other institutions, facili- 39 ties and research centers as have been or hereafter may be acquired, 40 established, operated or contracted to be operated for the state by the 41 state university trustees. 42 § 5-003. Paragraphs (f) and (g) of subdivision 2 and paragraph (d) of 43 subdivision 3 of section 6204 of the education law, paragraph (f) of 44 subdivision 2 as amended by chapter 306 and paragraph (g) of subdivision 45 2 as added by chapter 305 of the laws of 1979, and paragraph (d) of 46 subdivision 3 as amended by chapter 98 of the laws of 2010, are amended 47 to read as follows: 48 (f) The five trustees appointed by the mayor shall include at least 49 one resident of each of the [ five ] boroughs of the city of New York. 50 (g) The trustees appointed by the governor shall include at least one 51 resident of each of the [ five ] boroughs of the city of New York. 52 (d) (i) The board of trustees shall hold at least one public hearing 53 each year in each of the [ five ] boroughs of the city of New York. The 54 purpose of such hearing shall be to receive testimony and statements 55 from concerned individuals about university issues.

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1 (ii) The board of trustees shall fix the time, place, duration and 2 format of each hearing. 3 (iii) At least thirty days notice of the hearing shall be given by the 4 chairperson of the board of trustees to all of the trustees, to all 5 presidents of educational units, to the chair of faculty-senate bodies 6 of educational units, to all student government presidents of educa- 7 tional units, to the borough president, the members of the city council, 8 the members of the board of estimate, the local community boards of the 9 borough where the hearing is to be held and to the media. The notice 10 shall contain the time, place and date of the public hearing. Such 11 information shall be made electronically available on the city universi- 12 ty of New York website. Any such meeting of the board of trustees shall 13 be conducted in accordance with article seven of the public officers 14 law. 15 (iv) At least three trustees shall attend each hearing. 16 § 6-001. The judiciary law is amended by adding a new article 5-C to 17 read as follows: 18 ARTICLE 5-C 19 INTERIM COURT STRUCTURE FOR THE CITY OF STATEN ISLAND 20 Section 178. Declaration of legislative findings and intent. 21 178-a. Continuation of court proceedings. 22 178-b. Judicial transition. 23 178-c. Judiciary jurisdiction. 24 178-d. Judiciary; family court. 25 178-e. Judiciary; criminal court. 26 178-f. Judiciary; civil court. 27 178-g. Judicial transition; structure. 28 178-h. Unified court system; services. 29 178-i. Judicial transition services. 30 178-j. Effect of existing collective bargaining agreements. 31 § 178. Declaration of legislative findings and intent. The interim 32 court structure established for the city of Staten Island by this arti- 33 cle is being enacted in the exercise of the legislature's constitutional 34 authority to provide for the creation and organization of units of local 35 government. The legislature finds that it is not possible to create, 36 fund and staff a new and jurisdictionally distinct court structure for 37 the city of Staten Island which would be fully operational on the effec- 38 tive date of such city's incorporation. The legislature also finds that 39 the creation of a jurisdictionally distinct court structure for the city 40 of Staten Island would likely disrupt the orderly administration of 41 justice in such city and the county of Richmond, unnecessarily inconven- 42 ience and confuse litigants, and increase significantly the cost of 43 conducting litigation within such city and county. The purpose of this 44 article is to prevent an interregnum in the operations of the unified 45 court system in connection with the incorporation of the city of Staten 46 Island and its organization as a functional unit of local government. By 47 establishing an interim court structure for such city, the legislature 48 intends to relieve taxpayers and litigants of the expense, inconven- 49 ience, confusion, and delay that would be occasioned by the creation of 50 a new court structure for such city. By preserving the existing trial 51 court structure in the county of Richmond during the period of govern- 52 mental reorganization following the incorporation of the city of Staten 53 Island, the legislature intends that all inhabitants of such county and 54 city will continue to possess the same rights and access to the unified 55 court system that they possessed immediately prior to the incorporation 56 of such city.

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1 § 178-a. Continuation of court proceedings. The incorporation of the 2 city of Staten Island shall not alter the jurisdiction of any court 3 existing in the county of Richmond immediately prior to the effective 4 date of such city's incorporation. All courts in such county are contin- 5 ued, and no civil or criminal appeal, action or proceeding pending 6 before any court or any judge or justice on the effective date of incor- 7 poration shall abate or be impaired; and every such appeal, action or 8 proceeding shall be continued in the court in which such appeal, action 9 or proceeding was pending immediately prior to such effective date. 10 § 178-b. Judicial transition. There is established a judicial transi- 11 tion period for the city of Staten Island. Such period shall commence 12 on the effective date of such city's incorporation and terminate on 13 December thirty-first in the fifth year following such incorporation or 14 until the provisions of this article are specifically superseded by 15 state law. 16 § 178-c. Judiciary jurisdiction. During the judicial transition peri- 17 od: 18 (1) the county of Richmond shall be deemed to be a county within the 19 city of New York for all purposes of article six of the state constitu- 20 tion; 21 (2) the county of Richmond shall be deemed to be a county within the 22 city of New York for the purposes of section five hundred two of this 23 chapter; 24 (3) the city of Staten Island shall be deemed to be a part of the city 25 of New York for the purposes of section one hundred fifty-five and arti- 26 cles two-A and two-B of title two of the vehicle and traffic law; and 27 (4) the judge of the surrogate's court in the county of Richmond shall 28 be deemed to be a judge of a surrogate's court within the city of New 29 York for the purposes of subdivision c of section twelve of article six 30 of the state constitution. 31 § 178-d. Judiciary; family court. Notwithstanding section one hundred 32 twenty-one of the family court act, the county of Richmond shall be 33 deemed to be a county within the city of New York during the judicial 34 transition period, and there shall be no fewer than three judges of such 35 court who shall be residents of the county of Richmond. A vacancy occur- 36 ring in the office of any such judge during the judicial transition 37 period shall be filled by the mayor of the city of New York upon the 38 recommendation of the mayor of the city of Staten Island consistent with 39 the provisions of section two hundred sixteen-a of the family court act. 40 § 178-e. Judiciary; criminal court. Notwithstanding the provisions of 41 sections twenty and twenty-two of the New York city criminal court act, 42 the city of Staten Island shall be deemed to be part of the city of New 43 York during the judicial transition period, and there shall be no fewer 44 than three judges of such court who shall be residents of the city of 45 Staten Island. A vacancy occurring in the office of such judge during 46 the judicial transition period shall be filled by the mayor of the city 47 of New York upon the recommendation of the mayor of the city of Staten 48 Island consistent with the provisions of section twenty-two of the New 49 York city criminal court act. 50 § 178-f. Judiciary; civil court. Notwithstanding the provisions of 51 section one hundred two-a of the New York city civil court act, the city 52 of Staten Island shall be deemed to be part of the city of New York 53 during the judicial transition period, and there shall be no fewer than 54 three judges of such court who shall be residents of the city of Staten 55 Island. A vacancy occurring in the office of such judge otherwise than 56 by expiration of term during the judicial transition period shall be

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1 filled by the mayor of the city of New York upon the recommendation of 2 the mayor of the city of Staten Island consistent with the provisions of 3 section one hundred two-a of the New York city civil court act. 4 § 178-g. Judicial transition; structure. The mayor and the common 5 council of the city of Staten Island, in consultation with the chief 6 administrator of the courts, shall develop a plan for an appropriate 7 court structure for the city of Staten Island following the judicial 8 transition period. Such plan shall include recommendations for the 9 jurisdiction of each court, the number of judges needed, a personnel 10 structure for nonjudicial officers and employees, necessary physical 11 facilities, and a fiscal analysis of each component of the plan. Such 12 plan shall be submitted to the governor, the legislature and to the 13 chief judge of the state, no later than three years following commence- 14 ment of the judicial transition period. 15 § 178-h. Unified court system; services. The chief administrator of 16 the courts is authorized to do all things necessary to continue the 17 efficient operation of the unified court system within the county of 18 Richmond and the city of Staten Island during and after the judicial 19 transition period. 20 § 178-i. Judicial transition services. During the judicial transition 21 period, the mayor and the comptroller of the city of Staten Island and 22 the mayor and the comptroller of the city of New York are authorized to 23 enter into agreements relating to the provision of municipal services 24 for the courts within the city of Staten Island. Such municipal services 25 may include, but shall not be limited to, correctional services. 26 § 178-j. Effect of existing collective bargaining agreements. 27 Notwithstanding any other provision of law: 28 (1) The provisions of this article shall not alter any existing 29 collective negotiating unit of nonjudicial employees or any provision of 30 a collective negotiating agreement in effect on the effective date of 31 this article. 32 (2) To the extent permitted by the state constitution, where a judi- 33 cial or nonjudicial officer or employee of the unified court system is 34 required as a condition of their continued employment to reside in the 35 city of New York and, on the effective date of this article, they reside 36 in the county of Richmond, such officer or employee shall be deemed to 37 reside in the city of New York for so long as they remain in their posi- 38 tion, provided such officer or employee continues to reside in the coun- 39 ty or in the city of New York. 40 (3) The nonjudicial personnel of the courts affected by this article 41 in office on the effective date of this article shall, to the extent 42 practicable, be continued without diminution of salaries and with the 43 same status and rights in the courts continued in the county of Rich- 44 mond. 45 § 7-001. Section 31 of the public housing law, as amended by chapter 46 829 of the laws of 1947, is amended to read as follows: 47 § 31. Scope of authority's jurisdiction. The territorial jurisdiction 48 of an authority established for a city or village shall be coterminous 49 with the territorial limits of such city or village, and the territorial 50 jurisdiction of an authority established for a town shall include all 51 such town, except that such territorial jurisdiction shall not include 52 any territory that lies within the boundaries of any village, whether 53 such village has or has not established an authority. The members of 54 such town authority shall if they consent and when authorized by resol- 55 utions of the town board and the village board, act as the authority in

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1 and for said village, the same as if it had been created especially for 2 said village. 3 Notwithstanding the provisions of this section, the New York city 4 housing authority, the creation and establishment of which was validated 5 pursuant to section four hundred of this chapter, shall continue to have 6 territorial jurisdiction for the five counties which had constituted 7 parts of the city of New York prior to the establishment of the city of 8 Staten Island. 9 § 7-002. Subdivision 3 of section 402 of the public housing law, as 10 added by chapter 96 of the laws of 2013, is amended to read as follows: 11 3. a. The authority shall consist of seven members appointed by the 12 mayor, one of whom shall be designated by the mayor as [ chairman ] chair- 13 person removable at [ his or her ] the mayor's pleasure. The term of 14 office of each member other than the [ chairman ] chairperson shall be 15 three years, provided, however, that the initial appointments of the six 16 members other than the [ chairman ] chairperson shall be as follows: two 17 shall be appointed for one-year terms, two shall be appointed for two- 18 year terms, and two shall be appointed for three-year terms. The mayor 19 shall file with the commissioner of housing a certificate of appointment 20 of the [ chairman ] chairperson and of each member. Any member other than 21 the [ chairman ] chairperson may be removed by the mayor upon filing in 22 the office of the commissioner of citywide administrative services and 23 serving upon the member the reasons therefor. Such document setting 24 forth the reasons shall be made available to the general public, which 25 shall include but not be limited to publishing the reasons on the New 26 York city housing authority's website. Three of such members shall be a 27 tenant of record or an authorized member of the tenant household, in 28 good standing, residing in one of the federal projects owned or operated 29 by the authority, provided, however, that for the initial appointments 30 of the three such members, one shall be among the members initially 31 appointed for one-year terms, one shall be among the members initially 32 appointed for two-year terms, and one shall be among the members 33 initially appointed for three-year terms. A vacancy in the office of a 34 member other than the [ chairman ] chairperson occurring otherwise than by 35 expiration of term shall be filled for the unexpired term. Further, any 36 vacancy in the office of a tenant member shall only be filled by the 37 appointment of an eligible tenant member, and such appointment shall be 38 made within ninety days of such vacancy. 39 b. Notwithstanding paragraph a of this subdivision, upon the estab- 40 lishment of a city of Staten Island and for so long as the New York city 41 housing authority shall have territorial jurisdiction in the city of 42 Staten Island, such authority shall consist of eight members, the eighth 43 of whom shall be appointed by the mayor of Staten Island and shall serve 44 for a five-year term. The mayor of the city of Staten Island shall file 45 with the commissioner of housing and the chairperson of the New York 46 city housing authority a certificate of appointment of such member. Such 47 member may be removed by the mayor of Staten Island for cause after a 48 public hearing. Such member may be of any political party. A vacancy in 49 the office of such member occurring other than by expiration of a term 50 shall be filled for the unexpired term. 51 § 7-003. Section 455 of the education law, as amended by chapter 724 52 of the laws of 1976, is amended to read as follows: 53 § 455. Relationship with the board of education and the city of New 54 York. 1. In order most effectively to carry out its corporate purposes, 55 the fund shall cooperate with the director of management and budget and 56 the board of education of the city of New York in matters relating to

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1 land acquisition and capital planning for school buildings and facili- 2 ties. During the course of construction, reconstruction, rehabilitation 3 and improvement of combined occupancy structures the fund shall consult 4 with personnel of such board as the work progresses in matters relating 5 to space requirements, site plans, architectural concept, and substan- 6 tial changes in the plans and specifications therefor, and in matters 7 relating to the original furnishings, equipment, machinery and apparatus 8 needed to furnish and equip the school portion of such buildings and 9 structures, upon the completion of work. The board, on its part, shall 10 perform such functions and services for the fund as may be requested and 11 the fund shall pay to the board, from any monies of the fund available 12 for such purpose, the reasonable cost of such functions and services. 13 2. Notwithstanding subdivision one of this section, upon the estab- 14 lishment of a city of Staten Island, with respect to any fund activities 15 to take place within such city of Staten Island, the fund shall cooper- 16 ate with the mayor and comptroller of such city of Staten Island and the 17 board of education of the city school district of the city of Staten 18 Island in matters relating to land acquisition and capital planning for 19 school buildings and facilities to the same extent as with the respec- 20 tive officials of the city of New York. 21 § 7-004. Paragraph (c) of subdivision 1 of section 462 of the educa- 22 tion law, as separately amended by chapters 724 and 729 of the laws of 23 1976, is amended to read as follows: 24 (c) (i) To assure the continued operation and solvency of the capital 25 reserve fund for the carrying out of the public purposes of this arti- 26 cle, provision is made in paragraph (a) of this subdivision for the 27 accumulation in the capital reserve fund of an amount equal to the maxi- 28 mum amount of principal and interest maturing and becoming due and sink- 29 ing fund payments required to be made in any succeeding fiscal year on 30 all bonds of the fund then outstanding secured by the capital reserve 31 fund. In order further to assure such maintenance of the capital 32 reserve fund, the board of education shall annually request from the 33 city of New York and pay over to the fund, for deposit in the capital 34 reserve fund, such sum, if any, as shall be certified by the [ chairman ] 35 chairperson of the fund to the board, the mayor and the director of 36 management and budget of the city of New York as necessary to restore 37 the capital reserve fund to an amount equal to the maximum amount of 38 principal and interest maturing and becoming due and sinking fund 39 payments required to be made in the next succeeding fiscal year on the 40 bonds of the fund then outstanding secured by the capital reserve fund; 41 provided, however, that such sum shall have been first appropriated by 42 the city to the board or shall otherwise have been made lawfully avail- 43 able to the board for such purpose. The [ chairman ] chairperson of the 44 fund shall annually, not later than the fifteenth day of February in 45 each year, make and deliver to the board, the mayor and the director of 46 management and budget [ his ] their certificate stating the amount, if 47 any, required to restore the capital reserve fund to the amount afore- 48 said and the amount so stated, if any, shall be paid to the fund by the 49 board during the then current fiscal year of the fund. In the event of 50 the failure or inability of the board to pay over the stated amount to 51 the fund on or before August first of the same year, the [ chairman ] 52 chairperson of the fund shall forthwith make and deliver to the comp- 53 troller of the state of New York and the mayor and comptroller of the 54 city of Staten Island a further certificate restating the amount so 55 required and, after the comptroller of the state of New York shall have 56 given written notice to the commissioner of education, the mayor and

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1 director of management and budget and the mayor and comptroller of the 2 city of Staten Island , such amount shall be paid over to the fund by the 3 comptroller of the state of New York out of the next payment of state 4 aid apportioned , first, to the city of New York on behalf of the city 5 school district of the city of New York for the support of common 6 schools or such other aid or assistance payable in support of common 7 schools as shall supersede or supplement such state aid for the support 8 of common schools, including federal moneys apportioned by the state to 9 the city of New York on behalf of the city school district for the 10 support of common schools and, thereafter, if such amounts are insuffi- 11 cient, from such similar aid payable to the city of Staten Island . Any 12 amount so paid over to the fund shall be deducted from the corresponding 13 apportionment of state education aid or other aid or assistance for 14 education otherwise credited to the board of education for its purposes 15 and shall not obligate the state to make or entitle the city or the 16 board of education or city of Staten Island to receive any additional or 17 increased apportionment or payment of state aid for school purposes. 18 (ii) Notwithstanding subparagraph (i) of this paragraph, on or after 19 the first of January next succeeding the date on which this subparagraph 20 shall have become a law, the fund shall not issue any bonds, notes or 21 other obligations secured by a capital reserve fund into which state aid 22 or other aid otherwise payable to the city of Staten Island is to be 23 deposited pursuant to this paragraph, provided, however, the fund may 24 issue refunding bonds to pay bonds previously issued, which refunding 25 bonds may be so secured if the fund gives reasonable adequate notice of 26 its intention to issue such refunding bonds to the mayor of the city of 27 Staten Island and the comptroller of the city of Staten Island and both 28 such officials are given a reasonable opportunity to participate at the 29 meeting or meetings of the board of the fund at which action is taken to 30 issue such refunding bonds. 31 § 7-005. Paragraph (c) of subdivision 3 of section 462 of the educa- 32 tion law, as amended by chapter 474 of the laws of 1996, is amended to 33 read as follows: 34 (c) (i) To assure the continued operation and solvency of the fund for 35 the carrying out of the public purposes of this article, provision is 36 made in paragraph (a) of this subdivision for the accumulation in a debt 37 service reserve fund of an amount equal to the debt service reserve fund 38 requirement on all bonds of the fund then outstanding secured by a debt 39 service or debt service reserve fund. In order further to assure such 40 maintenance of a debt service reserve fund, the board of education shall 41 annually request from the city of New York and pay over to the fund 42 after making the payment required by paragraph (c) of subdivision one of 43 this section for deposit in a debt service reserve fund, such sum, if 44 any, as shall be certified by the [ chairman ] chairperson of the fund to 45 the board, the mayor and the director of the budget of the city of New 46 York as necessary to restore such debt service reserve fund to an amount 47 equal to the debt service reserve fund requirement for the bonds of the 48 fund secured by such debt service reserve fund; provided, however, that 49 such sum shall have been first appropriated by the city to the board or 50 shall otherwise have been made lawfully available to the board for such 51 purpose. The [ chairman ] chairperson of the fund shall annually, not 52 later than the fifteenth day of February in each year, make and deliver 53 to the board, the mayor and the director of the budget [ his ] their 54 certificate stating the amount, if any, required to restore a debt 55 service reserve fund to the amount aforesaid and the amount so stated 56 after making the payment required by paragraph (c) of subdivision one of

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1 this section if any, shall be paid to the fund by the board during the 2 then current fiscal year of the fund. In the event of the failure or 3 inability of the board to pay over the stated amount to the fund on or 4 before August first of the same year, the [ chairman ] chairperson of the 5 fund shall forthwith make and deliver to the comptroller of the state of 6 New York and the mayor and comptroller of the city of Staten Island a 7 further certificate restating the amount so required and, after the 8 comptroller of the state of New York shall have given written notice to 9 the commissioner, the mayor and director of the budget and the mayor and 10 comptroller of the city of Staten Island , such amount after making the 11 payment required by paragraph (c) of subdivision one of this section 12 shall be paid over to the fund by the comptroller of the state of New 13 York out of the next payment of state aid apportioned , first, to the 14 city of New York on behalf of the city school district of the city of 15 New York for the support of common schools or such other aid or assist- 16 ance payable in support of common schools as shall supercede or supple- 17 ment such state aid for the support of common schools, including federal 18 moneys apportioned by the state to the city of New York on behalf of the 19 city school district for the support of common schools and, thereafter, 20 if such amounts are insufficient, from such similar aid payable to the 21 city of Staten Island . Any amount so paid over to the fund under para- 22 graph (c) of subdivision one of this section shall be deducted from the 23 corresponding apportionment of state education aid or other aid or 24 assistance for education otherwise credited to the board of education or 25 the city of Staten Island for its purposes and shall not obligate the 26 state to make or entitle the city or the board of education or the city 27 of Staten Island to receive any additional or increased apportionment or 28 payment of state aid for school purposes. 29 (ii) Notwithstanding subparagraph (i) of this paragraph, on or after 30 the first of January next succeeding the date on which this subparagraph 31 shall have become a law, the fund shall not issue any bonds, notes or 32 other obligations secured by a debt service reserve fund into which 33 state aid or other aid otherwise payable to the city of Staten Island is 34 to be deposited pursuant to this paragraph, provided, however, the fund 35 may issue refunding bonds to pay bonds previously issued, which refund- 36 ing bonds may be so secured if the fund gives reasonable adequate notice 37 of its intention to issue such refunding bonds to the mayor of the city 38 of Staten Island and the comptroller of the city of Staten Island and 39 both such officials are given a reasonable opportunity to participate at 40 the meeting or meetings of the board of the fund at which action is 41 taken to issue such refunding bonds. 42 § 7-006. Subdivision 1 of section 1045-c of the public authorities 43 law, as added by chapter 513 of the laws of 1984, is amended to read as 44 follows: 45 1. A corporation known as the New York city municipal water finance 46 authority is hereby created for public purposes and charged with the 47 duties and having the powers provided in this title. The authority shall 48 be a body corporate and politic constituting a public benefit corpo- 49 ration. It shall be administered by a board of directors consisting of 50 [ seven ] eight members as follows: the commissioner of environmental 51 protection of the city, the state commissioner of environmental conser- 52 vation, the director of management and budget of the city, the commis- 53 sioner of finance of the city, two public members to be appointed by the 54 mayor , one public member to be appointed by the mayor of Staten Island 55 and one public member to be appointed by the governor. One public 56 member appointed by the mayor shall serve for a term of one year, one

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1 public member appointed by the mayor shall serve for a term of two 2 years, and the public [ member ] members appointed by the governor and 3 mayor of Staten Island shall serve for a term of two years from January 4 first next succeeding the date of their appointment. Their successors 5 shall serve for terms of two years each. Members shall continue in 6 office until their successors have been appointed and qualified. The 7 mayor , mayor of Staten Island or the governor shall fill any vacancy 8 which may occur by reason of death, resignation or otherwise in a manner 9 consistent with the original appointment. A public member may be 10 removed by the mayor , mayor of Staten Island, or the governor, [ whichev- 11 er ] whoever appointed [ him ] such member , for cause, but not without an 12 opportunity to be heard in person or by counsel, in [ his ] such member's 13 defense, upon not less than ten days' notice. The mayor shall select a 14 [ chairman ] chairperson from among the directors appointed by [ him ] such 15 mayor who shall serve in such capacity at [ his ] their pleasure. The 16 [ chairman ] chairperson shall preside over all meetings of the board of 17 directors and shall have such other duties as may be prescribed by the 18 board. 19 § 7-007. Subdivision 2 of section 1045-f of the public authorities 20 law, as added by chapter 513 of the laws of 1984, is amended to read as 21 follows: 22 2. The water board shall consist of seven members , six of which shall 23 be appointed by the mayor and, the seventh of which shall be appointed 24 by the mayor of Staten Island . The mayor of Staten Island shall fill 25 the earlier of the first expiration of a term or the first vacancy 26 occurring after the date of establishment of the city of Staten Island 27 and any successor thereto. Terms of office of the members shall be two 28 years except that the terms of four of the board members first appointed 29 shall be one year. At least one member shall have experience in the 30 science of water resource development. No member shall be a director of 31 the authority. The mayor shall appoint a [ chairman ] chairperson from 32 among the members of the board. All members shall continue to hold 33 office until their successors are appointed and qualified. Vacancies 34 shall be filled in the manner provided for original appointments. Vacan- 35 cies, occurring otherwise than by expiration of term of office, shall be 36 filled in the same manner as original appointments for the unexpired 37 terms. 38 § 7-008. Subdivision 5 of section 1045-f of the public authorities 39 law, as added by chapter 513 of the laws of 1984, is amended to read as 40 follows: 41 5. The appointing mayor may remove any member for inefficiency, 42 neglect of duty or misconduct in office after giving such member a copy 43 of the charges against such member and an opportunity to be heard and 44 defended, in person or by counsel, upon not less than ten days' notice. 45 If any member shall be so removed, the appointing mayor shall file in 46 the office of the clerk of the city a complete statement of charges 47 against such member, and the appointing mayor's findings thereon, 48 together with a complete record of the proceedings. 49 § 7-009. Paragraphs e and f of subdivision 1 of section 656 of the 50 private housing finance law, as amended by chapter 174 of the laws of 51 1992, are amended to read as follows: 52 e. (i) To assure the continued operation and solvency of the corpo- 53 ration for the carrying out of its corporate purposes, provision is made 54 in paragraph a of this subdivision for the accumulation in each capital 55 reserve fund of an amount equal to the maximum capital reserve fund 56 requirement. In order further to assure such maintenance of each capital

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1 reserve fund, there shall be paid by the city to the corporation for 2 deposit in each capital reserve fund on or before the first day of 3 April, in each year, such amount, if any, needed for the purpose of 4 restoring each such capital reserve fund to the maximum capital reserve 5 fund requirement for such fund, as shall be certified by the chairperson 6 of the corporation to the mayor and the director of management and budg- 7 et on or before the first day of December next preceding; provided that 8 any such amount shall have been first appropriated by or on behalf of 9 the city for such purpose or shall have been otherwise made available 10 from the proceeds of notes or bonds of the city authorized and issued 11 pursuant to the local finance law for such purpose, which is hereby 12 determined to be a specific object or purpose having a period of proba- 13 ble usefulness of five years. In the event of the failure or inability 14 of the city to pay over to the corporation, in full, on or before such 15 first day of April the amount so certified the chairperson of the corpo- 16 ration shall forthwith certify to the comptroller of the state of New 17 York the amount remaining unpaid and thereupon the state comptroller 18 shall pay to the corporation, out of the first moneys available for the 19 next succeeding payments of [ (i) ] (A) state aid apportioned to the city 20 of New York and, to the extent the amounts available therefor are insuf- 21 ficient, state aid apportioned to the city of Staten Island, as per 22 capita aid for the support of local government pursuant to section 23 fifty-four of the state finance law or [ (ii) ] (B) such other aid or 24 assistance payable by the state to the city and to the extent the 25 amounts available therefor are insufficient, such aid or assistance 26 payable by the state to the city of Staten Island and not otherwise 27 allocated as shall supersede or supplement such state per capita aid, 28 including federal moneys apportioned to the city and, to the extent the 29 amounts available therefor are insufficient, such moneys apportioned to 30 the city of Staten Island by the state, such amount remaining unpaid, 31 after giving written notice to the director of management and budget of 32 each amount to be paid out of such state aid, until the amount in each 33 such capital reserve fund is restored to the maximum capital reserve 34 fund requirement thereof; provided, however, that prior to the issuance 35 of any notes or bonds of the corporation pursuant to this article the 36 city shall have enacted a local law authorizing payments from such 37 sources into such a fund so long as any notes or bonds of the corpo- 38 ration shall be outstanding and unpaid, and provided further that 39 moneys, if any, payable to the city university construction fund pursu- 40 ant to the provisions of the city university construction fund act shall 41 be paid, in full, to such fund, prior to any payments therefrom to the 42 corporation. Any amount so paid over to the corporation shall be 43 deducted from the corresponding apportionment of such per capita state 44 aid otherwise payable to the city of New York or the city of Staten 45 Island, as applicable , and shall not obligate the state to make nor 46 entitle the city or the city of Staten Island to receive any additional 47 apportionment or payment of per capita state aid. All amounts paid over 48 to the corporation as provided in this [ paragraph ] subparagraph , includ- 49 ing amounts paid by the state comptroller out of payments of such state 50 aid, shall constitute and be accounted for as non-interest bearing loans 51 by the city or the city of Staten Island, as applicable to the corpo- 52 ration and, subject, subordinate and junior to the rights of the holders 53 of any notes or bonds of the corporation theretofore or thereafter 54 issued, shall be repaid to the city from [ (i) ] (A) moneys in such capi- 55 tal reserve fund in excess of the maximum capital reserve fund require-

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1 ment thereof or [ (ii) ] (B) any moneys of the corporation not required 2 for any other of its corporate purposes. 3 (ii) Notwithstanding subparagraph (i) of this paragraph, on or after 4 the first of January next succeeding the date on which this subparagraph 5 shall have become a law, the corporation shall not issue any bonds, 6 notes or other obligations secured by a capital reserve fund into which 7 per capita state aid or other aid otherwise payable to the city of 8 Staten Island is to be deposited pursuant to this subparagraph, 9 provided, however, the corporation may issue refunding bonds to pay 10 bonds previously issued, which refunding bonds may be so secured if the 11 corporation gives reasonable adequate notice of its intention to issue 12 such refunding bonds to the mayor of the city of Staten Island and the 13 comptroller of the city of Staten Island and both such officials are 14 given a reasonable opportunity to participate at the meeting or meetings 15 of the board of the corporation at which action is taken to issue such 16 refunding bonds. 17 f. In the event the chairperson of the corporation shall certify to 18 the mayor and director of management and budget or to the state comp- 19 troller any amount necessary to restore a capital reserve fund to the 20 maximum capital reserve fund requirement thereof pursuant to subdivision 21 e of this section, the chairperson shall simultaneously deliver to the 22 mayor of the city of Staten Island and the comptroller of the city of 23 Staten Island and additionally to such persons a statement of the cause 24 or causes of such capital reserve fund deficiency and the measures to be 25 taken by the corporation or the department of housing preservation and 26 development to insure repayment of any loans made by the city or the 27 city of Staten Island to the corporation, including amounts paid by the 28 state comptroller out of payments of state aid, for the purpose of 29 restoring such capital reserve fund to the maximum capital reserve fund 30 requirement thereof and to prevent the recurrence of any such deficien- 31 cy. 32 § 7-010. Subdivision 4 of section 1680-b of the public authorities 33 law, as amended by chapter 62 of the laws of 1988, is amended to read as 34 follows: 35 4. In the event that a participating municipality fails to pay to the 36 authority when due all or part of the rentals and other payments payable 37 pursuant to any lease, sublease or agreement with the authority, the 38 chairman or another officer of the authority shall certify at the times 39 provided in this subdivision the amount of rentals and other payments 40 then due from such participating municipality and unpaid. The state 41 comptroller, upon receipt of such certificate, shall deduct the amount 42 of such rentals and other payments as remains unpaid to the authority 43 first from the aid payable to such participating municipality from the 44 court facilities incentive aid fund established by section ninety-four 45 of the state finance law and, then, from the next succeeding payments of 46 state aid apportioned to such participating municipality, as revenue 47 sharing, per capita aid, and any other aid pursuant to section fifty- 48 four of the state finance law and, then, from the next succeeding 49 payments of state aid for any local governmental administrative costs 50 that are reimbursable to the participating municipality pursuant to 51 state law and, then, from the next succeeding payments of state aid from 52 moneys appropriated pursuant to section six hundred eight of the public 53 health law and pursuant to section ten-c of the highway law; provided, 54 however, that the right of the authority to the payment of any amount 55 deducted by the state comptroller pursuant to this section from per 56 capita aid apportioned to the city of New York or, to the extent insuf-

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1 ficient, the city of Staten Island shall be subject and subordinate to 2 the rights of the city university construction fund pursuant to section 3 sixty-two hundred seventy-nine of the education law, the New York city 4 housing development corporation pursuant to section six hundred fifty- 5 six of the private housing finance law, the trustees of the police 6 pension fund pursuant to paragraph e of subdivision seven of section 7 fifty-four of the state finance law, and the municipal assistance corpo- 8 ration for the city of New York pursuant to section three thousand thir- 9 ty-six-a of this chapter and subdivision one of section ninety-two-e of 10 the state finance law. In order to insure that the amount of rentals 11 and other payments due and unpaid by a participating municipality are 12 paid, the authority on or within thirty days prior to January twenty- 13 fifth, April twenty-fifth, July twenty-fifth and October twenty-fifth of 14 each year shall certify to the state comptroller the amount of rentals 15 and other payments then due and unpaid by each participating munici- 16 pality pursuant to any lease, sublease or other agreement. The amount 17 required to be deducted by the state comptroller pursuant to this subdi- 18 vision shall be deducted from such aid, whether or not the state aid 19 from which such deduction is to be made is then payable to the partic- 20 ipating municipality, and thereupon paid to the authority. The amount of 21 state aid payable to such participating municipality shall be reduced by 22 the amount deducted by the state comptroller notwithstanding the amount 23 appropriated and apportioned by the state to such participating munici- 24 pality, and the state shall not be obligated to make and the participat- 25 ing municipality shall not be entitled to receive any additional appor- 26 tionment or payment of such state aid. Nothing shall be construed to 27 create an obligation upon the state to appropriate moneys, to preclude 28 the state from reducing the amount of moneys appropriated or level of 29 assistance provided, or to preclude the state from altering or modifying 30 the manner in which it provides for or provides assistance. 31 § 7-011. Section 1727 of the public authorities law is amended by 32 adding a new subdivision 9 to read as follows: 33 9. Notwithstanding the provisions of this section or any other 34 provision of law to the contrary, the authority shall continue its 35 corporate existence regardless of the alteration of the composition of 36 the board of education of the city school district of the city of New 37 York caused by the incorporation of the city of Staten Island and the 38 establishment of the city school district of the city of Staten Island. 39 § 8-001. Subdivision 1 of section 23 of the executive law, as amended 40 by chapter 385 of the laws of 2017, is amended to read as follows: 41 1. Each county, except Richmond county and those counties contained 42 within the city of New York, and each city with a population of one 43 million or more, shall prepare a comprehensive emergency management 44 plan. Each city with a population of less than one million, town and 45 village is authorized to prepare a comprehensive emergency management 46 plan. The disaster preparedness commission shall provide assistance and 47 advice for the development of such plans. Each city with a population of 48 less than one million, town and village plan shall be coordinated with 49 the county plan. 50 § 8-002. Subdivision 1 of section 101-b of the executive law, as 51 added by chapter 1214 of the laws of 1971, is amended to read as 52 follows: 53 1. Definitions. As used in this section, 54 a. "Agency" means any state board, bureau, commission, department, 55 division or officer authorized by law to adopt rules.

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1 b. "Rule" means the whole or part of each agency statement of general 2 applicability or regulation or code that implements or applies law, 3 including the amendment, suspension or repeal thereof. 4 c. "Municipal corporation" means [ a ] any county outside the [ city ] 5 cities of New York and Staten Island , a city, a town, a village or a 6 school district. 7 d. "Governing body" means: 8 (1) In a county, a board of supervisors, county legislature or other 9 body vested by its charter, other law or other valid enactment with 10 jurisdiction to enact local laws; 11 (2) In a city, the board of aldermen, a common council, commission or 12 other body vested by its charter or other law with jurisdiction to enact 13 ordinances or local laws; 14 (3) In a town, the town board; 15 (4) In a village, the board of trustees; and 16 (5) In a school district, the board of education, board of trustees or 17 sole trustee. 18 § 8-003. Intentionally omitted. 19 § 8-004. Subdivisions 1, 2, 3, 4 and 6 of section 246 of the executive 20 law, subdivisions 1, 2 and 3 as amended by section 10 of part D of chap- 21 ter 56 of the laws of 2010, subdivision 4 as amended by section 102 of 22 part WWW of chapter 59 of the laws of 2017, and subdivision 6 as added 23 by chapter 479 of the laws of 1970 and as renumbered by chapter 813 of 24 the laws of 1985, are amended to read as follows: 25 1. The program of state aid to county probation services shall be 26 administered by the division of criminal justice services with the 27 advice of the state probation commission and the director of the office 28 of probation and correctional alternatives. Funds appropriated to the 29 division for distribution as state aid to county probation services 30 [ and ] , to the probation services of New York city and to the probation 31 services of the city of Staten Island shall be distributed by the divi- 32 sion in accordance with rules and regulations adopted by the commission- 33 er of the division of criminal justice services after consultation with 34 the state probation commission and the director of the office of 35 probation and correctional alternatives. 36 2. State aid shall be granted to the city of New York , the city of 37 Staten Island and the respective counties outside [ the city of New York ] 38 such cities for expenditures to be incurred by the county or [ city ] such 39 cities in maintaining and improving local probation services subject to 40 amounts appropriated for this purpose. State aid grants shall not be 41 used for expenditures for capital additions or improvements, or for debt 42 service costs for capital improvements. 43 State aid shall be granted by the commissioner of the division of 44 criminal justice services after consultation with the state probation 45 commission and the director of the office of probation and correctional 46 alternatives, provided the respective counties or the city of Staten 47 Island or the city of New York conform to standards relating to the 48 administration of probation services as adopted by the commissioner of 49 the division of criminal justice services after consultation with the 50 state probation commission and the director of the office of probation 51 and correctional alternatives. 52 3. Applications from counties or the city of Staten Island or the city 53 of New York for state aid under this section shall be made by filing 54 with the division of criminal justice services, a detailed plan, includ- 55 ing cost estimates covering probation services for the fiscal year or 56 portion thereof for which aid is requested. Included in such estimates

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1 shall be clerical costs and maintenance and operation costs as well as 2 salaries of probation personnel and such other pertinent information as 3 the commissioner of the division of criminal justice services may 4 require. Items for which state aid is requested under this section shall 5 be duly designated in the estimates submitted. The commissioner of the 6 division of criminal justice services, after consultation with the state 7 probation commission and the director of the office of probation and 8 correctional alternatives, shall approve such plan if it conforms to 9 standards relating to the administration of probation services as speci- 10 fied in the rules adopted by [ him or her ] such commissioner . 11 4. An approved plan and compliance with standards relating to the 12 administration of probation services promulgated by the commissioner of 13 the division of criminal justice services shall be a prerequisite to 14 eligibility for state aid. 15 The commissioner of the division of criminal justice services may take 16 into consideration granting additional state aid from an appropriation 17 made for state aid for county probation services for counties or the 18 city of Staten Island or the city of New York when a county or the city 19 of Staten Island or the city of New York demonstrates that additional 20 probation services were dedicated to intensive supervision programs and 21 intensive programs for sex offenders. The commissioner shall grant addi- 22 tional state aid from an appropriation dedicated to juvenile risk inter- 23 vention services coordination by probation departments which shall 24 include, but not be limited to, probation services performed under arti- 25 cle three of the family court act. The administration of such additional 26 grants shall be made according to rules and regulations promulgated by 27 the commissioner of the division of criminal justice services. Each 28 county and the city of Staten Island and the city of New York shall 29 certify the total amount collected pursuant to section two hundred 30 fifty-seven-c of this chapter. The commissioner of the division of crim- 31 inal justice services shall thereupon certify to the comptroller for 32 payment by the state out of funds appropriated for that purpose, the 33 amount to which the county or the city of Staten Island or the city of 34 New York shall be entitled under this section. The commissioner shall, 35 subject to an appropriation made available for such purpose, establish 36 and provide funding to probation departments for a continuum of 37 evidence-based intervention services for youth alleged or adjudicated 38 juvenile delinquents pursuant to article three of the family court act 39 or for eligible youth before or sentenced under the youth part in 40 accordance with the criminal procedure law. Such additional state aid 41 shall be made in an amount necessary to pay one hundred percent of the 42 expenditures for evidence-based practices and juvenile risk and 43 evidence-based intervention services provided to youth sixteen years of 44 age or older when such services would not otherwise have been provided 45 absent the provisions of [ a ] part WWW of chapter fifty-nine of the laws 46 of two thousand seventeen [ that increased the age of juvenile jurisdic- 47 tion ]. 48 6. The director, after consultation with the state probation commis- 49 sion, may authorize or require the comptroller to withhold the payment 50 of state aid to any county, or the city of Staten Island or the city of 51 New York, in the event that such county, or the city of Staten Island or 52 the city of New York, (a) fails to conform to standards of probation 53 administration as formulated by the director pursuant to this section, 54 (b) discontinues or fails to follow an approved plan, or (c) fails to 55 enforce in a satisfactory manner rules promulgated pursuant to this

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1 section, or laws now in effect or hereafter adopted which relate in any 2 manner to the administration of probation services. 3 § 8-004-a. The second undesignated paragraph of subdivision 4 of 4 section 246 of the executive law, as amended by section 103 of part WWW 5 of chapter 59 of the laws of 2017, is amended to read as follows: 6 The commissioner of the division of criminal justice services may take 7 into consideration granting additional state aid from an appropriation 8 made for state aid for county probation services for counties or the 9 city of Staten Island or the city of New York when a county or the city 10 of Staten Island or the city of New York demonstrates that additional 11 probation services were dedicated to intensive supervision programs and 12 intensive programs for sex offenders. The commissioner shall grant addi- 13 tional state aid from an appropriation dedicated to juvenile risk inter- 14 vention services coordination by probation departments which shall 15 include, but not be limited to, probation services performed under arti- 16 cle three of the family court act. The administration of such additional 17 grants shall be made according to rules and regulations promulgated by 18 the commissioner of the division of criminal justice services. Each 19 county and the city of Staten Island and the city of New York shall 20 certify the total amount collected pursuant to section two hundred 21 fifty-seven-c of this chapter. The commissioner of the division of crim- 22 inal justice services shall thereupon certify to the comptroller for 23 payment by the state out of funds appropriated for that purpose, the 24 amount to which the county or the city of Staten Island or the city of 25 New York shall be entitled under this section. The commissioner shall, 26 subject to an appropriation made available for such purpose, establish 27 and provide funding to probation departments for a continuum of 28 evidence-based intervention services for youth alleged or adjudicated 29 juvenile delinquents pursuant to article three of the family court act 30 or for eligible youth before or sentenced under the youth part in 31 accordance with the criminal procedure law. 32 § 8-005. Subdivision 1 of section 255 of the executive law, as added 33 by chapter 603 of the laws of 1973, is amended to read as follows: 34 1. There is hereby created a department of probation in and for the 35 city of New York to have charge of all probation work in the supreme, 36 family and criminal courts in the counties of Bronx, Kings, New York[ , ] 37 and Queens [ and Richmond ]. 38 § 8-006. The executive law is amended by adding a new section 255-a to 39 read as follows: 40 § 255-a. Probation in the city of Staten Island. 1. There is hereby 41 created a department of probation in and for the city of Staten Island 42 to have charge of all probation work in the supreme, family and other 43 criminal courts in the county of Richmond. 44 2. The head of such department shall be a director of probation 45 appointed by the mayor of the city of Staten Island to serve during the 46 pleasure of the mayor. The director shall have charge of the adminis- 47 tration of the department and shall be responsible for carrying out the 48 functions of the department including intake, investigation, super- 49 vision, conciliation and pre-disposition social treatment in cases 50 coming to the courts referred to in this section. The director may, 51 from time to time, create, abolish, transfer and consolidate bureaus and 52 other units within the department as such director may determine neces- 53 sary for efficient operation thereof. The director also shall have the 54 power to appoint and remove such deputy directors, assistants, probation 55 officers and other employees as may be needed for the performance of the 56 duties of the department and may prescribe their duties and fix their

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1 compensation, within appropriations made available therefor by the city 2 of Staten Island and subject to all applicable civil service laws and 3 rules and regulations. The director may, in such director's discretion, 4 appoint volunteer probation officers, when necessary, provided they have 5 the qualifications required of salaried officers, but no such volunteer 6 probation officer shall receive pay from the public funds for such offi- 7 cer's services. The city of Staten Island shall make the necessary 8 appropriation for the salaries of the director and of all officers and 9 employees of the department as referred to in this subdivision, as well 10 as for the expenses actually and necessarily incurred by such director, 11 officers and employees in the performance of their duties. 12 3. The director shall discharge such director's powers and responsi- 13 bilities in accordance with all laws and rules applicable to probation 14 and with the general rules regulating methods and procedure in the 15 administration of probation as adopted from time to time pursuant to 16 section two hundred forty-three of this chapter. The director may adopt 17 departmental rules, not inconsistent with law or the aforesaid general 18 rules, to regulate the policies, programs, standards, and methods of 19 procedure in relation to probation and the powers and duties of officers 20 and employees as in the director's judgment are deemed proper. 21 4. Notwithstanding any other provision of law or of the Staten Island 22 city charter or administrative code, any duly appointed officer or 23 employee of such probation department may reside in any county within 24 the state. 25 § 8-007. Subdivisions 1 and 4 of section 257-c of the executive law, 26 as added by chapter 55 of the laws of 1992, are amended to read as 27 follows: 28 1. Notwithstanding any other provision of law, every county , the city 29 of Staten Island and the city of New York, may adopt a local law requir- 30 ing individuals currently serving or who shall be sentenced to a period 31 of probation upon conviction of any crime under article thirty-one of 32 the vehicle and traffic law to pay to the local probation department 33 with the responsibility of supervising the probationer an administrative 34 fee of thirty dollars per month. The department shall waive all or part 35 of such fee where, because of the indigence of the offender, the payment 36 of said surcharge would work an unreasonable hardship on the person 37 convicted, [ his or her ] such person's immediate family, or any other 38 person who is dependent on such person for financial support. 39 4. In the event of non-payment of any fees which have not been waived 40 by the local probation department, the county , the city of Staten Island 41 or the city of New York may seek to enforce payment in any manner 42 permitted by law for enforcement of a debt. 43 § 8-008. Subdivision 3 of section 262 of the executive law, as amended 44 by section 28 of part A of chapter 56 of the laws of 2010, is amended to 45 read as follows: 46 3. Upon approval by the board, by a majority of its members, any coun- 47 ty outside the [ city ] cities of New York and Staten Island acting 48 through its county executive, and upon approval of the local legislative 49 body, may submit a proposed service plan to the office for approval. The 50 city of New York acting through the mayor and upon approval by the board 51 of estimate and the city of Staten Island acting through the mayor and 52 upon approval by the common council may submit a proposed service plan 53 to the office for approval. 54 § 8-009. Subdivisions 1 and 2 of section 266 of the executive law, as 55 added by chapter 338 of the laws of 1989, are amended to read as 56 follows:

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1 1. Counties and the [ city ] cities of New York and Staten Island may 2 submit approved amendments for alcohol and substance abuse programs as 3 defined in this article as part of or in addition to an approved plan. 4 In accordance with this article, nothing in this section shall prohibit 5 the development of regional alcohol and substance abuse programs by two 6 or more counties , the city of Staten Island or cities with a population 7 of one million or more. 8 2. Such approved amendments shall include a statement by the county or 9 the city of New York or the city of Staten Island indicating such 10 municipality's understanding that funding for eligible alcohol and 11 substance abuse programs shall be in accordance with subdivision four of 12 this section and the municipality's commitment to meet the funding 13 requirements as set forth in such subdivision. 14 § 8-010. Section 267 of the executive law, as amended by section 33 of 15 part A of chapter 56 of the laws of 2010, is amended to read as follows: 16 § 267. Office reports. The office shall submit to the governor, the 17 temporary president of the senate, the speaker of the assembly, the 18 [ chairman ] chairperson of the senate crime and correction committee and 19 the [ chairman ] chairperson of the assembly committee on codes by October 20 first of each year its evaluation and assessment of this alternatives 21 planning and programming effort by the counties. Such report shall 22 include, but not be limited to, the status of the development of such 23 plans, the approval and implementation of such plans, the success of the 24 programs, in terms of their utilization, effect on jail population, 25 results of the analyses provided counties and the [ city ] cities of New 26 York and Staten Island on the relationship between alcohol, drugs and 27 crime and the success of the eligible alcohol and substance abuse 28 programs and sentencing decisions together with any recommendations with 29 respect to the proper operation or improvement of planning and implemen- 30 tation of effective alternatives to detention and alternatives to incar- 31 ceration programs in counties. 32 § 8-011. Subdivisions 1 and 7 of section 530 of the executive law, 33 subdivision 1 as amended by section 4 of subpart B of part Q of chapter 34 58 of the laws of 2011, subdivision 7 as amended by section 21 of part K 35 of chapter 56 of the laws of 2019, are amended to read as follows: 36 1. Definitions. As used in this section, the term "municipality" shall 37 mean a county, the city of Staten Island or a city having a population 38 of one million or more. 39 7. The agency administering detention for each county and the city of 40 Staten Island and the city of New York shall submit to the office of 41 children and family services, at such times and in such form and manner 42 and containing such information as required by the office of children 43 and family services, an annual report on youth remanded pursuant to 44 article three or seven of the family court act who are detained during 45 each calendar year including, commencing January first, two thousand 46 twelve, the risk level of each detained youth as assessed by a detention 47 risk assessment instrument approved by the office of children and family 48 services provided, however, that the report due January first, two thou- 49 sand twenty-one and thereafter shall not be required to contain any 50 information on youth who are subject to article seven of the family 51 court act. The office may require that such data on detention use be 52 submitted to the office electronically. Such report shall include, but 53 not be limited to, the reason for the court's determination in accord- 54 ance with section 320.5 or seven hundred thirty-nine of the family court 55 act to detain the youth; the offense or offenses with which the youth is 56 charged; and all other reasons why the youth remains detained. The

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1 office shall submit a compilation of all the separate reports to the 2 governor and the legislature. 3 § 8-012. Subdivisions 1, 2 and 4 of section 214 of the elder law are 4 amended to read as follows: 5 1. Definitions. As used in this section, the following words shall 6 have the following meanings: 7 (a) "Designated agency" shall mean an agency which is designated by 8 the chief executive officer of the county if there be one, or otherwise 9 the governing board of such county, or the chief executive officer of 10 the city of New York or the mayor of the city of Staten Island , or the 11 governing board of an Indian tribal council; which is either a unit of 12 county government or the city of New York or the city of Staten Island 13 or an Indian tribal organization or a private non-profit agency, and 14 which is the area agency on aging created pursuant to the federal older 15 Americans act of 1965. 16 (b) "Elderly person" shall mean a person sixty years of age or older. 17 (c) "County" shall mean a county, as defined in section three of the 18 county law, except that the city of New York shall be considered one 19 county. 20 (d) "Base year expenditures" and "base year services" shall mean the 21 level of expenditures and services in the year prior to the first year 22 for which a county plan is submitted or in such county's two thousand 23 five fiscal year, whichever is greater. 24 (e) "Community services" shall mean services for elderly persons which 25 are provided by a public or governmental agency or non-profit agency, 26 and which are provided in the home of an elderly person or in community 27 settings such as senior citizens centers, housing projects, or agency 28 offices. Such services shall not include any services provided pursuant 29 to the public health law other than home care services. 30 (f) "Community service projects" shall mean community services 31 financed pursuant to paragraph (b) of subdivision four of this section. 32 (g) "County plan" shall mean a plan for community services prepared by 33 a county pursuant to this section. 34 (h) "Non-profit agency" shall mean a corporation organized or existing 35 pursuant to the not-for-profit corporation law. 36 (i) "Program year" shall mean the period from April first through 37 March thirty-first of the following calendar year. 38 (j) "First program year" for a county shall mean the initial year for 39 which the county has received approval for its county plan. 40 2. County plans for improving the availability of community services 41 to the elderly. (a) Counties with a designated agency are required to 42 submit a county plan for a two-, three-, or four-year period determined 43 by the director, with an annual update containing a budget request for 44 the forthcoming program year and such other information as shall be 45 required by the director, for improving the delivery of community 46 services for elderly persons in the format prescribed by the director. 47 The plan for the city of New York or the plan for the city of Staten 48 Island shall specifically address the needs of each county within such 49 city. Such plan shall be a comprehensive description of the manner in 50 which the county intends to address the needs of elderly persons living 51 in the county through improved coordination of existing community 52 services and by the development of any new or expanded community service 53 projects which will improve the delivery of services to the elderly. 54 Such plan shall contain: 55 (1) a statement of goals and objectives for addressing the needs of 56 elderly persons in the county, an assessment of the needs of elderly

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1 persons residing in the county, a description of public and private 2 resources that currently provide community services to elderly persons 3 within the county, a description of intended actions to consolidate and 4 coordinate existing community services administered by county govern- 5 ment, a description of the intended actions to coordinate congregate 6 services programs for the elderly operated within the county pursuant to 7 section two hundred seventeen of this title with other community 8 services for the elderly, a description of the means to coordinate other 9 community services for elderly persons in the county with those adminis- 10 tered by county government, and a statement of the priorities for the 11 provision of community services during the program period covered by 12 such plan; 13 (2) an identification of community service projects to be developed to 14 improve the delivery of services, a budget request for approval for the 15 forthcoming year which individually identifies each community service 16 project to be funded pursuant to paragraph (b) of subdivision four of 17 this section, letters of comment from the appropriate local agencies on 18 the relationship and expected impact of the proposed community service 19 projects, assurances that community service projects will provide 20 services to those most in need, an indication of fee schedules by which 21 elderly persons participating in community service projects may contrib- 22 ute to the costs of such projects, and an indication of how the effec- 23 tiveness of such community service projects will be evaluated; 24 (3) an identification of planning, coordination, and administrative 25 activities necessary to achieve the goals and objectives of the plan, 26 together with a budget request for such activities for approval for the 27 forthcoming year to be funded pursuant to paragraph (a) of subdivision 28 four of this section, and assurances by the county that it will comply 29 with the requirements of state and federal law; and 30 (4) such other components as may be required pursuant to regulations 31 promulgated by the director. 32 (b) Such county plan for community services or annual update shall be 33 prepared by the designated agency and approved by the chief executive 34 officer of the county, if there be one, or otherwise the governing board 35 of the county, or the chief executive of the city of New York or the 36 mayor of the city of Staten Island and submitted to the director no 37 later than ninety days prior to the beginning of the program period 38 covered by such plan or annual update. Prior to a submission of a coun- 39 ty plan or annual update to the director for approval, the designated 40 agency shall conduct such public hearings as may be required by regu- 41 lations of the director, provided that there shall be at least one such 42 hearing, and one in each county contained within the city of New York or 43 the city of Staten Island . 44 (c) The director shall review such county plan and may approve or 45 disapprove such plan, or any part, program, or project within such plan, 46 and shall propose such modifications and conditions as are deemed appro- 47 priate and necessary. Compliance with paragraphs (a) and (b) of this 48 subdivision shall be the basis for approval of a county plan. The direc- 49 tor shall establish by regulation the dates for notifying the designated 50 agency of approval or disapproval of a county plan. In the event the 51 director shall disapprove the proposed county plan, the county submit- 52 ting such application shall be afforded an opportunity for an adjudica- 53 tory hearing, as prescribed by article three of the state administrative 54 procedure act. 55 (d) Notwithstanding any provision of this section, nothing contained 56 in this section shall give the director or a designated agency any

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1 administrative, fiscal, supervisory, or other authority whatsoever over 2 any plans, programs or expenditures authorized pursuant to titles eigh- 3 teen, nineteen and twenty of the federal social security act, or over 4 any unit of state or local government. 5 (e) Counties with a designated agency may submit to the director a 6 letter of intent, in the form and by the date prescribed by the director 7 with the approval of the director of the budget, evidencing the commit- 8 ment of the county to develop a county home care plan for functionally 9 impaired elderly. 10 (f) Within the amounts appropriated therefor, counties submitting an 11 approved letter of intent pursuant to paragraph (e) of this subdivision 12 shall be eligible for reimbursement of one hundred percent of the 13 approved expenditures for preparing a county home care plan for func- 14 tionally impaired elderly. Such a grant-in-aid shall be available to a 15 county only once and shall be limited to one-half the amount available 16 to such county pursuant to subparagraph one of paragraph (a) of subdivi- 17 sion four of this section; provided however that in either of the two 18 years immediately following its first submission of a home care plan for 19 functionally impaired elderly, a county which does not receive state aid 20 during such year for expanded non-medical in-home services, non-institu- 21 tional respite services, case management services, and ancillary 22 services pursuant to paragraph (j) of subdivision four of this section, 23 may apply for reimbursement of one hundred percent of the approved 24 expenditures for revising such home care plan, limited to one-quarter 25 the amount available to such county pursuant to subparagraph one of 26 paragraph (a) of subdivision four of this section. 27 (g) County home care plans for functionally impaired elderly prepared 28 pursuant to this subdivision shall include a comprehensive description 29 of all aspects of home care, non-institutional respite, case management, 30 and ancillary services available to elderly persons in the county; a 31 description of intended actions to coordinate such home care, non-insti- 32 tutional respite, case management, and ancillary services to func- 33 tionally impaired elderly persons in their county provided under this 34 section with other services to elderly persons; a proposal for expanded 35 non-medical in-home services, non-institutional respite services, case 36 management services, and ancillary services for functionally impaired 37 elderly persons with unmet needs to support such persons' continued 38 residence in their homes; and such other components as may be required 39 pursuant to regulations promulgated by the director, including how the 40 proposed expanded non-medical in-home services, non-institutional 41 respite services, case management services, and ancillary services will 42 be delivered to unserved or underserved populations. 43 (h) Such county home care plan for functionally impaired elderly shall 44 be prepared by the designated agency after consultation with the social 45 services district and the local public health agency, and shall be 46 approved by the chief executive officer of the county, if there be one, 47 or otherwise the governing board of the county, or the chief executive 48 of the city of New York or the mayor of the city of Staten Island , and 49 submitted to the director for approval by such date as may be specified 50 by regulation. The director shall not approve such county home care plan 51 for functionally impaired elderly unless it complies with the standards 52 and regulations issued pursuant to this section. 53 4. State aid. (a) County plans for improving the availability of 54 community services to the elderly: 55 (1) within the amounts appropriated therefor, counties with an 56 approved county plan shall be eligible for reimbursement of one hundred

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1 percent of the annual approved expenditures for the preparation and 2 revision of such county plan, evaluation of projects contained within 3 such county plan, execution of interagency agreements necessary to carry 4 out the plan, actions to consolidate, combine or collocate services 5 within the county, and such other costs of the designated agency neces- 6 sary to implement such county plan, provided that the total annual 7 amount payable to a county pursuant to this subparagraph shall not 8 exceed the sum of one dollar for each elderly person residing in the 9 county, or seventy-five thousand dollars, whichever is less, and further 10 provided that for the city of New York or the city of Staten Island such 11 amount shall not exceed one dollar for each elderly person residing in 12 [ the ] such city or three hundred seventy-five thousand dollars, whichev- 13 er is less. Notwithstanding the foregoing limitations, counties with a 14 population of less than twenty thousand elderly persons shall be eligi- 15 ble for reimbursement of one hundred percent of such annual approved 16 expenditures provided that the total annual amount of such reimbursement 17 per county shall not exceed twenty thousand dollars. 18 (2) within the amounts appropriated therefor, a county may receive a 19 grant-in-aid of up to twenty-five per centum of the total annual amount 20 that such county is eligible to receive pursuant to subparagraph one of 21 this paragraph for the cost of preparing an initial county plan in 22 accordance with this section. Such a grant-in-aid shall be available to 23 a county only once and shall be in addition to the reimbursement 24 received by the county pursuant to subparagraph one of this paragraph 25 for the first program year. A request for such a grant-in-aid shall be 26 accompanied by a letter of intent in the form prescribed by the director 27 evidencing the commitment of the county to develop a county plan for 28 community services and shall be submitted to the director at least six 29 months prior to the beginning of the first program year. 30 (b) Community service projects: 31 (1) within the amounts appropriated therefor, counties having an 32 approved county plan shall be eligible for reimbursement by the state 33 for expenditures for approved community service projects pursuant to 34 this section. Such state reimbursement shall not exceed thirty-three 35 thousand six hundred dollars or four dollars twenty cents for each 36 elderly person residing in the county, whichever is greater. The annual 37 state reimbursement eligibility shall be at a rate of seventy-five 38 percent of the total annual expenditures for such approved programs. 39 (2) the director shall provide by regulation that certain non-county 40 moneys and in-kind equivalents may be used to comprise the county share 41 of such total annual approved expenditures, provided that such county 42 share shall not include cost-sharing received from elderly persons 43 receiving expanded non-medical in-home services, non-institutional 44 respite services, case management services, and ancillary services 45 pursuant to paragraph (k) of this subdivision or moneys received from 46 the federal government for services for the elderly allocated to the 47 states or local governments according to population or other such non- 48 competitive basis. 49 (3) the director shall provide by regulation the requirements for any 50 participant contributions and fee schedules used for community service 51 projects and the manner for the accounting and use of any such revenue. 52 (c) Reimbursement pursuant to this section shall not be available for 53 expenditures for base year services otherwise provided without cost, or 54 to replace base year expenditures made by the county or any other 55 service provider irrespective of the source of funds for such services.

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1 (d) Reimbursement shall not be available to community services 2 projects funded pursuant to paragraph (b) of this subdivision or to 3 expanded non-medical in-home services, non-institutional respite 4 services, case management services, and ancillary services funded pursu- 5 ant to paragraph (j) of this subdivision for services provided to elder- 6 ly persons who are eligible for or are receiving services to meet their 7 needs pursuant to titles eighteen, nineteen or twenty of the federal 8 social security act or any other governmental programs or for services 9 provided to residents in adult residential care facilities which had 10 previously been provided by the facility or which are required by law to 11 be provided by such facility. 12 (e) For the purpose of determining the amount of state reimbursement 13 for which a county is eligible pursuant to this section, the last 14 preceding federal census or other census data approved by the comp- 15 troller shall be used. Funds appropriated by the state for the purpose 16 of reimbursement for community services pursuant to this section shall 17 be apportioned among the counties pursuant to the formula set forth in 18 paragraph (b) of this subdivision by the director. Funds appropriated by 19 the state for the purpose of reimbursement for expanded non-medical 20 in-home services, non-institutional respite services, case management 21 services, and ancillary services pursuant to this section shall be 22 apportioned among the counties by the director pursuant to the formula 23 set forth in paragraph (j) of this subdivision. 24 (f) The comptroller may withhold the payment of state aid to any coun- 25 ty in the event that such county alters or discontinues the operations 26 approved by the director pursuant to this section or otherwise fails to 27 comply with the regulations or requirements of the director. 28 (g) Counties shall submit claims for reimbursement after the end of 29 each month or each quarter as required by and in accordance with proce- 30 dures prescribed by the director. Reimbursement shall be available for 31 approved expenditures incurred in accordance with an approved county 32 plan for community services. 33 (h) Reimbursement pursuant to subparagraph one of paragraph (b) or 34 paragraph (j) of this subdivision shall not be available for expendi- 35 tures for community or expanded non-medical in-home services, non-insti- 36 tutional respite services, case management services, and ancillary 37 services to elderly persons in the city of New York and in the city of 38 Staten Island unless expenditures for such services are apportioned for 39 services in each of the counties contained within such city in a manner 40 which the director has determined by regulation substantially reflects 41 the proportion that the number of elderly persons in that county bears 42 to the total number of elderly persons in [ the ] such city as a whole. In 43 determining whether reimbursement shall be available under paragraph (g) 44 of this subdivision, the director shall ensure that expenditures were 45 apportioned in accordance with the provisions of this paragraph. 46 (i) The director, within the amounts appropriated therefor and with 47 the approval of the director of the budget, may authorize a county which 48 has an approved home care plan for functionally impaired elderly to 49 provide expanded non-medical in-home services, non-institutional respite 50 services, case management services, and ancillary services pursuant to 51 such plan. Such services shall be limited to those services necessary to 52 meet otherwise unmet needs and which support such elderly persons' 53 continued residence in their homes. Needs will be determined pursuant to 54 a standardized evaluation of functional impairment, available resources 55 and such other relevant factors specified pursuant to regulations 56 promulgated by the director. No expanded non-medical in-home services,

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1 non-institutional respite services, or ancillary services shall be 2 provided to any individual pursuant to this section unless such expanded 3 non-medical in-home services, non-institutional respite services, or 4 ancillary services are accompanied by ongoing case management services 5 in accordance with regulations promulgated by the director. 6 (j) Within the amounts appropriated therefor, counties authorized to 7 provide expanded non-medical in-home services, non-institutional respite 8 services, case management services, and ancillary services pursuant to 9 paragraph (i) of this subdivision shall be eligible for reimbursement by 10 the state of up to seventy-five percent of allowable expenditures for 11 approved services pursuant to this section up to the level authorized by 12 the director. The director shall not authorize a level of state 13 reimbursement pursuant to this paragraph which exceeds the sum of nine- 14 ty-one thousand two hundred fifty dollars or seven dollars thirty cents 15 for each elderly person residing in the county, whichever is greater, 16 and shall proportionately reduce such sum for each county in any years 17 for which appropriations are not sufficient to fully fund approved 18 expanded non-medical in-home services, non-institutional respite 19 services, case management services, and ancillary services for func- 20 tionally impaired elderly in all counties with approved home care plans; 21 provided however that in state fiscal years beginning on or after the 22 first day of April, two thousand five, the director, with the approval 23 of the director of the budget, may authorize state reimbursement in 24 excess of these levels to the extent appropriations are available there- 25 for. 26 (k) The director, with the approval of the director of the budget, 27 shall provide by regulation the extent of cost-sharing to be required of 28 elderly persons receiving expanded non-medical in-home services, non-in- 29 stitutional respite services, case management services, and ancillary 30 services pursuant to this section, which shall reflect such recipients' 31 means to pay for such services and which will not affect their ability 32 to remain in their homes; provided however that the director shall not 33 authorize or direct the withholding of state aid pursuant to paragraph 34 (f) of this subdivision prior to the first day of April, two thousand 35 five, based on any county's failure or inability to comply with regu- 36 lations promulgated pursuant to this paragraph. The full amount of cost- 37 sharing actually received by any county from elderly persons receiving 38 expanded non-medical in-home services, non-institutional respite 39 services, case management services, and ancillary services shall be used 40 by such county to expand either such county's program of community 41 services or such county's program of expanded non-medical in-home 42 services, non-institutional respite services, case management services, 43 and ancillary services pursuant to this section. 44 (l) Reimbursement pursuant to paragraph (j) of this subdivision shall 45 not be available for expenditures for base year services otherwise 46 provided without cost, or to replace base year expenditures made by the 47 county or any other service provider irrespective of the source of 48 funds, or to replace community services expenditures pursuant to para- 49 graph (b) of this subdivision. 50 (m) Counties shall submit claims for reimbursement for expanded 51 in-home services, non-institutional respite services, case management 52 services, and ancillary services to functionally impaired elderly as 53 required by and in accordance with procedures prescribed by the direc- 54 tor. Reimbursement shall be available for approved expenditures 55 incurred in accordance with an approved county home care plan for func- 56 tionally impaired elderly to the extent the director has authorized

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1 state aid for such services pursuant to paragraph (i) of this subdivi- 2 sion. 3 (n) The director shall provide by regulation that certain non-county 4 moneys and in-kind equivalents may be used in part to compose the county 5 share of total allowable expenditures pursuant to paragraph (j) of this 6 subdivision, provided that such county share shall not include cost- 7 sharing received from elderly persons receiving expanded non-medical 8 in-home services, non-institutional respite services, case management 9 services, and ancillary services pursuant to paragraph (k) of this 10 subdivision or moneys received from the federal government for services 11 for the elderly allocated to the states or local governments according 12 to population or other such non-competitive basis. 13 § 8-013. Subdivision 9 of section 140 of the executive law, as amended 14 by chapter 861 of the laws of 1960, is amended to read as follows: 15 9. The clerks of the counties of New York, Kings, Queens, Richmond 16 and Bronx shall each keep a book or card index file in which shall be 17 registered the signature of the commissioners so filing such certif- 18 icates; and the county clerk of any county in the city with whom such 19 commissioner has filed a certificate of appointment shall, upon demand 20 and upon payment of the sum of fifty cents, authenticate a certificate 21 of acknowledgment or proof of oath taken before such commissioner of 22 deeds, without regard to the county in the city in which such [ acknowlg- 23 ment ] acknowledgment or proof was taken or oath administered, by 24 subjoining or attaching to the original certificate of acknowledgment or 25 proof or oath a certificate under [ his ] such clerk's hand and official 26 seal specifying that at the time of taking the acknowledgment or proof 27 or oath the officer taking it was duly authorized to take the same; that 28 the authenticating officer is acquainted with the former's handwriting, 29 or has compared the signature on the certificate of acknowledgment, 30 proof or oath with the autograph signature deposited in [ his ] such 31 clerk's office by such officer, and that [ he ] they verily believes the 32 signature is genuine. 33 § 8-014. Any person who resides in or maintains an office or other 34 place of business in the city of Staten Island and who resides in the 35 county of Richmond on the date of establishment of the city of Staten 36 Island who holds an appointment as a commissioner of deeds from the 37 preceding municipality shall be deemed to hold the appointment as 38 commissioner of deeds from the common council of the city of Staten 39 Island in accordance with the provisions of section 139 of the executive 40 law. Such person shall continue to hold such office until such person's 41 original appointment expires or is revoked pursuant to law. 42 § 8-015. Section 56 of the social services law, as amended by chapter 43 863 of the laws of 1977, is amended to read as follows: 44 § 56. City social services districts. The city of New York and the 45 city of Staten Island shall have all the powers and duties of a social 46 services district insofar as consistent with the provisions of the 47 special and local laws relating to such [ city ] cities . The officers 48 thereof charged with the administration of public assistance and care 49 shall have additional powers and duties of a commissioner of social 50 services not inconsistent with the laws relating to said [ city ] cities . 51 § 8-016. Section 57 of the social services law, as amended by chapter 52 863 of the laws of 1977, is amended to read as follows: 53 § 57. Cities in county social services districts. Each city, other 54 than the city of New York and the city of Staten Island , shall form part 55 of the county social services district of the county in which it is 56 situated and shall not assume any powers and responsibilities for the

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1 administration or expense of public assistance and care, in addition to 2 those specified in subdivision two of section sixty-nine, except pursu- 3 ant to the provisions of sections seventy-four and seventy-four-a of 4 this chapter. 5 § 8-017. Section 61 of the social services law is amended by adding a 6 new subdivision 1-a to read as follows: 7 1-a. The city of Staten Island is hereby constituted a city social 8 services district. 9 § 8-018. Subdivision 1 of section 74 of the social services law, as 10 added by chapter 863 of the laws of 1977, is amended to read as follows: 11 1. Each city, other than the city of New York and the city of Staten 12 Island , which is responsible for one or more types of public assistance 13 and care on the date this section becomes effective shall function under 14 section seventy-four-a of this chapter. 15 § 8-019. Section 86-a of the social services law, as amended by chap- 16 ter 655 of the laws of 1978, is amended to read as follows: 17 § 86-a. City public welfare funds. The taxes levied for public 18 assistance and care in a city, or in a city public welfare district, 19 shall be paid to the city treasurer, [ or ] the commissioner of finance in 20 the city of New York or the comptroller in the city of Staten Island , 21 and disbursed in accordance with the provisions of law relating to such 22 city for the payment of bills and claims, provided such provisions of 23 law are not inconsistent with the provisions of this chapter. 24 § 8-020. Intentionally omitted. 25 § 8-021. Subdivision 2 of section 209 of the social services law, as 26 amended by chapter 71 of the laws of 1983, paragraphs (a), (b), (c), 27 (d), (e) and (f) as amended by section 2 of part R of chapter 56 of the 28 laws of 2025, is amended to read as follows: 29 2. The following amounts shall be the standard of monthly need for 30 determining eligibility for and the amount of additional state payments, 31 depending on the type of living arrangement and the geographic area in 32 which the eligible individual or the eligible couple resides: 33 (a) On and after January first, two thousand twenty-five, for an 34 eligible individual living alone, $1,054.00; and for an eligible couple 35 living alone, $1,554.00. 36 (b) On and after January first, two thousand twenty-five, for an 37 eligible individual living with others with or without in-kind income, 38 $990.00; and for an eligible couple living with others with or without 39 in-kind income, $1,496.00. 40 (c) On and after January first, two thousand twenty-five, (i) for an 41 eligible individual receiving family care, $1,233.48 if such individual 42 is receiving such care in the city of New York , the city of Staten 43 Island or the county of Nassau, Suffolk, Westchester or Rockland; and 44 (ii) for an eligible couple receiving family care in the city of New 45 York , the city of Staten Island or the county of Nassau, Suffolk, West- 46 chester or Rockland, two times the amount set forth in subparagraph (i) 47 of this paragraph; or (iii) for an eligible individual receiving such 48 care in any other county in the state, $1,195.48; and (iv) for an eligi- 49 ble couple receiving such care in any other county in the state, two 50 times the amount set forth in subparagraph (iii) of this paragraph. 51 (d) On and after January first, two thousand twenty-five, (i) for an 52 eligible individual receiving residential care, $1,402.00 if such indi- 53 vidual is receiving such care in the city of New York , the city of 54 Staten Island or the county of Nassau, Suffolk, Westchester or Rockland; 55 and (ii) for an eligible couple receiving residential care in the city 56 of New York , the city of Staten Island or the county of Nassau, Suffolk,

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1 Westchester or Rockland, two times the amount set forth in subparagraph 2 (i) of this paragraph; or (iii) for an eligible individual receiving 3 such care in any other county in the state, $1,372.00; and (iv) for an 4 eligible couple receiving such care in any other county in the state, 5 two times the amount set forth in subparagraph (iii) of this paragraph. 6 (e) On and after January first, two thousand twenty-five, (i) for an 7 eligible individual receiving enhanced residential care, $1,661.00; and 8 (ii) for an eligible couple receiving enhanced residential care, two 9 times the amount set forth in subparagraph (i) of this paragraph. 10 (f) The amounts set forth in paragraphs (a) through (e) of this subdi- 11 vision shall be increased to reflect any increases in federal supple- 12 mental security income benefits for individuals or couples which become 13 effective on or after January first, two thousand twenty-six but prior 14 to June thirtieth, two thousand twenty-six. 15 § 8-022. Subdivision 1 of section 368-e of the social services law, as 16 amended by section 55 of part B of chapter 58 of the laws of 2009, is 17 amended to read as follows: 18 1. The department of health shall review claims for expenditures made 19 by counties , the city of Staten Island and the city of New York for 20 medical care, services and supplies which are furnished to preschool 21 children with handicapping conditions or such preschool children 22 suspected of having handicapping conditions, as such children are 23 defined in the education law. If approved by the department, payment for 24 such medical care, services and supplies which would otherwise qualify 25 for reimbursement under this title and which are furnished in accordance 26 with this title and the regulations of the department to such children, 27 shall be made in accordance with the department's approved medical 28 assistance fee schedules by payment to such county or [ city ] cities 29 which furnished the care, services or supplies either directly or by 30 contract. Notwithstanding any provisions of law, rule or regulation to 31 the contrary, any clinic or diagnostic and treatment center licensed 32 under article twenty-eight of the public health law, which as determined 33 by the state education department, in conjunction with the department of 34 health, has a less than arms length relationship with the provider 35 approved under section forty-four hundred ten of the education law 36 shall, subject to the approval of the department and based on standards 37 developed by the department, be authorized to directly submit such 38 claims for medical assistance, services or supplies so furnished for any 39 period beginning on or after July first, nineteen hundred ninety-seven. 40 The actual full cost of the individualized education program (IEP) 41 related services incurred by the clinic shall be reported on the New 42 York State Consolidated Fiscal Report in the education law section 43 forty-four hundred ten program cost center in which the student is 44 placed and the associated medical assistance revenue shall be reported 45 in the same manner. 46 § 8-023. Subdivision 13 of section 390 of the social services law, as 47 amended by chapter 160 of the laws of 2003, is amended to read as 48 follows: 49 13. Notwithstanding any other provision of law, this section[ , except 50 for paragraph (a-1) of subdivision two-a of this section, ] shall not 51 apply to child day care centers in the city of New York or in the city 52 of Staten Island . 53 § 9-001. Subdivision 1 of section 214 of the county law, as amended by 54 chapter 967 of the laws of 1973, is amended to read as follows: 55 1. Concurrent resolutions, election notices and official canvass. 56 The members of the county legislative body, whether such body be denomi-

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1 nated board of supervisors, county legislature or otherwise, or, in the 2 [ city ] cities of New York and Staten Island , of the council of each such 3 city representing respectively each of the two principal political 4 parties into which the people of the state are divided, shall designate 5 annually the newspaper published within the county to publish the 6 concurrent resolutions of the legislature. Such designation shall be in 7 writing and signed by a majority of the members representing each of 8 said political parties. In making such designation, consideration shall 9 be given to the newspapers advocating the principles of such political 10 party, the support of its nominees and the extent of the circulation in 11 the county. However the fact that a newspaper is an independent newspa- 12 per not advocating the principles of any political party shall not 13 disqualify it from consideration. If there be but one newspaper 14 published in the county, such newspaper shall be designated. The desig- 15 nation shall be filed with the clerk of the county legislative body or, 16 in the [ city ] cities of New York and Staten Island , with the clerk of 17 the council of each such city, who shall not later than January tenth 18 cause notice of the name and address of such newspaper or newspapers to 19 be forwarded to the secretary of state. In like manner the members of 20 the county legislative body or, in the [ city ] cities of New York and 21 Staten Island , of the council of each such city representing each of the 22 two principal political parties into which the people of the state are 23 divided, shall designate the newspaper published within the county to 24 publish the election notices issued by the secretary of state and the 25 newspaper to publish the official canvass. In the event of a failure so 26 to designate in any year, or if either of such political parties has no 27 representatives among the body or, in the [ city ] cities of New York and 28 Staten Island , council membership, the last newspaper designated by the 29 members of such party shall be deemed duly designated. 30 § 9-002. Section 226-a of the county law, as added by chapter 80 of 31 the laws of 1969, is amended to read as follows: 32 § 226-a. Patriotic observances. The county legislature and/or board 33 of supervisors, as the case may be, of any county or borough outside the 34 city of New York or the city of Staten Island , is hereby authorized to 35 appropriate and set aside each year such sums it may deem proper for the 36 purpose of providing for the due and proper observance of any legal 37 holiday, including Columbus day. 38 § 9-003. Section 361-a of the county law, as amended by chapter 359 of 39 the laws of 1989, is amended to read as follows: 40 § 361-a. Expenses of boards of elections outside New York City and the 41 city of Staten Island ; apportionment of. The board of elections in each 42 county, outside of the [ city ] cities of New York and Staten Island , on 43 or before the fifteenth day of December and not earlier than the first 44 day of October, in each year, shall certify to the clerk of the legisla- 45 tive body of the county, the total amount of the expenses of such board 46 of elections, including salaries for the preceding year, and, if the 47 legislative body of any county shall so direct, shall certify to such 48 clerk the portions of such expenses which under provisions of law are to 49 be borne by any city or cities in said county and the portion thereof 50 which is to be borne by the rest of such county and such clerk shall 51 thereupon notify the proper local official or officials, who, in spread- 52 ing upon the assessment-rolls the taxes to be levied upon the taxable 53 property in the city or any such cities, and in the rest of the county, 54 shall include in the amount so spread the amounts certified by the board 55 of elections to be borne by such city or cities, respectively, and in 56 the amount spread upon the assessment-rolls of the taxable property in

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1 the several towns or other political subdivisions of the rest of the 2 county the amount so certified by said board of elections to be borne by 3 such towns or political subdivisions respectively. Whenever any addi- 4 tional expenses either for salaries or supplies in addition to the regu- 5 lar county-wide primary and election expenses are incurred by a board of 6 elections incidental to any election in any city, town or village, such 7 board of elections shall certify to the county legislative body a 8 detailed statement of such expenses and said county legislative body may 9 cause the amount thereof to be levied against such city, town or village 10 or may certify the amount thereof to such city, town or village and such 11 city, town or village shall upon such certification, include the amount 12 so certified in the next budget and tax levy and shall pay the same to 13 the county. 14 § 9-004. Subdivision 2 of section 390 of the county law, as added by 15 chapter 1 of the laws of 1951, is amended to read as follows: 16 2. Whenever a patient admitted to said hospital has local residence, 17 as defined in the public health law, in the county in which the hospital 18 is situated, [ he ] such patient shall be a charge upon such county. If 19 such patient admitted to said hospital has local residence in some other 20 county or in the city of New York or the city of Staten Island , [ he ] 21 such patient shall be a charge upon such other county or the city of New 22 York or the city of Staten Island , as the case may be, and the super- 23 intendent shall send a bill for such charge to the clerk of the board of 24 supervisors of such other county or to the comptroller of the city of 25 New York or of the city of Staten Island . Such charge shall be at a 26 rate to be fixed by the board of managers, which shall not exceed the 27 per diem per capita cost of care and treatment in said hospital, and if 28 the county operating said hospital is currently receiving state aid for 29 the care and treatment of tuberculosis patients pursuant to the public 30 health law, such charge may be an amount for each day of such patient's 31 care equivalent to the balance of the total per diem per capita cost of 32 operating such hospital during the preceding fiscal year, as computed 33 and approved by the state commissioner of health [ pursuant to subdivi- 34 sion three of section fifty-four of the public health law ]. Such bill 35 shall be audited and paid by the board of supervisors of said county, 36 except that a bill so submitted to the city of New York or the city of 37 Staten Island shall be paid by such city after audit and upon warrant of 38 the comptroller of such city. Any patient admitted to said hospital may 39 pay for [ his ] their care and treatment in whole or in part if [ he ] such 40 patient volunteers to do so. 41 § 9-005. Section 391 of the county law, as added by chapter 1 of the 42 laws of 1951, is amended to read as follows: 43 § 391. Admission of out of county patients. 1. Exclusive of the 44 city of New York and the city of Staten Island , and exclusive of coun- 45 ties served by state tuberculosis hospitals, any person in a county not 46 having a county hospital for the care and treatment of persons suffering 47 from tuberculosis may apply in person to the clerk of the board of 48 supervisors of such county or to the state commissioner of health for 49 admission to a tuberculosis hospital, providing that such person submit 50 with such application a statement signed by a reputable physician that 51 such physician has, within the ten days preceding the date of such 52 application, examined such person and that, in [ his ] such physician's 53 opinion, such person is suffering from tuberculosis or is suspected of 54 having tuberculosis and is in need of care and treatment therefor. Upon 55 receipt of such application, the clerk of the board of supervisors or 56 the state commissioner of health, as the case may be, shall forward the

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1 same to the superintendent of any state, county or city hospital for the 2 care and treatment of tuberculosis. 3 2. Whenever the superintendent of such a hospital shall receive an 4 application for the admission of a patient in accordance with the 5 provisions of subdivision one of this section, if it appear from such 6 application that the person therein referred to is suffering from tuber- 7 culosis or is suspected of having tuberculosis and is in need of care 8 and treatment therefor, the superintendent shall notify said person to 9 appear in person at the hospital, provided there be a vacancy in such 10 hospital and there be no pending application from a patient living in 11 the county in which the hospital is located. If, upon personal examina- 12 tion of the patient, the superintendent is satisfied that such patient 13 is in need of care and treatment for tuberculosis, [ he ] such superinten- 14 dent shall admit [ him ] such patient to the hospital. Every patient so 15 admitted shall be a charge against the county in which [ he ] such patient 16 was living immediately prior to such admission. Such charge shall be at 17 a rate to be fixed by the board of managers, which shall not exceed the 18 per diem per capita cost of maintenance therein and any cost of trans- 19 portation to or from the hospital, except that if the county operating 20 said hospital is currently receiving state aid for the care and treat- 21 ment of tuberculosis patients pursuant to the public health law, such 22 charge shall be an amount for each day of such patient's care equivalent 23 to the balance of the total per diem per capita cost of operating such 24 hospital during the preceding fiscal year, as computed and approved by 25 the state commissioner of health [ pursuant to subdivision three of 26 section fifty-four of the public health law ]; and the bill therefor 27 shall be audited and paid by the board of supervisors of the said coun- 28 ty. However, if such patient has local residence, as defined in the 29 public health law, in some county other than the one in which [ he ] such 30 patient was living immediately prior to such admission or in the city of 31 New York or the city of Staten Island , [ he ] such patient shall be a 32 charge upon such other county or the city of New York or the city of 33 Staten Island , as the case may be, and in this event any amounts for the 34 cost of such care and treatment which shall have been paid by the county 35 from which [ he ] such patient was admitted shall be charged back and 36 reimbursed to such county by the aforesaid other county or the city of 37 New York or the city of Staten Island in which the patient has local 38 residence. Any patient admitted to a hospital in accordance with the 39 provisions of subdivision one of this section may pay for [ his ] their 40 care and treatment in whole or in part if [ he ] such patient volunteers 41 to do so. 42 § 9-006. Section 901 of the county law is amended by adding a new 43 subdivision 1-a to read as follows: 44 1-a. The commissioner of corrections of the city of Staten Island 45 shall have custody of the civil jails and persons lawfully committed to 46 such commissioner's custody and such jails shall be kept by them, or by 47 keepers appointed by such commissioner, for whose acts they shall be 48 responsible. 49 § 9-007. Subdivision 1 of section 902 of the county law, as amended by 50 chapter 950 of the laws of 1956, is amended to read as follows: 51 1. The offices of the county clerk in the counties constituting the 52 city of New York and the office of the Richmond county clerk shall 53 remain open for the transaction of business from nine o'clock in the 54 forenoon to four o'clock in the afternoon every day except Saturdays, 55 Sundays and holidays and except in the months of July and August when 56 said offices shall remain open for the transaction of business from nine

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1 o'clock in the forenoon to two o'clock in the afternoon except Satur- 2 days, Sundays and holidays. 3 § 9-008. Section 904 of the county law, as amended by chapter 655 of 4 the laws of 1978, is amended to read as follows: 5 § 904. Court and trust fund register and liability of officers. The 6 county clerks of the counties comprising the city of New York and the 7 Richmond county clerk shall perform the same duties and shall be subject 8 to the same penalties imposed by the provisions of this chapter upon 9 other county clerks of the state with relation to court and trust fund 10 registers and the delivery of property or moneys to the commissioner of 11 finance in pursuance of any judgment, decree or order of a court of 12 record of this state. 13 § 9-009. The county law is amended by adding a new section 905-a to 14 read as follows: 15 § 905-a. Liability for loss of court and trust funds in the city of 16 Staten Island. The officer responsible for collection and management of 17 public funds for the city of Staten Island and such officer's surety or 18 sureties shall be liable in the same manner as county treasurers are 19 made liable under the provisions of this chapter for the loss of court 20 and trust funds. 21 § 9-010. The county law is amended by adding a new section 906-a to 22 read as follows: 23 § 906-a. Liability of city of Staten Island for loss of court and 24 trust funds. The city of Staten Island shall be responsible for all 25 property or moneys deposited with the officer responsible for collection 26 and management of public funds for the city of Staten Island by virtue 27 of any judgment, decree or order of a court of record in this state 28 provided, however, that the city shall not be held liable for any loss 29 due to the depreciated value of an investment legal at the time of its 30 purchase and which continued to be a legal investment during the period 31 of the trust. An action to recover any loss to or of such fund may be 32 brought against the city by any party aggrieved or by the state comp- 33 troller in a court of competent jurisdiction. 34 § 9-011. The county law is amended by adding a new section 931-a to 35 read as follows: 36 § 931-a. Employees of the district attorney of the county of Rich- 37 mond. The district attorney of Richmond county is vested with the power 38 to appoint any person to any position for which there is now provision 39 by appropriation or which shall hereafter be established. All positions 40 in the district attorney's office of Richmond county for which there is 41 now provision by appropriation shall be continued, except that the mayor 42 of the city of Staten Island may with the consent of the district attor- 43 ney increase or decrease the number of positions and the term, grade, 44 salary and compensation of any position. 45 § 9-012. The county law is amended by adding a new section 944 to read 46 as follows: 47 § 944. Applicability of article to the county of Richmond. For the 48 purposes of continuing the application of this article within the city 49 of Staten Island on and after the date of establishment of the city of 50 Staten Island, the county of Richmond shall be deemed to continue as a 51 county within the city of New York for the purposes of exercising those 52 powers and duties devolved upon said county of Richmond pursuant to this 53 article. 54 § 9-013. Subdivision 2 and paragraphs (a) and (c) of subdivision 3 of 55 section 9-124 of the election law, subdivision 2 as amended by chapter 56 437 of the laws of 2019, paragraphs (a) and (c) of subdivision 3 as

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1 amended by chapter 481 of the laws of 2023, are amended to read as 2 follows: 3 2. Each box, envelope, or container containing the ballots and stubs, 4 if any, and all items described in subdivision one of this section shall 5 be deposited by an inspector designated for that purpose with the offi- 6 cer or board from whom or which the board of inspectors received it. In 7 the city of New York and the city of Staten Island , every such box, 8 envelope, or container shall be delivered at the polling place to police 9 or peace officers designated by the police commissioner of such [ city ] 10 cities , who shall deposit them with the appropriate board of elections. 11 (a) Except in the city of New York or the city of Staten Island , the 12 registration poll records or computer generated registration lists, the 13 returns of canvass with results tapes and tally sheets, if any, annexed, 14 the voted ballots, stubs, opened packages of unused ballots and ballot 15 envelopes, any early mail, absentee, military, special federal, or 16 special presidential ballots which may have been delivered to the poll 17 site during election day, the challenge report records, keys and the 18 package of protested and void ballots shall be filed with the appropri- 19 ate board of elections. 20 (c) In the city of New York and the city of Staten Island , the board 21 of inspectors shall deliver to police or peace officers designated by 22 the police commissioner of such [ city ] cities , at the polling place the 23 registration poll records or computer generated registration lists, 24 challenge report, records, keys, other election supplies, including two 25 copies of the returns of the canvass and any early mail, absentee, mili- 26 tary, special federal, or special presidential ballots which may have 27 been delivered to the poll site during election day, voted ballots, 28 stubs, open packages of unused ballots and ballot envelopes. Such police 29 or peace officers shall file the returns, the package of void and 30 protested ballots, if any, and the early mail, absentee, military, 31 special federal, or special presidential ballots which may have been 32 delivered to the poll site during election day; and emergency ballots, 33 stubs and ballot envelopes, if any, within twenty-four hours after the 34 close of the polls, in the office of the appropriate board of elections 35 or its branch office within the borough, as the case may be. 36 § 9-014. Subdivision 3 of section 9-124 of the election law is amended 37 by adding a new paragraph (d) to read as follows: 38 (d) In the city of Staten Island the board of inspectors, shall deliv- 39 er to the police or peace officer at the polling place the registration 40 poll records or computer generated registration lists, challenge report, 41 records, keys, the flag, other election supplies, the returns of the 42 canvass and the absentee and military, special federal, special presi- 43 dential and emergency ballots, stubs and ballot envelopes. The police 44 or peace officer shall file the returns, the package of void, protested 45 and wholly blank ballots, if any, and the absentee and military, special 46 federal, special presidential and emergency ballots, stubs and ballot 47 envelopes, if any, within twenty-four hours after the close of the 48 polls, in the office of the board of elections. 49 § 9-015. Section 88-b of the state finance law, as added by chapter 13 50 of the laws of 1987, subdivisions 2 and 6 as amended by chapter 65 of 51 the laws of 1988, is amended to read as follows: 52 § 88-b. Suburban transportation fund. 1. There is hereby established 53 in the joint custody of the commissioner of taxation and finance and the 54 comptroller a fund to be known as the "suburban transportation fund". 55 2. The suburban transportation fund shall consist of moneys from the 56 commuter railroad account of the metropolitan transportation authority

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1 special assistance fund required to be paid by such authority to the 2 suburban transportation fund pursuant to subdivision three of section 3 twelve hundred seventy-a of the public authorities law and any moneys 4 from the metropolitan transportation authority Dutchess, Orange and 5 Rockland fund transferred pursuant to subdivision four of section twelve 6 hundred seventy-a of the public authorities law. 7 3. Moneys in the suburban transportation fund shall be kept separate 8 from and shall not be commingled with any other moneys in the custody of 9 the commissioner of taxation and finance and the comptroller. All depos- 10 its of such money shall, if required by the comptroller, be secured by 11 obligations of the United States or of the state of market value equal 12 at all times to the amount of the deposit and all banks and trust compa- 13 nies are authorized to give such securities for such deposits. 14 4. Moneys of the fund shall be made available for financing any of the 15 following types of capital projects within the counties comprising the 16 metropolitan commuter transportation district, except those counties 17 comprising the city of New York or the city of Staten Island , but only 18 to the extent that such projects are on an adopted transportation plan 19 and approved by a designated transportation coordinating committee, if 20 one exists, or by the metropolitan planning organization as created 21 pursuant to section fifteen-a of the transportation law if no designated 22 transportation coordinating committee exists: capacity and infrastruc- 23 ture improvements to state, county, town, city, village roads, highways, 24 parkways and bridges; or state, county, town, city or village mass 25 transportation projects; provided, however, that in Nassau and Suffolk 26 counties such moneys shall be available only for capacity improvements 27 to state roads, highways, parkways and bridges. The amount of state 28 funds historically appropriated statewide, other than bond funds, for 29 transportation capital purposes from other sources shall not be reduced 30 because of the availability of such moneys made available pursuant to 31 this chapter, nor shall such moneys be used to match federal aid. Prior 32 to the allocation of state advance funds appropriated pursuant to this 33 section, the municipality responsible for the project shall certify to 34 the commissioner of transportation that the amount of funds appropriated 35 for transportation capital purposes by that municipality shall not be 36 reduced because of the availability of such state advance funds, and 37 that such moneys shall not be used to match federal aid. 38 The designated transportation coordinating committee, if one exists, 39 or the metropolitan planning organization if no designated transporta- 40 tion coordinating committee exists, shall notify the municipalities 41 within its jurisdiction of which projects it has approved. 42 5. In the event that any county withdraws from the metropolitan commu- 43 ter transportation district, the withdrawing county shall pay to the 44 state comptroller any amount that is required so that the state is fully 45 reimbursed for funds advanced in anticipation of reimbursement from the 46 suburban transportation fund. In the event that any withdrawing county 47 shall fail to make a payment pursuant to this subdivision, the state 48 comptroller shall withhold and pay to the capital projects fund an 49 amount equal to the amount owed from the next general or specific state 50 aid payment and scheduled to be paid to that county. 51 6. Moneys in the suburban transportation fund transferred pursuant to 52 section twelve hundred seventy-a of the public authorities law shall be 53 made available to the state department of transportation for capital 54 projects in the counties of Nassau, Suffolk, Westchester, Putnam, Dutch- 55 ess, Orange and Rockland on the basis of each county's average pro rata 56 share of the mortgage recording tax receipts raised in such counties

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1 pursuant to subdivision one of section two hundred sixty-one of the tax 2 law during the period January first, nineteen hundred eighty-four 3 through December thirty-first, nineteen hundred eighty-six as certified 4 by the metropolitan transportation authority. Moneys transferred to the 5 suburban transportation fund at the request of Dutchess, Orange or Rock- 6 land county pursuant to subdivision three of section twelve hundred 7 seventy-b of the public authorities law shall be used by the state 8 department of transportation to increase the proportionate share of such 9 capital projects in such county. Such projects shall be financed by 10 means of a state advance to be reimbursed by the New York state thruway 11 authority, or its successor agency, through the issuance of its bonds or 12 notes in the manner set forth in subdivision seven of this section, or 13 by means of a state advance to be reimbursed directly from the suburban 14 transportation fund. 15 7. (a) For projects funded by the suburban transportation fund, the 16 state department of transportation may enter into an agreement with the 17 New York state thruway authority, or its successor agency, for the 18 purpose of having the thruway authority, or its successor agency, issue 19 bonds or notes to pay the capital costs of such project. Such agreement 20 shall be subject to approval by the director of the division of the 21 budget. 22 (b) For projects funded pursuant to this subdivision, the affected 23 municipality shall enter into an agreement with the department of trans- 24 portation for the conveyance of all affected real property including 25 highways, roads and bridges to the thruway authority, or its successor 26 agency, for the term of the bonds or notes issued by the thruway author- 27 ity, or its successor agency, for such project or for such lesser period 28 that such bonds or notes are outstanding. During the period of such 29 conveyance to the thruway authority, or its successor agency, the 30 department of transportation or the municipality shall agree to maintain 31 the facility in a state of good repair, the responsibility for which 32 shall be with the state, or municipality, which had jurisdiction over 33 said facility prior to such agreement. 34 (c) Upon the final retirement of all bonds and notes issued by the 35 thruway authority, or its successor agency, for such purpose, such prop- 36 erty shall automatically revert to the conveying entity. 37 8. Payments to the thruway authority, or its successor agency, pursu- 38 ant to this section shall be subject to appropriation from the suburban 39 transportation fund. The thruway authority, or its successor agency, 40 shall utilize such moneys to pay the debt service on such bonds or notes 41 and to meet administrative costs in connection therewith. 42 § 9-016. Section 2302 of the surrogate's court procedure act, as 43 amended by chapter 460 of the laws of 1999, is amended to read as 44 follows: 45 § 2302. Award of costs and allowances 46 1. Upon a motion the court may award costs to any party in such 47 amount as it determines not exceeding $20 to each party, except in coun- 48 ties within the City of New York and in the city of Staten Island , where 49 such amount shall not exceed $40. 50 2. Upon rendering a decree or in granting or denying an application 51 to vacate a decree the court may award as costs such sum as it deems 52 reasonable to the petitioner and to any other party who has succeeded in 53 whole or in part in a contest or whose attorney, in the absence of a 54 contest, has rendered services of substantial benefit to him, her or it, 55 or to the estate, not exceeding

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1 (a) in counties within the City of New York and in the city of Staten 2 Island : 3 (i) $100 where there has not been a contest, or 4 (ii) $300 where there has been a contest and $300 for each day, less 5 one, necessarily occupied in the trial or hearing and in addition $100 6 for each day necessarily occupied in preparing therefore and $100 addi- 7 tional if a motion for a new trial is granted. 8 (b) in all other counties: 9 (i) $50 where there has not been a contest, or 10 (ii) $150 where there has been a contest and $150 for each day, less 11 one, necessarily occupied in the trial or hearing and in addition $50 12 for each day necessarily occupied in preparing therefore and $50 addi- 13 tional if a motion for a new trial is granted. 14 3. In a contested probate proceeding: 15 (a) Costs payable out of the estate or otherwise may be awarded (1) to 16 an unsuccessful contestant only if [ he, she or it ] such contestant be a 17 guardian ad litem or guardian, committee or conservator of a person 18 under disability; (2) to an unsuccessful proponent named as executor in 19 the will when propounded by [ him, her or it ] such proponent in good 20 faith as the last will of the decedent; and (3) to a person named as 21 executor in a prior will on file in the court that is not admitted to 22 probate when such person participates in the proceeding in good faith. 23 Such nominated executor, guardian ad litem, guardian, committee or 24 conservator, whether successful or not may be awarded costs and an 25 allowance in such sum as the court deems reasonable for [ his, her or 26 its ] their counsel fees and other expenses incurred in the contest or 27 attempt to sustain the will. The court may direct that such costs and 28 allowances in whole or in part be payable by an unsuccessful contestant 29 except that an award of the successful proponent's counsel's fees may 30 only be allowed where the court finds that the contest was brought in 31 bad faith or was frivolous. 32 (b) Either before or after the decree granting probate the court may 33 order that a copy of the minutes of the trial be furnished to a contes- 34 tant for the purposes of appeal and charge the expense thereof initially 35 to the estate if satisfied that the contest is in good faith. If the 36 contestant be unsuccessful upon the appeal and [ he, she or it ] such 37 contestant is not the guardian of an infant, the committee of an incom- 38 petent, the conservator of a conservatee or a guardian ad litem [ he, she 39 or it ] such contestant shall refund to the estate any amount so paid by 40 the estate for the minutes. 41 4. In a proceeding for probate of a will when the public administra- 42 tor or county treasurer has been directed to probate a will or continue 43 the proceedings for the probate thereof, the court may award to either 44 of them such sum as it deems reasonable for [ his, her or its ] their 45 counsel fees and other expenses necessarily incurred therein. 46 5. After appeal, pursuant to the direction of the appellate court the 47 court may award a fiduciary such sum as it deems reasonable for counsel 48 fees and other expenses necessarily incurred on the appeal. 49 6. In a proceeding to construe a will or after appeal in such a 50 proceeding, pursuant to the direction of the appellate court the court 51 may award to a fiduciary or any party to the proceeding such sum as it 52 deems reasonable for [ his, her or its ] their counsel fees and other 53 expenses necessarily incurred in the proceeding or on the appeal. 54 7. Upon a final or intermediate judicial settlement a fiduciary may 55 be awarded for [ his, her or its ] such fiduciary's expenses and counsel 56 fees such sum as the court deems reasonable not exceeding:

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1 (a) within the counties of the City of New York and in the city of 2 Staten Island : $100 for each day necessarily occupied in preparing the 3 account and in drawing, entering and executing the decree. Any sum so 4 awarded may be in addition to any costs, allowances or commissions 5 otherwise authorized and awarded by the court. 6 (b) in all other counties: $ 50 for each day necessarily occupied in 7 preparing the account and in drawing, entering and executing the decree. 8 Any sum so awarded may be in addition to any costs, allowances or 9 commissions otherwise authorized and awarded by the court. 10 8. In a proceeding for disposition of real property a fiduciary may 11 be awarded out of the proceeds of sale [ his, her or its ] such 12 fiduciary's commissions and such sum as the court deems reasonable for 13 counsel fees and expenses necessarily incurred in the proceeding. 14 § 9-017. The general municipal law is amended by adding a new section 15 929 to read as follows: 16 § 929. City of Staten Island industrial development agency. (a) 17 Legislative intent. It is the policy and intent of the city of Staten 18 Island to promote the economic welfare of its inhabitants and to active- 19 ly promote, attract, encourage and develop economically sound commerce 20 and industry through governmental action for the purpose of preventing 21 unemployment and economic deterioration by the creation of a city of 22 Staten Island industrial development agency. It is recognized that the 23 viability and integrity of the residential communities in the city of 24 Staten Island should be protected and maintained so that no person be 25 deprived of their place of residence by any condemnation for economic or 26 industrial development undertaken pursuant to this article. 27 (b) For the purpose of this section "city" means the city of Staten 28 Island. 29 (c) For the benefit of the city and the inhabitants thereof an indus- 30 trial development agency, to be known as the city of Staten Island 31 industrial development agency, is hereby established for the accomplish- 32 ment of any or all of the purposes specified in title one of this arti- 33 cle, except that it shall not have the power to construct or rehabili- 34 tate any residential facility or housing of any nature and kind 35 whatsoever, nor shall it use any of its funds to further the 36 construction or rehabilitation of any residential facility or housing of 37 any nature and kind whatsoever. It shall constitute a body corporate 38 and politic, and be perpetual in duration. It shall only have the 39 powers and duties conferred by title one of this article upon industrial 40 development agencies as of January first, nineteen hundred seventy-three 41 except it shall not have the power of condemnation. In the exercise of 42 the powers conferred upon such agency with respect to the acquisition of 43 real property by this article such agency shall be limited to the 44 geographical jurisdictional limits of the city. 45 (d) It shall be organized in a manner prescribed by and be subject to 46 the provisions of title one of this article, except that its board shall 47 consist of ten members. Among its membership shall be the city comp- 48 troller, the city commissioner of economic development, the corporation 49 counsel of such city and the director of the city planning commission of 50 such city, each of whom shall have the power to designate an alternate 51 to represent them at board meetings with all the rights and powers, 52 including the right to vote, reserved to all board members, provided 53 that such designation be in writing to the chairperson of the board. 54 The remaining six members shall be appointed by the mayor of such city. 55 (e) The mayor shall designate the chairperson of the board, who shall 56 serve at the pleasure of the mayor.

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1 (f) The terms of the directors first appointed by the mayor, other 2 than the chairperson of the board shall be as follows: 3 (1) two shall serve for terms of one year each; 4 (2) two shall serve for terms of two years each; 5 (3) two shall serve for terms of three years each, thereafter the 6 successors of all such directors shall serve for terms of three years 7 each. The mayor shall fill any vacancy which may occur by reason of 8 death, resignation, or otherwise in a manner consistent with the 9 original appointment. Members may be removed by the mayor for cause 10 after a hearing upon ten days' written notice. Such members shall 11 receive no compensation for their services but shall be entitled to the 12 necessary expenses, including traveling expenses, incurred in the 13 discharge of their duties. 14 (g) The chief executive officer of the agency shall be appointed by a 15 two-thirds vote of the board of directors. 16 (h) The agency, its members, officers, and employees, shall be 17 subject to article fourteen of the civil service law and for all such 18 purposes the agency shall be deemed the "public employer" and its 19 members, officers and employees shall be deemed "public employees". 20 (i) The city shall have the power to make, or contract to make grants 21 or loans including, but not limited to grants or loans of money, to the 22 agency in such amounts, upon such terms and conditions and for such 23 period or periods of time as in the judgment of the city and the agency 24 are necessary or appropriate for the accomplishment of any of the 25 purposes of the agency. 26 (j) The city shall have the power to condemn property for transfer to 27 the city of Staten Island industrial development agency under title one 28 of this article upon the request of two-thirds of the members of the 29 board of directors of the city of Staten Island industrial development 30 agency. No property shall be condemned on behalf of the agency which is 31 zoned "residential" as defined in the zoning resolution of the city, if 32 any, or which is occupied in whole or in part as a dwelling or resi- 33 dence. 34 (k) For the purpose of this section "governing body" as used in title 35 one of this article shall mean the mayor of the city. Except as other- 36 wise provided in this section, the agency, its members, officers and 37 employees, and its operations and activities shall be governed by the 38 provisions of title one of this article. 39 (l) The city shall save harmless and indemnify any person who is 40 serving or has served as a director or officer or as employee of the 41 city of Staten Island industrial development agency against any finan- 42 cial loss arising out of or in connection with any claim, demand, suit 43 or judgment, based on a cause of action involving allegations that pecu- 44 niary harm was sustained by any person as a result of any transaction, 45 act or omission to act of the city of Staten Island industrial develop- 46 ment agency or of any action or inaction or vote of any director, offi- 47 cer or employee of such agency unless such individual is found by a 48 final judicial determination not to have acted in good faith for a 49 purpose such individual reasonably believed to be in the best interests 50 of the agency or not to have had reasonable cause to believe that such 51 conduct was lawful. Provided, however, that such individual must trans- 52 mit to the corporation counsel of the city of Staten Island any notice 53 of claim, summons or complaint or other analogous paper served on such 54 individual within ten days of its receipt unless prevented from doing so 55 by compelling circumstances. The corporation counsel shall, without 56 charge, represent any such individual unless unable to do so by reason

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1 of conflict of interest. In the event that the corporation counsel is 2 unable to give such representation, the city of Staten Island shall 3 indemnify the individual for any reasonable litigation expense incurred 4 by such individual. 5 § 10-001. Legislative findings. It is the intention of the legisla- 6 ture that the incorporation of the city of Staten Island shall not alter 7 the existing landlord-tenant relationships within such city and that the 8 state and local laws regulating landlord-tenant relationships such as 9 legal regulated rents, maximum rents and tenancy issues shall continue 10 to provide such regulation until superseded by state law or local law of 11 the city of Staten Island and in accordance with such intent, such laws 12 and regulations are hereby continued. It is further provided that all 13 real property tax exemptions provided under article 4 of the real prop- 14 erty tax law shall be continued as shall all rent regulations and other 15 regulations and duties imposed on the owners of property receiving 16 exemptions pursuant to such article until superseded by state law or 17 local law of the city of Staten Island. 18 § 10-002. Section 1 of chapter 21 of the laws of 1962, constituting 19 the local emergency housing rent control act, is amended by adding a new 20 subdivision 2-a to read as follows: 21 2-a. Applicability. For the purposes of this act, a city which is 22 incorporated on or after the first of January next succeeding the date 23 on which this subdivision shall have become a law and which is comprised 24 of a geographical area with respect to which provisions of this act were 25 in effect on the date immediately prior to such incorporation and which 26 city had been wholly contained within a city with a population of one 27 million or more shall continue to be treated as a city with a population 28 of one million or more. 29 § 10-003. Section 4 of section 4 of chapter 576 of the laws of 1974, 30 constituting the emergency tenant protection act of nineteen seventy- 31 four, is amended by adding a new subdivision f to read as follows: 32 f. In the city of Staten Island, the rent guidelines board shall be 33 the rent guidelines board established pursuant to the local law enacted 34 as a successor to the New York city rent stabilization law of nineteen 35 hundred sixty-nine and provided with such powers under such local law. 36 § 10-004. Subdivision b of section 14 of section 4 of chapter 576 of 37 the laws of 1974, constituting the emergency tenant protection act of 38 nineteen seventy-four, is relettered subdivision c and a new subdivision 39 b is added to read as follows: 40 b. in the city of Staten Island; provided that for the purposes of 41 this act, the city of Staten Island shall continue to be treated as a 42 city with a population of one million or more and the reference to any 43 local law applicable to the geographical area of such city prior to its 44 incorporation shall refer to the appropriate successor legislation 45 enacted by the city of Staten Island; and 46 § 10-005. The section heading and subdivision 8 of section 352-eeee of 47 the general business law, as amended by section 1 of part N of chapter 48 36 of the laws of 2019, are amended to read as follows: 49 Conversions to cooperative or condominium ownership in the city of New 50 York or in the city of Staten Island . 51 8. The provisions of this section shall only be applicable in the city 52 of New York and the city of Staten Island . 53 § 10-006. Section 467-b of the real property tax law is amended by 54 adding a new subdivision 14 to read as follows: 55 14. For the purposes of this section, the city of Staten Island shall 56 continue to be treated as a city with a population of one million or

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1 more and any reference to a local law enacted pursuant to the local 2 emergency housing rent control act shall also refer to the successor 3 local law enacted by the city of Staten Island. 4 § 10-007. The real property tax law is amended by adding a new section 5 498 to read as follows: 6 § 498. City of Staten Island. For the purposes of this article, the 7 city of Staten Island shall continue to be treated as a city with a 8 population of one million or more and the reference to any local law 9 applicable to the geographical area of such city prior to its incorpo- 10 ration shall be deemed to refer to the appropriate successor legislation 11 enacted by the city of Staten Island. 12 § 10-008. Applicability. It is the intention of the legislature that 13 the state and local laws regulating landlord-tenant relationships such 14 as legal regulated rents, maximum rents and tenancy issues shall contin- 15 ue to provide such regulation; provided, however, that within one 16 hundred twenty days after the date of establishment of the city of 17 Staten Island, the common council of such city must make a determination 18 of whether or not a public emergency exists requiring the continuation 19 of such regulations. 20 § 11-001. Legislative findings. The legislature recognizes that the 21 formation of the city of Staten Island was not contemplated in the 22 establishment of the constitutional real property tax limitations. To 23 the greatest extent practicable, the establishment of the city of Staten 24 Island is formulated to preserve existing local laws, regulations and 25 instrumentalities of government to preserve the status quo and prevent a 26 disruption of government injurious to the public good. 27 The unique factor which determined the establishment of the constitu- 28 tional real property tax limits for the city of New York was the inclu- 29 sion of counties wholly within the city with the city assuming the 30 responsibilities and expenditures for functions normally exercised by 31 the counties in areas outside the city of New York. Staten Island will 32 now share this unique factor with New York city, as the county of Rich- 33 mond is wholly contained within the city of Staten Island. 34 Real property located in cities outside the city of New York is 35 subject to a real property tax limit of four percent, of which two 36 percent is city tax and two percent is county tax. Real property located 37 within New York city is subject to a more restrictive real property tax 38 limit of two and one-half percent, all of which is city tax. County real 39 property tax is not permitted within the city of New York. 40 The people of the city of Staten Island and county of Richmond and the 41 New York state legislature have adopted a charter for the city of Staten 42 Island which continues the New York city form of government placing 43 governmental responsibility on the city rather than the county. The 44 county of Richmond has not assumed new responsibilities justifying an 45 interpretation of the constitutional real property tax limits which 46 would permit the county of Richmond to impose a real property tax. Like- 47 wise the maintenance of the New York city form of government with the 48 usual county responsibilities being a function of city government when 49 combined with the prohibition of a county real property tax, requires an 50 interpretation providing a city real property tax limit of two and one- 51 half percent for the city of Staten Island. 52 Therefore the legislature finds and declares that the existing more 53 restrictive real property tax limits for real property located within 54 the county of Richmond remain in effect, providing a city real property 55 tax limit of two and one-half percent for the city of Staten Island and

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1 prohibiting the imposition of a real property tax by the county of Rich- 2 mond. 3 § 12-001. Subdivision (a) of section 1107 of the tax law, as amended 4 by section 1 of part C of chapter 407 of the laws of 1999, is amended to 5 read as follows: 6 (a) General. On the first day of the first month following the month 7 in which a municipal assistance corporation is created under article ten 8 of the public authorities law for a city of one million or more, in 9 addition to the taxes imposed by sections eleven hundred five and eleven 10 hundred ten, there is hereby imposed on such date, within the territo- 11 rial limits of such city (including, in the case of the municipal 12 assistance corporation for the city of New York, the city of Staten 13 Island) , and there shall be paid, additional taxes, at the rate of four 14 percent, which except as provided in subdivision (b) of this section, 15 shall be identical to the taxes imposed by sections eleven hundred five 16 and eleven hundred ten. Such sections and the other sections of this 17 article, including the definition and exemption provisions, shall apply 18 for purposes of the taxes imposed by this section in the same manner and 19 with the same force and effect as if the language of those sections had 20 been incorporated in full into this section and had expressly referred 21 to the taxes imposed by this section. 22 § 12-002. Subdivision (c) of section 1107 of the tax law, as amended 23 by chapter 588 of the laws of 2000, is amended to read as follows: 24 (c) Tax on sale of service of parking, garaging or storing of motor 25 vehicles. On the first day of the first month following the month in 26 which a municipal assistance corporation is created under article ten of 27 the public authorities law for a city of one million or more, in addi- 28 tion to the taxes imposed by sections eleven hundred five, eleven 29 hundred ten and subdivision (a) of this section, there is hereby imposed 30 on such date, within the territorial limits of such city (including, in 31 the case of the municipal assistance corporation for the city of New 32 York, the city of Staten Island) , and there shall be paid, additional 33 taxes at the rate of six percent on receipts from every sale of the 34 service of providing parking, garaging or storing for motor vehicles by 35 persons operating a garage (other than a garage which is part of prem- 36 ises occupied solely as a private one or two family dwelling), parking 37 lot or other place of business engaged in providing parking, garaging or 38 storing of motor vehicles provided, however, that this subdivision shall 39 not apply to such facilities owned and operated by such city or an agen- 40 cy or instrumentality of such city or a public corporation the majority 41 of whose members are appointed by the chief executive officer of such 42 city or the legislative body of such city or both of them; provided, 43 however, that receipts for such services paid to a homeowner's associ- 44 ation by its members or receipts paid by members of a homeowner's asso- 45 ciation to a person leasing the parking facility from the homeowner's 46 association shall not be subject to the tax imposed by this subdivision. 47 For purposes of this subdivision, a homeowner's association is an asso- 48 ciation (including a cooperative housing or apartment corporation) (i) 49 the membership of which is comprised exclusively of owners or residents 50 of residential dwelling units, including owners of units in a condomin- 51 ium, and including shareholders in a cooperative housing or apartment 52 corporation, where such units are located in a defined geographical area 53 such as a housing development or subdivision; and (ii) which owns or 54 operates a garage, parking lot or other place of business engaged in 55 providing parking, garaging or storing for motor vehicles located in 56 such area for use (whether or not exclusive) by such owners or resi-

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1 dents. All provisions set forth in this article applicable to the taxes 2 imposed under section eleven hundred five, including the definition and 3 exemption provisions of this article, shall apply with respect to a tax 4 imposed under this subdivision, except as to rate and except as other- 5 wise provided herein. The transitional provisions contained in section 6 eleven hundred six shall not apply to the taxes imposed by this section. 7 § 12-003. Intentionally omitted. 8 § 12-004. Section 1210 of the tax law is amended by adding two new 9 subdivisions (k) and (l) to read as follows: 10 (k) In the case of the municipal assistance corporation for the city 11 of New York the power of the city of Staten Island to adopt and amend 12 local laws, ordinances or resolutions imposing taxes pursuant to the 13 authority of such section shall, notwithstanding any provisions of arti- 14 cle twenty-nine of this chapter to the contrary, be suspended until all 15 the notes and bonds of such municipal assistance corporation shall have 16 been fully paid and discharged together with interest on unpaid install- 17 ments of interest. 18 (l) Notwithstanding the provisions of subdivision (k) of this section, 19 the city of Staten Island is hereby authorized and empowered to adopt 20 and amend local laws, imposing taxes, at a rate not to exceed two 21 percent on the receipts of sales from the services of laundering, dry- 22 cleaning, tailoring, weaving, pressing, shoe repairing and shoe shining, 23 and charges to a patron for admission to, or use of, facilities for 24 sporting activities in which the patron is to be a participant such as 25 bowling alleys and swimming pools. Such taxes shall be administered, 26 collected and distributed by the state tax commission as provided in 27 subpart B of part three and in part four of this article. 28 § 12-005. Subdivisions 3 and 4 of section 92-d of the state finance 29 law, subdivision 3 as amended by section 4 of part A of chapter 88 of 30 the laws of 2000 and subdivision 4 as amended by section 11 of part SS1 31 of chapter 57 of the laws of 2008, are amended to read as follows: 32 3. The taxes, interest and penalties imposed, pursuant to sections 33 eleven hundred seven or eleven hundred eight (as the case may be) of the 34 tax law within the territorial limits of a city in aid of which a munic- 35 ipal assistance corporation has been created (including, in the case of 36 the municipal assistance corporation for the city of New York, the city 37 of Staten Island) , and received by the commissioner of taxation and 38 finance, after deducting the amount which the commissioner of taxation 39 and finance shall determine to be necessary for reasonable costs of the 40 commissioner of taxation and finance in administering, collecting and 41 distributing such taxes, shall be appropriated (i) to the municipal 42 assistance corporation which has been created in aid of such city in 43 order to enable such corporation to fulfill the terms of any agreements 44 made with the holders of its notes and bonds and to carry out its corpo- 45 rate purposes, including the maintenance of the capital reserve fund, 46 and (ii) the balance, if any, to the city in aid of which such corpo- 47 ration has been created, or to a public benefit corporation to which the 48 tax may be otherwise payable pursuant to law, as hereinafter provided. 49 Notwithstanding the provisions of this subdivision, in the case of the 50 municipal assistance corporation for the city of New York, such balance, 51 if any, shall be divided between the city of New York and the city of 52 Staten Island and paid, as hereinafter provided. 53 4. On or before the twelfth day of each month, the commissioner of 54 taxation and finance shall certify to the comptroller the amount of all 55 revenues so received during the prior month as a result of the taxes, 56 interest and penalties so imposed and in addition on or before the last

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1 day of June the commissioner shall certify the amount of such revenues 2 received during and including the first twenty-five days of June. In 3 the case of the municipal assistance corporation for the city of New 4 York, the commissioner of taxation and finance shall certify separately 5 the amounts of such revenues received from within the territorial limits 6 of the city of New York and the territorial limits of the city of Staten 7 Island. The amount of revenues so certified shall be deposited by the 8 comptroller in the municipal assistance tax fund and the amount attrib- 9 utable to the taxes, interest and penalties imposed within the territo- 10 rial limits of a city in aid of which a municipal assistance corporation 11 has been created including, in the case of the municipal assistance 12 corporation for the city of New York, the city of Staten Island shall be 13 credited to a special account established in such fund for such corpo- 14 ration. Notwithstanding the foregoing provisions, the commissioner of 15 taxation and finance may prorate revenue attributable to the first or 16 last quarterly return period during which the taxes imposed by section 17 eleven hundred seven or eleven hundred eight (as the case may be) of the 18 tax law apply so as to separate from the revenue collected for that 19 quarter pursuant to such taxes the revenue collected pursuant to local 20 legislation adopted by a city pursuant to section twelve hundred ten or 21 twelve hundred twelve-A of the tax law. Such a proration by the commis- 22 sioner of taxation and finance shall be made on the basis of the ratio 23 of the number of months during which such taxes were imposed during such 24 quarterly return period to the total number of months in such quarterly 25 return period when such proration is reasonably necessary to ascertain 26 the amount of such money which must be deposited by the comptroller in 27 such special account and the amount of such money which must be deposit- 28 ed pursuant to section twelve hundred sixty-one of the tax law. The 29 commissioner of taxation and finance shall not be held liable for any 30 inaccuracy in any certification under this subdivision. 31 § 12-006. Subdivision 6 of section 92-d of the state finance law, as 32 amended by section 4 of part A of chapter 88 of the laws of 2000, is 33 amended to read as follows: 34 6. Upon receipt by the comptroller of a certificate or certificates 35 from the [ chairman ] chairperson of a municipal assistance corporation 36 that such corporation requires a payment or payments in order to comply 37 with any agreement with the holders of its notes and bonds and to carry 38 out its corporate purposes, including the maintenance of the capital 39 reserve fund, from the special account established for such corporation, 40 each of which certificates shall specify the required payment or 41 payments and the date when the payment or payments is required, the 42 comptroller shall pay from such special account on or before the speci- 43 fied date or within thirty days after such receipt, whichever is later, 44 to such corporation, as the [ chairman ] chairperson thereof may direct in 45 any such certificate, the amount or amounts so certified. In the case 46 of the municipal assistance corporation for the city of New York, each 47 amount so paid shall be comprised of revenues attributable to receipts 48 from both the city of New York and the city of Staten Island in the same 49 proportion that such revenues were received during the period covered by 50 each such certification. The [ chairman ] chairperson of such corporation 51 shall furnish the commissioner of taxation and finance with copies of 52 such certificates. The comptroller shall from time to time, but in no 53 event later than the fifteenth day of October, January and April and the 54 last day of June of each fiscal year, pay over and distribute to the 55 chief fiscal officer of the city in aid of which such municipal assist- 56 ance corporation has been created to be paid into the treasury of such

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1 city to the credit of the general fund, or pay over and distribute to a 2 public benefit corporation to which the tax may otherwise be payable 3 pursuant to law, all revenues in the special account established for 4 such corporation in the municipal assistance tax fund, if any, in excess 5 of the aggregate amount which the [ chairman ] chairperson of such corpo- 6 ration has certified to the comptroller and which has been previously 7 appropriated and paid to such corporation as hereinabove authorized. 8 Notwithstanding the provisions of this subdivision, in the case of the 9 municipal assistance corporation for the city of New York, the comp- 10 troller shall from time to time, but in no event later than the 11 fifteenth of October, January, and April and the last day of June of 12 each fiscal year, (a) apportion between the city of New York and the 13 city of Staten Island the revenues, if any, in the special account 14 established for such corporation in the municipal assistance tax fund on 15 the basis of the locus of their receipt and (b) pay over and distribute 16 to the chief fiscal officers of such cities to pay into their respective 17 treasuries to the credit of the general fund all such respective reven- 18 ues in excess of the aggregate amount which the chairperson of such 19 corporation has certified to the comptroller and which has been previ- 20 ously appropriated and paid to such corporation as hereinabove author- 21 ized. In no event shall the comptroller pay over and distribute any 22 revenues (other than the amount to be deducted for administering, 23 collecting and distributing such sales and compensating use taxes) to 24 any person other than the municipal assistance corporation unless and 25 until the aggregate of all payments certified to the comptroller as 26 required by such corporation as of such date in order to comply with its 27 agreements with the holders of its notes and bonds and to carry out its 28 corporate purposes, including the maintenance of the capital reserve 29 fund, which remain unappropriated or unpaid to such corporation shall 30 have been appropriated to such corporation and shall have been paid in 31 full; provided, however, that no person, including such corporation or 32 the holders of its notes or bonds shall have any lien on such revenues 33 and such agreement shall be executory only to the extent of such reven- 34 ues available to the state in such special account. On the day on which 35 the comptroller pays over and distributes to the chief fiscal officer of 36 such city or cities any revenues from such special account the commis- 37 sioner of taxation and finance shall certify to the comptroller the 38 amount to be deducted for administering, collecting and distributing the 39 tax imposed pursuant to section eleven hundred seven or eleven hundred 40 eight (as the case may be) of the tax law within the territorial limits 41 of such city or cities since [ he ] such commissioner last certified such 42 amount and the comptroller shall pay such amount into the general fund 43 of the state treasury to the credit of the state purposes fund therein. 44 § 12-007. Subdivision 3 of section 92-e of the state finance law, as 45 amended by chapter 187 of the laws of 1995, is amended to read as 46 follows: 47 3. Such amounts, including per capita aid apportioned to a city in aid 48 of which a municipal assistance corporation has been created (including, 49 in the case of the municipal assistance corporation for the city of New 50 York, the city of Staten Island) , shall be deposited by the comptroller 51 to the credit of the special account established for the municipal 52 assistance corporation which has been created in aid of such city in 53 order to enable such corporation to fulfill the terms of any agreements 54 made with the holders of its notes and bonds and to carry out its corpo- 55 rate purposes, including the maintenance of the capital reserve fund 56 securing such bonds and notes, and, subject to the provisions of section

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1 fifty-four of this chapter, and subdivisions five and five-a of this 2 section, the balance, if any, shall be paid to the chief fiscal officer 3 of the city in aid of which such corporation has been created as herein- 4 after provided. Notwithstanding the provisions of this subdivision, in 5 the case of the municipal assistance corporation for the city of New 6 York, such balance, if any, shall be divided between the city of New 7 York and the city of Staten Island and paid, as hereinafter provided. 8 § 12-008. Subdivision 5 of section 92-e of the state finance law, as 9 amended by chapter 55 of the laws of 1992, is amended to read as 10 follows: 11 5. Upon receipt by the comptroller of a certificate or certificates 12 from the [ chairman ] chairperson of a municipal assistance corporation 13 that such corporation requires a payment or payments in order to comply 14 with any agreement with the holders of its notes and bonds and to carry 15 out its corporate purposes, including the maintenance of the capital 16 reserve fund securing such bonds, from the appropriate special account 17 established for such corporation, each of which certificates shall spec- 18 ify the required payment or payments and the date when the payment or 19 payments is required, the comptroller shall pay from such special 20 account on or before the specified date or within thirty days after 21 receipt of such certificate or certificates, whichever is later, to such 22 corporation, as the [ chairman ] chairperson thereof may direct in any 23 such certificate, the amount or amounts so certified. In the case of 24 the municipal assistance corporation for the city of New York, each 25 amount so paid shall be comprised of per capita aid apportioned to the 26 city of New York and the city of Staten Island in the same proportion 27 that such amounts were so apportioned during the period covered by each 28 such certification. The comptroller shall from time to time, but in no 29 event later than the fifteenth day of October, January and April and the 30 last day of June of each fiscal year, pay over and distribute to the 31 chief fiscal officer of the city in aid of which such municipal assist- 32 ance corporation has been created to be paid into the treasury of such 33 city to the credit of the general fund all revenues in the special 34 account established for such corporation in the municipal assistance 35 state aid fund, if any, in excess of (i) the aggregate amount which the 36 [ chairman ] chairperson of such corporation has certified to the comp- 37 troller and which has been previously paid to such corporation as herein 38 above authorized, and (ii) amounts to be refunded to the general fund of 39 the state of New York pursuant to subdivision five-a of this section. 40 Notwithstanding the provisions of this subdivision, in the case of the 41 municipal assistance corporation for the city of New York, the comp- 42 troller shall from time to time, but in no event later than the 43 fifteenth of October, January and April and the last day of June of each 44 fiscal year, (a) apportion between the city of New York and the city of 45 Staten Island the revenues, if any, in the special account established 46 for such corporation in the municipal assistance state aid fund on the 47 basis of the amounts apportioned to each such city pursuant to section 48 fifty-four of this chapter and (b) pay over and distribute to the chief 49 fiscal officers of such cities to be paid into their respective treas- 50 uries to the credit of the general fund all such respective revenues in 51 excess of the aggregate amount which the chairperson of such corporation 52 has certified to the comptroller and which has been previously paid to 53 such corporation as hereinabove authorized. In no event shall the comp- 54 troller pay over and distribute any revenues to any person other than 55 the municipal assistance corporation unless and until the aggregate of 56 all payments certified to the comptroller as required by such corpo-

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1 ration as of such date in order to comply with its agreements with the 2 holders of its notes and bonds and to carry out its corporate purposes, 3 including the maintenance of the capital reserve fund securing such 4 bonds, which remain unpaid to such corporation shall have been paid in 5 full to such corporation; provided, however, that no person, including 6 such corporation or the holders of its notes or bonds shall have any 7 lien on such revenues and such agreement shall be executory only to the 8 extent of such revenues available to the state in such special account. 9 § 12-009. Paragraph c of subdivision 6 of section 54 of the state 10 finance law, as added by chapter 430 of the laws of 1997, is amended to 11 read as follows: 12 c. Upon such certification of the amounts payable to counties, cities, 13 villages and towns for town-wide and town outside village purposes, such 14 per capita aid shall be apportioned and paid to the chief fiscal officer 15 of each such locality pursuant to this section on audit and warrant of 16 the state comptroller out of moneys appropriated by the legislature for 17 such purpose to the credit of the local assistance account in the gener- 18 al fund of the state treasury; provided however that upon such certif- 19 ication of amounts payable to the city of New York or, the city of 20 Staten Island, if applicable , such per capita aid shall be apportioned 21 and paid as follows: (i) any amounts required to be paid to the city 22 university construction fund pursuant to the city university 23 construction fund act, (ii) any amounts required to be paid to the New 24 York city housing development corporation pursuant to the New York city 25 housing development corporation act, (iii) any amounts required to be 26 paid by the city to the New York city transit authority pursuant to the 27 provisions of chapter seven of the laws of nineteen hundred seventy-two, 28 (iv) any amounts required to be paid by the city to the state to repay 29 an advance made in nineteen hundred seventy-four to subsidize the fare 30 of the New York city transit authority, (v) five hundred thousand 31 dollars to the chief fiscal officer of the city of New York for payment 32 to the trustees of the police pension fund of such city pursuant to the 33 provisions of paragraph e of this subdivision, (vi) eighty million 34 dollars to the special account for the municipal assistance corporation 35 for the city of New York in the municipal assistance tax fund created 36 pursuant to section ninety-two-d of this chapter to the extent that such 37 amount has been included by the municipal assistance corporation for the 38 city of New York in any computation for the issuance of bonds on a pari- 39 ty with outstanding bonds pursuant to a contract with the holders of 40 such bonds prior to the issuance of any other bonds secured by payments 41 from the municipal assistance state aid fund created pursuant to section 42 ninety-two-e of this chapter, (vii) the balance to the special account 43 for the municipal assistance corporation for the city of New York in the 44 municipal assistance state aid fund created pursuant to section ninety- 45 two-e of this chapter, and (viii) any amounts to be refunded to the 46 general fund of the state of New York pursuant to the annual appropri- 47 ation enacted for the municipal assistance state aid fund. Notwithstand- 48 ing any existing law, no payments of per capita aid payable to the city 49 of New York shall be paid to the state of New York municipal bond bank 50 agency, the New York state sports authority or the transit construction 51 fund so long as amounts of such aid are required to be paid into the 52 municipal assistance state aid fund, and thereafter, after payment of 53 the amounts described in subparagraphs (i) through (viii) of this para- 54 graph the balance shall be paid (A) to the state in repayment of the 55 appropriation of two hundred fifty million dollars made to the city 56 pursuant to chapter two hundred fifty-seven of the laws of nineteen

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1 hundred seventy-five providing emergency financial assistance to the 2 city of New York at the extraordinary session held in such year, as 3 amended, (B) to the state of New York municipal bond bank agency to the 4 extent provided by section twenty-four hundred thirty-six of the public 5 authorities law, (C) to the New York state sports authority to the 6 extent provided by section twenty-four hundred sixty-three of the public 7 authorities law, (D) to the transit construction fund to the extent 8 provided by section twelve hundred twenty-five-i of the public authori- 9 ties law, and thereafter (E) to the city of New York . 10 § 12-010. Subparagraphs 1 and 2 of paragraph d of subdivision 6 of 11 section 54 of the state finance law, as added by chapter 430 of the laws 12 of 1997, are amended to read as follows: 13 (1) to the city of New York and the city of Staten Island , on the 14 twenty-fifth days of April, June, October and February; 15 (2) to every county, city, village or town, other than the city of 16 New York and the city of Staten Island , whose fiscal year commences on 17 the first day of June or July, on the twenty-fifth days of April, May, 18 September and December; 19 § 12-011. Subdivisions 1 and 2 of section 3034 of the public authori- 20 ties law, as added by chapter 169 of the laws of 1975, are amended to 21 read as follows: 22 1. The corporation shall be administered by a board of directors, 23 consisting of nine directors, none of whom shall be officers or employ- 24 ees of the federal government or of the state or political subdivisions 25 thereof. All of the directors shall be appointed by the governor with 26 the advice and consent of the senate, provided that four of such direc- 27 tors shall be appointed upon written recommendation of the mayor. Of 28 the directors initially appointed upon the written recommendation of the 29 mayor, one shall serve for a term ending December thirty-first, nineteen 30 hundred seventy-six; one shall serve for a term ending December thirty- 31 first, nineteen hundred seventy-seven; one shall serve for a term ending 32 December thirty-first, nineteen hundred seventy-eight; and one shall 33 serve for a term ending December thirty-first, nineteen hundred seven- 34 ty-nine. The provisions of this subdivision notwithstanding, of the 35 directors appointed upon the recommendation of the mayor, the director 36 whose term expires on the December thirty-first next preceding the 37 establishment of a city of Staten Island, and any successor thereto, 38 shall be appointed only upon the written recommendation of the mayor of 39 the city of Staten Island. Of the remaining directors initially 40 appointed by the governor, one shall serve for a term ending December 41 thirty-first, nineteen hundred seventy-six; one shall serve for a term 42 ending December thirty-first, nineteen hundred seventy-seven; one shall 43 serve for a term ending December thirty-first, nineteen hundred seven- 44 ty-eight; and two shall serve for a term ending December thirty-first, 45 nineteen hundred seventy-nine. Each director shall hold office until 46 [ his ] such director's successor has been appointed and qualified. There- 47 after each director appointed by the governor shall serve a term of four 48 years, except that any director appointed to fill a vacancy shall serve 49 only until the expiration of [ his ] their predecessor's term. 50 2. The speaker and the minority leader of the assembly, the president 51 pro-tem and the minority leader of the senate, the city board of esti- 52 mate acting by majority vote, [ and ] the [ vice-chairman ] vice-chairperson 53 of the city council, the comptroller of the city of Staten Island and 54 the common council of the city of Staten Island shall each be entitled 55 to appoint a representative to the board of directors. Each such 56 representative shall be entitled to receive notice of and to attend all

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1 meetings of the board of directors but shall not be entitled to vote. 2 No representative shall be an employee or officer of the federal, state 3 or city governments. Each representative shall serve at the pleasure of 4 the appointing official or body, shall be eligible for reappointment, 5 and shall hold office until [ his ] such representative's successor has 6 been appointed. 7 § 12-012. Subdivision 1 of section 3036 of the public authorities law, 8 as amended by chapter 201 of the laws of 1978, is amended to read as 9 follows: 10 1. Not less than one hundred twenty days before the beginning of each 11 fiscal year of the corporation (but not later than July 1, 1975 for the 12 fiscal year ending June 30, 1976), the [ chairman ] chairperson of the 13 board of directors of the corporation shall certify to the state comp- 14 troller and to the mayor a schedule setting forth the cash requirements 15 of the corporation for such fiscal year and the time or times when such 16 cash is required. The total amount so certified by such [ chairman ] 17 chairperson for such fiscal year shall be equal to: (i) the amounts 18 which are required to be deposited in the capital reserve fund author- 19 ized to be created and established pursuant to subdivision three of this 20 section during such fiscal year in order to maintain such capital 21 reserve fund of the corporation at the level required in accordance with 22 subdivision five of this section; (ii) the amounts required to be depos- 23 ited in the debt service fund of the corporation to pay all interest and 24 all payments of principal and redemption premium, if any, on notes and 25 bonds secured by such debt service fund maturing or otherwise coming due 26 during such fiscal year; and (iii) the amounts required to be deposited 27 in the operating fund of the corporation, as determined by the corpo- 28 ration, to meet the operating requirements and other expenses of the 29 corporation during such fiscal year. If any increase shall occur in the 30 cash requirements specified above, or if payments are required at a time 31 or times earlier than previously certified or if the city shall for any 32 reason fail to make timely payment of the principal and accrued interest 33 due on any obligation issued by the city to the corporation and maturing 34 within the same fiscal year, such [ chairman ] chairperson shall certify a 35 revised schedule of cash requirements for such fiscal year to the state 36 comptroller and to the mayor. The schedule accompanying each certif- 37 ication (or revision thereof) shall provide for such payment dates as 38 the corporation deems appropriate to assure that sufficient funds will 39 be available from the sources identified below to enable it to meet its 40 current obligations as they come due. Upon receipt of such certif- 41 ication, or any revision thereof, the state comptroller shall pay such 42 amount to the corporation for deposit in the appropriate funds, in 43 accordance with such certification from the special account established 44 for the corporation in the municipal assistance tax fund, in accordance 45 with subdivision one of section ninety-two-d of the state finance law, 46 including any amount transferred to the municipal assistance tax fund 47 from the stock transfer tax fund pursuant to subdivision four of section 48 [ 92-b ] ninety-two-b of the state finance law. Any such payment shall 49 be made within thirty days of receipt of the certification or at the 50 time specified in the certification, whichever is later; provided that 51 any such amounts shall have been first appropriated by the state for 52 such purpose or shall have been otherwise made available. Any amount so 53 paid to the corporation shall be deducted from the amount otherwise 54 payable to the city or the city of Staten Island, as the case may be, 55 from the municipal assistance tax fund established by section ninety- 56 two-d of the state finance law and shall not obligate the state to make,

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1 nor entitle the city or the city of Staten Island, as the case may be, 2 to receive, any additional payments. 3 § 12-013. Subdivision 1 of section 3036-a of the public authorities 4 law, as amended by chapter 55 of the laws of 1992, is amended to read as 5 follows: 6 1. In addition to the total amount certified by such [ chairman ] chair- 7 person for such fiscal year, all as referred to in subdivision one of 8 section three thousand thirty-six, the [ chairman ] chairperson shall at 9 the same time certify to the state comptroller and to the mayor a sched- 10 ule setting forth additional cash requirements of the corporation which 11 shall be equal to: (i) the amounts which are required to be deposited in 12 the capital reserve fund authorized to be created and established pursu- 13 ant to subdivision two of this section (in this section called the capi- 14 tal reserve fund) during such fiscal year in order to maintain the capi- 15 tal reserve fund at the level required in accordance with subdivision 16 four of this section; (ii) the amounts required to be deposited in the 17 bond service fund of the corporation to pay all interest and all 18 payments of principal and redemption premium, if any, on notes and bonds 19 payable from the sources hereinafter identified in this section and 20 maturing or otherwise coming due during such fiscal year; and (iii) the 21 amounts required to be deposited in the operating fund of the corpo- 22 ration heretofore established, as determined by the corporation, to meet 23 the operating requirements and other expenses of the corporation during 24 such fiscal year. If any increase shall occur in such additional cash 25 requirements specified above, or if payments are required at a time or 26 times earlier than previously certified or if the city shall for any 27 reason fail to make timely payment of the principal and accrued interest 28 due on any obligation issued by the city to the corporation and maturing 29 within the same fiscal year, such [ chairman ] chairperson shall certify a 30 revised schedule of such additional cash requirements for such fiscal 31 year to the state comptroller and to the mayor. The schedule accompany- 32 ing each certification (or revision thereof) shall provide for such 33 payment dates as the corporation deems appropriate to assure that suffi- 34 cient funds will be available from the sources identified below to 35 enable it to meet its current obligations under this section as they 36 come due. Upon receipt of such certification, or any revision thereof, 37 the state comptroller shall pay such amount to the corporation for 38 deposit in the appropriate funds referred to in this section, in accord- 39 ance with such certification from the special account established for 40 the corporation in the municipal assistance state aid fund in accord- 41 ance with subdivision one of section ninety-two-e of the state finance 42 law and, subject to agreements with outstanding bond and note holders of 43 the corporation, from the special account established for the corpo- 44 ration in the municipal assistance tax fund, in accordance with subdivi- 45 sion one of section ninety-two-d of the state finance law, including any 46 amount transferred to the municipal assistance tax fund from the stock 47 transfer tax fund pursuant to subdivision four of section ninety-two-b 48 of the state finance law. Any such payment shall be made within thirty 49 days of receipt of the certification or at the time specified in the 50 certification, whichever is later; provided that any such amounts shall 51 have been first appropriated by the state for such purpose or shall have 52 been otherwise made available. Any amount paid to the corporation from 53 such municipal assistance state aid fund shall be deducted from the 54 amount otherwise payable to the city or the city of Staten Island, as 55 the case may be, as per capita aid pursuant to sections fifty-four and 56 ninety-two-e of the state finance law and shall not obligate the state

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1 to make, nor entitle the city or the city of Staten Island, to receive, 2 any additional payments of per capita aid. Any amount so paid to the 3 corporation from the municipal assistance tax fund shall, in addition to 4 the amount deducted pursuant to subdivision one of section three thou- 5 sand thirty-six, be deducted from the amount otherwise payable to the 6 city or the city of Staten Island, as the case may be, from the munici- 7 pal assistance tax fund and shall not obligate the state to make, nor 8 entitle the city or the city of Staten Island to receive, any additional 9 payments from such municipal assistance tax fund. 10 § 12-014. Subdivision 1 of section 3036-b of the public authorities 11 law, as amended by chapter 55 of the laws of 1992, is amended to read as 12 follows: 13 1. In addition to the total amount certified by such [ chairman ] chair- 14 person for such fiscal year, all as referred to in subdivision one of 15 each of sections three thousand thirty-six and three thousand thirty- 16 six-a of this title, the [ chairman ] chairperson shall at the same time 17 certify to the state comptroller and to the mayor a schedule setting 18 forth additional cash requirements of the corporation which shall be 19 equal to: (i) the amounts required to be deposited in the bond payment 20 fund of the corporation to pay all interest and all payments of princi- 21 pal and redemption premium, if any, on bonds and notes payable from the 22 sources hereinafter identified in this section and maturing or otherwise 23 coming due during such fiscal year; (ii) the amounts required to be 24 deposited in the operating fund of the corporation heretofore estab- 25 lished, as determined by the corporation, to meet the operating require- 26 ments and other expenses of the corporation during such fiscal year to 27 the extent not otherwise provided for; and (iii) the amounts required to 28 be deposited in the bond reserve fund created and established pursuant 29 to the agreements of the corporation made with the holders of its bonds 30 or notes issued pursuant to subdivision two-b of section three thousand 31 thirty-three of this title during such fiscal year in order to maintain 32 the bond reserve fund at the level required in accordance with the 33 agreements of the corporation made with the holders of its bonds or 34 notes issued pursuant to subdivision two-b of section three thousand 35 thirty-three of this title. If any increase shall occur in such addi- 36 tional cash requirements specified above, or if payments are required at 37 a time or times earlier than previously certified or if the city shall, 38 for any reason, fail to make timely payment of the principal and accrued 39 interest due on any obligation issued by the city to the corporation and 40 maturing within the same fiscal year, such [ chairman ] chairperson shall 41 certify a revised schedule of such additional cash requirements for such 42 fiscal year to the state comptroller and to the mayor. The schedule 43 accompanying each certification, or revision thereof, shall provide for 44 such payment dates as the corporation deems appropriate to assure that 45 sufficient funds will be available from the sources identified below to 46 enable it to meet its current obligations under this section as they 47 come due. Upon receipt of such certification, or any revision thereof, 48 the state comptroller shall pay such amount to the corporation for 49 deposit in the appropriate funds referred to in this section, in accord- 50 ance with such certification and subject to agreements with holders of 51 outstanding bonds and notes of the corporation, from the special account 52 established for the corporation in the municipal assistance state aid 53 fund in accordance with subdivision one of section ninety-two-e of the 54 state finance law and from the special account established for the 55 corporation in the municipal assistance tax fund in accordance with 56 subdivision one of section ninety-two-d of the state finance law,

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1 including any amount transferred to the municipal assistance tax fund 2 from the stock transfer tax fund pursuant to subdivision four of section 3 ninety-two-b of the state finance law. Any such payment shall be made 4 within thirty days of receipt of the certification or at the time speci- 5 fied in the certification, whichever is later; provided that any such 6 amounts shall have been first appropriated by the state for such purpose 7 or shall have been otherwise made available. Any amount paid to the 8 corporation from such municipal assistance state aid fund, in addition 9 to the amount deducted pursuant to subdivision one of section three 10 thousand thirty-six-a of this title, shall be deducted from the amount 11 otherwise payable to the city or the city of Staten Island, as the case 12 may be, as per capita aid pursuant to sections fifty-four and ninety- 13 two-e of the state finance law and shall not obligate the state to make, 14 nor entitle the city or the city of Staten Island to receive, any addi- 15 tional payments of per capita aid. Any amount so paid to the corporation 16 from the municipal assistance tax fund, in addition to the amount 17 deducted pursuant to subdivision one of each of section three thousand 18 thirty-six or three thousand thirty-six-a of this title, shall be 19 deducted from the amount otherwise payable to the city or the city of 20 Staten Island, as the case may be, from the municipal assistance tax 21 fund and shall not obligate the state to make, nor entitle the city or 22 the city of Staten Island to receive, any additional payments from such 23 municipal assistance tax fund. 24 § 12-015. Section 6 of section 2 of chapter 868 of the laws of 1975, 25 constituting the New York state financial emergency act for the city of 26 New York, subdivision 1 as amended by chapter 777 of the laws of 1978, 27 subdivision 3 as amended by chapter 869 of the laws of 1975 and subdivi- 28 sion 4 as amended by chapter 201 of the laws of 1978, is amended to read 29 as follows: 30 § 6. Administration of the board. 1. The membership of the board 31 shall be the governor, the state comptroller (pursuant to [ his ] such 32 official's authority to supervise the accounts of any political subdivi- 33 sion of the state), the mayor, the city comptroller , the mayor of the 34 city of Staten Island, the comptroller of the city of Staten Island, and 35 three members appointed by the governor with the advice and consent of 36 the senate. At least two of the appointed members shall be residents of 37 the city or have their principal place of business in the city. The 38 mayor of the city of Staten Island may recommend to the governor the 39 appointment of one such appointed member. Such appointed members shall 40 serve at the pleasure of the governor. The governor shall be the [ chair- 41 man ] chairperson of the board and the governor or [ his ] the governor's 42 representative shall preside over all meetings of the board. The board 43 shall act by majority vote of the entire board , provided, however, on 44 matters affecting only the city, as determined by the governor, the 45 state comptroller and the appointed members, the mayor of the city of 46 Staten Island and the comptroller of the city of Staten Island shall not 47 vote, and on matters affecting only the city of Staten Island, as deter- 48 mined by the governor, the state comptroller and the appointed members, 49 the mayor and the city comptroller shall not vote. Such officials not 50 voting shall not be considered members of the board for determining a 51 majority . The board shall maintain a record of its proceedings in such 52 form as it may determine, but such record shall indicate attendance and 53 all votes cast by each member. Every member of the board, who is other- 54 wise an elected official of the state or city, shall be entitled to 55 designate a representative to attend, in [ his ] such official's place, 56 meetings of the board and to vote or otherwise act in [ his ] such offi-

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1 cial's behalf. Written notice of such designation shall be furnished to 2 the board by the designating member prior to any meeting attended by 3 [ his ] such official's representative. Any such representative shall 4 serve at the pleasure of the designating member. No such representative 5 shall be authorized to delegate any of [ his ] such representative's 6 duties or functions to any other person. The lieutenant governor, 7 temporary president of the senate, the minority leader of the senate, 8 speaker and minority leader of the assembly, the president of the coun- 9 cil of the city of New York, the city board of estimate acting by major- 10 ity vote, the speaker and the minority leader of the common council of 11 the city of Staten Island and the [ vice-chairman ] vice-chairperson and 12 the minority leader of the council of the city of New York, shall each 13 be entitled to appoint a representative to the board. Each such repre- 14 sentative shall be entitled to receive notice of and to attend all meet- 15 ings of the board but shall not be entitled to vote. No representative 16 shall be an employee or officer of the federal, state or city govern- 17 ments. Each representative shall serve at the pleasure of the appoint- 18 ing official or body, shall be eligible for reappointment, and shall 19 hold office until [ his ] such representative's successor has been 20 appointed. 21 2. Notwithstanding any inconsistent provisions of law, general, 22 special or local, no officer or employee of the state, or political 23 subdivision of the state, any governmental entity operating any public 24 school or college or other public agency or instrumentality or unit of 25 government which exercises governmental powers under the laws of the 26 state, shall forfeit [ his ] such person's office or employment by reason 27 of [ his ] such person's acceptance or appointment as a member, represen- 28 tative, officer, employee or agent of the board nor shall service as 29 such member, representative, officer, employee or agent of the board be 30 deemed incompatible or in conflict with such office or employment. 31 3. The members of the board appointed by the governor and all repre- 32 sentatives designated by members of the board shall serve without salary 33 or per diem allowance but shall be entitled to reimbursement for actual 34 and necessary expenses incurred in the performance of official duties 35 under this act, provided however that such members and representatives 36 are not, at the time such expenses are incurred, public employees other- 37 wise entitled to such reimbursement. 38 4. The governor and the mayor, jointly, shall appoint an executive 39 director of the board who shall serve at the pleasure of the board and 40 may be removed by the board. The board may delegate to the executive 41 director or to one or more of its other officers, employees or agents, 42 such powers and duties as the board may deem proper, except any duties 43 inconsistent with the duties and functions prescribed by any other 44 office or position any such person may hold. 45 § 12-016. Section 7 of section 2 of chapter 868 of the laws of 1975, 46 constituting the New York state financial emergency act for the city of 47 New York, paragraphs a, b, c, e, f and g of subdivision 1, paragraphs 48 (b) and (f) of subdivision 3 and subdivisions 4 and 6 as amended and 49 subdivision 7 as added by chapter 777 of the laws of 1978, paragraph h 50 of subdivision 1 as amended by chapter 870 of the laws of 1975, para- 51 graphs d and i of subdivision 1 as amended by chapter 830 of the laws of 52 1987, subdivisions 3 and 5 as added by chapter 201 of the laws of 1978, 53 and paragraph (i) of subdivision 3 as amended by chapter 285 of the laws 54 of 1985, is amended to read as follows: 55 § 7. Functions of the board. 1. In carrying out the purposes of this 56 act, the board shall perform the following functions:

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1 a. In accordance with the provisions of section eight of this act, the 2 board shall (i) consult with the city and the covered organizations and 3 to the extent it deems it necessary or appropriate to accomplish the 4 purposes of this act, the city of Staten Island, in the preparation of 5 the financial plan, and certify to the city the revenue estimates 6 approved therein, (ii) prescribe the form of the financial plan and the 7 supporting information required in connection therewith, and (iii) exer- 8 cise the rights of approval, disapproval and modification with respect 9 to the financial plan, including but not limited to the revenue esti- 10 mates contained therein. 11 b. The board, to the extent it deems it necessary or appropriate in 12 order to accomplish the purposes of this act, shall establish and adopt 13 procedures with respect to the (i) proper maintenance of the board fund, 14 (ii) the deposit and investment of revenues in such fund and (iii) 15 disbursement of monies from such fund. 16 c. The board shall, from time to time and to the extent it deems 17 necessary or appropriate in order to accomplish the purposes of this 18 act, (i) review the operations, management, efficiency and productivity 19 of such city operations and of such covered organizations or of the city 20 of Staten Island or portions thereof as the board may determine, and 21 make reports thereon; (ii) audit compliance with the financial plan in 22 such areas as the board may determine; (iii) recommend to the city , the 23 city of Staten Island and the covered organizations such measures relat- 24 ing to their operations, management, efficiency and productivity as it 25 deems appropriate to reduce costs and improve services so as to advance 26 the purposes of this act; and (iv) obtain information of the financial 27 condition and needs of the city , the city of Staten Island and the 28 covered organizations. Nothing herein shall diminish the powers of the 29 comptroller otherwise provided by law and the board may request the 30 assistance of the comptroller in performing the above functions. 31 d. The board (i) shall receive from the city and review the reports to 32 be prepared by or on behalf of the city pursuant to section seven-a; 33 (ii) shall receive from the city , the city of Staten Island and the 34 covered organizations and from the deputy comptroller, and shall review 35 such financial statements and projections, budgetary data and informa- 36 tion, and management reports and materials as the board deems necessary 37 or desirable to accomplish the purposes of this act; and (iii) shall 38 inspect, copy and audit such books and records of the city , the city of 39 Staten Island and the covered organizations as the board deems necessary 40 or desirable to accomplish the purposes of this act. 41 e. All contracts entered into by the city or any covered organization 42 and, to the extent the board deems necessary or desirable to accomplish 43 the purposes of this act, by the city of Staten Island must be consist- 44 ent with the provisions of this act and must comply with the require- 45 ments of the financial plan as approved by the board. With respect to 46 all contracts or other obligations to be entered into by the city or any 47 covered organization after October fifteenth, nineteen hundred seventy- 48 five, requiring the payment of funds or the incurring of costs by the 49 city or any covered organization: 50 (i) Within twenty days from the effective date of this act the mayor 51 shall present to the board proposed regulations respecting the catego- 52 ries and types of contracts and other obligations required to be 53 reviewed by the board pursuant to this subdivision [ e ]. Within thirty 54 days from the effective date of this act, the board shall approve or 55 modify and approve such proposed regulations or promulgate its own in 56 the event that such proposed regulations are not submitted to it within

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1 the twenty days as provided for herein. Such regulations may thereafter 2 be modified by the board from time to time on not less than thirty days 3 notice to the mayor and the mayor may from time to time propose modifi- 4 cations to the board. Unless expressly disapproved or modified by the 5 board within thirty days from the date of submission by the mayor, any 6 such proposed regulations or modifications shall be deemed approved by 7 the board; 8 (ii) Prior to entering into any contract or other obligations subject 9 to review of the board under its regulations, the city or any covered 10 organization and, to the extent the board deems necessary or desirable 11 to accomplish the purposes of this act, the city of Staten Island shall 12 submit a copy of such contract or other obligation to the board accompa- 13 nied by an analysis of the projected costs of such contract or other 14 obligation and a certification that performance thereof will be in 15 accordance with the financial plan, all in such form and with such addi- 16 tional information as the board may prescribe. The board shall promptly 17 review the terms of such contract or other obligation and the supporting 18 information in order to determine compliance with the financial plan; 19 (iii) During a control period the board shall, by order, disapprove 20 any contract or other obligation reviewed by it only upon a determi- 21 nation that, in its judgment, the performance of such contract or other 22 obligation would be inconsistent with the financial plan and the city , 23 the city of Staten Island or covered organization shall not enter into 24 such contract or other obligation; 25 (iv) During a control period if the board approves the terms of a 26 reviewed contract or other obligation, the city or covered organization 27 and, to the extent the board deems necessary or desirable to accomplish 28 the purposes of this act, the city of Staten Island may enter into such 29 contract or other obligation upon the terms submitted to the board. 30 Failure of the board to notify the city , the city of Staten Island or 31 covered organization within thirty days (or such additional time not 32 exceeding thirty days as the board shall have notified the city or 33 covered organization, that it requires to complete its review and analy- 34 sis) after submission to it of a contract or other obligation that such 35 contract or other obligation has been disapproved shall be deemed to 36 constitute board approval thereof. 37 f. Upon submission thereof by the city, the board shall review the 38 terms of each proposed long-term and short-term borrowing by the city 39 and any covered organization to be effected during a control period but 40 after October fifteenth, nineteen hundred seventy-five, and no such 41 borrowing shall be made unless approved by the board. To the extent the 42 board deems necessary or desirable to accomplish the purposes of this 43 act, during a control period, the city of Staten Island shall submit and 44 the board shall review the terms of each proposed long-term and short- 45 term borrowing by the city of Staten Island and no such borrowing shall 46 be made unless approved by the board. Each such proposed borrowing by a 47 covered organization shall be submitted to the city by the covered 48 organization before it may be considered by the board. Not more than 49 thirty days after any such submission by a covered organization the city 50 shall transmit any such proposed terms of borrowing to the board togeth- 51 er with the certification of the city as to whether such proposed terms 52 of borrowing are in accordance with the financial plan and are consist- 53 ent with the objectives and purposes of this act. Any such submission 54 to the city shall be accompanied by a certification of the covered 55 organization that the terms thereof are in accordance with the financial 56 plan and are consistent with the objectives or purposes of this act. The

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1 transmittal by the city to the board shall include a recommendation by 2 the city for the approval or disapproval of such proposed terms of 3 borrowing pursuant to the terms of this paragraph. In the event the 4 city does not make such transmittal within such thirty day period, such 5 covered organization may submit such proposed borrowing directly to the 6 board. The board shall disapprove any borrowing if it determines that 7 such borrowing is inconsistent with the financial plan or the objectives 8 or purposes of this act. The board shall consult and coordinate with the 9 municipal assistance corporation for the city of New York with respect 10 to borrowings of the city and any covered organization and shall receive 11 reports from the [ muncipal ] municipal assistance corporation for the 12 city of New York on its review of borrowings by the city. No covered 13 organizations shall be prohibited from issuing bonds or notes to pay 14 outstanding bonds or notes. 15 g. The board and the comptroller shall receive quarterly reports from 16 the city comptroller setting forth the debt service requirements on all 17 bonds and notes of the city and the covered organizations for the 18 following quarter, which reports shall be in such form and contain such 19 information as the board shall determine. Such reports shall be issued 20 no later than sixty days prior to the start of the quarter to which they 21 pertain and shall be updated immediately upon each issuance of bonds or 22 notes after the date of such report to reflect any change in debt 23 service requirements as a result of such issuance. The board also shall 24 receive from the city monthly and quarterly financial reports, which 25 reports shall be in such form and contain such information as the board 26 shall determine and shall be made available by the city to the public. 27 In order to avoid duplicative reports and reporting requirements, to the 28 extent that the city is required to submit monthly or quarterly finan- 29 cial reports to the department of the treasury pursuant to any agreement 30 or arrangement made in connection with federal guarantees of notes or 31 boards issued by the city or a state financing agency, copies of such 32 reports shall be submitted to the board in satisfaction of the monthly 33 and quarterly reporting requirements set forth above, together with such 34 additional information as the board may require. Each monthly and quar- 35 terly report herein required to be submitted to the board must indicate 36 any variance between actual and budgeted revenues, expenses or cash for 37 the period covered by such report. During a control period, to the 38 extent the board deems necessary or desirable to accomplish the purposes 39 of this act, the city of Staten Island shall be subject to the same 40 reporting requirements as the city. 41 h. The board shall issue, to the appropriate officials of the city , 42 the city of Staten Island and the covered organizations, such orders as 43 it deems necessary to accomplish the purposes of this act, including but 44 not limited to timely and satisfactory implementation of an approved 45 financial plan. Any order so issued shall be binding upon the official 46 to whom it was issued and failure to comply with such order shall 47 subject the official to the penalties described in section eleven of 48 this act. 49 i. The board shall coordinate with the municipal assistance corpo- 50 ration for the city of New York and the deputy comptroller with respect 51 to the performance of its review and monitoring of the revenues and 52 expenditures of the city and the covered organizations. 53 2. In the event of any default by the city on its outstanding bonds or 54 notes, and so long as such default has not been cured by the city , the 55 board may, any provisions of this act notwithstanding, take any action 56 that it is authorized to take pursuant to title six-A of article two of

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1 the local finance law, and may direct the city to take any action that 2 the city is authorized to take under such law. 3 3. (a) Notwithstanding any provision of the New York City Collective 4 Bargaining Law, codified as chapter [ fifty-four ] three of title twelve 5 of the New York city administrative code, or any general or special law 6 to the contrary, any report or recommendation of an impasse panel 7 constituted pursuant to such chapter which provides for an increase in 8 wages or fringe benefits of any employee of the city or covered organ- 9 ization, in addition to considering any standard or factor required to 10 be considered by applicable law, including the standards enumerated in 11 section [ 1173-7.0 ] 12-311 (c)(3)(b) of such chapter, shall also take into 12 consideration and accord substantial weight to the financial ability of 13 the city and or covered organization to pay the cost of such increase in 14 wages or fringe benefits. 15 (b) The board of collective bargaining constituted pursuant to such 16 chapter, when reviewing such report or recommendation before proceeding 17 to other issues, shall make a threshold determination as to whether such 18 report or recommendation for an increase in wages or fringe benefits is 19 within the city's and or covered organization's financial ability to 20 pay. If the threshold determination is in the negative, the matter shall 21 be remitted to the impasse panel for further consideration. If the 22 threshold determination is in the affirmative, the further review of the 23 report or recommendation with respect to other issues, if any, shall 24 proceed as provided by law. Unless the parties stipulate otherwise, the 25 threshold determination shall be made within thirty days after 26 submission of the report or recommendation to the board of collective 27 bargaining. 28 (c) Any determination pursuant to article eight of the labor law or 29 any agreement or stipulation entered into in lieu thereof which provides 30 for an increase in wages or fringe benefits of any employee of the city 31 or covered organization shall, in addition to considering any standard 32 or factor required to be considered by applicable law, also take into 33 consideration and accord substantial weight to the financial ability of 34 the city and or covered organization to pay the cost of such increase. 35 (d) Any report or recommendation of a fact finding or similar type 36 panel or any interest arbitration award which provides for an increase 37 in wages or fringe benefits of any employee of the city or covered 38 organization not subject to the provisions of the New York City Collec- 39 tive Bargaining Law, codified as chapter [ fifty-four ] three of title 40 twelve of the New York city administrative code, shall, in addition to 41 considering any standard or factor required to be considered by applica- 42 ble law, also take into consideration and accord substantial weight to 43 the financial ability of the city and or covered organization to pay the 44 cost of such increase. 45 (e) Any party to a proceeding before the board of collective bargain- 46 ing as described in paragraph (b) or other body as described in para- 47 graphs (c) or (d) [ hereof ] of this subdivision may commence a special 48 proceeding in the appellate division, first department, supreme court, 49 state of New York, to review the threshold determination as to the city 50 and/or covered organization's financial ability to pay. Such proceeding 51 shall be commenced not later than thirty days after the final determi- 52 nation has been made by the board of collective bargaining in the case 53 of paragraph (b) or other body in the case of paragraphs (c) or (d) of 54 this subdivision . Such proceeding shall have preference over all other 55 causes in such appellate division, other than causes relating to the 56 election law.

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1 (f) The court shall make a de novo review of the record solely for the 2 purpose of determining whether an award of an increase in wages or 3 fringe benefits was within the city's and or covered organization's 4 financial ability to pay. The court's findings as to such issue shall be 5 based upon a preponderance of all the evidence set forth in the record. 6 Unless the parties stipulate otherwise, arguments or submission shall be 7 had within fifteen days after commencement of the special proceeding and 8 the court shall render its decision within fifteen days thereafter. All 9 questions, other than the question relating to the threshold determi- 10 nation, shall be reviewed by the appellate division in the same proceed- 11 ing in the manner provided by articles seventy-five or seventy-eight of 12 the civil practice law and rules as may be appropriate, notwithstanding 13 that the issue would otherwise have been cognizable in the first 14 instance before a special or trial term of the supreme court. If an 15 appeal shall otherwise lie from such determination of the appellate 16 division to the court of appeals, notice of such appeal shall be filed 17 within thirty days after the entry of the final order or judgment of the 18 appellate division if such appeal is of right or within ten days after 19 entry of an order granting leave to appeal and such appeal shall have 20 preference over all other appeals other than appeals relating to the 21 election law. 22 (g) At any stage of any proceeding under paragraphs (a), (b), (c), (d) 23 and (e) hereof or any appeal from an order or judgment therefrom, the 24 board may intervene as a party on the issue of the financial ability of 25 the city and or covered organization to pay the cost of an increase in 26 wages or fringe benefits. 27 (h) For the purposes of this subdivision, financial ability to pay 28 shall mean the financial ability of the city and or covered organization 29 to pay the cost of any increase in wages or fringe benefits without 30 requiring an increase in the level of city taxes existing at the time of 31 the commencement of a proceeding under paragraph (a), (c) or (d) hereof. 32 [ (i) The provisions of this subdivision shall terminate on June thir- 33 tieth, nineteen hundred eighty-six. ] 34 4. During a control period, except upon approval by the board in 35 accordance with the provisions of paragraph e or f of subdivision one of 36 this section, as the board shall determine, neither the city nor a 37 covered organization nor, to the extent the board deems necessary or 38 desirable to accomplish the purposes of this act, the city of Staten 39 Island shall enter any agreement or other arrangement, whether or not it 40 creates a debt of the city , the city of Staten Island or a covered 41 organization, pursuant to which the revenues or credit of the city or 42 the city of Staten Island may be directly or indirectly pledged, encum- 43 bered, committed or promised, contingently or otherwise, for the payment 44 of obligations of a public benefit corporation. Nothing in this subdivi- 45 sion shall limit the right of the city to comply with the provisions of 46 any existing agreement or other arrangement in respect of the obli- 47 gations of a public benefit corporation. 48 5. The board may employ such consultants as it may deem necessary to 49 assist it in performing its functions required under this act. 50 6. The board shall have the authority to make and execute agreements 51 and all other instruments which the board deems necessary for the exer- 52 cise of its powers and functions including, in connection with any 53 agreement by the federal government or any agency or instrumentality 54 thereof to guarantee the payment of the principal of or interest on 55 bonds or notes issued by the city or by a state financing agency, to 56 enter into one or more agreements containing terms and conditions

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1 required by the secretary of the treasury pursuant to the New York City 2 Loan Guarantee Act of l978, Public Law 95-339 with the federal govern- 3 ment or any agency or instrumentality thereof with respect to such guar- 4 antee or any matters related thereto and to comply with such terms and 5 conditions. 6 7. The board may appoint qualified individuals to participate as 7 members of such audit, productivity or similar committees or councils as 8 the city may from time to time establish in consultation with the board. 9 Such individuals, however, shall not be deemed to be officers, employees 10 or agents of the board. The board shall review and report on, not less 11 than annually, the development and implementation of methods for enhanc- 12 ing the productivity of the city's labor force proposed by any such 13 committee or council. 14 § 12-017. Section 8 of section 2 of chapter 868 of the laws of 1975, 15 constituting the New York state financial emergency act for the city of 16 New York, subdivisions 1, 2, 4, 5 and 6 as amended by chapter 201 of the 17 laws of 1978, the opening paragraph and paragraph c of subdivision 1, 18 subdivisions 2-a and 3 as amended by chapter 777 of the laws of 1978, 19 paragraph a of subdivision 1 as amended by chapter 118 of the laws of 20 2020, is amended to read as follows: 21 § 8. Development of the financial plan. 1. Pursuant to the proce- 22 dures contained in subdivision three of this section, each year the 23 city and to the extent the board deems necessary or desirable to accom- 24 plish the purposes of this act, the city of Staten Island shall develop, 25 and may from time to time modify, with the approval of the board during 26 a control period, a four year financial plan covering the city and the 27 covered organizations or the city of Staten Island, as applicable . 28 Each such financial plan and financial plan modification shall comply 29 with the requirements of subdivision four of this section and shall, 30 except as otherwise provided pursuant to subdivision two-a of this 31 section, conform to the following standards: 32 a. For its fiscal years ending June thirtieth, nineteen hundred seven- 33 ty-nine through June thirtieth, nineteen hundred eighty-one, the city's 34 budget covering all expenditures other than capital items shall be 35 prepared and balanced so that the results thereof would not show a defi- 36 cit when reported in accordance with the accounting principles set forth 37 in the state comptroller's uniform system of accounts for munici- 38 palities, as the same may be modified by the comptroller, in consulta- 39 tion with the city comptroller, for application to the city; subject to 40 the provision of subdivision four of section three thousand thirty-eight 41 of the public authorities law with respect to contributions by the city 42 or other public employer to any retirement system or pension fund and 43 subject to the provision of paragraph (c) of subdivision five of section 44 three thousand thirty-eight of the public authorities law with respect 45 to expense items included in the capital budget of the city. For the 46 fiscal year ending June thirtieth, nineteen hundred eighty-two, and for 47 each fiscal year thereafter, the city's budget covering all expenditures 48 other than capital items shall be prepared and balanced so that the 49 results thereof would not show a deficit when reported in accordance 50 with generally accepted accounting principles and would permit compar- 51 ison of the budget with the report of actual financial results prepared 52 in accordance with generally accepted accounting principles. With 53 respect to financial plans that include the fiscal years ending June 54 thirtieth, nineteen hundred seventy-nine through June thirtieth, nine- 55 teen hundred eighty-one, the city's budget covering all expenditures 56 other than capital items shall be prepared in accordance with generally

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1 accepted accounting principles and there shall be substantial progress 2 in each such fiscal year towards achieving a city budget covering all 3 expenditures other than capital items the results of which would not 4 show a deficit when reported in accordance with generally accepted 5 accounting principles. The city shall eliminate expense items from its 6 capital budget not later than the commencement of the fiscal year ending 7 June thirtieth, nineteen hundred eighty-two. For the fiscal year ending 8 June thirtieth, nineteen hundred eighty-nine, and for each fiscal year 9 thereafter, the budgets covering all expenditures other than capital 10 items of each of the covered organizations shall be prepared and 11 balanced so that the results thereof would not show a deficit when 12 reported in accordance with generally accepted accounting principles; 13 and for each fiscal year prior thereto, there shall be substantial 14 progress towards such goal. Notwithstanding the foregoing and the 15 provisions of any general or special state law or local law to the 16 contrary, including but not limited to the New York city charter: (i) 17 all costs that would be capital costs in accordance with generally 18 accepted accounting principles, but for the application of governmental 19 accounting standards board statement number forty-nine, shall be deemed 20 to be capital costs for purposes of this act and any other provision of 21 state or local law, including but not limited to the New York city char- 22 ter, relevant to the treatment of such costs; and (ii) the determination 23 as to the existence of a deficit pursuant to this act and any other 24 provision of state or local law, including but not limited to the New 25 York city charter, shall be made without regard to changes in restricted 26 fund balances, as defined by the governmental accounting standards 27 board, where restrictions in relation to such fund balances are imposed 28 by state or federal law or regulation, or otherwise by private or 29 governmental parties other than the city of New York, and without regard 30 to funds held in the health stabilization fund, the school crossing 31 guards health insurance fund, any revenue stabilization fund established 32 pursuant to section fifteen hundred twenty-eight of the New York city 33 charter and the management benefits fund established by the city of New 34 York. Deposits into any such revenue stabilization fund shall be deemed 35 to be expenses of such city in the fiscal year in which such deposits 36 are made, and withdrawals from such fund shall be deemed to be revenues 37 of such city in the year in which such withdrawals are made; provided 38 however, that surpluses of such city, whether accumulated from fiscal 39 years ending prior to the effective date of the chapter of the laws of 40 two thousand twenty that amended this paragraph or existing at the close 41 of any fiscal year ending after such effective date, shall be deposited 42 into such revenue stabilization fund as soon as practicable, and such 43 deposits shall not be deemed expenses of the city in the fiscal year in 44 which such deposits are made. 45 b. The limitations on its outstanding short-term obligations required 46 by subdivision nine of section three thousand thirty-eight of the public 47 authorities law and by section nine-b of this act shall be observed at 48 all times, as each is amended from time to time. 49 c. Provision shall be made for the payment in full of the debt 50 service on all bonds and notes of the city and the covered organizations 51 (other than notes held by the municipal assistance corporation for the 52 city of New York to the extent that such corporation has evidenced its 53 intention not to present such notes for payment during the fiscal year 54 in which the determination is made provided that such notes were held by 55 such corporation on June thirtieth, nineteen hundred seventy-eight or 56 were issued in exchange for or in refunding or renewal of notes held by

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1 such corporation on such date) and to the extent the board deems neces- 2 sary or desirable to accomplish the purposes of this act, the city of 3 Staten Island , for the adequate funding of programs of the city , the 4 city of Staten Island, if applicable and the covered organizations which 5 are mandated by state or federal law and for which obligations are going 6 to be incurred during the fiscal year and for payment of a guarantee fee 7 or any other amounts required by the United States of America or any 8 agency or instrumentality thereof in connection with the guarantee of 9 the payment of the principal of or interest on bonds or notes issued by 10 the city. 11 d. All projections of revenues and expenditures contained in a finan- 12 cial plan shall be based on reasonable and appropriate assumptions and 13 methods of estimation. All cash flow projections shall be based upon 14 reasonable and appropriate assumptions as to sources and uses of cash 15 (including but not limited to the timing thereof), and shall provide for 16 operations of the city , the city of Staten Island, if applicable and 17 covered organizations to be conducted within the cash resources so 18 projected. 19 e. The city shall provide a general reserve for each fiscal year to 20 cover potential reductions in its projected revenues or increases in its 21 projected expenditures during each such fiscal year. The amount 22 provided for such general reserve shall be estimated by the city in 23 accordance with paragraph d of this subdivision, but in no event shall 24 it be less than one hundred million dollars at the beginning of any 25 fiscal year. 26 f. For financial plans beginning with the fiscal year ending June 27 thirtieth, nineteen hundred eighty-three or any succeeding fiscal year, 28 the first fiscal year included in any financial plan shall make 29 provision for the repayment of any deficit incurred by the city during 30 the preceding fiscal year. 31 2. In developing the financial plan the city shall seek to achieve a 32 stabilized work force for the city and, to the extent a reduction in the 33 work force is required, primary recourse shall be had to the attrition 34 process to accomplish such reduction. 35 2-a. The city and the board shall confer concerning the projected 36 effect on the budgets of the city and the covered organizations of any 37 change in generally accepted accounting principles, or change in the 38 application of generally accepted accounting principles to the city and 39 the covered organizations, made after the effective date of this act. 40 If the board determines that immediate compliance with such change will 41 have a material effect on such budgets over a time period insufficient 42 to accommodate the effect without a substantial adverse impact on the 43 delivery of essential services, the board may authorize and approve a 44 method of phasing the requirements of such change into such budgets over 45 such reasonably expeditious time period as the board deems appropriate. 46 3. The financial plan shall be developed and, during a control peri- 47 od, shall be approved, and may from time to time be modified, in accord- 48 ance with the following procedures: 49 a. The city shall, by June first, nineteen hundred seventy-eight, 50 prepare and submit a financial plan to the board covering the four year 51 period which begins with the fiscal year ending June thirtieth, nineteen 52 hundred seventy-nine. Thereafter, at least fifty days prior to the 53 beginning of each fiscal year or on such other date as the board may 54 approve upon the request of the city or the city of Staten Island, if 55 applicable , the city , and, during a control period, to the extent the 56 board deems necessary or desirable to accomplish the purposes of this

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1 act, the city of Staten Island shall prepare and submit a financial plan 2 to the board covering the four year period beginning with such fiscal 3 year. On such dates the mayor shall also submit to the board the city's 4 executive expense, revenue and capital budgets for the ensuing fiscal 5 year and a certificate of the mayor stating that such budgets are 6 consistent with the financial plan submitted therewith, that projections 7 contained in the budgets and financial plan are based upon reasonable 8 and appropriate assumptions and methods of estimation, and that opera- 9 tion within the budgets is feasible. 10 b. (i) During a control period the board shall promptly review each 11 financial plan and financial plan modification submitted by the city or, 12 the city of Staten Island, if applicable . Not more than forty-five days 13 after submission of a financial plan or more than thirty days after 14 submission of a financial plan modification the board shall determine 15 whether the financial plan or financial plan modification is complete 16 and complies with the standards set forth in subdivision one of this 17 section and shall approve or disapprove the financial plan or financial 18 plan modification in accordance with the provisions of this section. If 19 the board determines that the financial plan or financial plan modifica- 20 tion is complete and complies with the standards set forth in subdivi- 21 sion one of this section, the board shall approve the financial plan or 22 financial plan modification. Upon making such determination the board 23 shall make a certification to the city or, the city of Staten Island, if 24 applicable, setting forth revenue estimates approved by the board in 25 accordance with such determination. 26 (ii) At all times other than during a control period the board shall 27 promptly review each financial plan and financial plan modification 28 submitted by the city. If the board determines after such review that 29 the financial plan or financial plan modification submitted by the city 30 is not in accordance with the standards set forth in subdivision one of 31 this section, the board shall promptly so notify the city and may take 32 such other action under this act as it deems appropriate. 33 c. The board shall disapprove a financial plan or financial plan 34 modification if during a control period it determines that the financial 35 plan or financial plan modification is incomplete or fails to comply 36 with the provisions of subdivision one of this section. In disapproving 37 a financial plan or a financial plan modification the board may order 38 that one or more of the following actions be taken: 39 (i) expenditures or reserves to assure availability of amounts 40 required for debt service requirements on all bonds and notes of the 41 city , the city of Staten Island, if applicable and the covered organiza- 42 tions or expenditures required for adequate funding of programs of the 43 city , the city of Staten Island, if applicable and the covered organiza- 44 tions mandated by state or federal law and for which obligations are 45 going to be incurred during the fiscal year, be increased to the levels 46 required to provide for their payment in full; 47 (ii) the revenue projections (or any item thereof) during any period 48 be adjusted to comply with the standards set forth in subdivision one of 49 this section; and 50 (iii) the aggregate expenditures projected for any period be reduced 51 to conform to revenue estimates certified by the board in order to 52 comply with the standards set forth in subdivision one of this section. 53 d. During a control period in the event that the city or the city of 54 Staten Island, if applicable shall, for any reason, fail to submit a 55 financial plan prior to the beginning of a fiscal year, as required by 56 paragraph a of this subdivision, or in the event that the board has not,

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1 for any reason permitted under this act, approved a financial plan 2 submitted by the city or the city of Staten Island, if applicable prior 3 to the beginning of a fiscal year, the board shall formulate and adopt a 4 financial plan to be effective until the board approves a financial plan 5 submitted by the city or the city of Staten Island, if applicable . Any 6 financial plan so formulated by the board shall comply with the stand- 7 ards set forth in subdivision one of this section. The budgets and 8 operations of the city or the city of Staten Island, if applicable and 9 the covered organizations at all times shall be in conformance and 10 compliance with the respective financial plan then in effect. 11 e. After the initial adoption by the city, or the approval by the 12 board during a control period, or, during a control period, to the 13 extent the board deems necessary or desirable to accomplish the purposes 14 of this act, the initial adoption by the city of Staten Island, of a 15 financial plan, projections of revenues and expenditures and other esti- 16 mates contained in the financial plan shall be reexamined by the board 17 at least quarterly in consultation with the city and the covered organ- 18 izations, and during a control period the city or the city of Staten 19 Island, as applicable shall prepare and submit to the board financial 20 plan modifications at such times, in such detail and within such time 21 periods as the board may require in order to modify the respective 22 financial plan to conform to the standards set forth in subdivision one 23 of this section. During a control period in the event the board deter- 24 mines that (i) revenue estimates (or any item thereof) must be adjusted 25 to ensure compliance with the standards set forth in subdivision one of 26 this section, or (ii) that the city or a covered organization or the 27 city of Staten Island, as applicable is expending funds at a rate that 28 would cause expenditures to exceed the aggregate expenditure limitation 29 for the city or covered organization or the city of Staten Island, as 30 applicable provided for in the financial plan then in effect, prior to 31 the expiration of the fiscal year, the city or the city of Staten 32 Island, as applicable shall submit a financial plan modification to 33 effect such adjustments in revenue estimates and reductions in total 34 expenditures as may be necessary to conform to such standards or aggre- 35 gate expenditure limitations. If during a control period the city fails 36 to submit such modification after such determination as to adjustments 37 in revenue estimates or such determination as to rates of expenditures, 38 or to submit a financial plan modification in the detail or within the 39 time period specified by the board, or if such modification is disap- 40 proved by the board as not conforming to the standards set forth in 41 subdivision one of this section, the board may formulate and adopt such 42 financial plan modification as it deems appropriate to ensure that the 43 financial plan with respect to such entity continues to meet such stand- 44 ards. Such modification shall become effective on its adoption. 45 Notwithstanding the provisions of this section, in the event the city or 46 the city of Staten Island, as applicable shall determine that, due to 47 unforeseen events during a fiscal year, compliance with the standards 48 set forth in paragraph a of subdivision one of this section would result 49 in a material adverse impact upon the delivery of essential services, 50 the city or the city of Staten Island, as applicable shall notify the 51 board of such determination, together with such information, projections 52 or analyses relating thereto as the board may require, and shall submit 53 a modification to the financial plan reflecting such determination. 54 During a control period the board shall disapprove any such modification 55 unless it finds that (i) [ the city's ] such determination is supported by 56 information, projections and analyses which the board deems substantial-

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1 ly accurate in all material respects and (ii) such events, in its judg- 2 ment, warrant such modification to the financial plan to avoid such 3 adverse impact on the delivery of essential services. 4 f. The city or the city of Staten Island may, from time to time, 5 submit financial plan modifications to each plan for review by the 6 board. During a control period the board shall approve such modifica- 7 tions unless it determines that such modifications would constitute 8 grounds for disapproval of the financial plan pursuant to paragraph c of 9 this subdivision, or if applicable, pursuant to paragraph e of this 10 subdivision. 11 g. Anything contained in this act to the contrary notwithstanding, 12 during a control period the board may at any time disapprove or after 13 consultation with the city or the city of Staten Island, as appropriate, 14 revise the revenue estimates (or any item thereof) prepared by the city 15 or the city of Staten Island in connection with the preparation of a 16 financial plan or any modification thereto and determined by the board 17 not to be based on assumptions and methods of estimation which are 18 reasonable and appropriate under the circumstances and in view of the 19 objectives and purposes of the act. The board may after consultation 20 with the city or the city of Staten Island, as appropriate, determine 21 the estimated revenues of the city or the city of Staten Island, as 22 appropriate, and the covered organizations provided, however, that any 23 revenues estimated by the board shall be based on reasonable and appro- 24 priate assumptions and methods of estimation. 25 4. Each financial plan shall be in such form and shall contain such 26 information for each year during which the financial plan is in effect 27 as the board may specify, and shall, in such detail as the board may 28 from time to time prescribe, include projections of all revenues, 29 expenditures and cash flows (including but not limited to projected 30 capital expenditures and debt issuances) and a schedule of projected 31 capital commitments of the city or the city of Staten Island, as appro- 32 priate, and except in such instances as the board may deem appropriate 33 each of the covered organizations. In addition, each financial plan and 34 financial plan modification shall include a statement of the significant 35 assumptions and methods of estimation used in arriving at the projec- 36 tions contained therein, set forth in such form and in such detail as 37 the board may from time to time prescribe. 38 5. The city and the covered organizations and during a control period 39 to the extent the board deems necessary or desirable to accomplish the 40 purposes of this act, the city of Staten Island shall promptly furnish 41 the board with any information which the board may request to satisfy 42 itself that (i) projected employment levels, collective bargaining 43 agreements and other action relating to employee costs, capital 44 construction and such other matters as the board may specify, are 45 consistent with the provisions made for such costs in the financial 46 plan, (ii) the city and the covered organizations or the city of Staten 47 Island, as appropriate are taking whatever action is necessary with 48 respect to programs mandated by state and federal law to ensure that 49 expenditures for such programs are limited to and covered by the expend- 50 itures stated in the financial plan, and (iii) adequate reserves are 51 provided to maintain programs mandated by state and federal law and for 52 which obligations are going to be incurred in the fiscal year and other 53 essential programs in the event revenues have been overestimated or 54 expenditures underestimated for any period. 55 6. For each financial plan and financial plan modification to be 56 prepared and submitted by the city to the board pursuant to the

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1 provisions of this section, the covered organizations shall submit to 2 the city such information with respect to their projected expenditures, 3 revenues, cash flows and a schedule of projected capital commitments 4 for each year covered by such financial plan or modification as the city 5 shall determine. Notwithstanding any other provision of law limiting 6 the authority of the city with respect to any covered organization, the 7 city, in the preparation and submission of the financial plan and 8 modifications thereof, shall (except for debt service or for other 9 expenditures to the extent that such expenditures are required by law) 10 have the power to determine the aggregate expenditures to be allocated 11 to any covered organization in the financial plan and any modifications 12 thereto. 13 § 12-018. Section 9 of section 2 of chapter 868 of the laws of 1975, 14 constituting the New York state financial emergency act for the city of 15 New York, as amended by chapter 201 of the laws of 1978 and the section 16 heading and subdivisions 1 and 4 as amended by chapter 777 of the laws 17 of 1978, is amended to read as follows: 18 § 9. Establishment and application of the board fund. 1. There is 19 hereby established a fund designated the board fund. Commencing on 20 October twentieth, nineteen hundred seventy-five, and for the duration 21 of a control period, all revenues received or to be received by the city 22 or any covered organization and to the extent the board deems necessary 23 or desirable to accomplish the purposes of this act, the city of Staten 24 Island shall, unless exempted by order of the board, be revenues of the 25 board fund and shall be for the account of the city , the city of Staten 26 Island or the appropriate covered organizations, except (i) to the 27 extent expressly prohibited by federal law, (ii) where revenues of the 28 city are deposited in the general debt service fund, the TAN debt 29 service account or the RAN debt service account, or (iii) where such 30 revenues are pledged to the payment of any outstanding bonds, notes or 31 other obligations of covered organizations or state public authorities 32 as defined in section two hundred one of the civil service law. 33 Disbursement from the board fund shall be made by the board in accord- 34 ance with the approved financial plan except as provided in subdivision 35 five of this section nine. Commencing on October twentieth, nineteen 36 hundred seventy-five, and for the duration of a control period, all 37 funds and accounts established or thereafter established by the city , 38 the city of Staten Island or the covered organizations shall, unless 39 exempted by order of the board, thereafter be funds and accounts of the 40 board fund except to the extent expressly prohibited by federal law or 41 to the extent pledged by covenants or agreements relating to any 42 outstanding bonds, notes or other obligations of covered organizations 43 or public authorities as defined in section two hundred one of the civil 44 service law; and no monies or funds held in the general debt service 45 fund, the TAN debt service account or the RAN debt service account shall 46 be part of the board fund. All such accounts of the board shall have 47 such captions and entries as the board shall determine to be necessary 48 to credit the foregoing revenues and receipts to the board fund. The 49 monies of the fund shall not be deemed to be money of the state or money 50 under its control. 51 2. The deposit of revenues into the board fund and the investment or 52 deposit of monies therein shall be made in accordance with and pursuant 53 to procedures established by the board. 54 3. In order to assure compliance with the financial plan, the board 55 shall from time to time adopt procedures controlling the disbursement of 56 monies from the board fund. The board shall authorize the city or, if

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1 applicable, the city of Staten Island to make all disbursements of 2 [ city ] such entity's revenues from the board fund, which disbursements 3 shall be made in accordance with the approved financial plan; provided, 4 that the board may withdraw such authorization if it determines that (a) 5 any disbursements made or to be made by the city or, if applicable, the 6 city of Staten Island have not been or are likely not to be in compli- 7 ance with the approved financial plan, (b) the city or, if applicable, 8 the city of Staten Island has violated any other provisions of this act, 9 or (c) the city has violated an agreement with any holder or guarantor 10 of bonds or notes issued by the city or a state financing agency. 11 4. Within the board fund there is hereby established a special 12 account designated the debt service repayment account. The board shall 13 from time to time direct, in accordance with procedures adopted by the 14 board, the deposit in the debt service repayment account of such amounts 15 as the board shall, in its discretion, determine to be sufficient to 16 meet the debt service requirements of the covered organizations on their 17 bonds and notes (other than bonds and notes of covered organizations 18 payable from revenues not included in the board fund) as they become 19 due. Amounts in the debt service repayment account shall be used to 20 meet such debt service requirements of the covered organizations. 21 5. If at any time the board determines that the amount then held in 22 the board fund or the amount estimated by the board to be held in the 23 board fund is or will be insufficient to meet the expenditures in the 24 amounts and at the times required by the financial plan, the board shall 25 require disbursements from the board fund to be made in the following 26 order or priority unless otherwise required by law of the United States 27 of America: (i) the payment of amounts from the appropriate account of 28 the board fund to the debt service repayment account, the general debt 29 service fund, the TAN debt service account and the RAN debt service 30 account, to maintain therein the amount required, to meet debt service 31 requirements of the city , the city of Staten Island, if appropriate and 32 the covered organizations on their bonds and notes as they may become 33 due, (ii) the payment of other liabilities having statutory or contrac- 34 tual priority over remaining liabilities of the city , the city of 35 Staten Island, if appropriate and the covered organizations whose monies 36 are included in the board fund, and (iii) the payment of other obli- 37 gations on an allocated basis as specified by the city or, the city of 38 Staten Island, if appropriate, for expenditures in accordance with the 39 financial plan provided that, in the event that the city or, the city of 40 Staten Island, if appropriate, fails to so specify, the board may with- 41 hold payment of any of such other obligations or may direct their 42 payment pro rata. 43 6. The board shall cause to be performed such pre-audit and post-au- 44 dit reviews of the board funds and disbursements therefrom as it may 45 determine. 46 § 12-019. Section 9-a of section 2 of chapter 868 of the laws of 1975, 47 constituting the New York state financial emergency act for the city of 48 New York, as added by chapter 201 of the laws of 1978, subdivisions 1, 49 2, 3, 4, 6, 7, 8, 9 and 11 as amended, subdivision 10 as renumbered and 50 amended and subdivision 12 as added by chapter 777 of the laws of 1978, 51 is amended to read as follows: 52 § 9-a. Establishment and application of a general debt service fund. 53 1. Commencing on the first day of the first full fiscal quarter subse- 54 quent to the first sale of a federally guaranteed city obligation, the 55 city shall establish a general debt service fund for the purpose of 56 paying debt service due or becoming due in the then current fiscal year

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1 and in subsequent fiscal years until the later of (i) the termination 2 date of this act or (ii) the date when all general obligation bonds of 3 the city outstanding as of the establishment of the city of Staten 4 Island have been paid or payment therefor has been provided for in 5 accordance with their terms . All monies in the fund shall be held by 6 the comptroller, who shall administer and maintain the fund in accord- 7 ance with the provisions of this section. 8 2. All payments of or on account of real estate taxes or assessments 9 due to the city or the city of Staten Island , other than the proceeds of 10 tax anticipation notes, shall be immediately upon receipt deposited in 11 an account designated for the municipality to which payment was due 12 established in such fund. The comptroller shall retain, disburse and 13 apply monies in the fund during each month as follows: 14 a. During the first month of each fiscal quarter, there shall be 15 retained in the fund, subject to the provisions of subdivision three of 16 this section, all real estate tax payments deposited in the fund until 17 there shall have been retained from monies so deposited during such 18 month in the applicable account an amount equal to the total monthly 19 debt service, computed as of the date of any disbursement of money from 20 the fund, for the second and third months of such fiscal quarter; 21 provided that such amount shall be reduced by any amount already on 22 deposit in the fund which may be used to pay the monthly debt service 23 for such months. 24 Amounts to be on deposit in such accounts shall be determined as 25 follows: (i) with respect to the account of the city, debt service shall 26 include payments with respect to (a) all bonds and notes of the city 27 issued on or after the date of establishment of the city of Staten 28 Island and (b) all bonds or notes of the city prior thereto multiplied 29 by a fraction, the numerator of which is the total assessed valuation of 30 all taxable real property located in the city as of the date of such 31 establishment and the denominator of which is the total assessed valu- 32 ation of all taxable real property located in the city and the city of 33 Staten Island combined as of the date of such establishment and (ii) 34 with respect to the account of the city of Staten Island, debt service 35 shall include payments with respect to (a) all bonds or notes of the 36 city of Staten Island and (b) all bonds or notes of the city issued 37 prior to the establishment of the city of Staten Island multiplied by a 38 fraction, the numerator of which is the total assessed valuation of all 39 taxable real property located in the city of Staten Island as of the 40 date of such establishment and the denominator of which is the same as 41 in clause (b) of subparagraph (i) of this paragraph. To the extent 42 either account contains insufficient amounts to make payments on the 43 respective allocable portion of city bonds or notes issued prior to the 44 establishment of the city of Staten Island and such municipalities own 45 bonds or notes issued subsequent thereto, amounts on deposit in the 46 account of the other municipality in excess of the amounts required to 47 provide for payment of such latter municipality's own bonds or notes 48 issued subsequent to such establishment and allocable portion of city 49 bonds or notes issued prior thereto, shall be retained in such account 50 and applied to the payment of bonds or notes of the city issued prior to 51 such establishment to the extent of any insufficiency in such accounts. 52 For purposes of this section, fiscal quarter shall mean the three- 53 month period beginning July first, October first, January first or April 54 first, and monthly debt service shall mean, as of any date of computa- 55 tion, the amount of monies equal to the aggregate of (i) all interest 56 payable during such month on bonds and notes of the city or the city of

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1 Staten Island, as applicable , plus (ii) the amount of principal (includ- 2 ing payments into sinking funds) maturing or otherwise coming due during 3 such month on all bonds of the city or the city of Staten Island, as 4 applicable, (excluding principal payments made from sinking funds 5 required by the terms of certain city or the city of Staten Island, as 6 applicable, bonds), plus (iii) the amount of principal to be paid on 7 notes of the city or the city of Staten Island, as applicable, during 8 such month from sources other than the proceeds of bonds or renewal 9 notes (exclusive of revenue anticipation notes and tax anticipation 10 notes or renewals thereof issued less than two years prior to the date 11 of computation). 12 b. During the second and third months of each fiscal quarter, there 13 shall be retained in the fund, subject to the provisions of subdivision 14 three of this section, all real estate tax payments deposited in the 15 fund until there shall have been retained from monies so deposited 16 during such month an amount equal to the total monthly debt service, 17 computed as of the date of any disbursement of monies from the fund, for 18 the first month of the next succeeding fiscal quarter; provided that 19 such amount shall be reduced by any amount already on deposit in the 20 fund which may be used to pay the monthly debt service for such month. 21 c. During any month of a fiscal quarter, after the retentions 22 required by paragraphs a and b of this subdivision have been made for 23 such month, the comptroller shall deposit any remaining balance of real 24 estate taxes received during such month, first into the TAN debt service 25 account to the extent required under subdivision six of this section, 26 and second into the board fund to be applied in accordance with proce- 27 dures of the board. 28 d. The city may at any time pay into the fund any monies required by 29 law to be used to pay monthly debt service and any other monies avail- 30 able for such purpose. 31 3. The board may approve, subject to agreements made with the holders 32 or guarantors of outstanding notes or bonds issued by or for the benefit 33 of the city after the effective date of this act, criteria for calculat- 34 ing a proportion of real estate tax receipts to be retained in the fund 35 in order to provide for the retention of amounts required by the 36 provisions of subdivision two of this section in lieu of the retention 37 of all initial receipts as required by such subdivision; provided, that 38 if the board at any time determines that retentions in the fund pursuant 39 to the provisions of such subdivision are or are likely to be insuffi- 40 cient to provide for the payment of monthly debt service when due, in 41 order to ensure that the amounts on deposit in the fund will be suffi- 42 cient to pay monthly debt service when due, the board shall require (i) 43 that real estate tax receipts be retained in the fund in greater amounts 44 or at earlier dates than the provisions of such subdivision require, or 45 (ii) that other revenues or cash resources of the city be paid into the 46 fund. The board shall consider the impact of earlier or larger 47 retention of real estate tax receipts on the city's seasonal borrowing 48 requirements when determining whether it shall require such additional 49 retention or that other revenues or cash resources of the city be paid 50 into the fund. Prior to the issuance by the city of any bonds or notes, 51 the board shall review any criteria then in effect which determine the 52 proportion of real estate tax receipts to be retained in the fund to 53 determine whether the proposed debt service schedule for such bonds or 54 notes is consistent with the monies which will be available therefor or 55 whether such criteria should be revised. The board shall from time to 56 time take such action as it determines is necessary, including disap-

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1 proval of a proposed issue pursuant to paragraph f of subdivision one of 2 section seven, so that the monies in the fund shall be adequate to meet 3 debt service requirements. 4 4. Commencing on the first day of the second month of the first full 5 fiscal quarter subsequent to the first sale of a federally guaranteed 6 city obligation, the payment of monthly debt service shall be made, 7 first, from amounts retained in the fund. Amounts retained in the fund 8 shall be used only to pay debt service of the city. 9 5. Upon the issuance of any tax anticipation notes following the 10 effective date of this act, the comptroller shall establish and, so long 11 as any tax anticipation notes shall be outstanding, shall maintain a tax 12 anticipation note debt service account within the fund for the purpose 13 of paying the principal of tax anticipation notes. 14 6. The city shall determine the date on which the principal due or to 15 become due on an outstanding issue of tax anticipation notes shall equal 16 ninety percent of the available tax levy with respect to such issue, and 17 upon reasonable notice thereof the comptroller shall commence on such 18 date to pay into the TAN debt service account from collections of such 19 taxes and assessments, after retaining amounts required to be deposited 20 in the fund, amounts sufficient to pay when due, the principal of such 21 issue of tax anticipation notes. The payments of the principal of tax 22 anticipation notes shall be made, first, from amounts retained in the 23 TAN debt service account. 24 7. Upon the issuance of any revenue anticipation notes following the 25 effective date of this act, the comptroller shall establish and, so long 26 as any revenue anticipation notes shall be outstanding, shall maintain a 27 revenue anticipation note debt service account within the fund for the 28 purpose of paying the principal of revenue anticipation notes. Each 29 specific type of revenue in anticipation of which such notes are issued 30 and available for such purpose shall be deposited in such account imme- 31 diately upon receipt by the city. Where such revenue consists of state 32 aid or other revenue to be paid to the city by the comptroller, on the 33 date such revenue is payable to the city, the comptroller shall deposit 34 such revenue directly into such account in lieu of payment to the city. 35 All revenues deposited in the RAN debt service account shall be paid 36 immediately into the board fund except as otherwise provided in subdivi- 37 sion eight of this section. 38 8. The city shall determine the date on which the principal due or to 39 become due on an outstanding issue of revenue anticipation notes shall 40 equal ninety percent of the total amount of revenue against which such 41 notes were issued remaining to be paid to the city on or before the 42 fifth day prior to the maturity date of such notes and upon reasonable 43 notice thereof the comptroller shall commence on such date to retain in 44 the RAN debt service account from amounts deposited or to be deposited 45 therein of each specific type of revenue in anticipation of which reven- 46 ue such anticipation notes were issued, an amount sufficient to pay, 47 when due, the principal of such revenue anticipation notes. Monies 48 retained in such account shall vest immediately in the comptroller in 49 trust for the benefit of the holders of the revenue anticipation notes 50 in anticipation of which such notes were issued. No person having any 51 claim of any kind in tort, contract or otherwise against such city shall 52 have any right to or claim against any monies of the state appropriated 53 by the state and in anticipation of which such notes have been issued, 54 other than a claim for payment by the holders of such notes, and such 55 monies shall not be subject to any order, judgment, lien, execution, 56 attachment, setoff or counter-claim by any such person; provided, howev-

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1 er, that nothing contained in this paragraph shall be construed to 2 limit, impair, impede or otherwise adversely affect in any manner the 3 rights or remedies of the purchasers and holders and owners of any bonds 4 or notes of the state or any agency, instrumentality, public benefit 5 corporation or political subdivision thereof, including the city of New 6 York, under which such purchasers and holders and owners have any right 7 of payment of such bonds or notes by recourse to state aid or local 8 assistance monies held by the state or for the payment of which bonds or 9 notes state aid or local assistance monies are a designated source. The 10 payment of the principal of revenue anticipation notes shall be made 11 first from amounts retained in the RAN debt service account. 12 9. Whenever the amount contained in the TAN debt service account or 13 the RAN debt service account exceeds the amount required to be retained 14 in such account such excess monies, including earnings on investments of 15 monies in the fund, shall be withdrawn from such account and paid into 16 the board fund. 17 10. Subject to agreements made with holders or guarantors of 18 outstanding notes or bonds issued by or for the benefit of the city 19 after the effective date of this act, the comptroller shall invest the 20 monies retained in the fund in accordance with law. 21 11. The limitations imposed upon the city by this section shall be in 22 addition to any limitations imposed upon the city or the city of Staten 23 Island under the local finance law. In the event any provisions of the 24 local finance law shall be inconsistent with the provisions of this 25 section, the provisions of this section shall prevail. The requirements 26 of this section shall not apply to any note of the city held by the 27 municipal assistance corporation for the city of New York to the extent 28 that such corporation has evidenced its intention not to present such 29 notes for payment during the fiscal year in which the determination is 30 made provided that such notes were held by such corporation on June 31 thirtieth, nineteen hundred seventy-eight or were issued in exchange for 32 or in refunding or renewal of notes held by such corporation on such 33 date. 34 12. Notwithstanding any other provision of this section, the city and 35 the city of Staten Island, if applicable, may, at any time, subject to 36 approval by the comptroller, designate a trust company or bank having 37 its principal place of business in the state of New York and having the 38 powers of a trust company in the state of New York to hold all or any 39 part of the monies in the fund and to administer and maintain the monies 40 so held in accordance with the applicable provisions of this section and 41 any agreements made pursuant thereto. 42 § 12-020. Section 11 of section 2 of chapter 868 of the laws of 1975, 43 constituting the New York state financial emergency act for the city of 44 New York, subdivisions 1 and 3 as amended by chapter 777 of the laws of 45 1978, is amended to read as follows: 46 § 11. Prohibitions; penalties. 1. During a control period, (i) no 47 officer or employee of the city or of any of the covered organizations 48 or to the extent the board deems necessary or desirable to accomplish 49 the purposes of this act, the city of Staten Island shall make or 50 authorize an obligation or other liability in excess of the amount 51 available therefor under the financial plan as then in effect; (ii) no 52 officer or employee of the city or of any of the covered organizations 53 or the city of Staten Island shall involve the city , the city of Staten 54 Island, if applicable or any of the covered organizations in any 55 contract or other obligation or liability for the payment of money for 56 any purpose required to be approved by the board unless such contract,

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1 obligation or liability has been so approved or deemed to be approved as 2 provided in paragraphs e and f of subdivision one of section seven and 3 unless such contract or obligation or liability is in compliance with 4 the financial plan as then in effect. 5 2. No officer or employee of the city or any of the covered organiza- 6 tions , or, the city of Staten Island, if applicable, shall take any 7 action in violation of any valid order of the board or shall fail or 8 refuse to take any action required by any such order or shall prepare, 9 present or certify any information (including any projections or esti- 10 mates) or report for the board or any of its agents that is false or 11 misleading, or, upon learning that any such information is false or 12 misleading, shall fail promptly to advise the board or its agents there- 13 of. 14 3. In addition to any penalty or liability under other law, any offi- 15 cer or employee of the city or any of the covered organizations , or, the 16 city of Staten Island, if applicable, who shall knowingly and willfully 17 violate subdivision one or two of this section shall be subject to 18 appropriate administrative discipline, including, when circumstances 19 warrant, suspension from duty without pay or removal from office by 20 order of either the governor or the mayor or the mayor of the city of 21 Staten Island, if applicable, and shall, upon conviction, be guilty of a 22 misdemeanor. 23 4. In the case of a violation of subdivision one or two of this 24 section by an officer or employee of the city , or, the city of Staten 25 Island, if applicable, or any of the covered organizations, the mayor or 26 the mayor of the city of Staten Island, if applicable, or the chief 27 executive officer of such covered organization shall immediately report 28 to the board all pertinent facts together with a statement of the action 29 taken thereon. 30 § 13-001. Section 25-a of the general city law is amended by adding a 31 new undesignated paragraph to read as follows: 32 For the purposes of this article, a city which is incorporated on or 33 after the first of January next succeeding the date on which this para- 34 graph shall have become a law and which is comprised of a geographical 35 area which on the date immediately prior to such incorporation had been 36 wholly contained within a city with a population of one million or more 37 shall continue to be treated as a city with a population of one million 38 or more. 39 § 13-002. Section 25-w of the general city law is amended by adding a 40 new subdivision (g) to read as follows: 41 (g) For the purposes of this article, a city which is incorporated on 42 or after the first of January next succeeding the date on which this 43 subdivision shall have become a law and which is comprised of a 44 geographical area which on the date immediately prior to such incorpo- 45 ration had been wholly contained within a city with a population of one 46 million or more shall continue to be treated as a city with a population 47 of one million or more. 48 § 13-003. Section 1 of chapter 772 of the laws of 1966 relating to 49 imposition of a city business tax is amended by adding a new undesig- 50 nated paragraph to read as follows: 51 For the purposes of this section, a city which is incorporated on or 52 after the first of January next succeeding the date on which this para- 53 graph shall have become a law and which is comprised of a geographical 54 area which on the date immediately prior to such incorporation had been 55 wholly contained within a city with a population of one million or more

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1 shall continue to be treated as a city with a population of one million 2 or more. 3 § 13-004. Section 2 of chapter 772 of the laws of 1966 relating to 4 imposition of a city business tax is amended by adding a new undesig- 5 nated paragraph to read as follows: 6 For the purposes of this section, a city which is incorporated on or 7 after the first of January next succeeding the date on which this para- 8 graph shall have become a law and which is comprised of a geographical 9 area which on the date immediately prior to such incorporation had been 10 wholly contained within a city with a population of one million or more 11 shall continue to be treated as a city with a population of one million 12 or more. 13 § 13-005. Section 1301 of the tax law is amended by adding a new 14 subsection (f) to read as follows: 15 (f) For the purposes of this article, a city which is incorporated on 16 or after the first of January next succeeding the date on which this 17 subsection shall have become a law and which is comprised of a geograph- 18 ical area which on the date immediately prior to such incorporation had 19 been wholly contained within a city with a population of one million or 20 more shall continue to be treated as a city with a population of one 21 million or more. 22 § 14-001. The administrative code of the city of Staten Island is 23 enacted to read as follows: 24 Title 6 - General Services and Contracting 25 § 6-101 Definitions. As used in this title: 26 1. "Commissioner" shall mean the commissioner of the department of 27 general services and contracting. 28 2. "Department" shall mean the department of general services and 29 contracting. 30 § 6-102 Commissioner. The head of the department shall be the commis- 31 sioner. 32 § 6-103 Powers and duties. The commissioner shall have the power and 33 it shall be his or her duty to perform all the functions and operations 34 of the city of Staten Island relating to the construction, maintenance 35 and care of public buildings and facilities; the procurement of goods 36 and other personal property; the disposition of surplus property; the 37 providing to city agencies of services other than personal services; the 38 acquisition, disposition and management by the city of real property 39 other than housing; the providing of automotive, communication, energy 40 and data processing services including without limitation: 41 1. Procurement of goods, other personal property and services. With 42 respect to the procurement and disposal of goods and other personal 43 property and the procurement of services other than personal services, 44 the commissioner shall have the following power and duties: 45 (a) to purchase, inspect, store and distribute all goods, supplies, 46 materials, equipment and other personal property required by any city 47 agency, except as otherwise provided by law, or by any office of any 48 county wholly included in the city for which supplies, materials or 49 equipment are required, payment for which is made from the city treas- 50 ury; 51 (b) to establish and maintain one or more city storehouses, operating 52 therein a modern system of stores control to supply the estimated 53 current needs of the agencies for which the commissioner is authorized 54 to purchase. All purchases other than such purchases for stock for 55 estimated needs and all deliveries from such stock shall be upon justi- 56 fied requisitions. The commissioner shall also oversee the establish-

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1 ment of efficient and economical systems of stores control in other city 2 agencies and review the operations of such storehouses to assure their 3 efficient and economical management; 4 (c) to receive all surplus and obsolete personal property not required 5 by any agency for which the commissioner has the power to make purchases 6 and all such agencies shall surrender such property to the commissioner 7 who shall dispose thereof pursuant to rules promulgated by him or her 8 governing its redistribution, exchange, transfer, sale or other disposi- 9 tion; 10 (d) to procure, supply and manage contractual services other than 11 personal or professional services for the use of city agencies; 12 (e) to promulgate rules governing the purchase, payment, storage, and 13 delivery of goods, supplies, materials and equipment by agencies of the 14 city and the disposal of surplus and obsolete materials, and to super- 15 vise their enforcement; and 16 (f) to classify all goods, supplies, materials and equipment. 17 2. Energy; gas and electricity. The commissioner shall have charge and 18 control of furnishing the city or any part thereof, by contract or 19 otherwise, with gas, electricity, steam, hot water or other energy 20 source, except such functions as are exercised by the public utility 21 service of the city. 22 3. Data processing services; information technology and telecommuni- 23 cations. (a) For purposes of this title "telecommunications" shall mean 24 transmission of writings, signals, pictures, numbers and sounds or 25 intelligence of all kinds by and of wire, cable, optical fiber, radio, 26 satellite, electromagnetic wave, microwave or other like connection 27 between points of origin and reception of such transmission, including 28 all instrumentalities, facilities, apparatus and services incidental to 29 such transmission. 30 (b) The commissioner shall provide data processing support, program- 31 ming, and computer systems analysis services for city agencies when 32 necessary or desirable, in accordance with executive orders promulgated 33 by the mayor. 34 (c) In addition, the commissioner shall have further powers and 35 duties: 36 (i) to plan, formulate, coordinate and advance information technology 37 and telecommunications policy for the city; 38 (ii) to develop, maintain and implement a long range telecommuni- 39 cations strategy; 40 (iii) to administer, subject to the approval of the council where 41 applicable, all franchises and revocable consents relating to telecommu- 42 nications including without limitation, proposing authorizing resol- 43 utions for telecommunications, franchises, developing and issuing 44 requests for proposals or other solicitations of proposals for telecom- 45 munications franchises, selecting telecommunications franchises, review- 46 ing and approving petitions for revocable consents relating to telecom- 47 munications, negotiating the terms of contracts or other agreements 48 relating to telecommunications franchises and revocable consents, 49 enforcing the terms and conditions of such agreements; 50 (iv) to develop municipal uses of cable television and coordinate 51 interagency uses of cable television and other telecommunications; 52 (v) to ensure that priority is given on at least one municipal channel 53 to the cable casting of the public proceedings of the council and its 54 committees, the city planning commission and other state and city agen- 55 cies;

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1 (vi) to provide to city agencies such land-based and wireless voice, 2 data, video or other communication facilities, and technical assistance 3 or other assistance with respect to such facilities, as they may require 4 for the effective discharge of their responsibilities; 5 (vii) to participate in developing, maintaining and implementing a 6 long-range computer system and data communications strategy for the 7 city; 8 (viii) to assist in providing interagency coordination on matters 9 related to data communications activities and interfacing of computers; 10 (ix) to provide appropriate, reliable, cost-effective and responsive 11 computer and data communications services to agencies that require such 12 services by purchasing and maintaining hardware, software and such other 13 goods and services as may be necessary to effectively discharge the 14 powers and duties of the department; 15 (x) to provide assistance to agencies in meeting their data processing 16 and data communications objectives; 17 (xi) to provide agencies using or proposing to use the services of 18 this department with technical assistance in determining feasibility and 19 resource requirements; 20 (xii) to simplify access to shared information, reduce communication 21 costs and provide access to multiple computer systems by connecting 22 computers and terminals of various city agencies, and of other public 23 entities requesting such connection where such provision to such other 24 entities would in the judgment of the commissioner be in the city's 25 interests; 26 (xiii) to plan and provide telecommunications coordination in support 27 of disaster recovery; 28 (xiv) to ensure security for data and other information handled by 29 this department; 30 (xv) to institute procedures to assure restrictions of access to 31 information to the appropriate individuals, where such restrictions are 32 required by law; and 33 (xvi) to perform such other responsibilities with respect to informa- 34 tion technology and telecommunications matters, including responsibil- 35 ities delegated elsewhere by the code, as the mayor shall direct. 36 4. Automotive services. The commissioner shall acquire by purchase, 37 lease or otherwise, vehicles and other automotive equipment for the use 38 of city agencies; manage, maintain, store and operate a fleet of motor 39 vehicles; assign fleets to agencies in accordance with the direction of 40 the mayor and ensure the effective operation of all shops, yards, 41 garages, fuel depots and other facilities required for the maintenance 42 of fleets operated by agencies; and ensure the maintenance of records 43 for all city owned vehicles. 44 5. Right of entry. The commissioner, officers and employees of the 45 department may, in accordance with law, enter upon public or private 46 property for the purpose of making surveys, borings or other investi- 47 gations necessary for the exercise of powers or the performance of the 48 duties of the commissioner and the department. Refusal to permit such 49 entry shall be a misdemeanor punishable by not more than thirty days 50 imprisonment or by a fine of not more than $50.00, or both. 51 § 6-104 Emergency communications systems of other agencies. With 52 respect to emergency communications systems and emergency communications 53 facilities administered by another agency or another municipality, the 54 department shall exercise its powers and duties only as the mayor shall 55 direct or at the request of such agency.

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1 § 6-105 Records and information services. Within the department there 2 shall be a division of records and information services which shall 3 include, but not be limited to, municipal archives, a municipal refer- 4 ence and research center and a municipal records management division. 5 1. The division shall be responsible for the maintenance, access to 6 and preservation of records of the city. In addition, the division shall 7 develop and promulgate standards and procedures to effectively perform 8 those duties. 9 The division shall provide appropriate information and assistance to 10 the mayor and to members of the council. It shall also provide, within 11 reasonable limits, access to the public to records, books and documents 12 within its care and control. 13 2. The division is authorized to arrange for the exchange, sale, 14 purchase and loan of information materials from and with legislative 15 research services, libraries and institutions in other municipalities, 16 governmental bodies and public authorities. 17 3. The division shall: 18 (a) provide for the distribution of publications of the city, where 19 such authority is not vested in another city agency, and issue at regu- 20 lar intervals, no less than quarterly, a bulletin describing its facili- 21 ties and resources; 22 (b) institute actions in replevin to recover any historical and/or 23 other documents properly owned by, or originating from, the county of 24 Richmond prior to the creation of the preceding municipality; 25 (c) report annually by the thirtieth of September to the mayor, and 26 council on the powers and duties herein-mentioned including, but not 27 limited to, the cost of savings effectuated by the division during the 28 preceding fiscal year. 29 § 6-106 Departmental libraries. The commissioner shall analyze the 30 needs of each city agency, except the law department, with respect to 31 the establishment and maintenance of any library or research facility 32 therein, and make such recommendations as may be appropriate in the 33 circumstances. Any libraries or research facilities so established 34 shall, among any of its other duties, be responsible for the mainte- 35 nance, access to and preservation of records within its care and 36 control. 37 Title 7 - Legal Affairs 38 § 7-102 Department; corporation counsel. 1. There shall be a law 39 department the head of which shall be the corporation counsel. 40 2. The first assistant corporation counsel, appointed by the corpo- 41 ration counsel, during absence, disability or the vacancy of the office 42 of the corporation counsel, shall assume all powers and perform all 43 duties of the corporation counsel and shall act as corporation counsel 44 until a new appointment is made. 45 3. The corporation counsel may empower, by written authority filed 46 and remaining on record in the department, any of the assistants to 47 perform certain duties of the corporation counsel. 48 § 7-103 Powers and duties. The corporation counsel shall: 49 1. be attorney and counsel for the city and every agency thereof and 50 shall have charge of and conduct all the law business of the city and 51 its agencies; 52 2. have charge of and conduct the legal proceedings necessary in open- 53 ing, widening, altering and closing streets and in acquiring real estate 54 or in city condemnation proceedings; 55 3. have charge of and conduct the preparation of all leases, deeds, 56 contracts, bonds and all other legal papers for the city or connected

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1 agency or officer thereof; and the corporation counsel shall approve the 2 form of all such deeds, bonds, contracts, leases and legal papers; 3 4. have the right to institute actions in law or equity to maintain, 4 defend and establish the rights, interests, revenues, property, privi- 5 leges, franchises or demands of the city or the people thereof, and to 6 collect any money, debts, fines or penalties or enforce the laws; 7 5. not be empowered to compromise, settle or adjust any rights, 8 claims, demands or causes of action in favor of or against the city, to 9 offer or confess judgment against the city or accept any offer of judg- 10 ment in favor of the city without the approval of the comptroller; and 11 6. have the authority to assign one or more assistants to any agency; 12 and the head of each agency may employ staff counsel to assist in legal 13 affairs of the agency. 14 § 7-104 Legal authority. 1. All actions and proceedings for the 15 recovery of penalties for the violation of any law shall be brought in 16 the name of the city and not in that of any agency. 17 2. The mayor may delegate to any agency, after consultation with the 18 corporation counsel and head of the agency, responsibility for the 19 conduct of routine legal affairs of the agency. 20 3. The mayor may assign or transfer attorneys from the law department 21 of the agency to assist in such delegated functions. 22 4. The corporation counsel shall monitor and evaluate on a regular 23 basis the exercise of authority delegated. 24 5. The mayor, upon recommendation of the corporation counsel, may 25 suspend or withdraw any delegated authority whenever in his or her judg- 26 ment the interests of the city justify such action. 27 § 7-105 City sheriff; powers and duties. 1. There shall be a city 28 sheriff who shall be appointed by the mayor. 29 2. Except as otherwise provided by law, the functions, powers and 30 duties formerly exercised by the sheriff of the preceding municipality 31 as of the date of establishment of the city of Staten Island shall 32 remain with the city sheriff. 33 § 7-106 City clerk; powers and duties. The city clerk shall: 34 1. be the chief archivist of the city and shall advise the mayor and 35 council on those matters concerning the preservation of the city's 36 historical documentation; 37 2. act as the chief reference and research librarian for the mayor and 38 council and shall ensure that all significant materials pertaining to 39 operations of the city be preserved and readily available for use; 40 3. act as the chief public records officer for the mayor and council 41 and shall, except as otherwise provided by law, establish standards for 42 the proper records management in any agency or government instrumentali- 43 ty funded in whole or in part from local tax levy monies; and 44 4. have the power formerly exercised or delegate any of the functions 45 and duties vested in such city clerk by law of the preceding munici- 46 pality as it existed on the date of establishment. 47 Title 8 - Reserved

48 Title 9 - Criminal Justice

49 Chapter 1

50 Department of Corrections

51 § 9-101 Definitions. As used in this title:

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1 1. "Commissioner" shall mean the commissioner of the department of 2 corrections. 3 2. "Department" shall mean the department of corrections. 4 3. "Division" shall mean the division of juvenile justice. 5 § 9-102 Commissioner. The head of the department shall be the commis- 6 sioner of corrections. 7 § 9-103 Powers and duties of commissioner. 1. The commissioner shall 8 have: 9 a. charge and management of all institutions of the city (including 10 all hospital wards) for the care and custody of felons; misdemeanants; 11 all prisoners under arrest and waiting arraignment (including those who 12 require hospital care and/or psychiatric observation or treatment); 13 violators of ordinances or local laws and for the detention of any 14 witnesses who are unable to furnish security for their appearance in 15 criminal proceedings; 16 b. sole power and authority concerning the care, custody and control 17 of all court pens for the detention of prisoners while in custody of the 18 state of New York within the city of Staten Island, the family court of 19 the state of New York, the supreme court in the county of Richmond and 20 of all vehicles employed in the transportation of prisoners who have 21 been sentenced, are awaiting trial or being held for other cause; 22 c. charge and management of persons or any other institution of the 23 city placed under his or her jurisdiction; 24 d. all authority concerning the care and custody of felons, misdemean- 25 ants or violators of local laws held in institutions under his or her 26 jurisdiction; 27 e. all authority in relation to the custody and transportation of 28 persons held for any criminal proceedings, all prisoners under arrest 29 and waiting arraignment (including those requiring hospital care and/or 30 psychiatric treatment) in the city; and 31 f. supervision and responsibility for the planning and implementation 32 of re-training, counseling, and rehabilitative programs for felons, 33 misdemeanants and violators of local laws who are held in institutions 34 under his or her charge. 35 2. The commissioner shall maintain and operate buildings and struc- 36 tures under his or her jurisdiction and may construct additions and make 37 repairs to such buildings by use of the labor of persons under his or 38 her care and custody. 39 § 9-104 Labor of prisoners. 1. Every inmate of an institution under 40 the authority of the commissioner shall be employed in some form of 41 industry, farming operations or other employment and any products there- 42 of shall be utilized in the institutions under the commissioner's juris- 43 diction. 44 2. Any persons held for trial may be employed in the same manner as 45 sentenced prisoners; however, such sentenced prisoners must give their 46 consent in writing. 47 3. Inmates and/or prisoners held for trial may be detailed by the 48 commissioner to perform work or service on the grounds, buildings, or on 49 any public improvement under the charge of any other agency.

50 Chapter 2

51 Division of Juvenile Justice

52 § 9-201 The division of juvenile justice; director. 1. There shall be 53 within the department of corrections a division of juvenile justice.

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1 2. The head of the division shall be the director of juvenile justice. 2 § 9-202 Powers and duties of director. The director shall: 3 1. establish, initiate, control, maintain and operate secure and non- 4 secure facilities for the temporary care and maintenance of children 5 alleged to be or adjudicated as juvenile delinquents. 6 2. have the power to contract with other public and private agencies 7 for services in order to ensure adequate, suitable and accessible accom- 8 modations and that proper care will be available when required for 9 detention. 10 3. establish regulations for the operation of secure and non-secure 11 detention facilities and shall provide or secure the availability of 12 accessible and adequate non-secure detention facilities certified by 13 the state division of youth. 14 4. develop, implement and maintain systems to collect, store and 15 disseminate information concerning juvenile delinquency, juvenile crime 16 and the juvenile justice system. 17 5. participate with other city agencies in development, implementation 18 and maintenance of juvenile justice information. 19 Title 10 - Reserved 20 TITLE 11 21 TAXATION AND FINANCE 22 CHAPTER 1 23 DEPARTMENT OF FINANCE 24 § 11-001 Definitions and applicability. Any terms in this title refer- 25 ring to a governmental entity of the preceding municipality shall be 26 deemed to refer to such entity of the preceding municipality or its 27 successor entity under the city of Staten Island. Any action taken in 28 compliance with the provisions of this title prior to the incorporation 29 of the city of Staten Island shall be deemed to comply with the require- 30 ments of this title. For the purposes of this title, the term preceding 31 municipality shall mean the city government for the geographical area of 32 the city of Staten Island which existed immediately prior to the incor- 33 poration of the city of Staten Island. 34 § 11-101 Power of department of finance to adopt a seal. The depart- 35 ment of finance is authorized to adopt a seal. 36 § 11-102 Finance department; records; copies when in evidence. A 37 copy of any paper, record, book, document or map, filed in the depart- 38 ment of finance, or the minutes, records or proceedings, or any portion 39 thereof, of any board or commission of which the commissioner of 40 finance, is or may become a member, when certified by the commissioner 41 of finance, or a deputy commissioner of finance, to be a correct copy of 42 the original, shall be admissible in evidence in any trial, investi- 43 gation, hearing or proceeding in any court, or before any commissioner, 44 board or tribunal, with the same force and effect as the original. 45 Whenever a subpoena is served upon the commissioner of finance, or any 46 member of a board or commission of which the commissioner of finance is 47 a member, or upon any officer or employee of the department of finance, 48 or upon any officer or employee of such boards or commissions, requiring 49 the production upon any trial or hearing of an original paper, document, 50 book, map, record, minutes or proceedings, the commissioner of finance, 51 in his or her discretion, may furnish a copy certified as herein 52 provided, unless the subpoena be accompanied by an order of the court or 53 other tribunal before which trial or hearing is had requiring the 54 production of such original. 55 § 11-102.1 Authorization to require identifying numbers. a. The 56 commissioner of finance in the proper discharge of his or her duties in

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1 the administration and collection of taxes, assessments, arrears or 2 other charges payable to the city may require any person to furnish such 3 identifying number as the commissioner may prescribe for securing proper 4 identification of such person including, but not limited to, a social 5 security account number or federal employer identification number. 6 b. Any person who fails to supply such identifying number within thir- 7 ty days after written demand therefor shall be liable for a civil penal- 8 ty of not more than one thousand dollars. Upon application in writing 9 and for good cause shown, the commissioner of finance may extend the 10 time for compliance with such written demand. 11 c. The civil penalty prescribed by this section shall be recovered by 12 the corporation counsel in an action or proceeding in any court of 13 competent jurisdiction. In addition, the corporation counsel may insti- 14 tute any other action or proceeding in any court of competent jurisdic- 15 tion that may be appropriate or necessary for the enforcement of the 16 provisions of this section. 17 § 11-103 Bond of commissioner of finance. The commissioner of 18 finance, within ten days after receiving notice of his or her appoint- 19 ment and before such commissioner enters upon his or her office, shall 20 give a bond to the city and to the people of the state of New York in 21 the sum of three hundred thousand dollars, with not less than four 22 sufficient sureties to be approved by the comptroller, conditioned that 23 he or she will faithfully discharge the duties of the commissioner's 24 office and all trusts imposed on him or her by law in virtue of the 25 commissioner's office, including all duties in connection with the tax 26 on mortgages as prescribed by article eleven of the tax law. Such bond 27 shall be deemed to extend to the faithful execution of the duties of the 28 office until a new appointment shall be made and confirmed, and the 29 person so appointed enters upon the performance of the commissioner's 30 duties. In case of any official misconduct or default on the part of 31 such commissioner of finance, or his or her subordinates, an action upon 32 such bond may be begun and prosecuted to judgment by the city, which, 33 after first paying therefrom the expenses of the litigation, shall cause 34 the proceeds of such judgment to be distributed as shall be lawful and 35 equitable among the persons and objects injured or defrauded by such 36 official misconduct or default of the commissioner of finance or any of 37 his or her subordinates. 38 § 11-104 Commissioner of finance to keep accounts. a. The commission- 39 er of finance shall keep books showing the receipts of moneys from all 40 sources, and designating the sources of same, and also showing the 41 amounts paid from time to time on account of the several appropriations, 42 the forms of which shall be prescribed by the comptroller. 43 b. The city collector or the deputy collector in receiving moneys 44 payable to the city, from whatever source derived, shall not issue a 45 receipt to the payor for a payment made by personal, business or corpo- 46 rate check unless specifically requested. 47 § 11-105 Agreements with financing agencies or card issuers; payment 48 of fines, civil penalties, taxes, fees, rates, rent, charges or other 49 amounts by credit card. 1. As used in this section, the following terms 50 shall have the following meanings: 51 a. "Card issuer" shall mean an issuer of a credit card, charge card or 52 other value transfer device. 53 b. "Credit card" means any credit card, credit plate, charge card, 54 charge plate, courtesy card, debit card or other identification card or 55 device issued by a person to another person which may be used to obtain 56 a cash advance or a loan or credit, or to purchase or lease property or

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1 services on the credit of the person issuing the credit card or a person 2 who has agreed with the issuer to pay obligations arising from the use 3 of a credit card issued another person. 4 c. "Financing agency" means a person engaged, in whole or in part, in 5 the business of purchasing retail installment contracts, obligations or 6 credit agreements or indebtedness of buyers under credit agreements from 7 one or more retail sellers or entering into credit agreements with 8 retail buyers but shall not include a retail seller. The term includes 9 but is not limited to a bank, trust company, private banker, industrial 10 bank or investment company, if so engaged, but shall not include a 11 retail seller. 12 d. "Person" means an individual, partnership, corporation or any other 13 legal or commercial entity. 14 2. The city may enter into agreements with one or more financing agen- 15 cies or card issuers to provide for the acceptance by the city of credit 16 cards as an alternate means of payment of fines, civil penalties, taxes, 17 fees, rent, rates, charges or other amounts owed by a person to the 18 city. Any such agreement shall govern the terms and conditions upon 19 which a credit card proffered as a means of payment of a fine, civil 20 penalty, tax, fee, rent, rate, charge or other amount shall be accepted 21 or declined and the manner in and conditions upon which the financing 22 agency or card issuer shall pay to the city the amount of fines, civil 23 penalties, taxes, fees, rent, rates, charges or other amounts paid by 24 means of credit cards pursuant to such agreement. Any such agreement may 25 provide for the payment by the city to such financing agency or card 26 issuer of fees for the services rendered by such financing agency or 27 card issuer pursuant to such agreement, which fees may consist of a 28 discount deducted from or payable in respect of the amount of each such 29 fine, civil penalty, tax, fee, rent, rate, charge or other amount or 30 otherwise as the agreement may provide. 31 3. Notwithstanding any other provision of law to the contrary, any 32 agency or department of the city which, pursuant to an agreement entered 33 into under this section, accepts credit cards as a means of payment of 34 fines, civil penalties, taxes, fees, rent, rates, charges or other 35 amounts owed by a person to the city shall be authorized to charge and 36 collect from any person offering a credit card as a means of payment of 37 a fine a reasonable and uniform fee as a condition of accepting such 38 credit card in payment of a fine, civil penalty, tax, fee, rent, rate, 39 charge or other amount. Such fee shall not exceed the cost incurred by 40 the agency or department in connection with such credit card trans- 41 action, which cost shall include any fee payable by the city to the 42 financing agency. 43 § 11-106 Weekly reports by commissioner of finance to mayor and comp- 44 troller. The commissioner of finance shall report weekly in writing to 45 the mayor and to the comptroller all moneys received by the commission- 46 er, the amount of all warrants paid by him or her since the commission- 47 er's last report, and the amount remaining to the credit of the city. 48 § 11-107 Report to comptroller. The commissioner of finance, when 49 required by the comptroller, shall furnish to him or her such informa- 50 tion as the comptroller may demand in relation to the finances of the 51 city, within such reasonable time as the commissioner may direct. 52 § 11-108 Rules in signing warrants. No warrant shall be signed by 53 the comptroller or countersigned by the commissioner of finance, except 54 upon vouchers for the expenditures of the amount named therein, duly 55 prepared and audited according to the methods prescribed by the comp-

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1 troller, and filed with the comptroller, except in the case of judg- 2 ments, in which case a transcript thereof shall be filed. 3 § 11-109 Commissioner of finance to exhibit bank book. The commis- 4 sioner of finance shall exhibit his or her bank book to the comptroller 5 on the first Tuesday of every month and more often when required. 6 § 11-110 When commissioner of finance to close accounts. The accounts 7 of the commissioner of finance shall be annually closed on the last day 8 of June. 9 § 11-111 Withdrawal of moneys by heads of agencies. Notwithstanding 10 any provision of the charter, any city treasury or sinking fund moneys 11 which have been duly withdrawn from any bank or trust company upon prop- 12 er warrant and check to the order of the head or heads of any agency or 13 agencies may be redeposited by such head or heads of such agency or 14 agencies in a properly designated deposit bank and thereafter such rede- 15 posited moneys may be withdrawn upon check signed by him or her or them 16 without additional warrant. 17 § 11-112 Authorization of subordinates to sign checks and warrants. 18 Notwithstanding any provision of the charter, the comptroller or commis- 19 sioner of finance may designate and authorize any deputies, assistant 20 deputies, or employees to sign, each in his or her own name and in place 21 of and for the comptroller or commissioner of finance, respectively, any 22 or all checks or warrants, including those issued against sinking fund 23 and trust fund bank accounts. A warrant or check so signed shall be of 24 the same force and effect as if signed by the comptroller or commission- 25 er of finance, respectively. The designation or designations of depu- 26 ties shall be made in writing in the manner set forth in section nine- 27 ty-four of the charter of the preceding municipality as it existed 28 January first, nineteen hundred ninety-four. The designation or desig- 29 nations of assistant deputies or employees shall be in writing, signed 30 in duplicate by the comptroller or the commissioner of finance, respec- 31 tively, and shall be duly filed and remain of record in the office of 32 the comptroller and the department of finance. The period for which 33 each such designation of deputies, assistant deputies and employees 34 shall continue in force shall be specified therein and may be terminated 35 by the comptroller or commissioner of finance, respectively, at any time 36 by filing in the same office or offices in which the designation has 37 been filed a written notice of such termination signed by the comp- 38 troller or commissioner of finance, respectively. 39 § 11-113 Acceptance of facsimile signatures by banks or trust compa- 40 nies. Notwithstanding any provision of the charter, checks drawn upon 41 any bank or trust company for payment of payrolls or disbursements for 42 relief, required to be signed by the head of an agency or his or her 43 authorized designee, may be signed by the facsimile signature or signa- 44 tures of the person or persons authorized to sign such checks, if the 45 head of such agency so authorizes by an instrument in writing signed by 46 the head of such agency and filed with the comptroller; and, in such 47 event, any bank or trust company shall, acting in good faith and without 48 notice of any defect or invalidity, be authorized to pay and be 49 protected in paying any checks bearing or purporting to bear the facsim- 50 ile signature or signatures of the person or persons duly authorized to 51 sign such checks, regardless of the person by whom or the means by which 52 the actual or purported facsimile signature or signatures thereon may 53 have been affixed thereto, if such facsimile signature or signatures 54 closely resemble the facsimile specimens from time to time filed with 55 such banks or trust companies by the head of the agency in question; 56 provided, however, that nothing herein contained shall release such bank

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1 or trust company from any liability arising from any cause or fact other 2 than the fact that such facsimile signature is not a genuine facsimile 3 signature affixed with appropriate authority. 4 § 11-115 City collector; appointment; bond. The mayor shall appoint 5 the city collector. The city collector, before entering upon the duties 6 of his or her office, shall enter into a bond to the city of Staten 7 Island to be approved by the commissioner of finance and comptroller in 8 the penal sum of twenty-five thousand dollars, which bond shall be 9 conditioned for the faithful performance of the duties of the office by 10 the officer giving such bond. Such bond shall be a lien on all the real 11 estate held by the collector executing the same, or any surety thereto, 12 in the city at the time of the filing thereof, unless there be named and 13 described in or on any such bond, real estate in such city equal in 14 value to the amount of such bond and owned by a surety, in which case 15 the bond shall be a lien on such real estate so described and upon all 16 the real estate of such city collector, and no other, and shall continue 17 to be such lien until the condition, together with all costs and charges 18 which may accrue by the prosecution thereof, shall be fully satisfied, 19 or until such lien be released, not to exceed, however, the period of 20 ten years after the time when the officer who has given such bond shall 21 have ceased to hold his or her office, unless an action thereon has been 22 commenced and shall then be pending. 23 § 11-116 Deputies to give bond; duties. The city collector shall 24 take from each deputy a bond, in such penal sum and with such sureties 25 as may be approved by the city collector and by the comptroller and 26 commissioner of finance, which bond shall run to the city collector, the 27 city and to whom it may concern, and shall be conditioned for the faith- 28 ful performance of the duties of such deputy. Each bond taken in 29 pursuance of the provisions of this section shall be filed with the 30 comptroller. Each deputy collector shall have all the powers and be 31 subject to all the duties of the city collector in respect to the 32 collection and receipt of taxes, assessments, water rents and arrears. 33 § 11-117 Renewal of bond. If at any time during the continuance in 34 office of the city collector or deputy collectors the comptroller or 35 commissioner of finance shall deem any surety of them to be insuffi- 36 cient, he or she may require the city collector or deputy collectors to 37 enter into a new bond to be approved in like manner as prescribed in 38 section 11-115 of this chapter, within such time as the comptroller may 39 direct, not being less than ten days after requiring such new bond to be 40 given. In case of the neglect or refusal of any such officer to furnish 41 such bond within the time so directed, the comptroller or commissioner 42 of finance may declare his or her office vacant. 43 § 11-118 Bureau of city collections; duties. The duties of the bureau 44 of city collections shall also include the collection of water rents, 45 charges, fines and penalties in connection with the water supply, 46 including arrears, sewer rents, sewer surcharges, charges, fines and 47 penalties in connection with the sewer system as defined in sections 48 24-514 and 24-523 of the code of the preceding municipality, including 49 arrears, interest on bonds and mortgages and revenue arising from the 50 sale of property belonging to or managed by the city. 51 § 11-119 City collector; absence; suspension of. a. In case of 52 inability of the city collector to perform the duties of his or her 53 office by reason of sickness or absence from the city, the mayor shall 54 designate some suitable person to perform the duties of the city collec- 55 tor's office during such inability or absence, and shall, if the comp-

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1 troller so requires, take from such person a bond, with sufficient sure- 2 ties, in the manner hereinafter prescribed. 3 b. If the city collector or any deputy collector shall on any day omit 4 or neglect to furnish to the commissioner of finance or to the comp- 5 troller, respectively, the statements and vouchers required in section 6 11-121 of this chapter, or to make the prescribed daily payments, it 7 shall be the duty of the commissioner of finance forthwith to suspend 8 him or her from office. In case of such suspension, the commissioner of 9 finance shall appoint a suitable person to perform the duties of the 10 officer so suspended, who shall continue to act as such officer until 11 the person suspended shall be restored or another person shall have been 12 appointed. On making such temporary appointment, the commissioner of 13 finance shall be required to take from the person so appointed a bond, 14 with two sufficient sureties, to be approved by the comptroller and 15 filed with the comptroller, in such penal sum as the comptroller may 16 deem just, conditioned for the faithful performance of the duties of the 17 office during the continuance of the person appointed therein; and all 18 the provisions of law prescribing the duties of the city collector and 19 deputy collectors shall apply to the person or persons so appointed. 20 § 11-120 Bond of city collector to be filed. The bond given by the 21 city collector shall be filed and remain in the office of the comp- 22 troller, and true copies thereof, certified by the comptroller, shall be 23 filed in the office of the clerk, and shall be public records. In case 24 a certificate of the adjustment of the accounts of the city collector be 25 made, a true copy thereof, certified by the comptroller, shall be filed 26 in each of the offices in which a copy of the bond of the city collector 27 shall have been filed. 28 § 11-121 City collector; daily statements and accounts. a. The city 29 collector or the deputy collector shall enter upon accounts, to be main- 30 tained in each such office for each parcel of property, the payment of 31 taxes, assessments, sewer rents or water rents thereon, the amount 32 therefor, and the date when paid. The city collector shall daily enter 33 into suitable books to be kept for the purpose of such accounts, such 34 payments and the respective parcels on account of which the same were 35 paid. 36 b. At close of office hours each day, the city collector shall render 37 to the commissioner of finance a statement of the sums so received, and 38 at the same time pay over to such commissioner of finance, the amount 39 received on such day. The city collector shall thereupon receive from 40 such commissioner of finance a voucher for the payment of such sums 41 which he or she shall exhibit to the comptroller not later than the next 42 succeeding business day. 43 c. At the close of office hours each day, the city collector shall 44 also furnish a statement to the comptroller who shall file the same in 45 his or her office. Such statement shall indicate in detail such sums so 46 received and the respective parcels on account of which the same were 47 paid. The comptroller shall, on each day, immediately after receiving 48 such statement, compare it with a voucher furnished to him or her by the 49 commissioner of finance indicating the sums which have been paid on such 50 day to the commissioner of finance and if the aggregate amounts thereof 51 shall correspond, shall credit the city collector in his or her books 52 with such amount. 53 § 11-122 Exemption from taxes granted to REMICs. An entity that is 54 treated for federal income tax purposes as a real estate mortgage 55 investment conduit, hereinafter referred to as a REMIC, as such term is 56 defined in section 860D of the internal revenue code, shall be exempt

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1 from all taxation under chapters five and six of this title. A REMIC 2 shall not be treated as a corporation, partnership or trust for purposes 3 of chapter six of this title. The assets of a REMIC shall not be 4 included in the calculation of any tax liability under chapter six. This 5 provision does not exempt the holders of regular or residual interests, 6 as defined in section 860G of the internal revenue code, in a REMIC from 7 tax on or measured by such regular or residual interests, or on income 8 from such interests. 9 § 11-123 Interest compounded daily. 10 In computing the amount of any interest required to be paid under 11 section 11-224 (except subdivision j thereof), 11-224.1, 11-264, 11-306, 12 11-307, 11-312, 11-313, 17-151, 19-152, 24-317, 24-512, 24-605, 26-128, 13 26-517.1, 27-2144 or 27-4029.1 of the code, such interest shall be 14 compounded daily. 15 § 11-124 Conciliation conferences. a. The commissioner of finance may 16 establish a procedure for providing conciliation conferences for 17 purposes of settling contested determinations of taxes or charges or 18 denials of refunds or credits with respect to taxes or charges imposed 19 under chapter five, six, seven, eight, nine, eleven, twelve, thirteen, 20 fourteen, fifteen, twenty-one, twenty-two, twenty-four, twenty-five or 21 twenty-seven of this title, or for the purpose of settling disputes 22 arising from the notification of the refusal to grant, the suspension or 23 the revocation of a license issued pursuant to chapter thirteen of this 24 title. If such a procedure is established, a conciliation conference 25 shall be provided at the option of any taxpayer or any other person 26 subject to the provisions of any of such chapters. For purposes of this 27 subdivision, if the commissioner of finance fails to act with respect to 28 a refund application before the expiration of the time period after 29 which the taxpayer may file a petition for refund with the tax appeals 30 tribunal established by section one hundred sixty-eight of the charter 31 of the preceding municipality as it existed January first, nineteen 32 hundred ninety-four pursuant to subdivision (c) of section 11-529 or 33 subdivision three of section 11-680 of the code, such failure shall be 34 deemed to be the denial of a refund. 35 b. A request for a conciliation conference shall be made in the manner 36 set forth in rules promulgated by the commissioner of finance and, 37 notwithstanding any provision of law to the contrary, shall suspend the 38 running of the period of limitations for the filing of a petition with 39 such tax appeals tribunal under chapter five, six, seven, eight, nine, 40 eleven, twelve, thirteen, fourteen, fifteen, twenty-one, twenty-two, 41 twenty-four, twenty-five or twenty-seven of this title until such time 42 as a conciliation decision is rendered by the commissioner of finance, 43 or until the person who requested the conciliation conference makes a 44 written request to discontinue or withdraw from the conciliation 45 proceeding. 46 c. Nothing contained herein shall prevent any taxpayer or any other 47 person who has received a notice of determination, notice of deficiency 48 or notice of denial of a claim for refund from filing a petition with 49 such tax appeals tribunal if the time for filing such a petition has not 50 elapsed. 51 d. The commissioner of finance is authorized and empowered to make, 52 adopt and amend rules appropriate to the carrying out of this section 53 and the purposes thereof. 54 § 11-126 Definitions. When used in this title, the term "partnership" 55 shall mean an entity classified as a partnership for federal income tax 56 purposes, including a subchapter K limited liability company, and the

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1 term "partner" or the term "member" when used in relation to a partner- 2 ship shall include a member of a subchapter K limited liability company, 3 unless the context requires otherwise. The term "subchapter K limited 4 liability company" shall mean a limited liability company classified as 5 a partnership for federal income tax purposes. The term "limited liabil- 6 ity company" means a domestic limited liability company or a foreign 7 limited liability company, as defined in section one hundred two of the 8 state limited liability company law, a limited liability investment 9 company formed pursuant to section five hundred seven of the banking 10 law, or a limited liability trust company formed pursuant to section one 11 hundred two-a of the banking law. Notwithstanding anything herein to 12 the contrary, this section shall not apply for purposes of chapter 13 seventeen or nineteen of this title. 14 § 11-128 Payment of real property taxes by electronic funds transfer. 15 a. Definition. "Electronic funds transfer" shall mean any transfer of 16 funds, other than a transaction originated by check, draft or similar 17 paper instrument, which is initiated through an electronic terminal, 18 telephonic instrument or computer or magnetic tape so as to order, 19 instruct or authorize a financial institution to debit or credit an 20 account. 21 b. Authority. Notwithstanding any provision of law to the contrary, 22 the department of finance may accept and, as authorized by this section, 23 require payment of real property taxes by electronic funds transfer, and 24 may authorize a designee to accept such payments. The department of 25 finance, or its designee, may take all actions necessary to complete and 26 administer such transactions, including but not limited to requesting 27 and collecting necessary information and the debiting of specified 28 accounts as provided for by this section. 29 c. Participation. Notwithstanding any provision of law to the contra- 30 ry, the commissioner may require the payment of real property taxes by 31 electronic funds transfer for properties with annual real property tax 32 liability equal to or greater than three hundred thousand dollars. The 33 owner of any such real property, or the person or entity authorized by 34 such owner to pay real property taxes on such real property, shall be 35 required to enroll in an electronic payment program to make such 36 payments, including any arrears in real property taxes on such real 37 property, by electronic funds transfer, either by payment initiated by 38 the taxpayer as described in paragraph one of subdivision d of this 39 section or by authorizing the department of finance to debit the rele- 40 vant account as described in paragraph two of subdivision d of this 41 section. 42 1. Notwithstanding any other provision of this section, where a 43 taxpayer pays real property taxes for more than one property by a single 44 payment, and the total annual real property tax liability for such prop- 45 erties is equal to or greater than three hundred thousand dollars, the 46 total annual real property tax liability for such properties shall be 47 used to determine whether the taxes for a property must be paid by elec- 48 tronic funds transfer. 49 2. (i) Where real property taxes are paid for more than one taxpayer 50 by a single bill or paid by a single entity, including but not limited 51 to a mortgage escrow agent as defined in subparagraph (ii) of this para- 52 graph, if the total amount paid is equal to or greater than three 53 hundred thousand dollars annually, such amount shall be used to deter- 54 mine whether the taxpayer or entity is required to participate in an 55 electronic funds transfer program.

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1 (ii) For purposes of this paragraph, the term "mortgage escrow agent" 2 shall include every banking organization, federal savings bank, federal 3 savings and loan association, federal credit union, bank, trust company, 4 licensed mortgage banker, savings bank, savings and loan association, 5 credit union, insurance corporation organized under the laws of any 6 state other than New York, or any other person, entity or organization 7 which, in the regular course of its business, requires, maintains or 8 services escrow accounts in connection with mortgages on real property 9 located in the city. 10 d. Electronic payment program. The owner of real property, or other 11 person or entity authorized by such owner to pay real property taxes on 12 real property for which payment must be made by electronic funds trans- 13 fer under this section, may choose between participating in a taxpayer 14 initiated payment program or an automatic debit program, as set forth in 15 this subdivision and described in rules promulgated by the commissioner 16 of finance. 17 1. Taxpayer initiated program. In such a program, taxpayers initiate 18 payment by electric funds transfer, including payment by fedwire. 19 2. Automatic debit program. In such a program, taxpayers authorize the 20 department of finance, or the department's designee as determined by the 21 commissioner of finance, to debit the taxpayer's account for the amounts 22 due. 23 e. Notification of participation requirements. For taxpayers or enti- 24 ties subject to this section, the department of finance shall mail 25 notice of such requirement to the property owner or other party who has 26 been designated to receive real property tax bills on an owner's regis- 27 tration card filed by such owner. Such notice shall include the date by 28 which the owner or other party designated by such owner to pay real 29 property taxes on the property must enroll in the electronic payment 30 program. 31 f. Authorization. To administer the payment of real property taxes by 32 electronic funds transfer by automatic debit as described in paragraph 33 two of subdivision d of this section, the department of finance may 34 require that the party responsible for the payment of real property 35 taxes: 36 1. execute an electronic funds transfer agreement with the department 37 of finance or its designee, on a form approved by the department of 38 finance. Such form may be in a format designated by the commissioner, 39 including an electronic format. The agreement shall require that the 40 taxpayer authorize the department of finance or its designee to debit 41 such account on the last date by which the real property taxes may be 42 paid without the accrual of interest in accordance with applicable law; 43 and 44 2. furnish the department of finance or its designee with information 45 to enable the department of finance to complete the electronic funds 46 transfer transaction. Such information shall include, but not be limited 47 to, the name and address of the bank from which an electronic funds 48 transfer shall be authorized, the account number from which the payment 49 shall be authorized, the American Bankers Association (ABA) routing 50 number of the bank where the taxpayer maintains an account and the 51 borough, block and lot of the real property for which such payments are 52 authorized. 53 g. Timely payment. Notwithstanding any provision of law to the contra- 54 ry, where real property taxes are required to be made by electronic 55 funds transfer pursuant to subdivision c of this section, payment of

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1 real property tax by electronic funds transfer shall be deemed timely 2 and not subject to interest charges if: 3 1. for taxpayers enrolled in a taxpayer initiated program pursuant to 4 paragraph one of subdivision d of this section, (i) the taxpayer proper- 5 ly initiates payment on the last date by which the real property taxes 6 may be paid without the accrual of interest in accordance with applica- 7 ble law; and (ii) on the last date by which the real property taxes may 8 be paid without the accrual of interest in accordance with applicable 9 law, such account contains sufficient funds to enable the successful 10 completion of the electronic funds transfer; or 11 2. for taxpayers enrolled in an automatic debit program pursuant to 12 paragraph two of subdivision d of this section, (i) the department of 13 finance or its designee has been authorized to debit the taxpayer's 14 account on the last date by which the real property taxes may be paid 15 without the accrual of interest in accordance with applicable law; (ii) 16 such account is properly identified; and (iii) on the date such payment 17 is due, such account contains sufficient funds to enable the successful 18 completion of the electronic funds transfer. 19 h. Charge on returned payments. Where the department of finance or its 20 designee attempts to debit a taxpayer's account pursuant to a valid 21 electronic funds transfer agreement and is unable to successfully 22 complete the electronic funds transfer due to insufficient funds or 23 other cause not attributable to the department of finance or its desig- 24 nee, in addition to any interest accruing from the late payment of taxes 25 in accordance with applicable law, the same fee that is imposed for a 26 dishonored check pursuant to section eighty-five of the general munici- 27 pal law shall be imposed on the affected real property, and such fee may 28 be collected in the manner provided in such section. 29 i. Hardship. If a taxpayer is unable to enroll in the electronic 30 payment program required by subdivision c of this section or subsequent 31 to enrollment becomes unable to make payments by electronic funds trans- 32 fer as required by this section, the taxpayer may seek a waiver by writ- 33 ten application to the department of finance that sets forth the reason 34 for such inability. Such waiver may be granted in the discretion of the 35 commissioner of finance, who may consider such criteria as: 36 1. the hardship, whether financial or practical, created by partic- 37 ipation in the electronic funds transfer program for the taxpayer seek- 38 ing the waiver; 39 2. the length of time for which the waiver is requested; and 40 3. any other factors that the commissioner may deem relevant. 41 The commissioner shall issue a determination, in writing, within ten 42 days of the department of finance's receipt of a waiver request pursuant 43 to this subdivision, but no waiver shall be granted with respect to the 44 payment of any installment of real property taxes that is due within 45 thirty days of the date of the request for a waiver. 46 j. Confidentiality. The department of finance shall assure the confi- 47 dentiality of information supplied by taxpayers in effecting electronic 48 funds transfers in accordance with applicable provisions of law. The 49 provisions of article six of the public officers law shall not apply to 50 any such information furnished by taxpayers subject to the requirements 51 of this section. 52 k. Failure to pay by electronic funds transfer. 1. With respect to any 53 real property as to which real property taxes are required to be paid by 54 electronic funds transfer under this section, but for which an install- 55 ment of real property taxes is not paid by electronic funds transfer and 56 is paid instead by any other method, including payment by check, (i)

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1 with respect to the first installment that is paid by any other method, 2 including payment by check, the department of finance shall mail a warn- 3 ing notice to the taxpayer setting forth the requirement to make payment 4 by electronic funds transfer and the penalties for failure to do so; and 5 (ii) with respect to each and every subsequent installment that is paid 6 by any other method, including payment by check, the department of 7 finance shall impose a penalty charge in the amount of one percent of 8 the amount of the tax installment that was required under this section 9 to be paid by electronic funds transfer. 10 2. Any penalty charge imposed under this subdivision shall be a lien 11 against the real property for which the taxpayer failed to make a 12 payment in the manner required by this section, and shall accrue inter- 13 est at the same rate as is imposed on a delinquent tax on real property, 14 to be calculated to the date of payment from the date of entry. Such 15 lien shall be a tax lien within the meaning of sections 11-319 and 16 11-401 and may be sold, enforced or foreclosed in the manner provided in 17 chapters three and four of this title. 18 l. Rules. The commissioner may promulgate rules necessary to implement 19 this section. 20 CHAPTER 2 21 REAL PROPERTY ASSESSMENT, TAXATION AND CHARGES

22 SUBCHAPTER 1 23 ASSESSMENT ON REAL PROPERTY 24 § 11-201 Assessments on real property; general powers of finance 25 department. The commissioner of finance shall be charged generally with 26 the duty and responsibility of assessing all real property subject to 27 taxation within the city. 28 § 11-202 Maps and records; surveyor. The commissioner of finance 29 shall appoint a surveyor who shall make the necessary surveys and 30 corrections of the block or ward maps, and also make all new tax maps 31 which may be required. 32 § 11-203 Maps and records; tax maps. a. As used in the charter of 33 the city of Staten Island and in this code, the term "tax maps" shall 34 mean and include the block map of taxes and assessments to the extent 35 that the territory within the city of Staten Island is or shall be 36 embraced in such map, such ward or land maps as embrace the remainder of 37 such city, and also such maps as may be prepared under and pursuant to 38 subdivision d of this section. 39 b. Each separately assessed parcel shall be indicated on the tax maps 40 by a parcel number or by an identification number. A separate identifi- 41 cation number shall be entered upon the tax maps in such manner as 42 clearly to indicate each separately assessed parcel of real property not 43 indicated by parcel numbering. Real property indicated by a single 44 identification number shall be deemed to be a separately assessed 45 parcel. 46 In the case of a newly created parcel with any building thereon, no 47 tax lot number or identification number shall be assigned to such parcel 48 unless the commissioner of the department of buildings has certified 49 that the newly created parcel complies with all applicable zoning laws. 50 c. Parcel numbers shall designate each parcel by the use of three or 51 more numbers, of which one shall be a section or ward number, another a 52 block, district or plat number, and another a lot number. The depart- 53 ment of finance may from time to time change the form of the section and 54 blocks, and also the numbers thereof, on the tax maps filed in its 55 office whenever such change of form has been caused pursuant to section

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1 one hundred ninety-nine of the charter of the preceding municipality as 2 it existed on the first of January in the year next succeeding the 3 effective date of this section and there shall thereafter be delineated 4 and entered upon such maps such new additional sections and blocks and 5 their numbers as necessity may require. Such administration may from 6 time to time change the form of the lots or parcels comprised within any 7 block, and also the numbers thereof, and cause to be shown on such maps 8 the separate lots or parcels of land contained in any new block added 9 thereto and also the lot numbers thereof, according to the general plan 10 employed in the making of such maps. 11 d. Each separately assessed parcel indicated by an identification 12 number shall be shown by a description, or by inscription of such number 13 on the block map of taxes and assessments, or by other map and 14 description. Such numbers may be altered in the same manner as provided 15 in subdivision c of this section for the alteration of parcel numbers. 16 e. New tax maps shall be certified by the department of finance and 17 filed in its main office. All changes and alterations made in the tax 18 maps shall be transmitted within thirty days after such change or alter- 19 ation to such office. 20 § 11-204 Tax maps; block references; alterations and corrections. The 21 word "block", as used in this section designates a plot or parcel of 22 land such as is commonly so designated in the city, wholly embraced 23 within the continuous lines of streets, or streets and waterfront taken 24 together where water forms one of the boundaries of a block, and such 25 other parcels of land or land under water as may be indicated by the 26 department of finance upon such tax maps by block numbers as constitut- 27 ing blocks. 28 § 11-205 Maps and records; public inspection; evidential value. a. The 29 books, maps, assessment-rolls, files and records of the department of 30 finance shall be kept in such of the offices of the department of 31 finance as may be most convenient to the taxpayers of the city and suit- 32 able to the proper discharge of the business of the department of 33 finance. They shall be public records and shall at all reasonable times 34 be open to public inspection. 35 b. Copies of all such records and transcripts thereof, certified by 36 the commissioner of finance or an assessor or by an officer or employee 37 of the department of finance designated by the commissioner of finance, 38 and under the seal of the department of finance, shall be admissible in 39 evidence in all courts and places in the same manner and for the same 40 purposes as books, papers or documents similarly authenticated by the 41 clerk of a county. 42 § 11-206 Power of the commissioner of finance to correct errors. The 43 commissioner of finance may correct any assessment or tax which is erro- 44 neous due to a clerical error or to an error of description contained in 45 the several books of annual record of assessed valuations, or in the 46 assessments-rolls. If the taxes computed on such erroneous assessment 47 have been paid, the commissioner of finance is authorized to refund or 48 credit the difference between the taxes computed on the erroneous and 49 corrected assessments. 50 § 11-207 Duties of assessors in assessing property. a. In performing 51 their assessment duties, the assessors shall personally examine each 52 parcel of taxable real estate during at least every third assessment 53 cycle, and shall personally examine each parcel of real estate that is 54 not taxable during at least every fifth assessment cycle, as measured 55 from the last preceding assessment cycle during which such parcel was 56 personally examined, provided, however, the assessors shall revalue,

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1 reassess or update the assessment of each parcel of taxable or nontaxa- 2 ble real estate during each assessment cycle, irrespective of whether 3 such parcel was personally examined during each assessment cycle. 4 b. The persons having charge of the assessment office shall furnish to 5 the commissioner of finance, under oath, a detailed statement of all 6 taxable real estate in the city. Such statement shall contain the 7 street, the section or ward, the block and lot and map or identification 8 numbers of such real estate embraced within such city; the sum for 9 which, in their judgment, each separately assessed parcel of real estate 10 would sell under ordinary circumstances if it were wholly unimproved 11 and, separately stated, the sum for which the same parcel would sell 12 under ordinary circumstances with the improvements, if any, thereon, 13 such sums to be determined with regard to the limitations contained in 14 the state real property tax law. Such statement shall include such 15 other information as the commissioner of finance may, from time to time, 16 require. 17 § 11-208 Special right of entry; certificate of the commissioner of 18 finance. A right of entry upon real property and into buildings and 19 structures at all reasonable times to ascertain the character of the 20 property shall not be allowed to any person acting in behalf of the 21 department of finance, other than the officials mentioned in sections 22 one hundred fifty-six and one thousand five hundred twenty-one of the 23 charter of the preceding municipality as it existed on the first of 24 January in the year next succeeding the effective date of this section, 25 unless a certificate therefor, executed in writing and signed by the 26 commissioner of finance, is presented by such person to the owner, 27 lessee, or occupant of the premises or his or her agent before entry 28 thereon is made. 29 § 11-208.1 Income and expense statements. a. Where real property is 30 income-producing property, the owner shall be required to submit annual- 31 ly to the department not later than the first of September a statement 32 of all income derived from and all expenses attributable to the opera- 33 tion of such property as follows: 34 (1) Where the owner's books and records reflecting the operation of 35 the property are maintained on a calendar year basis, the statement 36 shall be for the calendar year preceding the date the statement shall be 37 filed. 38 (2) Where the owner's books and records reflecting the operation of 39 the property are maintained on a fiscal year basis for federal income 40 tax purposes, the statement shall be for the last fiscal year concluded 41 as of the first of August preceding the date the statement shall be 42 filed. 43 (3) Notwithstanding the provisions of paragraphs one and two of this 44 subdivision, where the owner of the property has not operated the prop- 45 erty and is without knowledge of the income and expenses of the opera- 46 tion of the property for a consecutive twelve month period concluded as 47 of the first of August preceding the date of the statement shall be 48 filed, then the statement shall be for the period of ownership. 49 (4) The commissioner may for good cause shown extend the time for 50 filing an income and expense statement by a period not to exceed thirty 51 days. 52 b. Such statements shall contain the following declaration: "I certify 53 that all information contained in this statement is true and correct to 54 the best of my knowledge and belief. I understand that the willful 55 making of any false statement of material fact herein will subject me to

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1 the provisions of law relevant to the making and filing of false instru- 2 ments and will render this statement null and void." 3 c. The form on which such statement shall be submitted shall be 4 prepared by the commissioner and copies of such form shall be made 5 available at the offices of the department in the county in which the 6 property is located. The commissioner may, by rule, require such state- 7 ment to be submitted electronically in such form and such manner as the 8 commissioner may determine. For good cause, the commissioner may waive 9 any rule requiring electronic filing and may permit a statement to be 10 filed in such other manner as the commissioner may designate. 11 d. (1) In the event that an owner of income-producing property fails 12 to file an income and expense statement within the time prescribed in 13 subdivision a of this section (determined with regard to any extension 14 of time for filing), such owner shall be subject to a penalty in an 15 amount not to exceed three percent of the assessed value of such 16 income-producing property determined for the current fiscal year in 17 accordance with section fifteen hundred six of the charter of the 18 preceding municipality as it existed on the first of January in the year 19 next succeeding the effective date of this section provided, however, 20 that if such statement is not filed by the thirty-first of December, the 21 penalty shall be in an amount not to exceed four percent of such 22 assessed value. If, in the year immediately following the year in which 23 an owner fails to file by the thirty-first of December, the owner again 24 fails to file an income and expense statement within the time prescribed 25 in subdivision a of this section (determined with regard to any exten- 26 sion of time for filing), such owner shall be subject to a penalty in an 27 amount not to exceed five percent of the assessed value of such property 28 determined for the current fiscal year. Such owner shall also be subject 29 to a penalty of up to five percent of such assessed value in any year 30 immediately succeeding a year in which a penalty of up to five percent 31 could have been imposed, if in such succeeding year the owner fails to 32 file an income and expense statement within the time prescribed in 33 subdivision a of this section (determined with regard to any extension 34 of time for filing). The penalties prescribed in this paragraph shall be 35 determined by the commissioner after notice and an opportunity to be 36 heard. 37 (2) The tax commission shall deny a hearing on any objection to the 38 assessment of property for which an income and expense statement is 39 required and has not been timely filed. 40 (3) Where an income and expense statement required under the 41 provisions of this section has not been timely filed, the commissioner 42 may compel by subpoena the production of the books and records of the 43 owner relevant to the income and expenses of the property, and may also 44 make application to any court of competent jurisdiction for an order 45 compelling the owner to furnish the required income and expense state- 46 ment. 47 e. As used in this section, the term "income-producing property" means 48 property owned for the purpose of securing an income from the property 49 itself, but shall not include property with an assessed value of forty 50 thousand dollars or less, or residential property containing ten or 51 fewer dwelling units or property classified in class one or two as 52 defined in article eighteen of the real property tax law containing six 53 or fewer dwelling units and one retail store. 54 f. Except in accordance with proper judicial order or as otherwise 55 provided by law, it shall be unlawful for the commissioner, any officer 56 or employee of the department, the president or a commissioner or

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1 employee of the tax commission, any person engaged or retained by the 2 department or the tax commission on an independent contract basis, or 3 any person, who, pursuant to this section, is permitted to inspect any 4 income and expense statement or to whom a copy, an abstract or a portion 5 of any such statement is furnished, to divulge or make known in any 6 manner except as provided in this subdivision, the amount of income 7 and/or expense or any particulars set forth or disclosed in any such 8 statement required under this section. The commissioner, the president 9 of the tax commission, or any commissioner or officer or employee of the 10 department or the tax commission charged with the custody of such state- 11 ments shall not be required to produce any income and expense statement 12 or evidence of anything contained in them in any action or proceeding in 13 any court, except on behalf of the department or the tax commission. 14 Nothing herein shall be construed to prohibit the delivery to an owner 15 or his or her duly authorized representative of a certified copy of any 16 statement filed by such owner pursuant to this section or to prohibit 17 the publication of statistics so classified as to prevent the identifi- 18 cation of particular statements and the items thereof, or making known 19 aggregate income and expense information disclosed with respect to prop- 20 erty classified as class four as defined in article eighteen of the real 21 property tax law without identifying information about individual leas- 22 es, or making known a range as determined by the commissioner within 23 which the income and expenses of a property classified as class two 24 falls, or the inspection by the legal representatives of the department 25 or of the tax commission of the statement of any owner who shall bring 26 an action to correct the assessment. Any violation of the provisions of 27 this subdivision shall be punished by a fine not exceeding one thousand 28 dollars or by imprisonment not exceeding one year, or both, at the 29 discretion of the court, and if the offender be an officer or employee 30 of the department or the tax commission, the offender shall be dismissed 31 from office. 32 g. The commissioner shall be authorized to promulgate rules and regu- 33 lations necessary to effectuate the purposes of this section. 34 h. Subdivision f of this section shall be deemed a state statute for 35 purposes of paragraph (a) of subdivision two of section eighty-seven of 36 the public officers law. 37 § 11-209 Taxable status of building in course of construction. a. A 38 building in the course of construction, commenced since the preceding 39 fifth day of January and not ready for occupancy on the fifth day of 40 January following, shall not be assessed unless it shall be ready for 41 occupancy or a part thereof shall be occupied prior to the fifteenth of 42 April. 43 b. (1) A commercial building in the course of construction, commenced 44 since the fifth day of January one year preceding the taxable status 45 date and not ready for occupancy or partially occupied on the taxable 46 status date, shall not be assessed unless it shall be ready for occupan- 47 cy or a part thereof shall be occupied prior to the fifteenth day of 48 April following the taxable status date. 49 (2) A commercial building in the course of construction, commenced 50 since the fifth day of January two years preceding the taxable status 51 date and not ready for occupancy or partially occupied on the taxable 52 status date, shall not be assessed unless it shall be ready for occupan- 53 cy or a part thereof shall be occupied prior to the fifteenth day of 54 April following the taxable status date. 55 (3) A commercial building in the course of construction, commenced 56 since the fifth day of January three years preceding the taxable status

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1 date and not ready for occupancy or partially occupied on the taxable 2 status date, shall not be assessed unless it shall be ready for occupan- 3 cy or a part thereof shall be occupied prior to the fifteenth day of 4 April following the taxable status date. 5 c. For purposes of this section, a "commercial building" shall mean a 6 building that is intended to be used, and upon completion is used, 7 exclusively for buying, selling or otherwise providing goods or 8 services, or for other lawful business, commercial or manufacturing 9 activities, excluding hotel services, except that a commercial building 10 may contain a residential component other than a hotel, provided (i) 11 that such residential component is receiving or has applied for and is 12 eligible to receive a partial exemption from real property taxes pursu- 13 ant to section four hundred twenty-one-a of the real property tax law, 14 or (ii) that such residential component in its entirety, both land and 15 building, is receiving or has applied for and is eligible to receive a 16 full exemption from real property taxes, provided, however, a "commer- 17 cial building" shall not include any building that is constructed on 18 block 1049, lot 29 as shown on the tax map of the city of New York for 19 the borough of Manhattan as such map was in effect for the assessment 20 roll published in calendar year two thousand. 21 d. Subdivision b of this section shall not apply to a tax lot that 22 constitutes a part of a building unless the building viewed as a whole 23 is a commercial building as defined in subdivision c of this section. 24 e. Any building that receives the benefit conferred pursuant to subdi- 25 vision b of this section that is subsequently determined not to have 26 been a commercial building as defined in subdivision c of this section 27 for any year in which it received such benefit shall have its assessment 28 corrected for any such year. Taxes shall be imposed in the amount that 29 would have applied had the corrected taxable assessed value appeared on 30 the final assessment roll. 31 § 11-210 Books of annual record of assessed valuation of real estate 32 indicated by parcel numbers; form and contents. a. There shall be kept 33 in the office of the department of finance, books of the annual record 34 of the assessed valuation of real estate to be called "the annual record 35 of the assessed valuation of real estate indicated by parcel numbers in 36 the Staten Island", in which shall be entered in detail the assessed 37 valuation of each separately assessed parcel indicated by a parcel 38 number within the limits of Staten Island. 39 b. The assessed valuation of each such parcel shall be set down in 40 such books in two columns. In the first column shall be stated, oppo- 41 site each such parcel, the sum for which such parcel would sell under 42 ordinary circumstances if wholly unimproved; and in the second column, 43 the sum for which such parcel would sell under ordinary circumstances 44 with the improvements, if any thereon. 45 c. Such books shall be prepared in such manner that the assessed valu- 46 ations entered therein shall be under sections and block headings as may 47 be most convenient for use in connection with the tax maps described in 48 section 11-203 of this chapter. 49 § 11-211 Books of annual record of assessed valuation of real estate 50 indicated by identification numbers. a. The assessed valuation of all 51 taxable real property indicated by identification numbers shall be 52 entered in the office of the department of finance. 53 b. The assessors in the city shall furnish to the commissioner of 54 finance at the office of the department of finance, a detailed statement 55 under oath of the assessable real property indicated by an identifica- 56 tion number in such city.

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1 c. There shall be kept in the office of the department of finance, 2 books of the annual record of the assessed valuation of real estate to 3 be known as "the annual record of the assessed valuation of real estate 4 indicated by identification numbers", in which shall be entered the 5 assessed valuations of the real property mentioned in this section. 6 § 11-212 Power of the commissioner of finance to equalize assessments 7 before opening books. a. Before opening the several books of annual 8 record of assessed valuation for public inspection, the commissioner of 9 finance shall fix the valuations of property for the purpose of taxation 10 throughout the city at such sums as will, in the commissioner's judg- 11 ment, establish a just and equal relation between the valuations of 12 property throughout the entire city. 13 b. To this end the assessors are required to transmit to the commis- 14 sioner of finance in each year a report of the assessed valuation of 15 real property at such time prior to the fifteenth of January as such 16 commissioner may prescribe. 17 § 11-213 Errors in annual records or assessment-rolls. The omission 18 from the several books of annual record of assessed valuations or from 19 the assessment-rolls in respect to the entry therein of the name of the 20 rightful owner or owners of real estate, whether individuals or corpo- 21 rations, shall not invalidate any tax or assessment. In such case, 22 however, no tax shall be collected except from the real estate so 23 assessed. 24 § 11-214 Procedure on apportionment of assessment. a. The commissioner 25 of finance may apportion any assessment in such manner as he or she 26 shall deem just and equitable, and forthwith cause such assessment to be 27 cancelled and new assessments, equal in the aggregate to the cancelled 28 assessment, to be made on the proper books and rolls. Within five days 29 thereafter the commissioner of finance shall cause written notice of the 30 new assessments to be mailed to the owners of record of the real estate 31 so assessed at their last known residence or business address, and an 32 affidavit of the mailing of such notice to be filed in the office of the 33 department of finance. 34 b. When such notice is mailed after the first of February such owners 35 may apply for correction of such assessments within twenty days after 36 the mailing of such notice with the same force and effect as if such 37 application were made on or before the first of March in such year. 38 § 11-215 Entry of corrections made by tax commission. Upon receiving 39 notice of a correction of an assessment made by the tax commission, the 40 commissioner of finance shall cause the amount of the assessment as 41 corrected to be entered upon the proper books of annual record and the 42 assessment-rolls for the year for which such correction is made. 43 § 11-216 Reduction in assessments; publication. a. There shall be 44 published annually in the City Record a list of all reductions in real 45 property assessments granted by the tax commission identifying the name 46 of the property owner, the address and the amount of reduction. 47 b. No reduction shall be granted for an income-producing property 48 unless there is submitted to the tax commission a statement of income 49 and expenses in the form prescribed by the tax commission and which 50 shall be, in the case of property valued at one million dollars or more 51 certified by a certified public accountant. The commissioner granting 52 such reduction in assessment shall state in a short memorandum the basis 53 upon which the reduction is granted. 54 c. In all cases where the reduction in assessment for the current year 55 is for fifty thousand dollars or more, the concurrence of the president 56 of the tax commission shall be required.

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1 § 11-217 Assessment-rolls; form and contents. Assessment-rolls shall 2 be so arranged with respect to number of columns and shall contain such 3 entries as the commissioner of finance shall prescribe, sufficient to 4 identify the property assessed and to show its total assessed valuation. 5 Real estate shall be described therein by the numbers by which such 6 property is designated on the tax maps and in the several books of the 7 annual record of the assessed valuation of real estate, and such numbers 8 shall import into the assessment-rolls any necessary identifying 9 description shown by the tax maps. 10 § 11-218 Assessment-rolls; delivery to council or city clerk. a. The 11 council shall meet at noon, on the day of delivery of the rolls, other 12 than a Saturday, Sunday, or legal holiday, at the city hall or usual 13 place of meeting for the purpose of receiving the assessment-rolls and 14 performing such other duties in relation thereto as are prescribed by 15 law. 16 b. If the council fails to meet as herein prescribed, the rolls shall 17 be delivered to the city clerk with the same effect as if delivered to 18 the council. 19 § 11-219 Books of annual record; delivery for publication. Within two 20 weeks after the delivery of the assessment-rolls to the council, the 21 commissioner of finance shall furnish to the director of the City Record 22 a copy of the several books of the annual record of the assessed valu- 23 ation of real estate, omitting, however, the two columns headed respec- 24 tively "size of house" and "houses on lot." 25 § 11-220 Council; date of meeting to fix tax rate. The council shall 26 meet on a day other than a Saturday, Sunday or legal holiday, to fix the 27 annual tax rate. 28 § 11-221 Extension of tax on assessment-rolls or upon assessment-roll 29 cards. The respective sums to be paid as taxes on the valuation of real 30 property, may be set down in the assessment-rolls, or upon assessment- 31 roll cards. 32 § 11-222 Tax account of the commissioner of finance. Upon notification 33 from the public advocate of the amount of taxes mentioned in such 34 assessment-rolls and tax warrants, the comptroller shall cause the prop- 35 er sum to be charged to the commissioner of finance for collection. 36 § 11-223 Apportionment of taxes. a. If a sum of money in gross has 37 been or shall be taxed upon any lands or premises, any person or persons 38 claiming any dividend or undivided part thereof may pay such part of 39 such sum so taxed and of any interest and charges due or charged there- 40 on, as the commissioner of finance may deem to be just and equitable. 41 b. The commissioner of finance shall apportion the assessed valuation 42 of such lands or premises. 43 c. The remainder of the sum of money so taxed and the interest and 44 charges shall be a lien upon the residue of the land and premises only, 45 and the tax lien upon such residue may be sold to satisfy such tax, 46 interest or charges thereon, in the same manner as though the residue of 47 said tax had been imposed only upon such residue of such lands or prem- 48 ises. 49 § 11-224 Interest on unpaid taxes. a. If any tax on real estate which 50 shall have become due and payable prior to January first, nineteen 51 hundred thirty-four, is unpaid in whole or in part, the commissioner of 52 finance shall charge, receive and collect interest upon the amount of 53 such tax or such part thereof, to be calculated to the date of payment 54 at the rate of seven per centum per annum from the date when such tax or 55 such part thereof became due and payable to January first, nineteen 56 hundred thirty-four, at the rate of ten per centum per annum from Janu-

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1 ary first, nineteen hundred thirty-four to May first, nineteen hundred 2 thirty-seven, or at the rate of seven per centum per annum for such 3 period if the comptroller and the commissioner of finance, in their 4 discretion, both determine that the payment of any tax arrears at such 5 reduced rate of interest may operate to save the property upon which 6 such taxes are in arrears from foreclosure or encourage its development 7 or is otherwise in the public interest, at the rate of seven per centum 8 per annum from May first, nineteen hundred thirty-seven to August first, 9 nineteen hundred sixty-nine, and from August first, nineteen hundred 10 sixty-nine to December thirty-first, nineteen hundred seventy-six, at 11 the rate of seven per centum per annum if the annual tax on a parcel is 12 two thousand dollars or less, and at the rate of one per centum per 13 month if the annual tax on a parcel is more than two thousand dollars 14 or, irrespective of the annual tax, if a parcel consists of vacant or 15 unimproved land, and from January first, nineteen hundred seventy-seven 16 at the rate of seven per centum per annum if the annual tax on a parcel 17 is two thousand dollars or less, and at the rate of fifteen per centum 18 per annum if the annual tax on a parcel is more than two thousand 19 dollars or, irrespective of the annual tax, if a parcel consists of 20 vacant or unimproved land. 21 b. If any tax on real estate which shall have become due and payable 22 after January first, nineteen hundred thirty-four and prior to April 23 first, nineteen hundred thirty-seven, is unpaid in whole or in part, the 24 commissioner of finance shall charge, receive and collect interest upon 25 the amount of such tax or such part thereof, to be calculated to the 26 date of payment at the rate of ten per centum per annum from the date on 27 which such tax or such part thereof became due and payable to May first, 28 nineteen hundred thirty-seven, or at the rate of seven per centum per 29 annum for such period if the comptroller and the commissioner of 30 finance, in their discretion, both determine that the payment of any tax 31 arrears at such reduced rate of interest may operate to save the proper- 32 ty upon which such taxes are in arrears from foreclosure or encourage 33 its development or is otherwise in the public interest, at the rate of 34 seven per centum per annum from May first, nineteen hundred thirty-seven 35 to August first, nineteen hundred sixty-nine, from August first, nine- 36 teen hundred sixty-nine to December thirty-first, nineteen hundred 37 seventy-six, at the rate of seven per centum per annum if the annual tax 38 on a parcel is two thousand dollars or less, and at the rate of one per 39 centum per month if the annual tax on a parcel is more than two thousand 40 dollars or, irrespective of the annual tax, if a parcel consists of 41 vacant or unimproved land, and from January first, nineteen hundred 42 seventy-seven, at the rate of seven per centum per annum if the annual 43 tax on a parcel is two thousand dollars or less, and at the rate of 44 fifteen per centum per annum if the annual tax on a parcel is more than 45 two thousand dollars or, irrespective of the annual tax, if a parcel 46 consists of vacant or unimproved land. 47 c. If any tax on real estate which shall have become due and payable 48 on or after April first, nineteen hundred thirty-seven and prior to 49 August first, nineteen hundred sixty-nine is unpaid in whole or in part, 50 the commissioner of finance shall charge, receive and collect interest 51 upon the amount of such tax or such part thereof, to be calculated to 52 the date of payment at the rate of seven per centum per annum from the 53 day on which such tax or such part thereof became due and payable to 54 August first, nineteen hundred sixty-nine, from August first, nineteen 55 hundred sixty-nine to December thirty-first, nineteen hundred seventy- 56 six, at the rate of seven per centum per annum if the annual tax on a

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1 parcel is two thousand dollars or less, and at the rate of one per 2 centum per month if the annual tax on a parcel is more than two thousand 3 dollars or, irrespective of the annual tax, if a parcel consists of 4 vacant or unimproved land, and from January first, nineteen hundred 5 seventy-seven at the rate of seven per centum per annum if the annual 6 tax on a parcel is two thousand dollars or less, and at the rate of 7 fifteen per centum per annum if the annual tax on a parcel is more than 8 two thousand dollars or, irrespective of the annual tax, if a parcel 9 consists of vacant or unimproved land. 10 d. If any tax on real estate which shall have become due and payable 11 on or after August first, nineteen hundred sixty-nine and prior to 12 December thirty-first, nineteen hundred seventy-six, is unpaid in whole 13 or in part, the commissioner of finance shall charge, receive and 14 collect interest upon the amount of such tax or such part thereof, to be 15 calculated from the date on which such tax or such part thereof became 16 due and payable to December thirty-first, nineteen hundred seventy-six, 17 at the rate of seven per centum per annum if the annual tax on a parcel 18 is two thousand dollars or less, and at the rate of one per centum per 19 month if the annual tax on a parcel is more than two thousand dollars 20 or, irrespective of the annual tax, if a parcel consists of vacant or 21 unimproved land, and from January first, nineteen hundred seventy-seven 22 at the rate of seven per centum per annum if the annual tax on a parcel 23 is two thousand dollars or less, and at the rate of fifteen per centum 24 per annum if the annual tax on a parcel is more than two thousand 25 dollars or, irrespective of the annual tax, if a parcel consists of 26 vacant or unimproved land. 27 e. If any tax on real estate which shall become due and payable at any 28 time on or after January first, nineteen hundred seventy-seven, shall 29 remain unpaid in whole or in part on the fifteenth day following the 30 date on which the same shall become due and payable, the commissioner of 31 finance shall charge, receive and collect interest upon the amount of 32 such tax or such part thereof remaining unpaid on that date, to be 33 calculated from the day on which such tax or such part thereof became 34 due and payable to the date of payment at the rate of seven per centum 35 per annum if the annual tax on a parcel is two thousand dollars or less, 36 and at the rate of fifteen per centum per annum if the annual tax on a 37 parcel is more than two thousand dollars or, irrespective of the annual 38 tax, if a parcel consists of vacant or unimproved land. 39 f. If any tax on real estate which shall become due and payable at any 40 time on or after July first, nineteen hundred seventy-nine, shall remain 41 unpaid in whole or in part on the fifteenth day following the date on 42 which the same shall become due and payable, or if any tax on real 43 estate which became due and payable prior to July first, nineteen 44 hundred seventy-nine shall remain unpaid on that date, the commissioner 45 of finance shall charge, receive and collect interest upon the amount of 46 such tax or such part thereof remaining unpaid, to be calculated, in the 47 case of any tax which shall become due and payable on or after July 48 first, nineteen hundred seventy-nine, from the day on which such tax or 49 such part thereof became due and payable, and in the case of any tax 50 which became due and payable prior to July first, nineteen hundred 51 seventy-nine, from July first, nineteen hundred seventy-nine, to the 52 date of payment at the rate of seven per centum per annum if the annual 53 tax on a parcel is two thousand seven hundred fifty dollars or less, and 54 at the rate of fifteen per centum per annum if the annual tax on a 55 parcel is more than two thousand seven hundred fifty dollars or, irre- 56 spective of the annual tax, if a parcel consists of vacant or unimproved

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1 land. Any interest accrued prior to July first, nineteen hundred seven- 2 ty-nine, pursuant to subdivisions a through e of this section shall be 3 unaffected by the provisions of this subdivision. 4 g. No later than the twenty-fifth day of May of each year, the banking 5 commission shall transmit a written recommendation to the council of a 6 proposed interest rate to be charged for nonpayment of taxes on real 7 estate in those cases where the annual tax on a parcel is more than two 8 thousand seven hundred fifty dollars or where, irrespective of the annu- 9 al tax, a parcel consists of vacant or unimproved land. In making such 10 recommendations the commission shall consider the prevailing interest 11 rates charged for commercial loans extended to prime borrowers by 12 commercial banks operating in the city and shall propose a rate of at 13 least six per centum per annum greater than such rates. The council may 14 by resolution adopt an interest rate to be applicable to the aforemen- 15 tioned parcels and may specify in such resolution the date on which such 16 interest rate is to take effect. 17 h. Notwithstanding anything to the contrary contained in the recommen- 18 dation transmitted by the banking commission to the council relative to 19 the proposed rate of interest to be charged during the fiscal year of 20 the city commencing July first, nineteen hundred seventy-nine in the 21 case of nonpayment of real estate taxes, or contained in the resolution 22 adopted by the council in accordance with such recommendation, the coun- 23 cil hereby sets the interest rate to be charged during the fiscal year 24 of the city commencing July first, nineteen hundred seventy-nine for 25 nonpayment of real estate taxes at eighteen per centum per annum where 26 the annual tax on a parcel is more than two thousand seven hundred fifty 27 dollars or where the parcel consists of vacant or unimproved land. 28 i. The interest mentioned in subdivisions a through h of this section 29 shall be paid over and accounted for from time to time by such commis- 30 sioner of finance as a part of the tax collected by him or her. 31 j. When an installment agreement has been entered into pursuant to any 32 of the provisions of chapter four of this title, during the period 33 beginning on the date this subdivision takes effect and ending April 34 thirtieth, nineteen hundred eighty-two, the commissioner of finance 35 shall, notwithstanding any higher rate of interest prescribed pursuant 36 to applicable law, and unless a lower rate of interest is applicable to 37 a parcel covered by such an agreement, charge, collect and receive 38 interest on the arrears due and payable under such agreement, to be 39 calculated at the rate of ten percent per annum from May first, nineteen 40 hundred eighty-two to the date of payment of each installment. Any 41 interest accrued or accruing prior to May first, nineteen hundred eight- 42 y-two shall not be affected by the provisions of this subdivision but 43 shall be charged, collected and received in the manner and at the rates 44 prescribed pursuant to applicable law. Such ten percent rate of inter- 45 est shall be applicable only if, as of May first, nineteen hundred 46 eighty-two, (i) there has been no default in such agreement, and (ii) 47 all current taxes, assessments or other legal charges are paid as they 48 become due or within the period of grace provided by law. Where an 49 installment agreement has been entered into prior to May fifth, nineteen 50 hundred eighty-two pursuant to the provisions of either paragraph three 51 of subdivision a of section 11-413 of chapter four of this title prior 52 to March fourteenth, nineteen hundred seventy-nine or of subdivision a 53 of section 11-405 or subdivision h of section 11-409 of chapter four of 54 this title and said agreement is current as to both installment payments 55 and current taxes, assessments and other legal charges, the commissioner 56 of finance, on application of the party who entered into such agreement,

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1 may cancel said agreement and enter into a new agreement containing the 2 terms provided on May fifth, nineteen hundred eighty-two. If any such 3 prior agreement is not cancelled as herein provided, any installments 4 due and payable under such agreement on or after May first, nineteen 5 hundred eighty-two shall be subject to interest at the rate and under 6 the conditions set forth above. In the event of any subsequent default 7 or failure to make timely payment of any installment payment or current 8 tax, assessment or other legal charge, the ten percent rate of interest 9 specified in this subdivision shall thereupon cease to be applicable and 10 the commissioner of finance shall thereafter charge, collect and receive 11 interest in the manner and at the rates prescribed pursuant to applica- 12 ble law. 13 k. 1. Notwithstanding any other provision of this section to the 14 contrary, but subject to the exception contained in paragraph two of 15 this subdivision, in the case of an installment of tax on real property 16 described in paragraph b of subdivision four of section fifteen hundred 17 nineteen of the city charter of the preceding municipality as it existed 18 on the first of January in the year next succeeding the effective date 19 of this section, interest shall be charged, received and collected at 20 the rate established pursuant to this section if such installment shall 21 remain unpaid in whole or in part on the date on which it shall become 22 due and payable. 23 2. If the tax rate for any fiscal year of the city has not been set by 24 the fifteenth of June preceding the start of such fiscal year, interest 25 shall not be charged, received and collected with respect to the first 26 installment of tax which is due and payable on the first of July in such 27 fiscal year if such installment is paid on or before the extended 28 payment date. For this purpose, the term "extended payment date" means 29 the date which falls the same number of days after the first of July in 30 such fiscal year as the number of days the date such tax rate is set 31 falls after such fifteenth of June. 32 l. No later than the fifth day following the effective date of this 33 subdivision and no later than May twenty-fifth of each succeeding year, 34 the banking commission shall transmit a written recommendation to the 35 council of proposed interest rates to be charged for nonpayment of taxes 36 on real property in those cases in which the annual tax on a parcel, 37 other than a parcel which consists of vacant or unimproved land, is not 38 more than two thousand seven hundred fifty dollars. In making such 39 recommendations, the banking commission shall consider the prevailing 40 interest rates charged for commercial loans extended to prime borrowers 41 by commercial banks operating in the city. In the case of any such 42 parcel with respect to which the real property taxes are held in escrow 43 and paid to the commissioner of finance by a "mortgage escrow agent," as 44 that term is defined in section fifteen hundred nineteen of the city 45 charter of the preceding municipality as it existed on the first of 46 January in the year next succeeding the effective date of this section, 47 the proposed rate shall be at least six percent per annum greater than 48 such prevailing prime rate, and in the case of all other such parcels, 49 the proposed rate shall be at least equal to such prevailing prime rate. 50 The council may by resolution adopt interest rates to be applicable to 51 the aforementioned parcels and may specify in such resolution the dates 52 on which such interest rates are to take effect. In the event the coun- 53 cil does not adopt interest rates as provided in this subdivision, the 54 interest rates otherwise specified in this section shall be applicable. 55 § 11-224.1 Interest on unpaid real property tax.

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1 (a) For real property with an assessed value of eighty thousand 2 dollars or less, if an installment of tax due and payable is not paid by 3 July fifteenth, October fifteenth, January fifteenth or April fifteenth, 4 interest shall be imposed on such unpaid amounts. 5 (b) For real property with an assessed value of over eighty thousand 6 dollars, if an installment of tax due and payable is not paid by July 7 first or January first, interest shall be imposed on such unpaid 8 amounts. 9 (c) If the council does not adopt interest rates by July first, two 10 thousand twenty-five, the rates shall be (i) for real property with an 11 assessed value of eighty thousand dollars or less, seven percent per 12 annum; and (ii) for real property with an assessed value of over eighty 13 thousand dollars, fifteen percent per annum. 14 (d) (i) Any tax or part of a tax that became due before July first, 15 two thousand five and remains unpaid after June thirtieth, two thousand 16 twenty-five, shall continue to accrue interest until paid at the rate 17 applicable under this section. 18 (ii) This section shall not apply to interest accrued before July 19 first, two thousand twenty-five. 20 (e) By May twenty-fifth of each year, the banking commission shall 21 send a written recommendation to the council of a proposed interest rate 22 to be charged for nonpayment of taxes on real property. The commission 23 shall consider the prevailing interest rates charged for commercial 24 loans extended to prime borrowers by commercial banks operating in the 25 city and: 26 (i) for real property with an assessed value of eighty thousand 27 dollars or less, shall propose a rate at least equal to such prevailing 28 prime rate; 29 (ii) for real property with an assessed value of over eighty thousand 30 dollars, shall propose a rate of at least six percent per annum greater 31 than such prevailing prime rate. 32 The council may by resolution adopt interest rates to be applicable to 33 the aforementioned properties and may specify in such resolution the 34 date that such rates will take effect. 35 (f) If the tax rate for any fiscal year of the city is not set by the 36 fifteenth of June preceding the start of such fiscal year, interest 37 shall not be charged for the first installment of tax which is due on 38 the first day of July in such fiscal year if such installment is paid on 39 or before the extended payment date. For this purpose, the term 40 "extended payment date" means the date which falls the same number of 41 days after the first day of July in such fiscal year as the number of 42 days the date such tax rate is set falls after such fifteenth day of 43 June. 44 (g) For purposes of this section, property held in the cooperative 45 form of ownership shall not be deemed to have an assessed value of over 46 eighty thousand dollars if the property's assessed value divided by the 47 number of residential dwelling units is eighty thousand dollars or less 48 per unit. 49 § 11-225 Power of tax commission to remit or reduce taxes. The tax 50 commission shall have power to remit or reduce a tax imposed upon real 51 property where lawful cause therefor is shown or where such tax is found 52 to be excessive or otherwise erroneous, but such remission or reduction 53 shall be made only with respect to an assessment for which an applica- 54 tion for correction has been made pursuant to section one hundred 55 sixty-three of the charter, and no such remission or reduction shall be 56 made when a claim to correct the assessment or recover the tax would be

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1 barred by passage of time or other adequate defense, or when, at the 2 time that the determination is rendered, applications for correction or 3 other proceedings are pending to review the assessment of such property 4 for more than one subsequent fiscal year, provided, however, the tax 5 commission shall have no power to remit or reduce a tax pursuant to this 6 section more than five years after the last day on which an application 7 for correction could have been filed to appeal the unlawful or erroneous 8 assessment upon which such tax was based. If such tax shall have been 9 paid the commissioner of finance is authorized to refund or credit the 10 amount of any such remission or reduction granted pursuant to this 11 section. When the correction results from an application for correction 12 made by the board of managers of a condominium, a refund may be paid to 13 the board of managers for distribution to the individual unit owners 14 with the consent of such board and on such conditions as the commission- 15 er deems appropriate. 16 § 11-226 Special right of entry; certificate of president. A right of 17 entry upon real property and into buildings and structures at all 18 reasonable times to ascertain the character of the property shall not be 19 allowed to any person acting in behalf of the tax commission, other than 20 the officials mentioned in sections one hundred fifty-six and fifteen 21 hundred twenty-one of the charter of the preceding municipality as it 22 existed on the first of January in the year next succeeding the effec- 23 tive date of this section, unless a certificate therefor, executed in 24 writing and signed by the president of the tax commission, is presented 25 by such person to the owner, lessee or occupant of the premises or his 26 agent before entry thereon is made. 27 § 11-227 Duties of authorized employees in examining applicants. a. 28 Employees of the tax commission, when authorized to take testimony on 29 application, shall reduce such testimony to writing. 30 b. Within ten days after the evidence on any application is taken, 31 they shall transmit the application and testimony so taken, with their 32 recommendation, to the tax commission at its main office or such other 33 office as the commission may prescribe. 34 § 11-228 Testimony taken on application to constitute part of record. 35 All written testimony taken by the tax commission, by a commissioner, or 36 by an employee of the commission authorized to take testimony on appli- 37 cations, shall constitute part of the record of the proceedings upon any 38 assessment. 39 § 11-229 Solicitation of retainers prohibited. It shall be unlawful 40 for any person or his or her or its agents or employee, or any person 41 acting on his or her or its behalf, to solicit, or procure through 42 solicitation, either directly or indirectly, any retainer or agreement: 43 (a) Authorizing such person, or his or her or its agent, employee or 44 any person acting on his or her or its behalf, to make application to 45 the commissioner of finance or tax commission for the correction of a 46 tentative or final assessed valuation of real property on behalf of an 47 owner of such property or other person claiming to be aggrieved, or 48 (b) Authorizing such person, or his or her or its agent, employee or 49 any person acting on his or her or its behalf, to appear for such 50 purpose or represent such owner or aggrieved person before such commis- 51 sion or a commissioner or any other officer or employee authorized by 52 law to act upon such application, examine applicants, take testimony, 53 make or recommend the making of a correction of any such assessed valu- 54 ation, or take any other official action in relation to any such 55 correction. Any violation of this section shall be a misdemeanor.

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1 § 11-230 Issuance of final determination; limitation of time. Except 2 as otherwise provided in section one hundred sixty-five of the charter 3 of the preceding municipality as it existed on the first of January in 4 the year next succeeding the effective date of this section, the final 5 determination of the tax commission upon any application for the 6 correction of an assessment and upon the evidence taken thereunder 7 shall, where the evidence is taken by the commission or by a commission- 8 er, be rendered within thirty days after the hearing of such application 9 is closed. Where the evidence is taken by an employee of the tax commis- 10 sion authorized to take testimony on applications, the final determi- 11 nation shall be rendered within thirty days after the application and 12 the testimony hereon shall have been filed with the commission at its 13 main office. 14 Immediately upon making a correction of an assessment, the tax commis- 15 sion shall notify the commissioner of finance thereof. 16 § 11-231 Proceeding to review tax assessment; contents of petition. a. 17 Any person or corporation claiming to be aggrieved by the assessed valu- 18 ation of real property may commence a proceeding to review or correct on 19 the merits a final determination of the tax commission by serving on the 20 president of the tax commission, or his or her duly authorized agent, a 21 copy of a verified petition as prescribed by law. No such petition shall 22 be accepted unless, prior to the service thereof, an index number has 23 been obtained from the county clerk. Within ten days after a proceeding 24 has been commenced as hereinbefore provided, the original verified peti- 25 tion with proof of service shall be filed in the office of the clerk of 26 the court in which the proceeding is to be heard. 27 b. Such review shall be allowed only on one or more of the following 28 grounds, which must be specified in such petition: 29 1. That the assessment is illegal, and stating the particulars of the 30 alleged illegality, or 31 2. That the assessment is erroneous by reason of over-valuation, or 32 3. That the assessment is erroneous by reason of inequality, in that 33 it has been made at a higher proportionate valuation than the assessment 34 of other real property on the assessment rolls of the city for the same 35 year, and for assessments made after December thirty-first, nineteen 36 hundred eighty-one, other real property within the same class as defined 37 in section eighteen hundred two of the real property tax law, specifying 38 the instances in which such inequality exists and the extent thereof, 39 and stating that the petitioner is or will be injured thereby, or 40 4. That the real property is misclassified, and stating the class in 41 which it is claimed the property should be classified. 42 c. The proceeding shall be maintained against the tax commission 43 either by naming the president and the commissioners of the tax commis- 44 sion individually, or by naming the tax commission of the city of Staten 45 Island generally. 46 d. Such proceeding to review and all proceedings thereunder shall be 47 brought at a special term of the supreme court in the judicial district 48 where the real property so assessed is situated. 49 e. The justice or referee before whom such proceeding shall be heard 50 may inspect the real property which is the subject of the proceeding. 51 § 11-232 Comptroller; rates of interest on taxes and assessments. The 52 comptroller shall not reduce the rate of interest upon any taxes or 53 assessments below the amount fixed by law. 54 § 11-233 Cancellation of unpaid taxes. When it shall appear to the 55 comptroller that the unpaid taxes or assessments, or both, together with 56 the interest and penalties thereon which may have been levied upon a

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1 parcel of real estate subject to easements which were in existence prior 2 to the levying of such taxes or assessments, equal or exceed the sum for 3 which, under ordinary circumstances, such parcel of real estate would 4 sell subject to such easements, the comptroller, with the written 5 approval of the corporation counsel, may settle and adjust such unpaid 6 taxes or assessments, or both, with the interest and penalties thereon, 7 and when it shall appear to the comptroller that such parcel of real 8 estate would sell under ordinary circumstances subject to such easements 9 for only a nominal sum, then the comptroller with the written approval 10 of the corporation counsel may cancel such unpaid taxes and assessments 11 together with the interest and penalties thereon. 12 § 11-235 Board of estimate; power to cancel taxes, assessments and 13 water rents. The board of estimate, upon the written certificate of the 14 comptroller approving the same, with whom application for relief under 15 this section shall be filed, in its discretion and upon such terms as it 16 may deem proper, by unanimous vote, may cancel and annul all taxes, 17 assessments and water rents and sales to the city of any or all of the 18 same which now are or may hereafter become a lien against any real 19 estate owned by any corporation, entitled to exemption of such real 20 estate owned by it from local taxation under the provisions of the real 21 property tax law formerly contained in subdivision six of section four 22 of the tax law, provided that all taxes and water rents from which 23 relief is asked be apportioned as of the date such corporation took 24 title to such real estate, and that such taxes and water rents so appor- 25 tioned to the period before such date, and all assessments which became 26 a lien before such date, be paid. The commissioner of finance shall mark 27 the city's books and rolls of taxes, assessments and water rents in 28 accordance with the determination of the board of estimate in every case 29 in which action shall be taken under the provisions of this section. 30 § 11-236 Powers of board of estimate to cancel taxes, water rents and 31 assessments. The council by local law may authorize the board of esti- 32 mate, by a unanimous vote, upon the written consent of the comptroller, 33 to cancel and annul any taxes, water rents and assessments constituting 34 a lien against any real property owned by a corporation whose property 35 is exempt from taxation under the provisions of the real property tax 36 law, notwithstanding that such taxes, water rents or assessments shall 37 have become a lien against such real property while owned by a person or 38 corporation not exempt under such section. The commissioner of finance 39 shall mark the city's books and rolls of taxes and assessments in 40 accordance with the determination of the board of estimate under such 41 local law. 42 § 11-237 Cancellation of assessments, water and sewer rents on real 43 property acquired by tax enforcement foreclosure proceedings. Upon the 44 cancellation of unpaid assessments, water and sewer rents by the city 45 collector pursuant to section 11-353 of this title, the comptroller 46 shall charge the unpaid amounts for assessments for local improvements, 47 so cancelled, to the surplus in the appropriate assessment fund; the 48 unpaid amounts for water charges, meter setting and repair, meter glass- 49 es and sewer rents, so cancelled, shall be deducted from the accounts 50 receivable of the appropriate fund. 51 § 11-238 Real property tax surcharge on absentee landlords. a. Impo- 52 sition of surcharge. A real property tax surcharge is hereby imposed on 53 class one property, as defined in section eighteen hundred two of the 54 real property tax law, excluding vacant land, that provides rental 55 income and is not the primary residence of the owner or owners of such 56 class one property, or the primary residence of the parent or child of

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1 such owner or owners, in an amount equal to zero percent of the net real 2 property taxes for fiscal years beginning on or after the first of July 3 in the second year next succeeding the effective date of this section. 4 As used in this section, "net real property tax" means the real property 5 tax assessed on class one property after deduction for any exemption or 6 abatement received pursuant to the real property tax law or this title. 7 b. Rental income, primary residence and/or relationship to owner or 8 owners. The property shall be deemed to be the primary residence of the 9 owner or owners thereof, if such property would be eligible to receive 10 the real property tax exemption pursuant to section four hundred twen- 11 ty-five of the real property tax law, regardless of whether such owner 12 or owners has filed an application for, or the property is currently 13 receiving, such exemption. Proof of primary residence and the resident's 14 or residents' relationship to the owner or owners and the absence of 15 rental income shall be in the form of a certification as required by the 16 rules of the commissioner. 17 c. Rules. The department of finance shall have, in addition to any 18 other functions, powers and duties which have been or may be conferred 19 on it by law, the power to make and promulgate rules to carry out the 20 purposes of this section, including, but not limited to, rules related 21 to the timing, form and manner of any certification required to be 22 submitted under this section. 23 d. Penalties. 1. Notwithstanding any provision of any general, special 24 or local law to the contrary, an owner or owners shall be personally 25 liable for any taxes owed pursuant to this section whenever such owner 26 or owners fail to comply with this section or the rules promulgated 27 hereunder, or makes a false or misleading statement or omission and the 28 commissioner determines that such act was due to the owner or owners' 29 willful neglect, or that under such circumstances such act constituted a 30 fraud on the department. The remedy provided herein for an action in 31 person shall be in addition to any other remedy or procedure for the 32 enforcement of collection of delinquent taxes provided by general, 33 special or local law. 34 2. If the commissioner should determine, within three years from the 35 filing of an application or certification pursuant to this section, that 36 there was a material misstatement on such application or certification, 37 he or she shall impose a penalty tax against the property of five 38 hundred dollars, in accordance with the rules promulgated hereunder. 39 e. Cessation of use. In the event that a property granted an exemption 40 from taxation pursuant to this section ceases to be used as the primary 41 residence of such owner or owners or his, her or their parent or child, 42 or produces rental income, such owner or owners shall so notify the 43 commissioner. 44 SUBCHAPTER 2 45 EXEMPTIONS FROM REAL PROPERTY TAXATION 46 PART 1 47 EXEMPTIONS FOR CERTAIN RESIDENTIAL PROPERTY 48 § 11-241 Discrimination in tax exempt projects. No exemption from 49 taxation, for any project, other than a project hitherto agreed upon or 50 contracted for, shall be granted to a housing company, insurance compa- 51 ny, redevelopment company or redevelopment corporation, which shall 52 directly or indirectly, refuse, withhold from, or deny to any person any 53 of the dwelling or business accommodations in such project or property, 54 or the privileges and services incident to occupancy thereof, on account 55 of the race, color or creed of any such person.

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1 Any exemption from taxation hereafter granted shall terminate sixty 2 days after a finding by the supreme court of the state of New York that 3 such discrimination is being or has been practiced in such project or 4 property; if within sixty days such discrimination shall have been 5 ended, then the exemption shall not terminate. 6 § 11-242 Exemption and tax abatement in regard to improvements of 7 substandard dwellings. a. As used in this section, the following terms 8 shall have the following meanings: 1. "Alteration" and "improvement": a 9 physical change in an existing dwelling other than painting, ordinary 10 repairs, normal replacements or maintenance items. 11 2. "Existing dwelling": a class A multiple dwelling in existence prior 12 to the commencement of alterations for which tax exemption and abatement 13 is claimed under the terms of this section and for which a valuation 14 appears on the annual record of assessed valuation of the city for the 15 fiscal year nineteen hundred fifty-five--nineteen hundred fifty-six. 16 3. "Start" on alteration or improvement: begin any physical operation 17 undertaken for the purpose of making alterations or improvements to an 18 existing dwelling. 19 4. "Complete" an alteration or improvement: conclude or terminate any 20 physical operation such as is referred to in subparagraph three of this 21 paragraph, to an extent or degree which renders such building capable of 22 use for the purpose for which the improvements or alterations were 23 intended. 24 5. "Multiple dwelling": multiple dwellings as that term is defined in 25 section four of the multiple dwelling law. 26 b. Any increase in assessed valuation resulting from alterations and 27 improvements to existing dwellings to eliminate presently existing 28 unhealthy or dangerous conditions in any existing dwelling or to replace 29 inadequate and obsolete sanitary facilities in any such dwelling, any of 30 which represent fire or health hazards, or to provide central or other 31 appropriate and approved heating, except insofar as the gross cubic 32 content of the building is increased thereby, shall be exempt from taxa- 33 tion for local purposes for a period of twelve years after the taxable 34 status date immediately following the completion of the alterations and 35 improvements, to the extent that such increase in assessed valuation 36 result from the reasonable cost of such alterations and improvements, 37 providing that construction is started after March first, nineteen 38 hundred fifty-five and completed before December thirty-first, nineteen 39 hundred fifty-nine. The assessed valuation allocated to such dwelling 40 after such alterations and improvements during such period of twelve 41 years, exclusive of the increase in valuation which is exempted, shall 42 not exceed the valuation of the previously existing dwelling appearing 43 on the assessment rolls after the taxable status date immediately 44 preceding the commencement of such alterations and improvements. The 45 assessed valuation of the land occupied by such dwelling and any 46 increase in valuation resulting from alterations and improvements other 47 than those made pursuant to this section, shall not be affected by the 48 provisions of this section. 49 c. The taxes upon any such property, including the land, shall be 50 abated and reduced by an amount equal to eight and one-third per centum 51 of the reasonable cost of such alterations and improvements each year 52 for a period of nine years commencing with the first tax bill for the 53 first tax year in which the exemption herein provided is effective, but 54 such abatement of taxes in any consecutive twelve-month period shall in 55 no event exceed the amount of taxes payable in such period.

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1 d. The department of buildings shall determine and certify the reason- 2 able cost of any such alterations and improvements and for that purpose 3 may adopt rules and regulations, administer oaths to and take testimony 4 of any person, including but not limited to the owner of such property, 5 may issue subpoenas requiring the attendance of such persons and the 6 production of such books, papers or other documents as the department 7 shall deem necessary, may make preliminary estimates of the maximum 8 reasonable cost of such alterations and improvements, may establish 9 maximum allowable costs for specified units, fixtures or work in such 10 alterations or improvements, and may require the submission of plans and 11 specifications of such alteration and improvements before the start 12 thereof. Application forms for the benefits of this section shall be 13 filed with the tax commission between February first and March fifteenth 14 and the tax commission shall certify to the city collector the amount of 15 taxes to be abated and reduced, pursuant to the certification of the 16 commissioner of buildings as herein provided. No such application shall 17 be accepted unless accompanied by copies of certificates of the city 18 planning commission and the commissioner of buildings, as provided in 19 this subdivision and in subdivision e of this section. 20 e. To the end that alterations and improvements in such property shall 21 interfere as little as practicable with urgently needed public improve- 22 ments, and the clearance and rebuilding of substandard and insanitary 23 areas, and shall be confined to multiple dwellings which are struc- 24 turally sound, comply with applicable provisions of law, and are 25 provided with adequate central or other appropriate and approved heating 26 exemption or abatement from taxation hereunder shall be restricted to 27 dwellings which: (1) the city planning commission certify will not undu- 28 ly interfere with projected public improvements or the clearance and 29 rebuilding of substandard and insanitary areas which certification shall 30 be evidenced by a certificate describing the property involved and shall 31 be issued upon application to such city planning commission in such 32 manner and in such form as may be prescribed by such city planning 33 commission, and (2) which the department of buildings shall certify to 34 be structurally sound, comply with applicable provisions of law and 35 provide central or other appropriate and approved heating, which certif- 36 ication shall be evidenced by a certificate describing the property 37 involved and shall be issued upon application to the department of 38 buildings in such manner and in such form as may be prescribed by such 39 department. Where the improvements and alterations include or benefit 40 that part of a building which is occupied by stores or used for commer- 41 cial purposes, the cost shall be apportioned so that the benefits of 42 this section shall not be provided for the cost of the improvements or 43 alterations made for store or commercial purposes. 44 f. Notwithstanding the provisions of the multiple dwelling law, or any 45 local law, ordinance, provisions of this code, rule or regulation, any 46 dwelling to which alterations and improvements are made pursuant to this 47 section and which did not require a certificate of occupancy on April 48 second, nineteen hundred forty-five, may be occupied lawfully after such 49 date upon the completion of such alterations and improvements without 50 such a certificate being obtained, provided, however, that such alter- 51 ations and improvements shall have been made in conformity with law and 52 the applicable provisions for fire protection required by articles six 53 and seven of the multiple dwelling law. 54 g. No owner of a dwelling to which the benefits of this section shall 55 be applied nor any agent, employee, manager or officer of such owner 56 shall directly or indirectly deny to any person because of race, color,

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1 creed, or religion any of the dwelling accommodations in such property 2 or any of the privileges or services incident to occupancy therein. 3 h. Each agency to which functions are assigned by this section may 4 adopt rules and regulations for the effectuation of the purposes of this 5 section, and a copy, for each member of the council, of such rules and 6 regulations shall be filed with the clerk of the council prior to 7 promulgation. 8 i. Any person who shall knowingly and wilfully make any false state- 9 ment as to any material matter in any application for the benefits of 10 this section shall be guilty of an offense punishable by a fine of not 11 more than five hundred dollars or imprisonment for not more than ninety 12 days, or both. 13 j. The benefits of this section shall not apply to any multiple dwell- 14 ing which is not subject to the provisions of the emergency housing rent 15 control law or its successor statute for the city of Staten Island, 16 provided that this subdivision shall not operate to rescind any benefits 17 granted by the tax commission under this section prior to July first, 18 nineteen hundred fifty-eight; and further provided that where the bene- 19 fits herein provided were or are granted by the tax commission on or 20 after July first, nineteen hundred fifty-eight to any multiple dwelling 21 which is decontrolled subsequent to the granting of such benefits, the 22 tax commission shall withdraw such benefits, effective upon the 23 commencement of the first tax year following the tax year in which such 24 multiple dwelling is decontrolled. 25 § 11-243 Reextension of exemption and tax abatement in regard to 26 improvements of substandard dwellings. a. As used in this section, the 27 following terms shall have the following meanings: 28 1. "Alteration" and "improvement": a physical change in an existing 29 dwelling other than painting, ordinary repairs, normal replacement of 30 maintenance items, provided, however, that ordinary repairs and normal 31 replacement of maintenance items, as defined by rules adopted by the 32 department of housing preservation and development pursuant to subdivi- 33 sion m of this section, shall be eligible for tax exemption and tax 34 abatement under this section provided that repairs and maintenance 35 items: 36 (1) were started and completed within a twelve-month period, 37 (2) were made to any common area of the dwelling premises concurrently 38 with a major capital improvement thereto, as defined by rules adopted by 39 the department of housing preservation and development pursuant to 40 subdivision m of this section, 41 (3) require the issuance of a permit for at least one item thereof by 42 any city agency, and 43 (4) the amount of money expended thereon shall not exceed two times 44 the amount expended on the major capital improvement performed concur- 45 rently therewith. 46 "Alteration" and "improvement" shall also mean "an abatement" of lead- 47 based paint hazards, as defined in part 745 of title forty of the code 48 of federal regulations or any successor regulations in any existing 49 dwelling including any common areas, and shall include an "inspection" 50 and "risk assessment" for lead-based paint hazards, as defined in such 51 part, in a dwelling unit whether such unit is vacant or occupied but 52 shall not include any work performed to comply with a notice of 53 violation issued for a violation of article fourteen of subchapter two 54 of chapter two of title 27 of the administrative code of the city of New 55 York. For purposes of this paragraph, the term, "targeted area" shall 56 mean the geographical area of New York city that is determined by the

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1 department of health and mental hygiene to have high rates of children 2 with environmental intervention blood lead levels. The department of 3 housing preservation and development shall establish two schedules of 4 certified reasonable costs for items that are included in an abatement 5 of lead-based paint hazards, one covering such abatement that is 6 performed in an eligible dwelling unit or common area located in the 7 targeted area, and one covering such abatement that is performed in an 8 eligible dwelling unit or common area that is not located in the target- 9 ed area. The first such schedules shall be promulgated by the department 10 of housing preservation and development within 180 days of the effective 11 date of this section and shall be used for any such abatements that are 12 commenced on or after August 2, 2004. Such schedules shall be reviewed 13 by such department biennially following their effective dates and 14 amended as necessary. Notwithstanding any other provision of law or 15 rule, an owner who performs an abatement of lead-based paint hazards 16 pursuant to this paragraph shall not be required to comply with subdivi- 17 sion y of this section which provides for filing of a notice of intent 18 form prior to the commencement of work, and no additional fee or penalty 19 shall be due and owing the department at the time of issuance of a 20 certificate of eligibility and reasonable cost for failure to file such 21 notice of intent. 22 2. "Existing dwelling": except as hereinafter provided in subdivision 23 d of this section, a class A multiple dwelling or a building consisting 24 of one or two dwelling units over space used for commercial occupancy in 25 existence prior to the commencement of alterations for which tax 26 exemption and abatement is claimed under the terms of this section and 27 for which a valuation appears on the annual record of assessed valuation 28 of the city for the fiscal year immediately preceding the commencement 29 of such alterations and improvements. 30 3. "Start" an alteration or improvement: begin any physical operation 31 undertaken for the purpose of making alterations or improvements to an 32 existing dwelling. 33 4. "Complete" an alteration or improvement: conclude or terminate any 34 physical operation such as is referred to in paragraph three of this 35 subdivision, to an extent or degree which renders such building capable 36 of use for the purpose for which the improvements or alterations were 37 intended. 38 5. "Multiple dwelling": multiple dwellings as that term is defined in 39 section four of the multiple dwelling law. 40 6. "Moderate rehabilitation": shall mean a scope of work which 41 (a) includes a building-wide replacement of a major component of one 42 of the following systems: 43 (1) Elevator 44 (2) Heating 45 (3) Plumbing 46 (4) Wiring 47 (5) Window; and 48 (b) has a certified reasonable cost of not less than twenty-five 49 hundred dollars, exclusive of any certified reasonable cost for ordinary 50 repairs, for each dwelling unit in existence at the commencement of the 51 rehabilitation; except that the department of housing preservation and 52 development may establish a minimum certified reasonable cost to be 53 greater than twenty-five hundred dollars per dwelling unit pursuant to 54 subdivision m of this section. 55 7. "Substantially occupied": shall mean an occupancy of not less than 56 sixty percent of all dwelling units immediately prior and during reha-

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1 bilitation, except that the department of housing preservation and 2 development may establish higher percentages of occupancy pursuant to 3 subdivision m of this section. 4 8. "Private dwelling" shall mean any building or structure designed 5 and occupied for residential purposes by not more than two families. 6 Private dwellings shall also be deemed to include a series of one-family 7 or two-family dwelling units each of which faces or is accessible to a 8 legal street or public thoroughfare, if each such dwelling unit is 9 equipped as a separate dwelling unit with all essential services, and if 10 each such unit is arranged so that it may be approved as a legal one-fa- 11 mily or two-family dwelling. 12 b. Subject to the limitations provided in subdivision d of this 13 section and the restrictions in this section on conversion of buildings 14 used in whole or in part for single room occupancy, any increase in the 15 assessed valuation of real property shall be exempt from taxation for 16 local purposes to the extent such increase results from the reasonable 17 cost of: (1) the conversion of a class B multiple dwelling to a class A 18 multiple dwelling except insofar as the gross cubic content of such 19 building is increased thereby; or (2) the conversion of any nonresiden- 20 tial building or structure situated in the county of Richmond to a class 21 A multiple dwelling except insofar as the gross cubic content of such 22 building or structure is increased thereby; or (3) alterations or 23 improvements to the exterior of an otherwise eligible building or struc- 24 ture visible from a public street pursuant to a permit issued by the 25 landmarks commission with respect to a designated historic or landmark 26 site or structure; or (4) alterations or improvements constituting a 27 moderate rehabilitation of a substantially occupied class A multiple 28 dwelling except insofar as the gross cubic content of such building or 29 structure is increased thereby; or (5) alterations or improvements to an 30 otherwise eligible building or structure commenced after January first, 31 nineteen hundred eighty designed to conserve the use of fuel, electric- 32 ity or other energy sources or to reduce demand for electricity, includ- 33 ing the installation of meters for purposes of measuring the amount of 34 electricity consumed for each dwelling unit, and conversions of direct 35 metering to a system that includes a master meter and submeters in any 36 cooperative, condominium, or housing development fund company organized 37 under article eleven of the private housing finance law; or (6) alter- 38 ations or improvements to existing dwellings to eliminate existing 39 unhealthy or dangerous conditions in any such existing dwelling or 40 replace inadequate and obsolete sanitary facilities in any such existing 41 dwelling, any of which represents fire or health hazards, including as 42 improvements asbestos abatement to the extent such asbestos abatement is 43 required by federal, state or local law, except insofar as the gross 44 cubic content of such existing dwelling is increased thereby; or (7) 45 conversion of residential units qualified for the protection of article 46 seven-C of the multiple dwelling law in buildings or portions thereof 47 registered with the New York city loft board as interim multiple dwell- 48 ings pursuant to such article to units which are in compliance with the 49 standards of safety and fire protection set forth in article seven-B of 50 the multiple dwelling law or to units which have a certificate of occu- 51 pancy as class A multiple dwellings; or (8) alterations or improvements 52 commenced on or after September first, nineteen hundred eighty-seven 53 constituting a substantial rehabilitation of a class A multiple dwell- 54 ing, or a conversion of a building or structure into a class A multiple 55 dwelling, as part of a program to provide housing for low and moderate 56 income households as defined by the department of housing preservation

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1 and development pursuant to the rules and regulations promulgated pursu- 2 ant to subdivision m of this section, provided that such alterations or 3 improvements or conversions shall be aided by a grant, loan or subsidy 4 from any federal, state or local agency or instrumentality, including, 5 in the discretion of the department of housing preservation and develop- 6 ment, a subsidy in the form of a below market sale from the city of New 7 York; or (9) alterations or improvements to any private dwelling or 8 conversion of any private dwelling to a multiple dwelling or conversion 9 of any multiple dwelling to a private dwelling, provided that such 10 alterations, improvements or conversions are part of a project that has 11 applied for or is receiving benefits pursuant to this section and shall 12 be aided by a grant, loan or subsidy from any federal, state or local 13 agency or instrumentality. Such conversions, alterations or improvements 14 shall be completed within thirty-six months after the date on which same 15 shall be started except that such thirty-six month limitation shall not 16 apply to conversions of residential units which are registered with the 17 loft board in accordance with article seven-C of the multiple dwelling 18 law pursuant to paragraph eight of this subdivision. Provided, however, 19 a sixty-month period for completion shall be available for alterations 20 or improvements undertaken by a housing development fund company organ- 21 ized pursuant to article eleven of the private housing finance law, 22 which are carried out with the substantial assistance of grants, loans 23 or subsidies from any federal, state or local governmental agency or 24 instrumentality or which are carried out in a property transferred from 25 the city of New York or the city of Staten Island if alterations and 26 improvements are completed within seven years after the date of trans- 27 fer. In addition, the department of housing preservation and development 28 may grant an extension of the period of completion for any project 29 carried out with the substantial assistance of grants, loans or subsi- 30 dies from any federal, state or local governmental agency or instrumen- 31 tality, if such alterations, improvements or conversions are completed 32 within sixty months from commencement of construction. Provided, 33 further, that such conversions, alterations or improvements shall in any 34 event be completed prior to the thirty-first of December in the third 35 year next succeeding the effective date of this section. Exemption for 36 conversions, alterations or improvements pursuant to paragraph one, two, 37 three, four, six, seven, eight or ten of this subdivision shall continue 38 for a period not to exceed fourteen years and begin no sooner than the 39 first tax period immediately following the completion of such conver- 40 sions, alterations or improvements. Exemption for alterations or 41 improvements pursuant to paragraph five or nine of this subdivision 42 shall continue for a period not to exceed thirty-four years and shall 43 begin no sooner than the first tax period immediately following the 44 completion of such alterations or improvements. Such exemption shall be 45 equal to the increase in the valuation, which is subject to exemption in 46 full or proportionally under this subdivision for ten or thirty years, 47 whichever is applicable. After such period of time, the amount of such 48 exempted assessed valuation of such improvements shall be reduced by 49 twenty percent in each succeeding year until the assessed value of the 50 improvements is fully taxable. Provided, however, exemption for any 51 conversions, alterations or improvements, which are aided by a loan or 52 grant under article eight, eight-A, eleven, twelve, fifteen, or twenty- 53 two of the private housing finance law, section six hundred ninety-six-a 54 or section ninety-nine-h of the general municipal law, or section three 55 hundred twelve of the housing act of nineteen hundred sixty-four (42 56 U.S.C.A. 1452b), or the Cranston-Gonzalez national affordable housing

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1 act, (42 U.S.C.A. 12701 et. seq.), or started after July first, nineteen 2 hundred eighty-three by a housing development fund company organized 3 pursuant to article eleven of the private housing finance law which are 4 carried out with the substantial assistance of grants, loans or subsi- 5 dies from any federal, state or local governmental agency or instrumen- 6 tality or which are carried out in a property transferred from the city 7 of New York and where alterations and improvements are completed within 8 seven years after the date of transfer may commence at the beginning of 9 any tax period subsequent to the start of such conversions, alterations 10 or improvements and prior to the completion of such conversions, alter- 11 ations or improvements. The assessed valuation of the land occupied by 12 such dwelling and any increase in assessed valuation resulting from 13 conversions, alterations, or improvements other than those made pursuant 14 to this section shall not be affected by the provisions of this section. 15 b-1. Notwithstanding the provisions of subdivision b of this section, 16 alterations, improvements or conversions of any building or structure 17 that are eligible for benefits pursuant to subdivision b of this section 18 except insofar as the gross cubic content of such building or structure 19 is increased thereby shall be eligible for such benefits insofar as the 20 gross cubic content of such building or structure is increased thereby 21 provided that: 22 (1) for all tax lots now existing or hereafter created, at least fifty 23 percent of the floor area of the completed building or structure 24 consists of the pre-existing building or structure that was converted, 25 altered or improved in accordance with subdivision b of this section, 26 and 27 (2) for tax lots now existing or hereafter created within the follow- 28 ing area in the borough of Manhattan, such conversions, alterations or 29 improvements are aided by a grant, loan or subsidy from any federal, 30 state or local agency or instrumentality: beginning at the intersection 31 of the United States pierhead line in the Hudson river and the center 32 line of Chambers street extended, thence easterly to the center line of 33 Chambers street and continuing along the center line of Chambers street 34 to the center line of Centre street, thence southerly along the center 35 line of Centre street to the center line of the Brooklyn Bridge to the 36 intersection of the Brooklyn Bridge and the United States pierhead line 37 in the East river, thence northerly along the United States pierhead 38 line in the East river to the intersection of the United States pierhead 39 line in the East river and the center line of one hundred tenth street 40 extended, thence westerly to the center line of one hundred tenth street 41 and continuing along the center line of one hundred tenth street to its 42 westerly terminus, thence westerly to the intersection of the center 43 line of one hundred tenth street extended and the United States pierhead 44 line in the Hudson river, thence southerly along the United States pier- 45 head line in the Hudson river to the point of beginning. 46 (3) For purposes of this subdivision, "floor area" shall mean the 47 horizontal areas of the several floors or any portion thereof of a 48 dwelling or dwellings and accessory structures on a lot measured from 49 the exterior faces of exterior walls or from the center line of party 50 walls. 51 (4) Nothing in this subdivision shall be construed to provide tax 52 abatement benefits pursuant to subdivision c of this section for the 53 costs attributable to the increased cubic content in any such building 54 or structure. 55 c. (1) Except as provided in paragraphs two, three and four of this 56 subdivision, the taxes upon any real property, including the land, may

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1 be abated each year for a period of not more than twenty years by an 2 amount no greater than eight and one-third per centum of the reasonable 3 cost of eligible conversions, alterations or improvements provided in 4 paragraphs one through eight and paragraph ten of subdivision b of this 5 section provided that the abatement in taxes in any consecutive twelve- 6 month period shall in no event exceed the amount of taxes payable in 7 such twelve-month period; and provided further that alterations or 8 improvements pursuant to paragraph four of subdivision b of this section 9 shall only receive the benefits of this section if construction 10 commenced after January first, nineteen hundred seventy-eight and that 11 in no event shall the aggregate abatement exceed ninety per centum of 12 the reasonable cost of conversions, alterations or improvements provided 13 in paragraphs one, three, four, six, seven, and ten of subdivision b of 14 this section, or exceed fifty per centum of the reasonable cost of 15 conversions pursuant to paragraph one of subdivision b of this section 16 if construction commenced after January first, nineteen hundred eighty- 17 two or exceed fifty per centum of the reasonable cost of conversions 18 pursuant to paragraphs two and eight of subdivision b of this section, 19 or exceed one hundred per centum of the reasonable cost of alterations 20 or improvements pursuant to paragraph five of subdivision b of this 21 section provided that where alterations or improvements pursuant to 22 paragraphs four and six of subdivision b of this section are done in 23 conjunction with a conversion pursuant to paragraph two of subdivision b 24 of this section, the aggregate abatement shall not exceed fifty per 25 centum of the reasonable cost. Notwithstanding the foregoing, the taxes 26 upon real property, including the land may be abated for a period of not 27 more than twenty years at eight and one-third per centum of the reason- 28 able cost of conversions where construction actually commenced in good 29 faith prior to July first, nineteen hundred eighty pursuant to an alter- 30 ation permit issued by the department of buildings prior to July first, 31 nineteen hundred eighty provided that the aggregate abatement shall not 32 exceed ninety per centum of the reasonable cost thereof and provided 33 further that in no event shall the abatement in taxes in any twelve- 34 month period exceed the amount of taxes payable in such twelve-month 35 period. In no event, however, shall the aggregate abatement for conver- 36 sions, alterations or improvements pursuant to subdivision b of this 37 section exceed such dollar limit per existing class A dwelling unit or 38 additional unit created by conversion to a class A multiple dwelling as 39 may be established pursuant to rules and regulations promulgated by the 40 department of housing preservation and development pursuant to subdivi- 41 sion m of this section. Only those items of work set forth in the item- 42 ized cost breakdown schedule contained in rules and regulations promul- 43 gated by the department of housing preservation and development pursuant 44 to subdivision m of this section shall be eligible for tax abatement. 45 Such abatement shall commence on the later of July first, nineteen 46 hundred seventy-eight or the first day of the first tax quarter follow- 47 ing the completion of such construction and the filing for benefits as 48 provided in subdivision h of this section except that such period of 49 abatement may commence on the later of the first day of the first tax 50 quarter following commencement of any conversion, alteration or improve- 51 ment or (i) July first, nineteen hundred seventy-six, if aided by a loan 52 pursuant to article eight of the private housing finance law and 53 completed after December thirty-first, nineteen hundred seventy-five; or 54 (ii) July first, nineteen hundred seventy-seven, if aided by a loan 55 pursuant to article fifteen of the private housing finance law; or (iii) 56 July first, nineteen hundred eighty, if aided by a loan pursuant to

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1 article eight-A of the private housing finance law; or (iv) July first, 2 nineteen hundred eighty, if aided by a loan pursuant to section three 3 hundred twelve of the housing act of nineteen hundred sixty-four (42 4 U.S.C.A. §1452b); or (v) July first, nineteen hundred ninety-two, if 5 started after such date and aided by a loan or grant under article elev- 6 en, twelve, or twenty-two of the private housing finance law, section 7 six hundred ninety-six-a or section ninety-nine-h of the general munici- 8 pal law, or the Cranston-Gonzalez national affordable housing act (42 9 U.S.C.A. 12701 et seq.); or (vi) July first, nineteen hundred eighty- 10 eight, if started after such date by or on behalf of a company not qual- 11 ified under any of the above provisions, which is a not-for-profit 12 corporation qualified pursuant to section 501(c)(3) of the internal 13 revenue code and which has entered into a regulatory agreement with the 14 local housing agency requiring operation of the property as housing for 15 low and moderate income persons and families. 16 (2) In the case of alterations or improvements pursuant to paragraph 17 five of subdivision b of this section which are carried out with the 18 substantial assistance of grants, loans or subsidies from any federal, 19 state or local agency or instrumentality or any not-for-profit philan- 20 thropic organization one of whose primary purposes is providing low or 21 moderate income housing or financed with mortgage insurance by the New 22 York city residential mortgage insurance corporation or the state of New 23 York mortgage agency or pursuant to a program established by the federal 24 housing administration for rehabilitation of existing multiple dwellings 25 in a neighborhood strategy area as defined by the United States depart- 26 ment of housing and urban development, the abatement of taxes on such 27 property, including the land, shall not exceed the lesser of the actual 28 cost of the alterations or improvements or one hundred fifty per centum 29 of the certified reasonable cost of the alterations or improvements, as 30 determined under regulations of the department of housing preservation 31 and development, and the annual abatement of taxes shall not exceed 32 twelve and one-half per centum of such certified reasonable cost, 33 provided that such abatement shall not be effective for more than twenty 34 years and the annual abatement of taxes in any consecutive twelve-month 35 period shall in no event exceed the amount of taxes payable in such 36 twelve-month period. 37 (3) In the case of alterations or improvements carried out with the 38 substantial assistance of grants, loans or subsidies from any federal, 39 state or local agency or instrumentality or any not-for-profit philan- 40 thropic organization one of whose primary purposes is providing low or 41 moderate income housing, or financed with mortgage insurance by the New 42 York city residential mortgage insurance corporation or the state of New 43 York mortgage agency or pursuant to a program established by the federal 44 housing administration for rehabilitation of existing multiple dwellings 45 in a neighborhood strategy area as defined by the United States depart- 46 ment of housing and urban development where such alterations or improve- 47 ments are done on property located in census tracts in which seventy- 48 five percent or more of the population live in households which earn 49 fifty percent or less of the median household income of the city, the 50 abatement of taxes on such property, including the land, shall not 51 exceed the lesser of the actual cost of the alterations or improvements 52 or one hundred fifty per centum of the certified reasonable cost of the 53 alterations or improvements, as determined under regulations of the 54 department of housing preservation and development, and the annual 55 abatement of taxes shall not exceed twelve and one-half per centum of 56 such certified reasonable cost, provided that such abatement shall not

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1 be effective for more than twenty years and the annual abatement of 2 taxes in any consecutive twelve-month period shall in no event exceed 3 the amount of taxes payable in such twelve-month period. 4 (4) In the case of alterations, improvements or conversions pursuant 5 to paragraph eight of subdivision b of this section, the abatement of 6 taxes on such property, including the land, shall not exceed the lesser 7 of the actual cost of the alterations or improvements or one hundred 8 fifty per centum of the certified reasonable cost of the alterations or 9 improvements, as determined under regulations of the department of hous- 10 ing preservation and development, and the annual abatement of taxes 11 shall not exceed twelve and one-half per centum of such certified 12 reasonable cost, provided that such abatement shall not be effective for 13 more than twenty years and the annual abatement of taxes in any consec- 14 utive twelve-month period shall in no event exceed the amount of taxes 15 payable in such twelve-month period. 16 d. The benefits of this section shall apply: 17 (1) to any multiple dwelling which is altered, improved or increased 18 in valuation with aid of a loan provided by the city of New York or the 19 city of Staten Island, the New York city housing development corporation 20 or the United States department of housing and urban development for the 21 elimination of conditions dangerous to human life or detrimental to 22 health, including nuisances as defined in section three hundred nine of 23 the multiple dwelling law, or other rehabilitation or improvement wheth- 24 er or not all of the units thereof were in existence prior to rehabili- 25 tation pursuant to the provisions of: (i) article two, eight or eight-A 26 of the private housing finance law provided that such dwelling is made 27 available solely to persons or families of low income as defined in said 28 articles, (ii) article twelve of the private housing finance law, (iii) 29 article fifteen of the private housing finance law or (iv) any federal 30 law where the multiple dwelling is supervised or regulated by the United 31 States department of housing and urban development. 32 (2) except as hereinafter provided, to any building or structure which 33 is converted to a class A multiple dwelling or to any existing dwelling 34 which is substantially rehabilitated, and further provided that the 35 rents subsequent to conversion or substantial rehabilitation shall not 36 exceed such amount as may be fixed: (i) by the United States department 37 of housing and urban development, (ii) pursuant to the private housing 38 finance law of the state of New York, or (iii) pursuant to chapter three 39 or chapter four of title twenty-six of the code of the preceding munici- 40 pality, provided that the initial legal regulated rent for the dwelling 41 units shall be the rent charged and paid by the initial tenant and 42 registered with the New York state division of housing and community 43 renewal. Buildings or structures which are converted to class A multiple 44 dwellings and existing dwellings which are substantially rehabilitated 45 shall contain bedrooms in a number equal to at least fifty percent of 46 the apartments created where an alteration permit has been issued by the 47 department of buildings prior to April first, nineteen hundred eighty 48 and seventy-five percent of the apartments created where an alteration 49 permit has been issued by the department of buildings on or after April 50 first, nineteen hundred eighty provided, however, that if a building or 51 structure is converted from a non-residential use to a class A multiple 52 dwelling and the units therein contain an average floor area of one 53 thousand square feet, such requirement as to the number of bedrooms 54 shall not be applicable and if an existing dwelling is substantially 55 rehabilitated, the seventy-five percent bedroom requirement shall be 56 reduced to the extent its application would necessitate a reduction in

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1 the number of units which are contained in the existing dwelling prior 2 to commencement of substantial rehabilitation. 3 (3) to any multiple dwelling, building or structure otherwise eligible 4 for any of the benefits of this section which: 5 (i) is operated exclusively for the benefit of persons or families who 6 are or will be entitled to occupancy by reason of ownership of stock or 7 membership in the corporate owner, or for the benefit of such persons or 8 families and other persons or families entitled to occupancy under 9 applicable provisions of law without ownership of stock or membership in 10 the corporate owner, or (ii) is owned as a condominium and is occupied 11 as the residence or home of three or more families living independently 12 of each other; provided, however, that, in addition to all other condi- 13 tions of eligibility for the benefits of this section, except for multi- 14 ple dwellings in which units have been newly created by substantial 15 rehabilitation of vacant buildings or conversions of non-residential 16 buildings, the availability of benefits under this section for such 17 multiple dwellings, buildings or structures shall be conditioned on the 18 following: (a) alterations or improvements to at least one building-wide 19 system are part of the application for benefits, and (b) (i) the 20 assessed valuation of such multiple dwelling, building, or structure, 21 including land, shall not exceed an average of thirty thousand dollars 22 per dwelling unit at the time of the commencement of the alterations or 23 improvements, and (ii) during the three years immediately preceding the 24 commencement of the alterations or improvements the average per room 25 sale price of the dwelling units or the stock allocated to such dwelling 26 units shall have been no greater than thirty-five percent of the maximum 27 mortgage amount for a single family home eligible for purchase by the 28 Federal National Mortgage Association; provided that if less than ten 29 percent of the dwelling units or an amount of stock less than the amount 30 allocable to ten percent of such dwelling units was not transferred 31 during such preceding three year period, eligibility for benefits shall 32 be conditioned upon the multiple dwelling, building, or structure having 33 an assessed valuation per dwelling unit of no more than twenty-five 34 thousand dollars at the time of the commencement of the alterations or 35 improvements. Provided, further, that such benefits shall be available 36 only for alterations or improvements commenced on or after June first, 37 nineteen hundred eighty-six. 38 Notwithstanding the foregoing, the benefits of this section shall be 39 available for any alterations or improvements commenced after August 40 seventh, two thousand eight for such multiple dwellings, buildings or 41 structures and shall be conditioned on the following: (1) the applica- 42 tion for benefits may include any item of work designated in the rules 43 adopted by the department of housing preservation and development as a 44 major capital improvement or asbestos abatement to the extent such 45 asbestos abatement is required by federal, state and local law; and (2) 46 (i) the assessed valuation of such multiple dwelling, building or struc- 47 ture, including land, shall not exceed an average of forty thousand 48 dollars per dwelling unit at the time of the commencement of the alter- 49 ations or improvements; and (ii) the average per room sale price of the 50 dwelling units or the stock allocated to such dwelling units shall have 51 been no greater than thirty-five percent of the maximum mortgage amount 52 for a single family home eligible for purchase by the Federal National 53 Mortgage Association during the three years immediately preceding the 54 commencement of the alterations or improvements; provided that if less 55 than ten percent of the dwelling units or an amount of stock less than 56 the amount allocable to ten percent of such dwelling units was not

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1 transferred during such preceding three-year period, eligibility for 2 benefits shall be conditioned upon the multiple dwelling, building, or 3 structure having an assessed valuation per dwelling unit of no more than 4 forty thousand dollars at the time of the commencement of the alteration 5 or improvement. Provided, however, benefits shall also be available 6 under this section for work completed in any such multiple dwelling, 7 building or structure within the first three years of its conversion to 8 cooperative or condominium ownership, as evidenced by the date on which 9 the first closing in a condominium to a bona fide purchaser occurs or in 10 the case of a cooperative, the date on which the shares allocable to a 11 unit are conveyed to a bona fide purchaser, provided, however, that the 12 availability of such benefits for conversions, alterations or improve- 13 ments commenced prior to June first, nineteen hundred eighty-six, except 14 with respect to governmentally assisted projects as defined in regu- 15 lations issued by the department of housing preservation and develop- 16 ment, shall be conditioned upon the completion of such conversions, 17 alterations or improvements within three years after acceptance for 18 filing of the prospectus to establish such cooperative or condominium 19 entity by the attorney general of the state of New York. The maximum 20 amount of tax abatement which may be received in any tax period under 21 this section by any such multiple dwelling, building or structure for 22 any alterations and improvements commenced three or more years after its 23 initial conversion to cooperative or condominium ownership shall be 24 limited to an amount not in excess of two thousand five hundred dollars 25 per dwelling unit of the certified reasonable cost of the alterations or 26 improvements as determined under regulations of the department of hous- 27 ing preservation and development. 28 (3-a) Notwithstanding any contrary provision of paragraph three of 29 this subdivision, the availability of any benefits under this section to 30 any multiple dwelling, building or structure owned and operated by a 31 limited-profit housing company established pursuant to article two of 32 the private housing finance law shall not be conditioned upon the 33 assessed valuation of such multiple dwelling, building or structure, 34 including land, as calculated as an average dollar amount per dwelling 35 unit, at the time of the commencement of the alterations or improve- 36 ments; provided, however, that such limited-profit housing company (i) 37 is organized and operating as a mutual company, (ii) continues to be 38 organized and operating as a mutual company and to own and operate the 39 multiple dwelling, building or structure receiving such benefits, and 40 (iii) has entered into a binding and irrevocable agreement with the 41 commissioner of housing of the state of New York, the supervising agen- 42 cy, the New York city housing development corporation, or the New York 43 state housing finance agency prohibiting the dissolution or reconsti- 44 tution of such limited-profit housing company pursuant to section thir- 45 ty-five of the private housing finance law for not less than fifteen 46 years from the commencement of such benefits. For the purposes of this 47 paragraph, the terms "mutual company" and "supervising agency" shall 48 have the same meanings as set forth in section two of the private hous- 49 ing finance law. 50 (4) provided that, in the case of any building or structure: (i) in 51 which conversion, alteration or improvement commences on or after Janu- 52 ary first, nineteen hundred eighty-two, and (ii) which is located within 53 an area designated herein as a minimum tax zone, the benefits of this 54 section shall not be applied to abate or reduce the taxes upon the land 55 portion of such real property, which shall continue to be taxed based 56 upon the assessed valuation of the land and the applicable tax rate at

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1 the time such taxes are levied; provided, however, that the foregoing 2 limitation with respect to abatement of taxes shall not apply: 3 (A) to any multiple dwelling which is eligible for benefits based upon 4 moderate rehabilitation pursuant to paragraph four of subdivision b of 5 this section, or (B) to any multiple dwelling which is governmentally 6 assisted as such term is defined in regulations to be promulgated by the 7 department of housing preservation and development pursuant to subdivi- 8 sion m of this section. 9 (5) provided that, in the case of any building or structure: (i) in 10 which conversion, alteration or improvement commences on or after Janu- 11 ary first, nineteen hundred eighty-two, and (ii) which is located within 12 an area designated herein as a tax abatement exclusion zone, the bene- 13 fits of this section shall not be applied to abate or reduce the taxes 14 upon such real property, which shall continue to be taxed based upon the 15 assessed valuation of the land and the improvements and the applicable 16 tax rate at the time such taxes are levied; provided, however, that the 17 foregoing limitation shall not deprive such real property of any bene- 18 fits of exemption from taxation of an increase in assessed valuation to 19 which it is entitled pursuant to this section; provided, however, that 20 the foregoing limitation with respect to abatement of taxes shall not 21 apply: 22 (A) to any alteration or improvement designated as a major capital 23 improvement, by the regulations promulgated by the department of housing 24 preservation and development pursuant to subdivision m of this section, 25 provided that the maximum amount of tax abatement which may be received 26 in any tax period under this section by any such multiple dwelling, 27 building or structure for any alterations and improvements shall be 28 limited to an amount not in excess of twenty-five hundred dollars per 29 dwelling unit of the certified reasonable cost of the alterations and 30 improvements as determined under regulations of the department of hous- 31 ing preservation and development, or (B) to any multiple dwelling which 32 is governmentally assisted as such term is defined by said regulations. 33 (8) Limitation on benefits. (a) The provisions of this paragraph shall 34 apply to all conversions, alterations and improvements except the 35 following: 36 (i) alterations or improvements under paragraphs three, five and six 37 of subdivision b of this section, where carried out: 38 (A) with the substantial assistance of grants, loans or subsidies from 39 any federal, state or local agency or instrumentality, or any not-for- 40 profit philanthropic organization one of whose primary purposes is 41 providing low or moderate incoming housing; or 42 (B) with mortgage insurance by the New York city residential mortgage 43 insurance corporation or the state of New York mortgage agency; or 44 (C) in the areas bounded and described as follows: 45 AREAS IN THE COUNTY OF RICHMOND: 46 PORT RICHMOND--The area bounded by the Kill Van Kull; Jewett Avenue 47 and its prolongation; Forest Avenue; and, the Willow Brook Expressway. 48 NEW BRIGHTON--The area bounded by the Kill Van Kull; Westervelt 49 Avenue; Brook Street; Castleton Avenue; and, North Randall Avenue and 50 its prolongation. 51 STAPLETON--The area bounded by Victory Boulevard; the Upper New York 52 Bay; Vanderbilt Avenue; Van Duzer Street; Cebra Avenue; and, St. Pauls 53 Avenue. 54 FOX HILLS--The area bounded by Vanderbilt Avenue; the Upper New York 55 Bay; the Staten Island Rapid Transit Railway right of way; and, the 56 Staten Island Expressway.

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1 (D) pursuant to a program established by the federal housing adminis- 2 tration, federal national mortgage association, federal home loan mort- 3 gage corporation or government national mortgage association for the 4 rehabilitation of existing multiple dwellings for persons of low or 5 moderate income, or a program of mortgage insurance for the rehabili- 6 tation of existing multiple dwellings pursuant to section two hundred 7 twenty-three-f of the national housing act, as amended, or a program of 8 mortgage insurance established by the federal housing administration for 9 the rehabilitation of existing multiple dwellings for persons of low or 10 moderate income; provided that properties receiving benefits under such 11 programs are located in a neighborhood strategy area, as defined, by the 12 United States department of housing and urban development, or in one of 13 the areas listed in subparagraph (C) of this paragraph. 14 (ii) alterations or improvements under paragraph four of subdivision b 15 of this section; and 16 (iii) conversion of residential units qualified for the protection of 17 article seven-C of the multiple dwelling law under paragraph seven of 18 subdivision b of this section. 19 (b) Abatement limitations. (i) The amount of abatement under subdivi- 20 sion c of this section shall not exceed the certified reasonable cost of 21 the conversion, alteration or improvement, as determined under regu- 22 lations of the department of housing preservation and development, 23 provided that the amount of certified reasonable cost eligible for 24 abatement under this section shall not exceed fifteen thousand dollars 25 for a dwelling unit of three and one-half rooms, as determined under the 26 applicable zoning resolution, and a comparable amount for dwelling units 27 of other sizes, determined under regulations of the department of hous- 28 ing preservation and development, and further provided that the amount 29 of certified reasonable cost eligible for abatement under this section 30 may exceed fifteen thousand dollars or such comparable amount per dwell- 31 ing unit, but not more than twenty-five percent above such amount, upon 32 application of the property owner and a determination by the department 33 of housing preservation and development that: 34 (A) in the case of a conversion under paragraph one or two of subdivi- 35 sion b of this section, the increased cost is necessary to comply with 36 applicable law; 37 (B) in the case of an alteration or improvement under paragraph six of 38 subdivision b of this section, the increased cost is necessary to elimi- 39 nate the unhealthy or dangerous conditions or replace the inadequate and 40 obsolete facilities in a satisfactory manner; 41 (C) in the case of an alteration or improvement under paragraph five 42 of subdivision b of this section, the increased cost is necessary to 43 conserve energy in a satisfactory manner; or 44 (D) in the case of an alteration or improvement under paragraph three 45 of subdivision b of this section, the increased cost, to the extent such 46 cost is not offset by any and all tax credits received as a result of 47 the alteration or improvement, is necessary to comply with any provision 48 of law regulating historic or landmark buildings or structures. 49 (ii) Notwithstanding any other provisions of this subparagraph, and in 50 addition to all other conditions of eligibility for the benefits of this 51 section, the availability of abatements pursuant to subdivision c of 52 this section for any multiple dwellings, buildings or structures not 53 owned as a condominium or cooperative, except for multiple dwellings in 54 which units have been newly created by substantial rehabilitation of 55 vacant buildings or conversions of non-residential buildings, shall be 56 conditioned on the assessed valuation of such multiple dwelling, build-

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1 ing or structure, including land, not exceeding an average of thirty 2 thousand dollars per dwelling unit at the time of commencement of the 3 alterations or improvements, provided, however, that such average shall 4 not exceed forty thousand dollars per dwelling unit at the time of 5 commencement of the alteration or improvement for alterations or 6 improvements commenced after the effective date of this paragraph. 7 (c) Exemption limitations. (i) The increase in assessed valuation of 8 the real property resulting from the conversion, alteration or improve- 9 ment under subdivision b of this section, shall be exempt from taxation 10 as provided in this section, only to the extent provided in this subpar- 11 agraph, provided that this subparagraph shall not apply to any conver- 12 sions, alterations or improvements commenced on or after June first, 13 nineteen hundred eighty-six. The amount of the increased assessed valu- 14 ation that is exempt from taxation shall depend on the amount of the 15 total assessed value per dwelling unit calculated by dividing the amount 16 of the total assessed valuation of the property, as determined under the 17 real property tax law, by the number of dwelling units in the building 18 after completion of the conversion, alteration or improvement. The 19 amount of increased assessed valuation that will be exempt from taxation 20 for buildings with total assessed valuation per dwelling unit of less 21 than thirty-eight thousand dollars shall be calculated pursuant to the 22 following formula: (A) any portion of total assessed valuation of the 23 property attributable to the first eighteen thousand dollars of total 24 assessed valuation per dwelling unit, to the extent it represents 25 increased assessed valuation, shall be one hundred percent exempt; (B) 26 any portion of total assessed valuation attributable to the next four 27 thousand dollars of total assessed valuation per dwelling unit, to the 28 extent it represents increased assessed valuation, shall be seventy-five 29 percent exempt; (C) any portion of total assessed valuation attributable 30 to the next four thousand dollars of total assessed valuation per dwell- 31 ing unit, to the extent it represents increased assessed valuation, 32 shall be fifty percent exempt; (D) any portion of total assessed valu- 33 ation attributable to the next four thousand dollars of total assessed 34 valuation per dwelling unit, to the extent it represents increased 35 assessed valuation, shall be twenty-five percent exempt; and (E) any 36 portion of total assessed valuation attributable to the next eight thou- 37 sand dollars of total assessed valuation per dwelling unit, to the 38 extent it represents increased assessed valuation per dwelling unit, 39 shall be fully taxable. Property with a total assessed valuation per 40 dwelling unit of thirty-eight thousand dollars or more shall not be 41 eligible for a tax exemption under this section. 42 (ii) In calculating the amount of increased assessed valuation that 43 will be exempt from taxation pursuant to the formula in clause (i) of 44 this subparagraph, the full amount of total assessed valuation that does 45 not represent increased assessed valuation shall be applied in such 46 formula prior to the inclusion of any amount of increased assessed valu- 47 ation. 48 (iii) Where the real property is occupied in part for residential 49 purposes and in part for non-residential purposes, the assessed valu- 50 ation of the property shall be appropriately allocated between the resi- 51 dential and non-residential portions. In computing the total assessed 52 valuation per dwelling unit under this subparagraph, only the amount of 53 valuation so allocated to the residential portion shall be considered. 54 (iv) Commencing with the assessment roll for the year nineteen hundred 55 eighty-four, where there has been a change in the level of assessment 56 from the assessment roll of the prior year of properties receiving

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1 exemptions under this section, the department of finance may petition 2 the state board to certify the percentage of such change for the 3 purposes of this section. In such petition, the department of finance 4 shall submit such information as the state board shall require in order 5 to certify the percentage of such change. The state board may also make 6 such a certification on its own motion. Upon receipt of such certif- 7 ication from the state board, the department of housing preservation and 8 development may modify the dollar values of total assessed valuation per 9 dwelling unit in clause (i) of this subparagraph to reflect the percent- 10 age change in the level of assessment as shown in such certification. As 11 used in this subparagraph, the term "change in the level of assessment" 12 means the net increase or decrease in the assessed valuation of proper- 13 ties in the assessing unit that received exemptions under this section 14 in the current year as compared to those that received exemptions under 15 this section in the prior year as a result of assessing such properties 16 at a higher or lower ratio of full value. 17 (v) (A) Notwithstanding the provisions of clause (i) of this subpara- 18 graph, the department of housing preservation and development may reduce 19 or remove the limitations on the exemption from taxation provided in 20 such clause with respect to a particular property undergoing alteration 21 or improvement, upon application of the property owner and a determi- 22 nation by such department that the increased benefit will increase the 23 number of dwelling units that will be affordable to persons of low and 24 moderate income, and the increased benefit is necessary to make econom- 25 ically viable units or improvement in the quality of dwelling units that 26 will be affordable to persons of low or moderate income. 27 (B) As used in this subparagraph, the term "persons of low or moderate 28 income" shall mean persons who would qualify for housing subsidies 29 pursuant to section two hundred thirty-five of the national housing act, 30 as amended, at one hundred thirty-five percent of the income limitations 31 provided therein. 32 (C) Upon receiving an application under this subparagraph in proper 33 form, the department of housing preservation and development shall imme- 34 diately submit it to the community board for the area in which the 35 project is located, which may, within forty-five days of receiving it 36 and after a public hearing, make recommendations to the department as to 37 the application. The department shall act on the application within 38 sixty days of receiving it from the property owner in proper form, but 39 not before expiration of the time for the community board to make its 40 recommendations, unless the board has acted sooner. 41 (d) The department of housing preservation and development may set 42 forth preliminarily the terms of a determination under subparagraph (b) 43 or (c) of this paragraph prior to the commencement of the conversion, 44 alteration or improvement. Any such determination shall take effect 45 after completion of the work in accordance with the terms of the appli- 46 cation made by the property owner. 47 (e) Any determination of the department of housing preservation and 48 development to increase an abatement under subparagraph (b) of this 49 paragraph, or to reduce or remove the exemption limitations under 50 subparagraph (c) of this paragraph shall state the basis for the deter- 51 mination and the data on which the determination was based. Such deter- 52 mination shall be published in the City Record for five consecutive days 53 after the determination is rendered. 54 e. Notwithstanding any provision of this section or any other section 55 of the code to the contrary, where such dwelling is in an area where a 56 plan of redevelopment, program of neighborhood improvement, housing

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1 maintenance, demonstration rehabilitation or concentrated code enforce- 2 ment is being carried out, the rents subsequent to conversion, alter- 3 ation or improvement may exceed the maximum amount allowable pursuant to 4 chapter four of title twenty-six of the code of the preceding munici- 5 pality where necessity for the adjustment of such rents is certified by 6 the department of housing preservation and development. 7 f. Subject to the provisions of subdivision d of this section, the 8 department of housing preservation and development shall determine and 9 certify the reasonable cost of any such conversions, alterations or 10 improvements and eligibility for the benefits of this section and for 11 that purpose may adopt rules and regulations, administer oaths to and 12 take the testimony of any person, including but not limited to the owner 13 of such property, may issue subpoenas requiring the attendance of such 14 persons and the production of such bills, books, papers or other docu- 15 ments as it shall deem necessary, may make preliminary estimates of the 16 maximum reasonable cost of such conversions, alterations or improve- 17 ments, may establish maximum allowable costs of specified units, 18 fixtures or work in such conversions, alterations or improvements, and 19 may require the submission of plans and specifications of such conver- 20 sions, alterations or improvements, and may require the submission of 21 plans and specifications of such conversions, alterations or improve- 22 ments before the start thereof. Applications for certification shall 23 include all bills and other documents showing the cost of construction 24 or such other evidence of such cost as shall be satisfactory to the 25 department of housing preservation and development, including, without 26 limitation, certification of cost by a certified public accountant in 27 accordance with generally accepted accounting principles. Applications 28 for certification for a building eligible for benefits pursuant to para- 29 graph three of subdivision d of this section, for alterations or 30 improvements completed more than three years after its conversion to 31 cooperative or condominium ownership, shall include such documentation 32 of the sale price of dwelling units or stock allocated to such dwelling 33 units as may be required by the department of housing preservation and 34 development, including but not limited to certification of sales price 35 by a certified public accountant. In addition, such applications shall 36 contain the consent of the applicant to allow the department of housing 37 preservation and development access to records, including but not limit- 38 ed to other tax records, as the department may deem appropriate to 39 enforce such conditions of eligibility. Applications for certification 40 filed on or after January first, nineteen hundred seventy-nine pursuant 41 to paragraphs one through six and paragraph eight of subdivision b of 42 this section shall be made after completion and within forty-eight 43 months following the start of construction of the conversion, alteration 44 or improvement, except that applications for certification for alter- 45 ations or improvements undertaken by a housing development fund company 46 organized pursuant to article eleven of the private housing finance law, 47 which are carried out with the substantial assistance of grants, loans 48 or subsidies from any federal, state or local governmental agency or 49 instrumentality or which are carried out in a property transferred from 50 the city of New York or city of Staten Island shall be made after 51 completion and within seventy-two months following the start of the 52 construction of the alteration or improvement. Provided, however, the 53 department of housing preservation and development is empowered to grant 54 an extension of the period for application for any project carried out 55 with the substantial assistance of loans, grants or subsidies from any 56 federal, state or local governmental agency or instrumentality, if such

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1 application is made within seventy-two months from commencement of 2 construction. Applications for certification pursuant to paragraph seven 3 of subdivision b of this section shall be filed within twelve months of 4 the date of completion as provided by such subdivision. 5 g. To the end that conversions, alterations or improvements in such 6 property shall interfere as little as practicable with the clearance, 7 rehabilitation or rebuilding of sub-standard and insanitary areas and 8 shall be confined to buildings and structures which are structurally 9 sound and comply with applicable provisions of law, eligibility for the 10 benefits of this section shall be restricted to such buildings and 11 structures which the department of housing preservation and development 12 shall certify: 13 (1) to be structurally sound and to comply with applicable provisions 14 of law, as determined by the department of buildings, which certif- 15 ication shall be evidenced by a certificate describing the property 16 involved; 17 (2) if in an area for which a final plan of clearance, replanning, 18 reconstruction, rehabilitation, or redevelopment has been approved 19 pursuant to article fifteen of the general municipal law, or if in an 20 area for which an urban renewal plan or tests, studies or demonstrations 21 have been approved pursuant to article fifteen of the general municipal 22 law, to be improved in conformity with such replanning, reconstruction, 23 rehabilitation, redevelopment, tests, studies, demonstrations or plan; 24 and 25 (3) if in an area where a program of local neighborhood improvement or 26 housing maintenance is being carried out, to be in conformity with such 27 program. 28 h. Application forms for the benefits of this section shall be filed 29 with the department of finance within the time periods to be established 30 by rules and regulations promulgated by the department of housing pres- 31 ervation and development pursuant to subdivision m of this section. The 32 department of finance shall certify the amount of taxes to be abated, 33 pursuant to the certification of the department of housing preservation 34 and development as herein provided. No such application shall be 35 accepted unless accompanied by a copy of the certificate of the depart- 36 ment of housing preservation and development both as to reasonable cost 37 and as to eligibility as provided in subdivision f of this section. 38 i. The benefits of this section shall not apply: 39 (1) except as provided in subdivision d of this section, to any exist- 40 ing dwelling which is not subject to the provisions of the emergency 41 housing rent control law or to the city rent and rehabilitation law or 42 to the city rent stabilization law or to the private housing finance law 43 or to any federal law providing for supervision or regulation by the 44 United States department of housing and urban development; 45 (2) to any private dwelling, notwithstanding any other provision of 46 this section, unless it is in an area where a plan of redevelopment or 47 program of neighborhood improvement, housing maintenance, demonstration 48 rehabilitation or concentrated code enforcement is being carried out and 49 the department of housing preservation and development finds that the 50 conversion, alteration or improvement is in conformity with such plan of 51 redevelopment, or program of neighborhood improvement, housing mainte- 52 nance, demonstration rehabilitation or concentrated code enforcement; 53 provided that, however, for the purposes of this section, a class A 54 multiple dwelling may be deemed to include any garden-type maisonette 55 dwelling project consisting of a series of dwelling units which together 56 and in their aggregate were arranged or designed to provide three or

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1 more apartments and are provided as a group collectively with all essen- 2 tial services such as, but not limited to, water supply, house sewers 3 and heat, and which are in existence and operated as a unit under single 4 ownership on the date upon which an application for the benefits of this 5 section is received by the department of housing preservation and devel- 6 opment, even though certificates of occupancy were issued for portions 7 thereof as private dwellings; 8 (3) to any property receiving tax exemption or abatement concurrently 9 for rehabilitation or new construction under any other provision of New 10 York state, city of New York or city of Staten Island law with the 11 exception of any alteration or improvement to property receiving such 12 tax exemption or abatement under the provisions of the private housing 13 finance law, provided, however, that the benefits of this section shall 14 not apply to any alterations or improvements done in connection with the 15 refinancing, pursuant to section 223f of the national housing act, as 16 amended, of a housing project organized pursuant to article two and 17 article four of the private housing finance law; 18 (4) to any multiple dwelling for ordinary repairs and normal replace- 19 ment of maintenance items, as provided in paragraph one of subdivision 20 a, hereof in the event that the dwelling thereof is receiving the bene- 21 fits of this section for other ordinary repairs and normal replacement 22 of maintenance items as of the December thirty-first preceding the date 23 of application; 24 (5) to the conversion of any building or structure, or portion there- 25 of: 26 (i) which is located in the city of Staten Island where residential 27 conversion as of right is not permitted by the zoning resolution; 28 (ii) where such benefits are eliminated by regulations to be promul- 29 gated by the department of housing preservation and development pursuant 30 to subdivision m of this section, unless, in the case of a building or 31 structure in Richmond county, construction actually commenced prior to 32 October first, nineteen hundred eighty-three, pursuant to an alteration 33 permit. A copy of any proposed regulation pursuant to this paragraph 34 shall be transmitted to the city council not less than sixty days prior 35 to its publication in the City Record, pursuant to section eleven 36 hundred five of the charter of the preceding municipality as it existed 37 on the first of January, in the year next succeeding the effective date 38 of this section; and 39 (iii) provided that the provisions of this paragraph shall not apply 40 to conversions pursuant to paragraph seven of subdivision b of this 41 section. 42 (6) to any conversion of or alteration or improvement, commenced on or 43 after July first, nineteen hundred eighty-two, to any class B multiple 44 dwelling or class A multiple dwelling used in whole or in part for 45 single room occupancy, regardless of the status or use of the building 46 after the conversion, alteration or improvement unless such conversion, 47 alteration or improvement is carried out with the substantial assistance 48 of grants, loans or subsidies from any federal, state or local agency or 49 instrumentality. 50 (7) to any conversion of or alteration or improvement, commenced on or 51 after the effective date of this paragraph, to any property classified 52 under the zoning resolution as a non-profit institution with sleeping 53 accommodations, regardless of the status or use of the building after 54 the conversion, alteration or improvement unless such conversion, alter- 55 ation or improvement is carried out with the substantial assistance of

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1 grants, loans or subsidies from any federal, state or local agency or 2 instrumentality. 3 j. Notwithstanding the provisions of the multiple dwelling law, or any 4 local law, ordinance, provisions of this code, rule or regulation, any 5 dwelling to which alterations and improvements are made pursuant to this 6 section and which did not require a certificate of occupancy on April 7 second, nineteen hundred forty-five, may be occupied lawfully after such 8 date upon the completion of such alterations and improvements without 9 such a certificate being obtained, provided, however, that such alter- 10 ations and improvements shall have been made in conformity with law and 11 the applicable provisions for fire protection required by articles six 12 and seven of the multiple dwelling law. 13 k. No owner of a dwelling to which the benefits of this section shall 14 be applied, nor any agent, employee, manager or officer of such owner 15 shall directly or indirectly deny to any person because of race, color, 16 creed, national origin, gender, sexual orientation, disability, marital 17 status, age, religion, alienage or citizenship status, or the use of, 18 participation in, or being eligible for a governmentally funded housing 19 assistance program, including, but not limited to, the section 8 housing 20 voucher program and the section 8 housing certificate program, 42 U.S.C. 21 1437 et seq., or the senior citizen rent increase exemption program, 22 pursuant to either chapter seven of title twenty-six of the code of the 23 preceding municipality or section 26-509 of such code, any of the dwell- 24 ing accommodations in such property or any of the privileges or services 25 incident to occupancy therein. The term "disability" as used in this 26 subdivision shall have the meaning set forth in section 8-102 of the 27 code of the preceding municipality. Nothing in this subdivision shall 28 restrict such consideration in the development of housing accommodations 29 for the purpose of providing for the special needs of a particular 30 group. 31 l. Any person who shall knowingly and willfully make any false state- 32 ment as to any material matter in any application for the benefits of 33 this section shall be guilty of an offense punishable by a fine of not 34 more than five hundred dollars or imprisonment for not more than ninety 35 days, or both. The commissioner of the department of housing preserva- 36 tion and development may reduce or revoke past and future exemption or 37 tax abatement authorized pursuant to this section if the application for 38 tax exemption or tax abatement contains a false statement or false 39 information as to a material matter or omits a material matter. 40 m. Each agency or department to which functions are assigned by this 41 section may adopt and promulgate rules and regulations for the effectua- 42 tion of the purpose of this section. 43 n. The department of housing preservation and development may require 44 a filing fee in an amount as provided by the rules and regulations 45 promulgated by the department of housing preservation and development 46 pursuant to subdivision m of this section. 47 o. Any tax abatement granted for a period of nine years to a multiple 48 dwelling aided by a loan provided by the city of New York prior to Janu- 49 ary first, nineteen hundred seventy-one, shall upon application therefor 50 be adjusted to extend for a period of up to twenty years, provided that 51 the total abatement before and after such adjustment shall not exceed 52 the total abatement to which such property was initially entitled under 53 this section. 54 p. This section is enacted pursuant to the provisions of section four 55 hundred eighty-nine of the real property tax law and subdivision two of 56 section four hundred five of the private housing finance law.

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1 q. No application for the benefits of this section shall be accepted 2 by the department of finance if there are outstanding real estate taxes 3 or water and sewer charges or payments in lieu of taxes which were due 4 and owing as of the last day of the tax period preceding the date of 5 such filing with the department of finance, provided that an applicant 6 aided by article eight or article fifteen of the private housing finance 7 law shall have such application accepted by the department of finance if 8 there are no outstanding real estate taxes or water and sewer charges 9 due and owing as of the last day of the tax period preceding commence- 10 ment of construction. 11 r. In the event that any building or structure receiving the benefits 12 of this section shall become operated exclusively for commercial, hotel 13 or transient hotel use, the tax commission shall withdraw benefits 14 granted herein prospectively. 15 s. The benefits of this section shall not apply to alterations or 16 improvements to existing dwellings in existence on December thirty- 17 first, nineteen hundred seventy-five where (i) such alterations or 18 improvements were completed on or before December thirty-first, nineteen 19 hundred seventy-five, and (ii) no dwelling units thereof on December 20 thirty-first, nineteen hundred seventy-five had rentals which were 21 subject to control by the city rent agency pursuant to chapter four of 22 title twenty-six of the code of the preceding municipality. This subdi- 23 vision shall not apply to alterations or improvements to any building or 24 structure which is benefitted by mortgage insurance pursuant to section 25 two hundred thirteen of the national housing act for applications filed 26 prior to January first, nineteen hundred seventy-nine. 27 t. Notwithstanding any law to the contrary, the owner of any building 28 or structure eligible for any of the benefits of this section which is 29 converted to a class A multiple dwelling, completed, or substantially 30 rehabilitated on or after January one, nineteen hundred seventy-four, 31 shall register the initial rent for each dwelling unit in such building 32 or structure with the New York state division of housing and community 33 renewal. After such registration, the rents of such dwelling units shall 34 be fully subject to regulations under chapter four of title twenty-six 35 of the code of the preceding municipality so long as the benefits of 36 this section are in effect or for such longer period as may be provided 37 by law. 38 u. Any tax exemption or tax abatement authorized pursuant to this 39 section may be revoked retroactively by the commissioner of department 40 of housing preservation and development or the department of finance at 41 any time during the authorized term of such tax exemption or tax abate- 42 ment if real estate taxes or water and sewer charges due to the city of 43 New York or city of Staten Island remain unpaid for one year after the 44 same are due and payable. In no event shall revocation be effective 45 prior to the date such taxes or charges were first due and payable. 46 v. Where alterations, improvements, or conversions include or benefit 47 that part of a building which is not occupied for dwelling purposes but 48 is occupied by stores or otherwise used for commercial purposes or 49 community facilities, the increase in assessed valuation and the cost of 50 the alteration shall be apportioned so that the benefits of this title 51 shall not be provided for alterations, improvements or conversions made 52 for other than dwelling purposes. 53 w. If any provision of this section or its application to any person 54 shall be held invalid, the remainder of this section and the applicabil- 55 ity of its provisions to other persons or circumstances shall not be 56 affected thereby.

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1 x. Notwithstanding any provision of this section, no benefit pursuant 2 to paragraph four of subdivision b of this section shall be granted for 3 work commenced after January first, nineteen hundred eighty, unless the 4 applicant establishes that the department of housing preservation and 5 development and tenants of such class A multiple dwelling were given 6 notice of (i) the proposed work prior to commencement of such work, (ii) 7 the identity of the owner's representative, and (iii) the tenants' 8 rights under applicable law with respect to such work, provided that, in 9 the case of a loan program supervised by such department, notice to the 10 department shall be unnecessary, and further provided that the depart- 11 ment may itself provide the required notice to the tenants. 12 y. Applicants for benefits under the provisions of this section shall 13 file with the department of finance a form supplied by said department 14 which (i) states an intention to file for benefits under the provisions 15 of this section, (ii) describes the work for which tax benefits will be 16 claimed and (iii) estimates the cost of such work which will be eligible 17 for benefits. Such form shall be filed prior to the commencement of such 18 work. If the scope of such work or the estimated cost thereof changes 19 materially, applicant shall file a revised statement. Applicants who 20 fail to comply with the requirements of this subdivision shall be 21 subject to a penalty not to exceed one hundred percent of the filing fee 22 otherwise payable pursuant to subdivision n of this section. 23 z. A former tenant or former subtenant of premises in a non-residen- 24 tial building which is the subject of an application for an alteration 25 permit for conversion to a class A multiple dwelling, prior to the 26 application for any tax exemption or abatement benefits for such build- 27 ing pursuant to this section, and as a condition to the grant thereof, 28 shall be entitled to a relocation award under the terms and conditions 29 set forth below: 30 (1) As used in this subdivision, the term "eligible tenant" shall mean 31 any former tenant or former subtenant who: 32 (i) leased and used the vacated premises to conduct a manufacturing, 33 warehousing, or wholesaling business for not less than two consecutive 34 years immediately prior to vacating; 35 (ii) vacated such premises on or after April first, nineteen hundred 36 eighty-one for any reason other than eviction for non-payment of rent; 37 (iii) vacated such premises (a) no earlier than twenty-four months 38 prior to the filing date of an application for such alteration permit 39 and (b) no later than the completion of the conversion as evidenced by 40 the issuance of a permanent certificate of occupancy for a class A 41 multiple dwelling; 42 (iv) either purchased or leased for a term of not less than eighteen 43 months other premises within the city of Staten Island with a floor area 44 not less than one-third of the floor area of the vacated premises; 45 (v) relocated their business to such other premises within one year of 46 vacating the vacated premises; and 47 (vi) paid all commercial rent or occupancy tax for the vacated prem- 48 ises. A subtenant shall be eligible to receive a relocation award 49 notwithstanding any lack of eligibility of its prime tenant; 50 (2) the relocation award shall not exceed the greater of (i) the 51 aggregate base rent which accrued and was paid by the eligible tenant 52 during the final twenty-four months of its occupancy of the vacated 53 premises or (ii) four dollars for each square foot that the eligible 54 tenant occupied in the vacated premises during the final twenty-four 55 months of its occupancy of the vacated premises. As used in this subdi- 56 vision, base rent shall be calculated in the same manner as base rent is

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1 calculated for purposes of commercial rent or occupancy tax in the city 2 of Staten Island. However, the aggregate award payable to a prime tenant 3 and/or any subtenants of such prime tenant shall not exceed the amount 4 which would have been payable to the prime tenant had the prime tenant 5 been eligible for an award based on the entire floor area it leased from 6 the owner; and if such limitation applies, the awards shall be prorated 7 based upon the total floor area used and occupied by each eligible 8 tenant; 9 (3) the relocation award shall become due and payable to an eligible 10 tenant at the time the eligible tenant (i) either purchases or leases 11 other premises in accordance with paragraph one of this subdivision, and 12 (ii) certifies eligibility to, and demands payment of, the award from 13 the owner of the vacated building. If the relocation award is not paid 14 within thirty days of such certification and demand, interest shall 15 accrue on the relocation award from the date of the certification and 16 demand at the rate of twenty-four percent per annum; 17 (4) at any time after such certification and demand and prior to the 18 date of the filing of an application for tax exemption or abatement for 19 the vacated building pursuant to this section, an eligible tenant who 20 has not received a relocation award shall have a right to file a notice 21 of claim. Such notice of claim shall be filed with the county clerk of 22 the county and shall verify the claimant's name, its compliance with 23 eligibility requirements, the address of the vacated premises, the floor 24 area it occupied, the name of the prime tenant if the claimant is a 25 subtenant, and all the base rent that accrued and was paid by the claim- 26 ant during the final twenty-four months of its occupancy; 27 (5) a notice of claim, filed in accordance with paragraph four of this 28 subdivision, may be discharged by the filing of an undertaking with the 29 county clerk in an amount equal to the amount claimed and in accordance 30 with the procedures set forth in subdivision four of section nineteen of 31 the lien law, or by the payment into court of such amount in accordance 32 with the procedures set forth in section fifty-five of such law; 33 (6) no tax exemption or abatement shall be granted pursuant to this 34 section unless the department of housing preservation and development 35 receives an affidavit from the applicant for benefits of this section 36 which verifies that: 37 (i) the applicant has caused to be published a notice in a newspaper 38 of general circulation within the city of Staten Island, no later than 39 sixty days prior to filing of an application for tax exemption or abate- 40 ment pursuant to this section, which advises former tenants and subten- 41 ants of their rights pursuant to this subdivision; and 42 (ii) no notice of claim has been filed or all claims have been 43 released by the claimants, or secured in accordance with the provisions 44 of paragraph five of this subdivision, or discharged as an improper 45 claim by court order; 46 (7) the affidavit required pursuant to the provisions of paragraph six 47 of this subdivision shall be considered part of the application for 48 benefits pursuant to this section; 49 (8) if an eligible tenant has duly filed a notice of claim pursuant to 50 paragraph four of this subdivision and did not receive a relocation 51 award as provided herein, it may commence an action against any appli- 52 cant who filed a false affidavit pursuant to paragraph six of this 53 subdivision or any security posted by such applicant pursuant to para- 54 graph five of this subdivision, within three years of such filing. In 55 any action to enforce a claim pursuant to this subdivision, if the court 56 finds that the claimant has wilfully exaggerated the amount of the

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1 claim, the claimant may be held liable in damages for an amount not to 2 exceed the proper relocation award. An eligible tenant in whose favor a 3 judgment is entered shall be entitled to costs and reasonable legal fees 4 and disbursements provided that such judgment is in excess of the amount 5 which the applicant or owner offered to pay the eligible tenant; and 6 (9) any lease or other rental agreement provision exempting, waiving, 7 releasing or discharging the obligation to pay a relocation award pursu- 8 ant to this subdivision shall be void as against public policy and whol- 9 ly unenforceable. 10 aa. Harassment. (1) The provisions of this subdivision apply to and 11 are additional requirements for claiming or receiving: 12 (a) any tax exemption under this section; or 13 (b) any tax abatement under this section where the certified reason- 14 able cost per dwelling unit of the conversion, alteration or improvement 15 (including the cost of any conversion, alteration or improvement for 16 which an abatement was approved within four years prior to commencement 17 of the conversion, alteration or improvement) exceeds seven thousand 18 five hundred dollars. 19 (2) The owner of the property shall file with the department of hous- 20 ing preservation and development, not less than thirty days before the 21 commencement of the conversion, alteration or improvement (hereinafter 22 referred to as the "cut-off date"), an affidavit, or, where any informa- 23 tion referred to in paragraph one of this subdivision changes prior to 24 applying for or claiming any benefit under this section, an amending 25 affidavit, setting forth the following information: 26 (a) every owner of record and owner of a substantial interest in the 27 property or entity owning the property or sponsoring the conversion, 28 alteration or improvement; 29 (b) a statement that none of such persons had, within the five years 30 prior to the cut-off date, been found to have harassed or unlawfully 31 evicted tenants by judgment or determination of a court or agency 32 (including a non-governmental agency having appropriate legal jurisdic- 33 tion) under the penal law, any state or local law regulating rents or 34 any state or local law relating to harassment of tenants or unlawful 35 eviction; and 36 (c) any change in the information required to be set forth. 37 (3) No conversion, alteration or improvement subject to this subdivi- 38 sion shall be eligible for tax exemption or tax abatement under this 39 section where: 40 (a) any affidavit required under this subdivision has not been filed; 41 (b) any such affidavit contains a willful misrepresentation or omis- 42 sion of any material fact; or 43 (c) any person referred to in subparagraph (a) of paragraph two of 44 this subdivision has been found to have harassed or unlawfully evicted 45 tenants as described in that paragraph, until and unless the finding is 46 reversed on appeal, provided that any such finding after the cut-off 47 date shall not apply to or affect any tax abatement or exemption for the 48 conversion, alteration or improvement covered by the affidavit. 49 (4) The department of housing preservation and development and the 50 department of finance shall maintain a list of affidavits as described 51 in paragraph two of this subdivision. Each agency shall review that list 52 with respect to each application or claim for benefits subject to this 53 subdivision. 54 (5) "Substantial interest" as used in subparagraph (a) of paragraph 55 two of this subdivision shall mean ownership of an interest of ten per

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1 centum or more in the property or entity owning the property or sponsor- 2 ing the conversion, alteration or improvement. 3 (6) Where the conversion, alteration or improvement is commenced 4 before August first, nineteen hundred eighty-three, the cut-off date 5 shall be as set forth in this subdivision, but no affidavit shall be 6 required to be filed until thirty days after the effective date of this 7 subdivision. 8 bb. Notwithstanding any contrary provision of the private housing 9 finance law, the benefits of this section shall apply to any limited 10 profit housing company as provided in this section. Such multiple dwell- 11 ing, building or structure shall be eligible for benefits where at least 12 one building-wide improvement or alteration is part of the application 13 for benefits. Furthermore, to the extent that such alterations or 14 improvements are financed with grants, loans or subsidies from any 15 federal, state, or local agency or instrumentality, such multiple dwell- 16 ing, building or structure shall be eligible for benefits only if the 17 limited profit housing company has entered into a binding and irrev- 18 ocable agreement with the commissioner of housing of the state of New 19 York, the supervising agency, as such term is defined in section two of 20 the private housing finance law, the New York city housing development 21 corporation, or the New York state housing finance agency prohibiting 22 the dissolution or reconstitution of such limited profit housing company 23 pursuant to section thirty-five of the private housing finance law for 24 not less than fifteen years from the commencement of benefits. The 25 abatement of taxes on such property, including the land, shall not be an 26 amount greater than ninety per centum of the certified reasonable cost 27 of such alterations or improvements, as determined under regulations of 28 the department of housing preservation and development, nor greater than 29 eight and one-third percent of such certified reasonable cost in any 30 twelve-month period, nor be effective for more than twenty years. The 31 annual abatement of taxes in any twelve-month period shall in no event 32 exceed fifty percent of the amount of taxes payable in such twelve-month 33 period pursuant to the applicable exemption granted pursuant to article 34 two of the private housing finance law or other applicable laws or fifty 35 percent of payments required to be made in lieu of taxes in such twelve- 36 month period. Provided, however, the annual abatement of taxes for 37 alterations or improvements commenced prior to June first, nineteen 38 hundred eighty-six may not be applied to reduce the amount of taxes 39 payable or the amount of payments required to be made in lieu of taxes 40 in any twelve-month period to an amount less than the minimum amount of 41 taxes required to be paid pursuant to section thirty-three of the 42 private housing finance law. 43 cc. The commissioner of the department of housing preservation and 44 development and the commissioner of the department of finance shall 45 prepare an annual report which shall be submitted to the Mayor and the 46 council on or before the first of July next succeeding the year to which 47 the report pertains, regarding the exemptions and abatements granted 48 pursuant to this section and shall include, but not be limited to the 49 following information: (i) the amount of real property tax that would 50 have been paid in the aggregate by the owners of real property granted 51 an exemption or abatement if the property were fully taxable and the 52 amount of tax actually paid in the aggregate by such owners, (ii) the 53 geographic distribution of exemptions and abatements granted pursuant to 54 this section, and (iii) a distribution by type of eligible categories as 55 delineated in paragraphs one through nine of subdivision b of this 56 section.

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1 dd. Partial waiver of rent adjustments attributable to major capital 2 improvements. (1) The provisions of this subdivision apply to and are 3 additional requirements for claiming or receiving any tax abatement 4 under this section, except as provided in paragraphs three and four of 5 this subdivision. 6 (2) The owner of the property shall file with the department of hous- 7 ing preservation and development, on the date any application for bene- 8 fits is made, a declaration stating that in consideration of any tax 9 abatement benefits which may be received pursuant to such application 10 for alterations or improvements constituting a major capital improve- 11 ment, such owner agrees to waive the collection of a portion of the 12 total annual amount of any rent adjustment attributable to such major 13 capital improvement which may be granted by the New York state division 14 of housing and community renewal pursuant to the rent stabilization code 15 or its successor statute for the city of Staten Island equal to one-half 16 of the total annual amount of the tax abatement benefits which the prop- 17 erty receives pursuant to such application with respect to such alter- 18 ations or improvements. Such waiver shall commence on the date of the 19 first collection of such rent adjustment, provided that, in the event 20 that such tax abatement benefits were received prior to such first 21 collection, the amount waived shall be increased to account for such tax 22 abatement benefits so received. Following the expiration of a tax abate- 23 ment for alterations or improvements constituting a major capital 24 improvement for which a rent adjustment has been granted by such divi- 25 sion, the owner may collect the full amount of annual rent permitted 26 pursuant to such rent adjustment. A copy of such declaration shall be 27 filed simultaneously with the New York state division of housing and 28 community renewal. Such declaration shall be binding upon such owner, 29 and his or her successors and assigns. 30 (3) The provisions of this subdivision shall not apply to substantial 31 rehabilitation of buildings vacant when alterations or improvements are 32 commenced or to buildings rehabilitated with the substantial assistance 33 of city, state or federal subsidies. 34 (4) The provisions of this subdivision shall apply only to alterations 35 and improvements commenced after the effective date of such subdivision. 36 § 11-244 Tax exemption and abatement for rehabilitated buildings. a. 37 As used in this section, the following terms shall have the following 38 meanings: 39 1. "Eligible real property" shall mean: 40 (i) any class B multiple dwelling; 41 (ii) any class A multiple dwelling used for single room occupancy 42 pursuant to section two hundred forty-eight of the multiple dwelling law 43 which contains no more than twenty-five percent class A dwelling units 44 which contain lawful sanitary and kitchen facilities within the dwelling 45 unit, provided that in the case of a multiple dwelling containing ten 46 dwelling units or less, up to forty percent of the dwelling units may be 47 class A units; and 48 (iii) not-for-profit institutions with sleeping accommodations. 49 Notwithstanding the foregoing, eligible real property shall not 50 include college and school dormitories, club houses, or residences whose 51 occupancy is restricted to an institutional use such as housing intended 52 for use primarily or exclusively by the employees of a single company or 53 institution. A building is an eligible real property only if it quali- 54 fies as such after completion of the eligible improvements, but need not 55 have been an eligible real property prior to the eligible improvements.

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1 2. "Eligible improvements" shall be limited to the following catego- 2 ries of work, provided further that such work shall be in conformity 3 with all applicable laws: 4 (i) replacement of a boiler or burner or installation of an entire new 5 heating system; 6 (ii) replacement or upgrading of electrical system; 7 (iii) replacement or upgrading of elevators; 8 (iv) installation or replacement or upgrading of the plumbing system, 9 including water main and risers; 10 (v) replacement or installation of walls, ceilings, floors or trim 11 where necessary; 12 (vi) replacement or upgrading of doors, installation of security 13 devices and systems; 14 (vii) installation, replacement or upgrading of smoke detectors, fire 15 alarms, fire escapes or sprinkler systems; 16 (viii) replacement or repair of roof, leaders and gutters; 17 (ix) replacement or installation of bathroom facilities; 18 (x) installation of wall and pipe insulation; 19 (xi) replacement or upgrading of street connections for water or sewer 20 services; 21 (xii) replacement or installation of windows, or installation of 22 window gates or guards; 23 (xiii) installation or replacement of boiler smoke stack; 24 (xiv) pointing, waterproofing and cleaning of entire building exterior 25 surface; 26 (xv) improvements designed to conserve the use of fuel, electricity or 27 other energy sources; 28 (xvi) work necessary to effect compliance with all applicable laws 29 including, but not limited to the multiple dwelling law, the city hous- 30 ing maintenance code or its successor statute for the city of Staten 31 Island and the building code; and 32 (xvii) improvements unique to congregate living facilities, as defined 33 by rules and regulations promulgated by the department of housing pres- 34 ervation and development. 35 3. "Existing dwelling" shall mean any eligible real property in exist- 36 ence prior to the commencement of eligible improvements, for which tax 37 exemption and abatement is claimed under the terms of this section and 38 for which a valuation appears on the annual record of assessed valuation 39 of the city for the fiscal year immediately preceding the commencement 40 of construction of such eligible improvements. 41 4. "Commencement of eligible improvement" shall mean the beginning of 42 any physical operation undertaken for the purpose of making eligible 43 improvements to eligible real property. 44 5. "Completion of eligible improvement" shall mean the conclusion or 45 termination of any physical operation referred to in the preceding para- 46 graph, to an extent or degree which renders an eligible property capable 47 of use for the purpose for which the improvements were intended. 48 6. "Permanent resident" shall mean a person who has resided in eligi- 49 ble real property for six months or more; has a lease or other rental 50 agreement for a term of six or more months; or has requested a lease 51 pursuant to the provisions of the rent stabilization code or its succes- 52 sor statute for the city of Staten Island for housing accommodations 53 located in hotels. 54 b. Any increase in the assessed valuation of eligible real property 55 shall be exempt from taxation for local purposes for a period of thir-

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1 ty-two years to the extent such increase results from eligible improve- 2 ments, provided that: 3 (i) the eligible improvements are commenced after July first, nineteen 4 hundred eighty, and prior to the thirty-first of December in the year 5 next succeeding the effective date of this section, and are completed 6 within thirty-six months from commencement; 7 (ii) the department of housing preservation and development determines 8 and certifies the cost, qualification and eligibility of any improvement 9 for benefits of this section; 10 (iii) the exemption may commence no sooner than the July first follow- 11 ing the filing with the department of finance of a certification of 12 eligibility issued by the department of housing preservation and devel- 13 opment for benefits of this section; provided, however, that if the 14 rehabilitation is carried out with substantial government assistance as 15 part of a program for affordable housing the exemption may commence no 16 sooner than the July first following the commencement of construction of 17 eligible improvements; 18 (iv) immediately prior to, and during, the construction of eligible 19 improvements, not less than fifty percent of the dwelling units in such 20 eligible real property are occupied by permanent residents; provided 21 that such occupancy requirement shall not apply to a vacant, govern- 22 mentally owned multiple dwelling which had been vacant for not less than 23 two years prior to the commencement of construction of eligible improve- 24 ments, nor to a vacant multiple dwelling where the eligible improvements 25 are carried out with the substantial assistance of grants, loans or 26 subsidies from any federal, state or local agency or instrumentality or 27 any not-for-profit philanthropic organization one of whose primary 28 purposes is providing low or moderate income housing; 29 (v) no outstanding real estate taxes, water and sewer charges, 30 payments in lieu of taxes or other municipal charges are due and owing 31 as of the tax quarter immediately preceding the commencement of tax 32 exemption pursuant to this section; provided that an applicant aided 33 pursuant to the provisions of the private housing finance law shall have 34 such application accepted by the tax commission if there are no 35 outstanding real estate, water and sewer taxes due and owing as of the 36 last day of the tax quarter preceding commencement of construction of 37 eligible improvements; 38 (vi) except in the case of eligible real property which is receiving 39 or has received assistance pursuant to a governmental rent subsidy 40 program or which is owned by a not-for-profit corporation or by a wholly 41 owned subsidiary of a not-for-profit corporation and which is receiving 42 or has received assistance pursuant to a governmental loan subsidy 43 program, as defined by the rules and regulations promulgated by the 44 department of housing preservation and development, for the construction 45 of eligible improvements, the initial rent after completion of eligible 46 improvements, for ninety percent of the total number of dwelling units 47 occupied by permanent residents in a class A or class B multiple dwell- 48 ing other than apartments shall not exceed the greater of either the 49 amount of any governmental rental assistance received by an occupant or 50 seventy-five percent of the rent which is permitted to be charged for 51 zero-bedroom units on the moderate rehabilitation fair market rent sche- 52 dule as determined by the United States department of housing and urban 53 development for the housing assistance payments program under section 54 eight of the national housing act; 55 (vii) no person residing in eligible real property prior to or during 56 the construction of eligible improvements shall be required by the owner

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1 to vacate the eligible real property solely in order to perform the 2 eligible improvements or any related work. 3 c. Eligible real property which qualifies for exemption from taxation 4 for local purposes for eligible improvements shall also be eligible for 5 an annual abatement of real property taxes in an amount not to exceed 6 twelve and one-half percent of the reasonable cost of eligible improve- 7 ments certified by the department of housing preservation and develop- 8 ment, which abatement may commence on the first day of the first tax 9 quarter following the filing with the department of finance of a certif- 10 ication of eligibility issued by the department of housing preservation 11 and development for benefits of this section; provided, however, that if 12 the rehabilitation is carried out with substantial government assistance 13 as part of a program for affordable housing the abatement may commence 14 no sooner than the first day of the first tax quarter following the 15 commencement of construction of eligible improvements, provided further 16 that: 17 (i) the annual abatement shall not exceed the amount of taxes other- 18 wise payable in the corresponding year; 19 (ii) the period during which such abatement is effective shall not 20 exceed twenty consecutive years from the date such abatement first 21 becomes effective; and 22 (iii) the total abatement shall not exceed the lesser of one hundred 23 fifty percent of the certified reasonable costs of eligible improvements 24 or the actual costs as determined by the department of housing preserva- 25 tion and development pursuant to its rules and regulations. 26 d. During the period of tax exemption or abatement pursuant to this 27 section, each of the following shall be a condition precedent to the 28 continuation of the exemption and/or abatement: 29 (i) compliance with all applicable provisions of law, including, but 30 not limited to the multiple dwelling law, the building code and the 31 housing maintenance code of the preceding municipality; 32 (ii) all dwelling units, except owner occupied units, shall be subject 33 to the emergency housing rent control law or the local housing rent 34 control act or the tenant protection act of nineteen hundred seventy- 35 four, or any local laws enacted pursuant thereto or the rent stabiliza- 36 tion law of nineteen hundred sixty-nine or their successor statutes for 37 the city of Staten Island; provided, however, that the department of 38 housing preservation and development may exempt from this requirement 39 dwelling units that are not occupied by permanent residents in those 40 buildings owned by a not-for-profit corporation and which are improved 41 with the aid of a rehabilitation loan from any government agency or 42 instrumentality or operated pursuant to a contract with a governmental 43 entity. 44 (iii) eligible real property receiving tax exemption or tax abatement 45 benefits under this section shall not receive tax exemption or tax 46 abatement for new construction or rehabilitation under any other 47 provision of law; 48 (iv) the eligible improvements shall not be used as the basis for any 49 application for rent increases and the owner shall file a statement to 50 such effect with the department of housing preservation and development 51 and with any appropriate rent regulatory agency, provided, however, that 52 rents of units improved with the aid of a rehabilitation loan from any 53 governmental agency or instrumentality may within the limitations estab- 54 lished by this section be increased pursuant to the rules and regu- 55 lations of the department of housing preservation and development; and

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1 (v) a minimum of seventy-five percent of the dwelling units shall be 2 rental units occupied by permanent residents; provided, however that the 3 department of housing preservation and development may exempt from this 4 requirement those buildings improved with the aid of a rehabilitation 5 loan from any governmental agency or instrumentality or operated pursu- 6 ant to a contract with a governmental entity. 7 e. During the period of tax exemption or abatement pursuant to this 8 section, the owner shall submit an annual certification to the depart- 9 ment of housing preservation and development in the form prescribed by 10 such department. Failure to submit such certification in any given year 11 may result in the revocation of benefits. The certification shall 12 include the following: 13 (i) the total number of dwelling units within the eligible real prop- 14 erty and the total number of dwelling units occupied by permanent resi- 15 dents; 16 (ii) the number of dwelling units subject to the provisions of the 17 emergency housing rent control act, the emergency tenant protection act 18 of nineteen seventy-four or any local laws enacted pursuant thereto; the 19 emergency housing rent control law or the rent stabilization law of 20 nineteen hundred sixty-nine or their successor statutes applicable to 21 the city of Staten Island; and 22 (iii) all such other information required by the department of housing 23 preservation and development. 24 f. Any tax exemption or tax abatement authorized pursuant to this 25 section may be revoked or reduced by the department of housing preserva- 26 tion and development or by the department of finance at any time during 27 the authorized term of such tax exemption or tax abatement upon a find- 28 ing by either department that: 29 (i) the application for benefits pursuant to this section or the annu- 30 al certification required hereunder contains a false statement or false 31 information as to a material matter, or omits a material matter, in 32 which case the revocation or reduction may be retroactive to the 33 commencement of benefits pursuant to this section; 34 (ii) real estate taxes, water, sewer or other municipal charges, or 35 payments in lieu of said taxes or charges are, and have remained, due 36 and owing for more than one year, in which case the revocation or 37 reduction may be retroactive to the commencement of benefits pursuant to 38 this section, provided that in no event shall revocation be effective 39 prior to the date such taxes or charges were first due and payable; or 40 (iii) the eligible real property fails to comply with one or more of 41 the provisions or requirements of this section. 42 g. Application forms for the benefits of this section shall be filed 43 with the tax commission within the time periods to be established by 44 rules and regulations promulgated by the department of housing preserva- 45 tion and development, pursuant to subdivision i of this section. The tax 46 commission shall certify to the department of finance the amount of 47 taxes to be abated, pursuant to the certification of the department of 48 housing preservation and development as herein provided. No such appli- 49 cation shall be accepted unless accompanied by a copy of the certificate 50 of the department of housing preservation and development both as to 51 reasonable cost and as to eligibility as provided in subdivision b of 52 this section. 53 h. No owner of a dwelling to which the benefits of this section apply, 54 nor any agent, employee, manager or officer of such owner shall directly 55 or indirectly deny to any person because of race, color, creed, national 56 origin, sex, disability, marital status, age, religion, military status,

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1 gender identity or expression or sexual orientation any of the dwelling 2 accommodations in such property or any of the privileges or services 3 incident to occupancy therein. The term "disability" as used in this 4 subdivision shall mean a physical, mental or medical impairment result- 5 ing from anatomical, physiological, or neurological conditions which 6 prevents the exercise of a normal bodily function or is demonstrable by 7 medically accepted clinical or laboratory diagnostic techniques. Nothing 8 in this subdivision shall restrict such consideration in the availabili- 9 ty of housing accommodations for the purpose of providing for the 10 special needs of a particular group. 11 i. The department of housing preservation and development shall deter- 12 mine and certify the reasonable cost of any such conversions, alter- 13 ations or improvements and eligibility for the benefits of this section 14 and for that purpose may adopt rules and regulations, administer oaths 15 to and take the testimony of any person, including, but not limited to 16 the owner of such property, may issue subpoenas requiring the attendance 17 of such persons and the production of such bills, books, papers or other 18 documents as it shall deem necessary, may make preliminary estimates of 19 the maximum reasonable cost of such conversions, alterations or improve- 20 ments, may establish maximum allowable costs of specified units, 21 fixtures or work in such conversions, alterations or improvements, and 22 may require the submission of plans and specifications of such conver- 23 sions, alterations or improvements before the start thereof. Applica- 24 tions for certification shall include all bills and other documents 25 showing the cost of construction or such other evidence of such cost as 26 shall be satisfactory to the department of housing preservation and 27 development, including, without limitation, certification of cost by a 28 certified public accountant in accordance with generally accepted 29 accounting principles. Each additional agency to which functions are 30 assigned by this section may adopt and promulgate rules and regulations 31 for the effectuation of the purposes of this section. 32 j. The department of housing preservation and development may require 33 a filing fee in an amount as provided by the rules and regulations 34 promulgated by the department of housing preservation and development 35 pursuant to subdivision i of this section. 36 k. Any person who shall knowingly and wilfully make any false state- 37 ments as to any material matter in any application for the benefits of 38 this section shall be guilty of an offense punishable by a fine of not 39 more than five hundred dollars or imprisonment for not more than ninety 40 days, or both. 41 l. If any provision of this section or its application to any person 42 shall be held invalid, the remainder of this section and the applicabil- 43 ity of its provisions to other persons or circumstances shall not be 44 affected thereby. 45 § 11-245.1 Site eligibility limitations on benefits pursuant to 46 section four hundred twenty-one-a of the real property tax law. 47 (a) Where eligibility for benefits under section four hundred twenty- 48 one-a of the real property tax law is sought for any construction 49 commenced on or after November twenty-ninth, nineteen hundred eighty- 50 five and before May twelfth, two thousand on the basis that such 51 construction shall take place on land which, on the date thirty-six 52 months prior to the commencement of such construction, was improved with 53 a nonresidential building or buildings and was under-utilized, the 54 under-utilization of the land must have been such that each building or 55 buildings:

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1 (1) contained no more than the permissible floor area ratio for 2 nonresidential buildings in the zoning district in question and a 3 floor area ratio which was twenty percent or less of the maximum 4 floor area ratio for residential buildings, 5 (2) had an assessed valuation equal to or less than twenty percent 6 of the assessed valuation of the land on which the building or 7 buildings were situated, or 8 (3) by reason of the configuration of the building, or substantial 9 structural defects not brought about by deferred maintenance prac- 10 tices or intentional conduct, could no longer be functionally or 11 economically utilized in the capacity in which it was formerly 12 utilized. 13 For purposes of this subdivision and subdivisions (a-1) through (a-4) 14 of this section, construction shall be deemed to have commenced on the 15 date immediately following the issuance by the department of buildings 16 of a new building permit for an entire new building (based upon archi- 17 tectural, plumbing and structural plans approved by such department) on 18 which the excavation and the construction of initial footings and foun- 19 dations commences in good faith, on vacant land and for the entire 20 project site, as certified by an architect or professional engineer 21 licensed in the state, provided that installation of footings and foun- 22 dations is similarly certified by such architect or engineer to have 23 been completed without undue delay. 24 (a-1) Except as provided in subdivision (a-2) of this section, where 25 eligibility for benefits under section four hundred twenty-one-a of the 26 real property tax law is sought for any construction commenced on or 27 after May twelfth, two thousand and before the effective date of subdi- 28 visions (a-3) and (a-4) of this section on the basis that such 29 construction shall take place on land which, on the date thirty-six 30 months prior to the commencement of such construction, was improved with 31 a nonresidential building or buildings and was under-utilized, the 32 under-utilization of the land must have been such that each building or 33 buildings: 34 (1) contained no more than the permissible floor area ratio for 35 nonresidential buildings in the zoning district in question and a 36 floor area ratio which was seventy-five percent or less of the maxi- 37 mum floor area ratio for residential buildings, 38 (2) had an assessed valuation equal to or less than seventy-five 39 percent of the assessed valuation of the land on which the building 40 or buildings were situated, or 41 (3) by reason of the configuration of the building, or substantial 42 structural defects not brought about by deferred maintenance prac- 43 tices or intentional conduct, could no longer be functionally or 44 economically utilized in the capacity in which it was formerly 45 utilized. 46 For purposes of this subdivision, construction shall be deemed to have 47 commenced as provided in subdivision (a) of this section. 48 (a-2) Where eligibility for benefits under section four hundred twen- 49 ty-one-a of the real property tax law is sought for any construction on 50 any tax lot now existing or hereafter created which is located south of 51 or adjacent to either side of one hundred tenth street in the borough of 52 Manhattan which construction commenced on or after May twelfth, two 53 thousand and before the effective date of subdivisions (a-3) and (a-4) 54 of this section on the basis that such construction shall take place on 55 land which, on the date thirty-six months prior to the commencement of 56 such construction, was improved with a nonresidential building or build-

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1 ings and was under-utilized, the under-utilization of the land must have 2 been such that each building or buildings: 3 (1) contained no more than the permissible floor area ratio for 4 nonresidential buildings in the zoning district in question and a 5 floor area ratio which was fifty percent or less of the maximum 6 floor area ratio for residential buildings, 7 (2) had an assessed valuation equal to or less than fifty percent of 8 the assessed valuation of the land on which the building or build- 9 ings were situated, or 10 (3) by reason of the configuration of the building, or substantial 11 structural defects not brought about by deferred maintenance prac- 12 tices or intentional conduct, could no longer be functionally or 13 economically utilized in the capacity in which it was formerly 14 utilized. 15 For purposes of this subdivision, construction shall be deemed to have 16 commenced as provided in subdivision (a) of this section. 17 (a-3) Except as provided in subdivision (a-4) of this section, where 18 eligibility for benefits under section four hundred twenty-one-a of the 19 real property tax law is sought for any construction commenced on or 20 after the effective date of this subdivision on the basis that such 21 construction shall take place on land which, on the date thirty-six 22 months prior to the commencement of such construction, was improved with 23 a nonresidential building or buildings and was under-utilized, the 24 under-utilization of the land must have been such that each building or 25 buildings: 26 (1) contained no more than the permissible floor area ratio for 27 nonresidential buildings in the zoning district in question and 28 either (i) had a floor area ratio which was seventy-five percent or 29 less of the maximum floor area ratio for residential buildings in 30 such zoning district, or (ii) if the land was not zoned to permit 31 residential use on the date thirty-six months prior to the commence- 32 ment of construction, had a floor area ratio which was seventy-five 33 percent or less of the floor area ratio of the residential building 34 which replaces such non-residential building, 35 (2) had an assessed valuation equal to or less than seventy-five 36 percent of the assessed valuation of the land on which the building 37 or buildings were situated, or 38 (3) by reason of the configuration of the building, or substantial 39 structural defects not brought about by deferred maintenance prac- 40 tices or intentional conduct, could no longer be functionally or 41 economically utilized in the capacity in which it was formerly 42 utilized. 43 For purposes of this subdivision, construction shall be deemed to have 44 commenced as provided in subdivision (a) of this section. 45 (a-4) Where eligibility for benefits under section four hundred twen- 46 ty-one-a of the real property tax law is sought for any construction on 47 any tax lot now existing or hereafter created which is located south of 48 or adjacent to either side of one hundred tenth street in the borough of 49 Manhattan which construction commenced on or after the effective date of 50 this subdivision on the basis that such construction shall take place on 51 land which, on the date thirty-six months prior to the commencement of 52 such construction, was improved with a nonresidential building or build- 53 ings and was under-utilized, the under-utilization of the land must have 54 been such that each building or buildings: 55 (1) contained no more than the permissible floor area ratio for 56 nonresidential buildings in the zoning district in question and

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1 either (i) had a floor area ratio which was fifty percent or less of 2 the maximum floor area ratio for residential buildings in such 3 zoning district, or (ii) if the land was not zoned to permit resi- 4 dential use on the date thirty-six months prior to the commencement 5 of construction, had a floor area ratio which was fifty percent or 6 less of the floor area ratio of the residential building which 7 replaces such non-residential building, 8 (2) had an assessed valuation equal to or less than fifty percent of 9 the assessed valuation of the land on which the building or build- 10 ings were situated, or 11 (3) by reason of the configuration of the building, or substantial 12 structural defects not brought about by deferred maintenance prac- 13 tices or intentional conduct, could no longer be functionally or 14 economically utilized in the capacity in which it was formerly 15 utilized. 16 For purposes of this subdivision, construction shall be deemed to have 17 commenced as provided in subdivision (a) of this section. 18 (b) The department of housing preservation and development may promul- 19 gate rules and regulations for the effectuation of the purposes of this 20 section. 21 (c) The limitations on benefits contained in this section shall be in 22 addition to those contained in any other law or regulation. 23 § 11-245.1-a Boundary review commission. (a) There shall be estab- 24 lished a boundary review commission consisting of eleven members, 25 including the commissioner of finance, the commissioner of housing pres- 26 ervation and development, the commissioner of buildings, the chairperson 27 of the department of city planning, the director of the office of 28 management and budget, the executive director of the board of standards 29 and appeals and five members chosen by the speaker of the council. The 30 appointees of the speaker of the council shall serve at the pleasure of 31 the speaker. The commission shall elect a chairperson from among its 32 members. 33 (b) The boundary review commission shall undertake a biennial review 34 of the tax benefit program established pursuant to section four hundred 35 twenty-one-a of the real property tax law to determine whether the areas 36 for which the tax benefits are restricted pursuant to those provisions 37 of the administrative code which relate to such program should be 38 revised in any manner. 39 (c) In conducting a review to determine whether geographic exclusion 40 zones restricting benefits provided pursuant to section four hundred 41 twenty-one-a of the real property tax law should be revised, the commis- 42 sion shall review measurers of housing activity and housing market 43 conditions throughout the city including (i) the amount of new develop- 44 ment; (ii) values in land sales, residential sales prices and rents; 45 (iii) trends in land sales, residential sales prices and rents and other 46 development trend data including land use trends, lot consolidation and 47 board of standards and appeals actions; (iv) development potential; (v) 48 relationship between volume of potential development and existing hous- 49 ing; and (vi) financial feasibility of development with and without the 50 benefits provided pursuant to section four hundred twenty-one-a of the 51 real property tax law. 52 (d) On or before December first of each even numbered year following 53 the effective date of this section, such commission shall submit a 54 report to the speaker of the council and the mayor on its deliberations 55 and shall include recommendations for revisions to such boundaries that 56 it deems appropriate or why no revisions were recommended, including the

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1 methodology by which it applied the criteria in subdivision (c) of this 2 section to arrive at its recommendations, and all data used to make such 3 recommendations. Any recommendations shall be consistent with the 4 provisions of section four hundred twenty-one-a of the real property tax 5 law. 6 § 11-245.1-b Limitations on benefits pursuant to section four hundred 7 twenty-one-a of the real property tax law. (a) As used in this section, 8 the following terms shall have the following meanings: 9 (1) "Residential tax lot" shall mean a tax lot that contains dwelling 10 units. 11 (2) "Non-residential tax lot" shall mean a tax lot that does not 12 contain any dwelling units. 13 (3) "Annual limit" shall mean sixty-five thousand dollars, which 14 amount shall be increased by three percent, compounded annually, on each 15 taxable status date following the first anniversary of the effective 16 date of the local law that added this section. 17 (4) "Certificate of occupancy" shall mean the first certificate of 18 occupancy covering all residential areas of the building on or contain- 19 ing a tax lot. 20 (5) "Unit count" shall mean (i) in the case of a residential tax lot 21 that does not contain any commercial, community facility or accessory 22 use space, the number of dwelling units in such tax lot, and (ii) in the 23 case of a residential tax lot that contains commercial, community facil- 24 ity or accessory use space, the number of dwelling units in such tax lot 25 plus one. 26 (6) "Exemption cap" shall mean the unit count multiplied by the annual 27 limit. 28 (b) The provisions of this section shall apply only to projects that 29 commence construction on or after the effective date of this section. 30 (c) No benefits under section four hundred twenty-one-a of the real 31 property tax law shall be conferred for any multiple dwelling containing 32 fewer than four dwelling units, as set forth in the certificate of occu- 33 pancy, unless the construction of such multiple dwelling is carried out 34 with substantial assistance of grants, loans or subsidies from any 35 federal, state or local agency or instrumentality where such assistance 36 is provided pursuant to a program for the development of affordable 37 housing. 38 (d) The portion of the assessed valuation of any residential tax lot 39 exempted from real property taxation in any year pursuant to section 40 four hundred twenty-one-a of the real property tax law shall not exceed 41 the exemption cap on or after the first taxable status date after the 42 building on or containing such tax lot receives its certificate of occu- 43 pancy unless, in accordance with a regulatory agreement with or approved 44 by the department of housing preservation and development that is appli- 45 cable to such tax lot, (1) the construction of such building is carried 46 out with substantial assistance of grants, loans or subsidies from any 47 federal, state or local agency or instrumentality and such assistance is 48 provided pursuant to a program for the development of affordable hous- 49 ing, or (2) the department of housing preservation and development has 50 imposed a requirement or has certified that twenty per cent of the units 51 be restricted income units. All such restricted income units must be 52 situated onsite. For the purposes of this section, "onsite" shall mean 53 that restricted income units shall be situated within the building or 54 buildings for which benefits pursuant to section four hundred twenty- 55 one-a of the real property tax law are being granted. A dwelling unit 56 that is located in two or more tax lots shall be ineligible to receive

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1 any benefits under section four hundred twenty-one-a of the real proper- 2 ty tax law. The portion of the assessed valuation of all non-residential 3 tax lots in the building on or containing such non-residential tax lots 4 exempted from real property taxation in any year pursuant to section 5 four hundred twenty-one-a of the real property tax law shall not exceed 6 a cumulative total equal to the annual limit on or after the first taxa- 7 ble status date after the building on or containing such non-residential 8 tax lots receives its certificate of occupancy. 9 (e) A new multiple dwelling that is situated in (1) a neighborhood 10 preservation program area as determined by the department of housing 11 preservation and development as of June first, nineteen hundred eighty- 12 five, (2) a neighborhood preservation area as determined by the New York 13 city planning commission as of June first, nineteen hundred eighty-five, 14 (3) an area that was eligible for mortgage insurance provided by the 15 rehabilitation mortgage insurance corporation as of May first, nineteen 16 hundred ninety-two, or (4) an area receiving funding for a neighborhood 17 preservation project pursuant to the neighborhood reinvestment corpo- 18 ration act (42 U.S.C. §§ 8101 et seq.) as of June first, nineteen 19 hundred eighty-five, shall only be eligible for the benefits available 20 pursuant to subparagraph (iii) of paragraph (a) of subdivision two of 21 section four hundred twenty-one-a of the real property tax law if: 22 a. the construction is carried out with substantial assistance of 23 grants, loans or subsidies from any federal, state or local agency or 24 instrumentality and such assistance is provided pursuant to a program 25 for the development of affordable housing, or 26 b. the department of housing preservation and development has imposed 27 a requirement or has certified that twenty percent of the units be 28 restricted income units. All such restricted income units must be situ- 29 ated onsite. 30 (f) The department of housing preservation and development may promul- 31 gate rules and regulations to effectuate the purposes of this section. 32 (g) The limitations on eligibility for benefits contained in this 33 section shall be in addition to those contained in any other law, rule 34 or regulation. 35 (h) Notwithstanding anything to the contrary contained herein, the 36 limitations on eligibility for benefits contained in this section shall 37 not apply to a covered project as defined in subparagraph (i) of para- 38 graph a of subdivision six of section four hundred twenty-one-a of the 39 real property tax law. 40 § 11-245.2 Exemption for real property of certain water-works corpo- 41 rations. Real property owned by a water-works corporation subject to the 42 provisions of the public service law and used exclusively for the sale, 43 furnishing and distribution of water for domestic, commercial and public 44 purposes, shall not be taxable. 45 § 11-245.3 Exemption for persons sixty-five years of age or over. 1. 46 Real property owned by one or more persons, each of whom is sixty-five 47 years of age or over, or real property owned by husband and wife or by 48 siblings, one of whom is sixty-five years of age or over, or real prop- 49 erty owned by one or more persons, some of whom qualify under this 50 section and section 11-245.4 of this part shall be exempt from taxes on 51 real estate to the extent of fifty per centum of the assessed valuation 52 thereof. For the purposes of this section, siblings shall mean a brother 53 or a sister, whether related through halfblood, whole blood or adoption. 54 2. Exemption from taxation for school purposes shall not be granted in 55 the case of real property where a child resides if such child attends a 56 public school of elementary or secondary education.

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1 3. No exemption shall be granted: 2 (a) if the income of the owner or the combined income of the owners of 3 the property exceeds the sum of twenty-six thousand dollars beginning 4 July first, two thousand six, twenty-seven thousand dollars beginning 5 July first, two thousand seven, twenty-eight thousand dollars beginning 6 July first, two thousand eight, twenty-nine thousand dollars beginning 7 July first, two thousand nine, and fifty thousand dollars beginning July 8 first, two thousand seventeen for the income tax year immediately 9 preceding the date of making application for exemption. Income tax year 10 shall mean the twelve-month period for which the owner or owners filed a 11 federal personal income tax return, or if no such return is filed, the 12 calendar year. Where title is vested in either the husband or the wife, 13 their combined income may not exceed such sum, except where the husband 14 or wife, or ex-husband or ex-wife is absent from the property as 15 provided in subparagraph (ii) of paragraph (d) of this subdivision, then 16 only the income of the spouse or ex-spouse residing on the property 17 shall be considered and may not exceed such sum. Such income shall 18 include social security and retirement benefits, interest, dividends, 19 total gain from the sale or exchange of a capital asset which may be 20 offset by a loss from the sale or exchange of a capital asset in the 21 same income tax year, net rental income, salary or earnings, and net 22 income from self-employment, but shall not include gifts, inheritances, 23 a return of capital, payments made to individuals because of their 24 status as victims of Nazi persecution as defined in P.L. 103-286, monies 25 earned through employment in the federal foster grandparent program, and 26 veterans disability compensation as defined in title 38 of the United 27 States Code, and any such income shall be offset by all medical and 28 prescription drug expenses actually paid which were not reimbursed or 29 paid for by insurance. In computing net rental income and net income 30 from self-employment no depreciation deduction shall be allowed for the 31 exhaustion, wear and tear of real or personal property held for the 32 production of income. 33 (b) unless the title of the property shall have been vested in the 34 owner or one of the owners of the property for at least twelve consec- 35 utive months prior to the date of making application for exemption, 36 provided, however, that in the event of the death of either husband or 37 wife in whose name title of the property shall have been vested at the 38 time of death and then becomes vested solely in the survivor by virtue 39 of devise by or descent from the deceased husband or wife, the time of 40 ownership of the property by the deceased husband or wife shall be 41 deemed also a time of ownership by the survivor and such ownership shall 42 be deemed continuous for the purposes of computing such period of twelve 43 consecutive months, and provided further, that in the event of a trans- 44 fer by either husband or wife to the other spouse of all or part of the 45 title to the property, the time of ownership of the property by the 46 transferer spouse shall be deemed also a time of ownership by the trans- 47 feree spouse and such ownership shall be deemed continuous for the 48 purposes of computing such period of twelve consecutive months, and 49 provided further, that where property of the owner or owners has been 50 acquired to replace property formerly owned by such owner or owners and 51 taken by eminent domain or other involuntary proceeding, except a tax 52 sale, and where a residence is sold and replaced with another within one 53 year and both are within the state, the period of ownership of the 54 former property shall be combined with the period of ownership of the 55 property for which application is made for exemption and such periods of 56 ownership shall be deemed to be consecutive for purposes of this

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1 section. Where the owner or owners transfer title to property which as 2 of the date of transfer was exempt from taxation under the provisions of 3 this section, the reacquisition of title by such owner or owners within 4 nine months of the date of transfer shall be deemed to satisfy the 5 requirement of this paragraph that the title of the property shall have 6 been vested in the owner or one of the owners for such period of twelve 7 consecutive months. Where, upon or subsequent to the death of an owner 8 or owners, title to property which as of the date of such death was 9 exempt from taxation under such provisions, becomes vested, by virtue of 10 devise or descent from the deceased owner or owners, or by transfer by 11 any other means within nine months after such death, solely in a person 12 or persons who, at the time of such death, maintained such property as a 13 primary residence, the requirement of this paragraph that the title of 14 the property shall have been vested in the owner or one of the owners 15 for such period of twelve consecutive months shall be deemed satisfied; 16 (c) unless the property is used exclusively for residential purposes, 17 provided, however, that in the event any portion of such property is not 18 so used exclusively for residential purposes but is used for other 19 purposes, such portion shall be subject to taxation and the remaining 20 portion only shall be entitled to the exemption provided by this 21 section; 22 (d) unless the property is the legal residence of and is occupied in 23 whole or in part by the owner or by all of the owners of the property; 24 except where, (i) an owner is absent from the residence while receiving 25 health-related care as an inpatient of a residential health care facili- 26 ty, as defined in section twenty-eight hundred one of the public health 27 law, provided that any income accruing to that person shall be income 28 only to the extent that it exceeds the amount paid by such owner, 29 spouse, or co-owner for care in the facility, and provided further, that 30 during such confinement such property is not occupied by other than the 31 spouse or co-owner of such owner; or, (ii) the real property is owned by 32 a husband and/or wife, or an ex-husband and/or an ex-wife, and either is 33 absent from the residence due to divorce, legal separation or abandon- 34 ment and all other provisions of this section are met provided that 35 where an exemption was previously granted when both resided on the prop- 36 erty, then the person remaining on the real property shall be sixty-two 37 years of age or over. 38 4. Application for such exemption must be made by the owner, or all of 39 the owners of the property, on forms prescribed by the state board to be 40 furnished by the department of finance and shall furnish the information 41 and must be executed in the manner required or prescribed in such form 42 and shall be filed in the department of finance in the borough in which 43 the real property is located between the fifteenth day of January and 44 the fifteenth day of March. Notwithstanding any other provision of law, 45 any person otherwise qualifying under this section shall not be denied 46 the exemption under this section if he or she becomes sixty-five years 47 of age after the taxable status date and on or before December thirty- 48 first of the same year. 49 5. At least sixty days prior to the fifteenth day of January the 50 department of finance shall mail to each person who was granted 51 exemption pursuant to this section on the latest completed assessment 52 roll an application form and a notice that such application must be 53 filed between the fifteenth day of January and the fifteenth day of 54 March every two years from the year in which such exemption was granted 55 and be approved in order for the exemption to be granted. The department 56 of finance shall, within three days of the completion and filing of the

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1 tentative assessment roll, notify by mail any applicant who has included 2 with his application at least one self-addressed, prepaid envelope, of 3 the approval or denial of the application; provided, however, where an 4 applicant has included two such envelopes, the department of finance 5 shall, upon the filing of the application, send by mail, notice of 6 receipt of that application. Where an applicant is entitled to notice of 7 denial provided herein, such notice shall state the reasons for such 8 denial and shall further state that such determination is reviewable in 9 a manner provided by law. Failure to mail any such application form or 10 notices or the failure of such person to receive any or all of the same 11 shall not prevent the levy, collection and enforcement of the payment of 12 the taxes on property owned by such person. 13 6. Any conviction of having made any willful false statement in the 14 application for such exemption shall be punishable by a fine of not more 15 than one hundred dollars and shall disqualify the applicant or appli- 16 cants from further exemption for a period of five years. 17 7. Notwithstanding the maximum income exemption eligibility level 18 provided in subdivision three of this section, an exemption, subject to 19 all other provisions of this section, shall be granted as indicated in 20 the following schedule:

21 Annual Income Percentage Assessed Valuation 22 as of July 1, 2006 Exempt From Taxation

23 More than $26,000 but less than $27,000 45 per centum 24 $27,000 or more but less than $28,000 40 per centum 25 $28,000 or more but less than $29,000 35 per centum 26 $29,000 or more but less than $29,900 30 per centum 27 $29,900 or more but less than $30,800 25 per centum 28 $30,800 or more but less than $31,700 20 per centum 29 $31,700 or more but less than $32,600 15 per centum 30 $32,600 or more but less than $33,500 10 per centum 31 $33,500 or more but less than $34,400 5 per centum

32 Percentage Assessed Valuation 33 Annual Income as of July 1, 2007 Exempt From Taxation

34 More than $27,000 but less than $28,000 45 per centum 35 $28,000 or more but less than $29,000 40 per centum 36 $29,000 or more but less than $30,000 35 per centum 37 $30,000 or more but less than $30,900 30 per centum 38 $30,900 or more but less than $31,800 25 per centum 39 $31,800 or more but less than $32,700 20 per centum 40 $32,700 or more but less than $33,600 15 per centum 41 $33,600 or more but less than $34,500 10 per centum 42 $34,500 or more but less than $35,400 5 per centum

43 Percentage Assessed Valuation 44 Annual Income as of July 1, 2008 Exempt From Taxation

45 More than $28,000 but less than $29,000 45 per centum 46 $29,000 or more but less than $30,000 40 per centum 47 $30,000 or more but less than $31,000 35 per centum 48 $31,000 or more but less than $31,900 30 per centum 49 $31,900 or more but less than $32,800 25 per centum 50 $32,800 or more but less than $33,700 20 per centum

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1 $33,700 or more but less than $34,600 15 per centum 2 $34,600 or more but less than $35,500 10 per centum 3 $35,500 or more but less than $36,400 5 per centum

4 Percentage Assessed Valuation 5 Annual Income as of July 1, 2009 Exempt From Taxation

6 More than $29,000 but less than $30,000 45 per centum 7 $30,000 or more but less than $31,000 40 per centum 8 $31,000 or more but less than $32,000 35 per centum 9 $32,000 or more but less than $32,900 30 per centum 10 $32,900 or more but less than $33,800 25 per centum 11 $33,800 or more but less than $34,700 20 per centum 12 $34,700 or more but less than $35,600 15 per centum 13 $35,600 or more but less than $36,500 10 per centum 14 $36,500 or more but less than $37,400 5 per centum

15 Annual Income as of July 1, 2017 Percentage Assessed Valuation 16 Exempt From Taxation

17 More than $50,000 but less than $51,000 45 per centum 18 $51,000 or more but less than $52,000 40 per centum 19 $52,000 or more but less than $53,000 35 per centum 20 $53,000 or more but less than $53,900 30 per centum 21 $53,900 or more but less than $54,800 25 per centum 22 $54,800 or more but less than $55,700 20 per centum 23 $55,700 or more but less than $56,600 15 per centum 24 $56,600 or more but less than $57,500 10 per centum 25 $57,500 or more but less than $58,400 5 per centum

26 8. Any exemption provided by this section shall be computed after all 27 partial exemptions allowed by law have been subtracted from the total 28 amount assessed. 29 9. Exemption from taxation as provided in this section on real proper- 30 ty owned by husband and wife, one of whom is sixty-five years of age or 31 older, once granted, shall not be rescinded solely because of the death 32 of the older spouse so long as the surviving spouse is at least sixty- 33 two years of age. 34 10. a. For the purposes of this section, title to that portion of real 35 property owned by a cooperative apartment corporation in which a 36 tenant-stockholder of such corporation resides and which is represented 37 by his or her share or shares of stock in such corporation as determined 38 by its or their proportional relationship to the total outstanding stock 39 of the corporation, including that owned by the corporation, shall be 40 deemed to be vested in such tenant-stockholder. That proportion of the 41 assessment of real property owned by a cooperative apartment corpo- 42 ration, determined by the relationship of such real property vested in 43 such tenant-stockholder to such entire parcel and the buildings thereon 44 owned by such cooperative apartment corporation in which such tenant- 45 stockholder resides, shall be subject to exemption from taxation pursu- 46 ant to this section and any exemption so granted shall be credited by 47 the department of finance against the assessed valuation of such real 48 property; the reduction in real property taxes realized thereby shall be 49 credited by the cooperative apartment corporation against the amount of 50 such taxes otherwise payable by or chargeable to such tenant-stockhold- 51 er. Each cooperative apartment corporation shall notify each tenant-

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1 stockholder in residence thereof of such provisions as are set forth in 2 this section. 3 b. Notwithstanding any other provision of law, a tenant-stockholder 4 who resides in a dwelling which is subject to the provisions of either 5 article two, four, five or eleven of the private housing finance law and 6 who is eligible for a rent increase exemption pursuant to chapter seven 7 of title twenty-six of the code of the preceding municipality shall not 8 be eligible for an exemption pursuant to this subdivision. Notwithstand- 9 ing any other provision of law, a tenant-stockholder who resides in a 10 dwelling which is subject to the provisions of either article two, four, 11 five or eleven of the private housing finance law and who is not eligi- 12 ble for a rent increase exemption pursuant to chapter seven of title 13 twenty-six of this code but who meets the requirements for eligibility 14 for an exemption pursuant to this section shall be eligible for such 15 exemption provided that such exemption shall be in an amount determined 16 by multiplying the exemption otherwise allowable pursuant to this 17 section by a fraction having a numerator equal to the amount of real 18 property taxes or payments in lieu of taxes that were paid with respect 19 to such dwelling and a denominator equal to the full amount of real 20 property taxes that would have been owed with respect to such dwelling 21 had it not been granted an exemption or abatement of real property taxes 22 pursuant to any provision of law, provided, however, that any reduction 23 in real property taxes received with respect to such dwelling pursuant 24 to chapter seven of title twenty-six of this code or pursuant to this 25 section shall not be considered in calculating such numerator. Any 26 tenant-stockholder who resides in a dwelling which was or continues to 27 be subject to a mortgage insured or initially insured by the federal 28 government pursuant to section two hundred thirteen of the national 29 housing act, as amended, and who is eligible for both a rent increase 30 exemption pursuant to chapter seven of title twenty-six of this code and 31 an exemption pursuant to this subdivision, may apply for and receive 32 either a rent increase exemption pursuant to such chapter or an 33 exemption pursuant to this subdivision, but not both. 34 11. Exemption Option. Notwithstanding any provision of this part to 35 the contrary, real property owned by one or more persons where one of 36 such owners qualifies for a real property tax exemption pursuant to this 37 section or section 11-245.4 of this part, and another of such owners 38 qualifies for a different tax exemption pursuant to such sections of 39 this part as authorized by state law, such owners shall have the option 40 of choosing the one exemption which is most beneficial to such owners. 41 Such owners shall not be prohibited from taking one such exemption sole- 42 ly on the basis that such owners qualify for more than one exemption and 43 therefore are not eligible for any exemptions. 44 § 11-245.4 Exemption for persons with disabilities. 1. (a) Real prop- 45 erty owned by one or more persons with disabilities, or real property 46 owned by a husband, wife, or both, or by siblings, at least one of whom 47 has a disability, or real property owned by one or more persons, some of 48 whom qualify under this section and section 11-245.3 of this part, and 49 whose income, as hereafter defined, is limited by reason of such disa- 50 bility, shall be exempt from taxes on real estate to the extent of fifty 51 per centum of the assessed valuation thereof as hereinafter provided. 52 For purposes of this section, sibling shall mean a brother or a sister, 53 whether related through half blood, whole blood or adoption. 54 (b) For purposes of this section, a person with a disability is one 55 who has a physical or mental impairment, not due to current use of alco- 56 hol or illegal drug use, which substantially limits such person's abili-

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1 ty to engage in one or more major life activities, such as caring for 2 one's self, performing manual tasks, walking, seeing, hearing, speaking, 3 breathing, learning and working, and who (i) is certified to receive 4 social security disability insurance (SSDI) or supplemental security 5 income (SSI) benefits under the federal social security act, or (ii) is 6 certified to receive railroad retirement disability benefits under the 7 federal railroad retirement act, or (iii) has received a certificate 8 from the state commission for the blind and visually handicapped stating 9 that such person is legally blind, or (iv) is certified to receive a 10 United States postal service disability pension. An award letter from 11 the social security administration or the railroad retirement board or a 12 certificate from the state commission for the blind and visually hand- 13 icapped or an award letter from the United States postal service shall 14 be submitted as proof of disability. 15 2. Exemption from taxation for school purposes shall not be granted in 16 the case of real property where a child resides if such child attends a 17 public school of elementary or secondary education. 18 3. No exemption shall be granted: 19 (a) if the income of the owner or the combined income of the owners of 20 the property for the income tax year immediately preceding the date of 21 making application for exemption exceeds the sum of twenty-six thousand 22 dollars beginning July first, two thousand six, twenty-seven thousand 23 dollars beginning July first, two thousand seven, twenty-eight thousand 24 dollars beginning July first, two thousand eight, twenty-nine thousand 25 dollars beginning July first, two thousand nine, and fifty thousand 26 dollars beginning July first, two thousand seventeen. Income tax year 27 shall mean the twelve-month period for which the owner or owners filed a 28 federal personal income tax return, or if no such return is filed, the 29 calendar year. Where title is vested in either the husband or the wife, 30 their combined income may not exceed such sum, except where the husband 31 or wife, or ex-husband or ex-wife is absent from the property due to 32 divorce, legal separation or abandonment, then only the income of the 33 spouse or ex-spouse residing on the property shall be considered and may 34 not exceed such sum. Such income shall include social security and 35 retirement benefits, interest, dividends, total gain from the sale or 36 exchange of a capital asset which may be offset by a loss from the sale 37 or exchange of a capital asset in the same income tax year, net rental 38 income, salary or earnings, and net income from self-employment, but 39 shall not include a return of capital, gifts, inheritances or monies 40 earned through employment in the federal foster grandparent program and 41 any such income shall be offset by all medical and prescription drug 42 expenses actually paid which were not reimbursed or paid for by insur- 43 ance. In computing net rental income and net income from self-employment 44 no depreciation deduction shall be allowed for the exhaustion, wear and 45 tear of real or personal property held for the production of income; 46 (b) unless the property is used exclusively for residential purposes, 47 provided, however, that in the event any portion of such property is not 48 so used exclusively for residential purposes but is used for other 49 purposes, such portion shall be subject to taxation and the remaining 50 portion only shall be entitled to the exemption provided by this 51 section; 52 (c) unless the real property is the legal residence of and is occupied 53 in whole or in part by the disabled person; except where the disabled 54 person is absent from the residence while receiving health-related care 55 as an inpatient of a residential health care facility, as defined in 56 section twenty-eight hundred one of the public health law, provided that

S. 8578 224

1 any income accruing to that person shall be considered income for 2 purposes of this section only to the extent that it exceeds the amount 3 paid by such person or spouse or sibling of such person for care in the 4 facility. 5 4. Application for such exemption must be made annually by the owner, 6 or all of the owners of the property, on forms prescribed by the state 7 board, and shall be filed with the department of finance on or before 8 the fifteenth day of March of the appropriate year; provided, however, 9 proof of a permanent disability need be submitted only in the year 10 exemption pursuant to this section is first sought or the disability is 11 first determined to be permanent. 12 5. At least sixty days prior to the fifteenth day of March of the 13 appropriate year, the department of finance shall mail to each person 14 who was granted exemption pursuant to this section on the latest 15 completed assessment roll an application form and a notice that such 16 application must be filed on or before the fifteenth day of March and be 17 approved in order for the exemption to continue to be granted. Failure 18 to mail such application form or the failure of such person to receive 19 the same shall not prevent the levy, collection and enforcement of the 20 payment of the taxes on property owned by such person. 21 6. Notwithstanding the maximum income exemption eligibility level 22 provided in subdivision three of this section, an exemption, subject to 23 all other provisions of this section, shall be granted as indicated in 24 the following schedule:

25 Percentage Assessed Valuation 26 Annual Income as of July 1, 2006 Exempt From Taxation

27 More than $26,000 but less than $27,000 45 per centum 28 $27,000 or more but less than $28,000 40 per centum 29 $28,000 or more but less than $29,000 35 per centum 30 $29,000 or more but less than $29,900 30 per centum 31 $29,900 or more but less than $30,800 25 per centum 32 $30,800 or more but less than $31,700 20 per centum 33 $31,700 or more but less than $32,600 15 per centum 34 $32,600 or more but less than $33,500 10 per centum 35 $33,500 or more but less than $34,400 5 per centum

36 Percentage Assessed Valuation 37 Annual Income as of July 1, 2007 Exempt From Taxation

38 More than $27,000 but less than $28,000 45 per centum 39 $28,000 or more but less than $29,000 40 per centum 40 $29,000 or more but less than $30,000 35 per centum 41 $30,000 or more but less than $30,900 30 per centum 42 $30,900 or more but less than $31,800 25 per centum 43 $31,800 or more but less than $32,700 20 per centum 44 $32,700 or more but less than $33,600 15 per centum 45 $33,600 or more but less than $34,500 10 per centum 46 $34,500 or more but less than $35,400 5 per centum

S. 8578 225

1 Percentage Assessed Valuation 2 Annual Income as of July 1, 2008 Exempt From Taxation

3 More than $28,000 but less than $29,000 45 per centum 4 $29,000 or more but less than $30,000 40 per centum 5 $30,000 or more but less than $31,000 35 per centum 6 $31,000 or more but less than $31,900 30 per centum 7 $31,900 or more but less than $32,800 25 per centum 8 $32,800 or more but less than $33,700 20 per centum 9 $33,700 or more but less than $34,600 15 per centum 10 $34,600 or more but less than $35,500 10 per centum 11 $35,500 or more but less than $36,400 5 per centum

12 Percentage Assessed Valuation 13 Annual Income as of July 1, 2009 Exempt From Taxation

14 More than $29,000 but less than $30,000 45 per centum 15 $30,000 or more but less than $31,000 40 per centum 16 $31,000 or more but less than $32,000 35 per centum 17 $32,000 or more but less than $32,900 30 per centum 18 $32,900 or more but less than $33,800 25 per centum 19 $33,800 or more but less than $34,700 20 per centum 20 $34,700 or more but less than $35,600 15 per centum 21 $35,600 or more but less than $36,500 10 per centum 22 $36,500 or more but less than $37,400 5 per centum

23 Percentage Assessed Valuation 24 Annual Income as of July 1, 2017 Exempt From Taxation

25 More than $50,000 but less than $51,000 45 per centum 26 $51,000 or more but less than $52,000 40 per centum 27 $52,000 or more but less than $53,000 35 per centum 28 $53,000 or more but less than $53,900 30 per centum 29 $53,900 or more but less than $54,800 25 per centum 30 $54,800 or more but less than $55,700 20 per centum 31 $55,700 or more but less than $56,600 15 per centum 32 $56,600 or more but less than $57,500 10 per centum 33 $57,500 or more but less than $58,400 5 per centum

34 7. Any exemption provided by this section shall be computed after all 35 other partial exemptions allowed by law have been subtracted from the 36 total amount assessed; provided, however, that no parcel may receive an 37 exemption pursuant to both this section and section 11-245.3. 38 8. (a) For purposes of this section, title to that portion of real 39 property owned by a cooperative apartment corporation in which a 40 tenant-stockholder of such corporation resides, and which is represented 41 by his or her share or shares of stock in such corporation as determined 42 by its or their proportional relationship to the total outstanding stock 43 of the corporation, including that owned by the corporation, shall be 44 deemed to be vested in such tenant-stockholder. That proportion of the 45 assessment of such real property owned by a cooperative apartment corpo- 46 ration determined by the relationship of such real property vested in 47 such tenant-stockholder to such entire parcel and the buildings thereon 48 owned by such cooperative apartment corporation in which such tenant- 49 stockholder resides shall be subject to exemption from taxation pursuant 50 to this section and any exemption so granted shall be credited by the

S. 8578 226

1 department of finance against the assessed valuation of such real prop- 2 erty; the reduction in real property taxes realized thereby shall be 3 credited by the cooperative apartment corporation against the amount of 4 such taxes otherwise payable by or chargeable to such tenant-stockhold- 5 er. 6 (b) Notwithstanding any other provision of law, a tenant-stockholder 7 who resides in a dwelling which is subject to the provisions of either 8 article two, four, five or eleven of the private housing finance law 9 shall not be eligible for an exemption pursuant to this subdivision. 10 9. Notwithstanding any other provision of law to the contrary, the 11 provisions of this section shall apply to real property held in trust 12 solely for the benefit of a person or persons who would otherwise be 13 eligible for a real property tax exemption, pursuant to subdivision one 14 of this section, were such person or persons the owner or owners of such 15 real property. 16 10. Exemption Option. Notwithstanding any provision of this part to 17 the contrary, real property owned by one or more persons where one of 18 such owners qualifies for a real property tax exemption pursuant to this 19 section or section 11-245.3 of this part, and another of such owners 20 qualifies for a different tax exemption pursuant to such sections of 21 this part as authorized by state law, such owners shall have the option 22 of choosing the one exemption which is most beneficial to such owners. 23 Such owners shall not be prohibited from taking one such exemption sole- 24 ly on the basis that such owners qualify for more than one exemption and 25 therefore are not eligible for any exemptions. 26 § 11-245.45 Exemption for veterans. Pursuant to paragraph (d) of 27 subdivision eight of section four hundred fifty-eight of the real prop- 28 erty tax law, the city hereby authorizes real property owned by a coop- 29 erative apartment corporation to be exempt from taxation in accordance 30 with such section and any local laws adopted pursuant to such section 31 beginning July first, nineteen hundred ninety-eight. 32 § 11-245.46 Exemption for veterans; taxes for school purposes 33 exempted. Pursuant to paragraph three of subdivision one of section 34 four hundred fifty-eight of the real property tax law, the city hereby 35 provides that the exemption authorized pursuant to such section shall be 36 applicable to taxes for school purposes. 37 § 11-245.5 Alternative exemption for veterans. Pursuant to paragraph 38 (d) of subdivision six of section four hundred fifty-eight-a of the real 39 property tax law, the city hereby authorizes real property owned by a 40 cooperative apartment corporation to be exempt from taxation in accord- 41 ance with such section and any local laws adopted pursuant to such 42 section beginning July first, nineteen hundred ninety-eight. 43 § 11-245.6 Alternative exemption for veterans; maximum exemptions 44 allowable. Pursuant to subparagraph (ii) of paragraph (d) of subdivision 45 two of section four hundred fifty-eight-a of the real property tax law, 46 the city hereby increases the maximum exemptions allowable in paragraphs 47 (a), (b) and (c) of subdivision two of section four hundred 48 fifty-eight-a of the real property tax law. The maximum exemption allow- 49 able in such paragraph (a) shall be fifteen percent of the assessed 50 value of the qualifying residential real property; provided, however, 51 that such exemption shall not exceed forty-eight thousand dollars or the 52 product of forty-eight thousand dollars multiplied by the latest class 53 ratio, whichever is less. In addition to the exemption provided by such 54 paragraph (a), as increased by this section, the maximum exemption 55 allowable in such paragraph (b) shall be ten percent of the assessed 56 value of the qualifying residential real property; provided, however,

S. 8578 227

1 that such exemption shall not exceed thirty-two thousand dollars or the 2 product of thirty-two thousand dollars multiplied by the latest class 3 ratio, whichever is less. In addition to the exemptions provided by such 4 paragraphs (a) and (b), as increased by this section, the maximum 5 exemption allowable in such paragraph (c) shall be the product of the 6 assessed value of the qualifying residential real property multiplied by 7 fifty percent of the veteran's disability rating; provided, however, 8 that such exemption shall not exceed one hundred sixty thousand dollars 9 or the product of one hundred sixty thousand dollars multiplied by the 10 latest class ratio, whichever is less. The maximum exemptions allowable 11 in such paragraphs (a), (b) and (c), as increased by this section, shall 12 not apply to any assessment roll completed and filed prior to the first 13 day of January, two thousand six. 14 § 11-245.7 Alternative exemption for veterans; gold star parent. 15 Pursuant to paragraph (b) of subdivision seven of section four hundred 16 fifty-eight-a of the real property tax law, and in accordance with such 17 section and any local laws adopted pursuant thereto, the city hereby 18 includes a gold star parent within the definition of "qualified owner" 19 as provided in paragraph (c) of subdivision one of such section, and 20 includes property owned by a gold star parent within the definition of 21 "qualifying residential real property" as provided in paragraph (d) of 22 subdivision one of such section, provided that such property is the 23 primary residence of the gold star parent. 24 § 11-245.75 Alternative exemption for veterans; school district taxa- 25 tion exempted. Pursuant to subparagraph (i) of paragraph (d) of subdivi- 26 sion two of section four hundred fifty-eight-a of the real property tax 27 law, the city hereby provides that the exemptions allowable in para- 28 graphs (a), (b) and (c) of subdivision two of section four hundred 29 fifty-eight-a of the real property tax law shall be applicable to school 30 district taxation. 31 § 11-245.8 ENERGY STAR appliances. a. For the purposes of this 32 section, the following definitions shall apply in conjunction with the 33 definitions found in sections 27-232 and 27-2004 of this code: 34 (1) The term "ENERGY STAR" shall mean a designation from the United 35 States environmental protection agency or department of energy indicat- 36 ing that a product meets the energy efficiency standards set forth by 37 the agency for compliance with the ENERGY STAR program. 38 (2) The term "household appliance" shall mean any refrigerator, room 39 air conditioner, dishwasher or clothes washer, within a dwelling unit in 40 a multiple dwelling that is provided by the owner of such multiple 41 dwelling. This definition shall also include any boiler or furnace that 42 provides heat or hot water for any dwelling unit in a multiple dwelling. 43 b. For any building for which any benefit is conferred pursuant to 44 four hundred eighty-nine of the real property tax law, whenever any 45 household appliance in any dwelling unit, or any household appliance 46 that provides heat or hot water for any dwelling unit in a multiple 47 dwelling, is installed or replaced with a new household appliance, such 48 new appliance shall be certified as Energy Star. 49 c. For any building for which any benefit is conferred pursuant to 50 section four hundred twenty-one-a of the real property tax law, whenever 51 any household appliance in any dwelling unit, or any household appliance 52 that provides heat or hot water for any dwelling unit in a multiple 53 dwelling, is installed or replaced with a new household appliance, such 54 new appliance shall be certified as Energy Star. 55 d. The commissioner may enact rules requiring additional energy 56 conservation measures for any building for which any benefit is

S. 8578 228

1 conferred pursuant to section four hundred eighty-nine of the real prop- 2 erty tax law or section four hundred twenty-one-a of the real property 3 tax law. 4 e. The commissioner shall inform applicants for any benefits affected 5 by this section of the requirements of this section. 6 f. The requirements of subdivisions b and c of this section shall not 7 apply where: 8 1) an ENERGY STAR certified household appliance of appropriate size is 9 not manufactured, such that movement of walls or fixtures would be 10 necessary to create sufficient space for such appliance; or 11 2) an ENERGY STAR certified boiler or furnace of sufficient capacity 12 is not manufactured. 13 § 11-245.9 Notice of residential property tax exemptions. a. The 14 commissioner of finance, or his or her designee, shall provide a notice 15 relating to the lien sale process to all property owners included with 16 the notice of value sent to property owners by the department of finance 17 and, in addition, no later than October thirty-first of each year, to 18 any property owner who is delinquent in the payment of any real property 19 taxes, assessments, or any other charges that are made a lien subject to 20 the provisions of chapter three of this title, except sewer rents, sewer 21 charges and water rents, if such delinquency, in the aggregate, equals 22 or exceeds the sum of one thousand dollars. This notice shall include, 23 but not be limited to, actions homeowners can take if a lien is sold on 24 such property; the type of debt that can be sold in a lien sale; a time- 25 line of statutory notifications required pursuant to section 11-320 of 26 this title; a clear, concise explanation of the consequences of the sale 27 of a tax lien; the telephone number and electronic mail address of the 28 employee or employees designated pursuant to subdivision f of section 29 11-320 of this title; a conspicuous statement that an owner of any class 30 of property may enter into a payment plan for the satisfaction of delin- 31 quent real property taxes, assessments, sewer rents, sewer surcharges, 32 water rents, and any other charges that are made a lien subject to the 33 provisions of chapter three of this title, or exclusion from the tax 34 lien sale; credits and property tax exemptions that may exclude certain 35 class one real property from a tax lien sale; and clear and concise 36 instructions on how an owner of any class of property may register to 37 receive information from the department, through electronic mail, 38 regarding outreach sessions relating to the sale of tax liens conducted 39 pursuant to subdivision j of section 11-320 of this title. Such notice 40 shall also include information on the following real property tax cred- 41 its or real property tax exemptions: 42 1. the senior citizen homeowner exemption pursuant to section 11-245.3 43 of this part; 44 2. the exemption for persons with disabilities pursuant to section 45 11-245.4 of this part; 46 3. the exemptions for veterans pursuant to sections four hundred 47 fifty-eight and four hundred fifty-eight-a of the real property tax law; 48 4. the school tax relief (STAR) exemption pursuant to section four 49 hundred twenty-five of the real property tax law; 50 5. the enhanced school tax relief (STAR) exemption pursuant to subdi- 51 vision four of section four hundred twenty-five of the real property tax 52 law; 53 6. the state circuit breaker income tax credit pursuant to subsection 54 (e) of section six hundred six of the tax law; and

S. 8578 229

1 7. any other credit or residential real property tax exemption, which, 2 in the discretion of the commissioner, should be included in such 3 notice. 4 Upon such property owner's written request, or verbal request to 311 5 or any employee designated pursuant to subdivision f of section 11-320 6 of this title, a Chinese, Korean, Russian or Spanish translation of such 7 notice shall be provided promptly to such property owner. 8 b. The notice required pursuant to this section shall include: 9 1. a brief description of each exemption program; and 10 2. a phone number at the department and a website address where 11 taxpayers can obtain additional information on the exemption programs 12 and all necessary forms and applications. 13 c. The notice that is required, pursuant to this section, to be 14 provided by the commissioner of finance or his or her designee no later 15 than October thirty-first of each year shall include contact information 16 for the office of financial empowerment at the department of consumer 17 and worker protection. 18 § 11-245.10 Alternative exemption for veterans; transfer of title. 1. 19 Pursuant to subdivision eight of section four hundred fifty-eight-a of 20 the real property tax law, where a veteran, the spouse of a veteran or 21 unremarried surviving spouse already receiving an exemption pursuant to 22 such section sells the property receiving such exemption and purchases 23 property within the city, the department of finance shall transfer and 24 prorate, for the remainder of the fiscal year, the exemption received. 25 The prorated exemption shall be based upon the date the veteran, the 26 spouse of the veteran or unremarried surviving spouse obtains title to 27 the new property and shall be calculated by multiplying the tax rate for 28 which taxes were levied, on the appropriate tax roll used for the fiscal 29 year during which the transfer occurred, multiplied by the previously 30 granted exempt amount, multiplied by the fraction of each fiscal year 31 remaining subsequent to the transfer of title. 32 2. Nothing in this section shall be construed to remove the require- 33 ment that any such veteran, the spouse of the veteran or unremarried 34 surviving spouse transferring an exemption pursuant to subdivision one 35 of this section shall reapply for the exemption authorized pursuant to 36 section four hundred fifty-eight-a of the real property tax law on or 37 before the following taxable status date, in the event such veteran, the 38 spouse of the veteran or unremarried surviving spouse wishes to receive 39 the exemption in future fiscal years.

40 PART 2 41 EXEMPTION FOR CERTAIN NONPROFIT ORGANIZATIONS

42 § 11-246 Taxation of property of nonprofit organizations, pharmaceu- 43 tical societies and dental societies. 1. a. Pursuant to the requirements 44 of sections four hundred twenty-a and four hundred forty-six of the real 45 property tax law, real property owned by a corporation or association 46 which is organized or conducted exclusively for religious, charitable, 47 hospital, educational or cemetery purposes, or for the purposes of the 48 moral or mental improvement of men, women or children or for two or more 49 such purposes shall not be taxable. 50 b. Real property owned by a corporation or association which is organ- 51 ized or conducted exclusively for Bible, tract, benevolent, missionary, 52 infirmary, public playground, scientific, literary, library, patriotic 53 or historical purposes, for the development of good sportsmanship for 54 persons under the age of eighteen years through the conduct of super-

S. 8578 230

1 vised athletic games, or for the enforcement of laws relating to chil- 2 dren or animals, or for two or more such purposes, and used exclusively 3 for carrying out thereupon one or more of such purposes either by the 4 owning corporation or association, or by another such corporation or 5 association as provided in section four hundred twenty-b of the real 6 property tax law shall not be taxable. Any corporation or association 7 which uses real property exempted from taxation pursuant to this para- 8 graph shall make available to the council, the commissioner of finance 9 and the public a report, in such form as may be prescribed by the 10 commissioner of finance, setting forth the efforts of such corporation 11 or association undertaken in the previous calendar year to provide 12 assistance to city programs and city residents, by filing such report 13 with the city clerk not later than June first of each year. 14 c. Real property owned by a corporation or association which is organ- 15 ized or conducted exclusively for bar association or medical society 16 purposes, or both such purposes, and used exclusively for carrying out 17 thereupon one or both such purposes either by the owning corporation or 18 association, or by another such corporation or association shall be 19 taxable pursuant to the authority contained in section four hundred 20 twenty-b of the real property tax law. 21 2. Real property from which no rent is derived and which is owned by 22 an incorporated pharmaceutical society which is either wholly or partly 23 within the city, which society has heretofore been or may hereafter be 24 authorized and empowered by act of the legislature to establish and 25 which has established or may hereafter establish a college of pharmacy 26 in this city shall be taxable. 27 3. Real property from which no income is derived which is owned by a 28 dental society of any judicial district which judicial district is whol- 29 ly or partly within the city, which dental society was incorporated 30 under the education law shall be taxable. 31 4. Real property previously exempt from taxation but made taxable 32 pursuant to this section as of the first of January, nineteen hundred 33 seventy-two shall be taxed for the period from the first of January to 34 and including the thirtieth of June, nineteen hundred seventy-two by 35 applying one-half of the tax rate for the fiscal year nineteen hundred 36 seventy-one, seventy-two to the assessments made and exemptions claimed 37 with reference to the taxable status date falling on the twenty-fifth of 38 January, nineteen hundred seventy-two. The taxes thus computed for the 39 period from the first of January to and including the thirtieth of June, 40 nineteen hundred seventy-two shall be due and payable on the first of 41 June, nineteen hundred seventy-two. 42 5. Real property which is taxable under this section shall be subject 43 to any special ad valorem levies and special assessments which are 44 imposed to defray the cost of improvements or services furnished by the 45 city. 46 § 11-246.1 Denial; information required. The commissioner of finance 47 shall include, in any written communication with a property owner 48 related to the denial of a real property tax exemption pursuant to 49 section four hundred twenty-a, four hundred twenty-b, four hundred 50 forty-six, or four hundred sixty-two of the real property tax law, 51 information on actions a property owner can take, upon notice of a sale 52 of a tax lien of property of such owner, that may prevent the sale of 53 such tax lien.

S. 8578 231

1 PART 3 2 TAX EXEMPTION FOR CERTAIN INDUSTRIAL AND 3 COMMERCIAL PROPERTIES

4 § 11-247 Definitions. When used in this part: 5 a. "Applicant" means any person or corporation obligated to pay real 6 property taxes on the property for which an exemption is sought, or in 7 the case of exempt property, the record owner thereof, provided, howev- 8 er, that such property is not commercial property located in an area 9 designated as excluded pursuant to section 11-249 of this part; 10 b. "Board" means the industrial and commercial incentive board; 11 c. "Commercial" means any non-residential property used primarily for 12 the buying, selling or otherwise providing of goods or services, 13 provided that the use of such property has not been designated as a 14 restricted commercial use pursuant to section 11-249 of this part; 15 d. "Construction" means the building of new industrial or commercial 16 structures on vacant or predominantly vacant land, or the modernization, 17 rehabilitation or expansion or other improvements of an existing commer- 18 cial structure where such modernization, rehabilitation, expansion or 19 other improvement is not physically or functionally integrated with the 20 existing structure or results in additional usable square footage fifty 21 per centum greater than the square footage of the existing structure; 22 e. "Industrial" means property used primarily for the manufacturing or 23 assembling of goods or the processing of raw materials; 24 f. "Predominantly vacant land" means land, including land under water, 25 on which not more than fifteen percent of the lot area contains 26 enclosed, permanent improvements; in addition, such land may include 27 existing foundations. A fence, shed, garage, attendant's booth, paving, 28 pier, bulkhead, lighting fixtures, and similar items, or any improvement 29 having an assessed value of less than two thousand dollars shall not 30 constitute an enclosed, permanent improvement; 31 g. "Reconstruction" means the modernization, rehabilitation, expansion 32 or other improvement of an existing commercial or industrial structure 33 where the total proposed project cost is in an amount equal to at least 34 twenty per centum of the assessed value of the property at the time an 35 application for a certificate of eligibility pursuant to this part is 36 made, and where such modernization, rehabilitation, expansion or other 37 improvement is physically and functionally integrated with the existing 38 structure and does not create additional usable square footage greater 39 than fifty per centum of the usable square footage of the existing 40 structure except in a case where the existing structure has been 41 substantially destroyed by fire or other casualty; 42 h. "Residential property" shall mean property, other than property 43 used for hotel purposes, on which will exist upon completion of 44 construction a building or structure containing more than one independ- 45 ent dwelling unit or where more than one-third of the total square 46 footage of said structure is to be used for residential purposes; it 47 shall also mean, in the case of reconstruction, property on which exists 48 or will exist upon completion of the reconstruction a building or struc- 49 ture where more than one-third of the total square footage is used or is 50 to be used for dwelling purposes; 51 i. "Vacant land" means land, including land under water, which 52 contains no enclosed, permanent improvement. A fence, shed, garage, 53 attendant's booth, paving, pier, bulkhead, lighting fixtures, and simi- 54 lar items, or any improvement having an assessed value of less than two

S. 8578 232

1 thousand dollars shall not constitute an enclosed, permanent improve- 2 ment. 3 § 11-248 Industrial and commercial incentive board. There shall be an 4 industrial and commercial incentive board to consist of the deputy mayor 5 who shall be chairperson of the board, the commissioner of finance, the 6 director of planning and the director of budget, each of whom shall have 7 the power to designate an alternate to represent him or her at board 8 meetings with all the rights and powers, including the right to vote, 9 reserved to all board members, provided that such designation be in 10 writing to the chairperson of the board, and three other members to be 11 appointed by the mayor. The members of the board who shall be agents, 12 officers, or employees of the city shall serve without compensation but 13 shall be reimbursed for expenses necessarily incurred in the performance 14 of their duties. The members of the board who are not agents, officers, 15 or employees of the city shall receive as compensation for their 16 services one hundred dollars per diem, provided, however, that the total 17 compensation paid to any such member shall not exceed twelve hundred 18 dollars for any calendar year. Four members of the board shall consti- 19 tute a quorum. 20 § 11-249 Functions, powers and duties of the board; annual desig- 21 nation of exemption areas and restricted commercial uses. a. The 22 members of the board shall have the following functions, powers and 23 duties: 24 1. to receive and review applications for certificates of eligibility 25 pursuant to the charter and pursuant to subdivision thirteen of section 26 11-604 and subdivision (e) of section 11-503 of this title; 27 2. to make findings and determinations on the qualifications of 28 applicants for certificates of eligibility pursuant to this part and 29 subdivision (e) of section 11-503 of this title; 30 3. to issue certificates of eligibility and amendments thereto; 31 4. to make recommendations to the tax commission on the termination of 32 a tax exemption pursuant to section 11-253 of this part; 33 5. to designate annually, pursuant to subdivision b of this section, 34 areas in which exemptions for commercial construction or reconstruction 35 shall be granted as of right, areas from which such exemptions shall be 36 excluded and commercial uses for which the granting of exemptions shall 37 be restricted; and 38 6. to make and promulgate rules and regulations to carry out the 39 purposes of the board. 40 b. (1) Not later than October first of each year the board shall 41 publish a notice at least once in the official paper or a newspaper of 42 general circulation in the city setting forth: (i) the proposed bounda- 43 ries of areas in which commercial construction or reconstruction shall 44 be granted exemptions as of right, proposed boundaries of areas from 45 which exemptions for commercial construction or reconstruction shall be 46 excluded and proposed restricted commercial uses; and (ii) the date, not 47 earlier than ten nor later than thirty days following the publication of 48 such notice, on which the board will hold a public hearing to hear all 49 persons interested in the designation of such boundaries and restricted 50 commercial uses. 51 (2) Not earlier than ten nor later than thirty days following the 52 conclusion of the public hearing provided for in paragraph one of this 53 subdivision, the board shall designate the boundaries of areas in which 54 exemptions for commercial construction or reconstruction shall be grant- 55 ed as of right and areas from which such exemptions shall be excluded

S. 8578 233

1 and shall also designate restricted commercial uses. Such designations 2 shall be made upon the following determinations: 3 (i) With respect to areas in which exemption for commercial 4 construction or reconstruction shall be granted as of right, the board 5 shall determine that market conditions in each area are such that 6 exemptions are required to attract commercial construction or recon- 7 struction to the area and that attracting such construction or recon- 8 struction, and the granting of exemptions therefor, are in the public 9 interest. In making such determination, the board may consider, among 10 other factors, that the area is experiencing economic distress or is 11 characterized by an unusually large number of vacant, underutilized, 12 unsuitable or substandard structures, or by other substandard, unsani- 13 tary, deteriorated or deteriorating conditions, with or without tangible 14 blight, or that commercial development in the area will be beneficial to 15 the city's economy. 16 (ii) With respect to areas from which exemptions for commercial 17 construction or reconstruction are to be excluded, the board shall 18 determine that market conditions in each area are such that exemptions 19 are not required to attract commercial construction or reconstruction to 20 the area, or that it is not in the public interest to grant exemptions 21 for commercial construction or reconstruction in the area. No applica- 22 tions for exemptions for commercial construction or reconstruction shall 23 be accepted from such areas. 24 (iii) With respect to restricted commercial uses, the board shall 25 determine that it is not in the public interest to grant exemptions for 26 such uses unless the board further determines that in certain areas 27 designated pursuant to this subdivision, such uses will have an espe- 28 cially positive impact on the area's economy. All applications for 29 exemptions for restricted commercial uses shall be determined pursuant 30 to paragraphs two and three of subdivision b of section 11-251 of this 31 part. 32 (3) Designations made pursuant to this subdivision shall be effective 33 on the first of January of each year. 34 c. So far as practicable and subject to the approval of the mayor, the 35 services of all other city departments and agencies shall be made avail- 36 able by their respective heads to the board for the carrying out of the 37 functions stated in this part. The head of any department or agency 38 shall furnish information in the possession of such department or agency 39 when the board, after consultation with the mayor, so requests. 40 § 11-250 Real property tax exemption. a. A real property tax 41 exemption pursuant to this part shall be granted to an applicant who, 42 within a period of thirty-six months, or following an extension pursuant 43 to section 11-254 of this part within a period of forty-eight months, 44 from the date of issuance of a certificate of eligibility has completed 45 reconstruction or construction work in accordance with the plans 46 approved by the board in the certificate of eligibility. The amount of 47 the tax exemption shall be determined as follows: 48 (1) In the case of an applicant who has completed industrial 49 construction or reconstruction work, or commercial reconstruction work 50 designated as of right pursuant to section 11-249 of this part or as 51 specially needed pursuant to section 11-251 of this part, the tax 52 exemption shall continue for nineteen tax years in an amount decreasing 53 by five per centum each year from an exemption of ninety-five per centum 54 of the exemption base, as defined in paragraph four of this subdivision. 55 (2) In the case of an applicant who has completed other commercial 56 reconstruction work, or new commercial construction work designated as

S. 8578 234

1 of right pursuant to section 11-249 of this part or as specially needed 2 pursuant to section 11-251 of this part, the tax exemption shall contin- 3 ue for ten tax years, in an amount decreasing by five per centum each 4 year from an exemption of fifty per centum of the exemption base. 5 (3) In the case of an applicant who has completed other new commercial 6 construction work, the exemption shall continue for five tax years in an 7 amount decreasing by ten per centum each year from an exemption of fifty 8 per centum of the exemption base. 9 (4) The term "exemption base" shall mean the difference between the 10 final assessed value of the property as determined upon completion of 11 the construction or reconstruction work and the lesser of (i) the 12 assessed value of the property at the time an application for certif- 13 icate of eligibility pursuant to this part is made, or (ii) the assessed 14 value as may thereafter be reduced pursuant to application to the tax 15 commission. 16 The tax exemption shall be computed according to the following tables:

17 CONSTRUCTION OR RECONSTRUCTION OF INDUSTRIAL STRUCTURES OR 18 RECONSTRUCTION OF AS OF RIGHT OR SPECIALLY NEEDED COMMERCIAL STRUCTURES

19 ======================================================================== 20 Year following 21 completion Percentage 22 of work of exemption 23 ------------------------------------------------------------------------ 24 1...........................................95 25 2...........................................90 26 3...........................................85 27 4...........................................80 28 5...........................................75 29 6...........................................70 30 7...........................................65 31 8...........................................60 32 9...........................................55 33 10...........................................50 34 11...........................................45 35 12...........................................40 36 13...........................................35 37 14...........................................30 38 15...........................................25 39 16...........................................20 40 17...........................................15 41 18...........................................10 42 19........................................... 5 43 ========================================================================

44 RECONSTRUCTION OF OTHER COMMERCIAL STRUCTURES OR CONSTRUCTION OF AS OF 45 RIGHT OR SPECIALLY NEEDED COMMERCIAL STRUCTURES

46 ======================================================================== 47 Year following 48 completion of Percentage 49 work of exemption

S. 8578 235

1 ------------------------------------------------------------------------ 2 1..........................................50 3 2..........................................45 4 3..........................................40 5 4..........................................35 6 5..........................................30 7 6..........................................25 8 7..........................................20 9 8..........................................15 10 9..........................................10 11 10.......................................... 5 12 ========================================================================

13 CONSTRUCTION OF OTHER NEW COMMERCIAL STRUCTURES 14 ======================================================================== 15 Year following 16 completion of Percentage 17 work of exemption 18 ------------------------------------------------------------------------ 19 1..........................................50 20 2..........................................40 21 3..........................................30 22 4..........................................20 23 5..........................................10 24 ========================================================================

25 b. The taxes payable during the period from the issuance of a certif- 26 icate of eligibility to the approval of the tax exemption pursuant to 27 section 11-252 of this part shall be paid on the lesser of: 28 (1) the assessed value of the property at the time an application for 29 a certificate of eligibility pursuant to this part is made, or 30 (2) the assessed value as may thereafter be reduced pursuant to appli- 31 cation to the tax commission, provided, however, that if reconstruction 32 or construction is not completed in accordance with the plans approved 33 in the certificate of eligibility including any amendments thereto, 34 taxes shall be due and payable retroactively as otherwise required by 35 law. 36 c. In all cases where the board shall have issued a certificate of 37 eligibility prior to January first, nineteen hundred eighty-two, the 38 exemption percentage shall apply to any subsequent increase in the 39 assessed valuation of the property during the tenure of the exemption. 40 Where the board has issued a certificate of eligibility on or after 41 January first, nineteen hundred eighty-two, the exemption percentage 42 shall apply to any subsequent increase in the assessed valuation of the 43 property during the first two years after approval of the tax exemption 44 pursuant to section 11-252 of this part. Commencing two years after 45 approval of the tax exemption pursuant to section 11-252 of this part, 46 the exemption percentage shall apply to any subsequent increase in 47 assessed valuation of the property only to the extent such increase is 48 attributable to the construction or reconstruction work approved in the 49 certificate of eligibility. 50 d. The provisions of this part shall not apply to any increase in 51 assessed value resulting from the construction or reconstruction of a 52 residential structure on any property receiving an exemption under the 53 provisions of this part. The provisions of this part shall apply exclu-

S. 8578 236

1 sively to those structures and the lands underlying them which were 2 identified explicitly in the certificate of eligibility. 3 e. The provisions of this part shall not apply if any new or rehabili- 4 tated construction displaces or replaces a building or buildings 5 containing more than twenty-five occupied dwelling units in existence on 6 the date an application for certificate of eligibility is submitted for 7 preliminary approval pursuant to section 11-251 of this part, which are 8 administered under the local emergency housing rent control act, the 9 rent stabilization law of nineteen hundred sixty-nine or the emergency 10 tenant protection act of nineteen seventy-four, or their successor stat- 11 utes applicable to the city of Staten Island, unless a certificate of 12 eviction has been issued for any of the displaced or replaced units 13 pursuant to the powers granted by the city rent and rehabilitation law. 14 f. The provisions of this part shall not apply to an applicant who 15 has commenced construction or reconstruction work prior to the granting 16 of a certificate of eligibility except where applicant, having filed an 17 application for a certificate of eligibility, receives written permis- 18 sion to commence from the board or its designated representative prior 19 to the granting of a certificate of eligibility. Demolition of existing 20 structures, site preparation limited to grading, filling or clearing, or 21 the curing of a safety or sanitary hazard shall not be deemed to be 22 commencement of construction or reconstruction work. 23 g. Any property enjoying the benefits of a tax exemption approved by 24 the board shall be ineligible for any subsequent or additional tax 25 exemption pursuant to the provisions of this part until the expiration 26 of the original exemption period or earlier termination of the existing 27 exemption by action of the tax commission. 28 § 11-251 Applications for certificates of eligibility. a. Applica- 29 tions for a certificate of eligibility pursuant to this part shall be 30 submitted for preliminary approval to the office for economic develop- 31 ment commencing immediately after March first, nineteen hundred eighty- 32 two and continuing until the thirty-first of January, nineteen hundred 33 eighty-six, on such form or forms as shall be prescribed by the board. 34 In addition to any other information required by the board, the applica- 35 tion shall include plans for reconstruction or construction that have 36 been certified by a professional engineer or an architect of the appli- 37 cant's choice and cost estimates or bids for the proposed reconstruction 38 or construction. Upon a finding by such office that the application 39 satisfies the requirements of reconstruction or construction as defined 40 in this part, the application shall be presented to the board for evalu- 41 ation and written notice thereof shall be given to the community board 42 of the district in which the application site is located. 43 b. (1) In the case of an application for construction or recon- 44 struction of an industrial structure or a commercial structure located 45 in an area designated as of right, the board shall issue a certificate 46 of eligibility upon determining that the application satisfies the 47 requirements of construction or reconstruction as defined in this part, 48 that the applicant has obtained plans for construction or reconstruction 49 certified by a professional engineer or architect, and that the appli- 50 cant has otherwise complied with the provisions of this part and other 51 applicable provisions of law. 52 (2) In the case of an application for construction or reconstruction 53 of a commercial structure not located in an as of right area, or involv- 54 ing a restricted commercial use, the board shall issue a certificate of 55 eligibility upon making the determination specified in paragraph one of 56 this subdivision and upon making the further determination that the

S. 8578 237

1 granting of a tax exemption for the construction or reconstruction of 2 such a structure in the proposed location is in the public interest. In 3 making such determination, the board shall make findings that there is a 4 need in the area for the services the enterprise will provide, that the 5 enterprise will generate or retain employment in the area, and that a 6 tax incentive is required to attract construction or reconstruction of 7 such a structure to the area. In addition, the board shall consider the 8 economic impact such commercial structure will have in the area. 9 (3) In the case of an application for construction or reconstruction 10 of a commercial structure not located in an as of right area, or involv- 11 ing a restricted commercial use, the board may make a further determi- 12 nation that special circumstances warrant designating the proposed 13 construction or reconstruction as "specially needed". In making such 14 determination, the board shall make findings that the commercial 15 services to be provided will have an especially positive impact on the 16 area's or the city's economy and that the applicant has demonstrated 17 that the project cannot go forward without the greater exemption granted 18 by such designation. 19 c. Any meeting of the board at which an application for a certificate 20 of eligibility is to be considered shall be open to the public, and 21 notice of such meeting shall be given at least two weeks prior thereto 22 by publication in a newspaper of general circulation within the city. 23 d. The burden of proof shall be on the applicant to show by clear and 24 convincing evidence that the requirements for granting a tax exemption 25 pursuant to this part have been satisfied, and the board shall have the 26 authority to require that statements made in consideration of the appli- 27 cation be taken under oath. 28 e. After the issuance of a certificate of eligibility the applicant 29 shall apply to the city tax commission, during the period provided by 30 law for filing applications for corrections of assessed valuations, for 31 a tax exemption as provided for in section 11-250 of this part. The 32 application shall be accompanied by a copy of the certificate of eligi- 33 bility. 34 § 11-252 Approval of tax exemption. On completion of the recon- 35 struction or construction work the applicant shall notify the board in 36 writing of said completion. The board shall determine the eligibility 37 of the applicant for the tax exemption as provided in section 11-250 of 38 this part and shall notify the tax commission of such determination. If 39 the applicant is determined to be qualified the commission shall approve 40 the tax exemption. 41 § 11-253 Continuation of tax exemption; termination of tax exemption. 42 The tax exemption approved by the board shall continue in accordance 43 with this part, provided that the applicant files an annual certificate 44 of continuing use stating that the structure and property continue to be 45 used for the industrial or commercial purposes justifying the issuance 46 of the certificate of eligibility. The certificate of continuing use 47 shall be filed with the tax commission on such form or forms and 48 containing such information as shall be prescribed by the tax commis- 49 sion. The tax commission shall have authority to terminate a tax 50 exemption on failure of an applicant to file an annual certificate of 51 continuing use or on the recommendation of the commissioner of finance 52 who, in reviewing the certificate filed by an applicant, has determined 53 that the structure or property has ceased to be used for the industrial 54 or commercial purposes justifying the issuance of the certificate of 55 eligibility.

S. 8578 238

1 § 11-254 Extension of time for completion. Where an applicant has 2 received a certificate of eligibility but has not completed or will not 3 be able to complete the construction or reconstruction work within thir- 4 ty-six months, the board shall, upon application, extend to forty-eight 5 months, from the time of issuance of such certificate, the time for 6 completion of the construction or reconstruction work; provided the 7 applicant has completed not less than two-thirds of the work as speci- 8 fied in the certified plans previously filed with the application at the 9 time of such application for extension. 10 § 11-255 Prior certificates of eligibility. Any project for which a 11 certificate of eligibility has been approved by the board prior to the 12 enactment of this section shall be eligible for a tax exemption computed 13 according to the tax exemption tables and formulae in effect on the date 14 of such approval.

15 PART 4 16 TAX EXEMPTION AND DEFERRAL OF TAX 17 PAYMENT FOR CERTAIN 18 INDUSTRIAL AND COMMERCIAL PROPERTIES

19 § 11-256 Definitions. When used in this part: 20 a. "Applicant" means any person obligated to pay real property taxes 21 on the property for which an exemption from or abatement or deferral of 22 real property tax payments is sought, or in the case of exempt property, 23 the record owner or lessee thereof. 24 b. "Approved plans" means plans submitted to and approved by the 25 department of buildings in connection with the applicant's building 26 permit, including any amendments to such plans approved by such depart- 27 ment before final inspection of the work for which such permit was 28 issued. 29 c. "Benefit period" means the period of time when a recipient is 30 eligible to receive benefits pursuant to this part including in the case 31 of a recipient of a certificate of eligibility for commercial 32 construction work in a deferral area, the period of time when tax 33 payments are to be deferred, the interim period when no tax payments are 34 to be deferred and no deferred tax payments are required to be made, and 35 the period of time when the deferred tax payments are to be made. 36 d. "Commission" means the temporary commercial incentive area boundary 37 commission. 38 e. "Commercial construction work" means the construction of a new 39 building or structure, or portion thereof, or the modernization, reha- 40 bilitation, expansion, or other improvement of an existing building or 41 structure, or portion thereof, for use as commercial property. 42 f. "Commercial property" means nonresidential property: (1) on which 43 will exist after completion of commercial construction work, a building 44 or structure used for the buying, selling or otherwise providing of 45 goods or services including hotel services, or for other lawful busi- 46 ness, commercial or manufacturing activities; and (2) (a) where, except 47 as provided in subparagraph (b) of this paragraph and paragraph (3) of 48 this subdivision, not more than fifteen per centum of the total net 49 square footage of any building or structure on such property was used 50 for manufacturing activities at any one or more times during the twen- 51 ty-four months immediately preceding the date of application for a 52 certificate of eligibility or (b) where not more than fifteen per centum 53 of the total net square footage of any building or structure on such 54 property was used for manufacturing activities at any one or more times

S. 8578 239

1 during the sixty months immediately preceding the date of application 2 for a certificate of eligibility if such property is located, in whole 3 or in part, in the area in the borough of Manhattan lying south of the 4 center line of 96th Street; and (3) in the commercial revitalization 5 area, and with respect to an application for a certificate of eligibil- 6 ity filed on or after July first, two thousand, "commercial property" 7 means nonresidential property on which will exist after completion of 8 commercial construction work, a building or structure used for the 9 buying, selling or otherwise providing of goods or services including 10 hotel services, or for other lawful business, commercial or manufactur- 11 ing activities. 12 f-1. "Commercial revitalization area" means any district that is zoned 13 C4, C5, C6, M1, M2 or M3 in accordance with the zoning resolution in any 14 area of the city. 15 g. "Deferral area" means an area in which deferral of payment of real 16 property taxes in accordance with section 11-257 of this part shall be 17 available to a recipient who has performed commercial construction work. 18 h. "Excluded area" means each area specified in paragraphs (1), (2) 19 and (3) of subdivision d of section 11-258 of this part. 20 i. "Exemption base". (1) For purposes of computing the exemption 21 pursuant to subdivision a, b, c or d of section 11-257 of this part, 22 "exemption base" shall mean, with respect to property that is the 23 subject of a certificate of eligibility with an effective date of June 24 thirtieth, nineteen hundred ninety-two or before: (a) for the first, 25 second and third taxable years following the effective date of a certif- 26 icate of eligibility, the assessed value of improvements made since the 27 effective date of such certificate which are attributable exclusively to 28 commercial or industrial construction work described in approved plans; 29 and (b) for all other years, the assessed value of such improvements 30 which have been made before the fourth taxable status date following the 31 effective date of such certificate. 32 (2) For purposes of computing the exemption pursuant to subdivision c, 33 d or e of section 11-257 of this part, "exemption base" shall mean, with 34 respect to property that is the subject of a certificate of eligibility 35 with an effective date of July first, nineteen hundred ninety-two or 36 after: (a) for the first through fifth taxable years following the 37 effective date of a certificate of eligibility, the assessed value of 38 improvements made since the effective date of such certificate which are 39 attributable exclusively to commercial or renovation construction work 40 described in approved plans; and (b) for all other years, the assessed 41 value of such improvements which have been made before the sixth taxable 42 status date following the effective date of such certificate. 43 (3) For purposes of computing the exemption pursuant to subdivision a 44 or b of section 11-257 of this part, "exemption base" shall mean, with 45 respect to property that is the subject of a certificate of eligibility 46 with an effective date of July first, nineteen hundred ninety-two or 47 after: (a) for the first through fifth taxable years following the 48 effective date of a certificate of eligibility, the assessed value of 49 improvements made since the effective date of such certificate which are 50 attributable exclusively to commercial or industrial construction work 51 described in approved plans plus any equalization increases or minus any 52 equalization decreases in the assessed value of the property so improved 53 (excluding the land) occurring subsequent to the effective date of such 54 certificate; and (b) for all other years, the assessed value of such 55 improvements made before the sixth taxable status date following the 56 effective date of such certificate plus any equalization increases or

S. 8578 240

1 minus any equalization decreases in the assessed value of the property 2 so improved (excluding the land) occurring subsequent to the effective 3 date of such certificate but before the fourteenth taxable status date 4 following the effective date of such certificate. For purposes of the 5 preceding sentence: no adjustment shall be made to the assessed value of 6 the improvements referred to in subparagraphs (a) and (b) of this para- 7 graph for any portion of an equalization increase or decrease which is 8 being phased in pursuant to section eighteen hundred five of the real 9 property tax law subsequent to the effective date of the certificate of 10 eligibility if such increase or decrease occurred prior to such effec- 11 tive date; with respect to any taxable year, an adjustment for an equal- 12 ization increase or decrease shall reflect only the portion of such 13 increase or decrease which is being phased in during such taxable year 14 or which was phased in during a prior taxable year; no adjustment for an 15 equalization decrease shall reduce the exemption base to an amount less 16 than the assessed value of the improvements referred to in subparagraphs 17 (a) and (b) of this paragraph, and, to the extent that any such decrease 18 would reduce the exemption base below such amount, such decrease shall 19 reduce the taxable portion of the assessed value; and no adjustment 20 shall be made for an equalization increase or decrease if the improve- 21 ments referred to in subparagraphs (a) and (b) of this paragraph do not 22 result in a physical increase in the assessed value of the property. 23 (4) Notwithstanding paragraph one of this subdivision, for purposes of 24 computing the exemption pursuant to subdivision a of section 11-257 of 25 this part, "exemption base" shall mean, with respect to industrial prop- 26 erty that is located in the area in Staten Island; and that is the 27 subject of a certificate of eligibility with an effective date after 28 December thirty-first, nineteen hundred eighty-nine and before July 29 first, nineteen hundred ninety-two: (a) for the first, second and third 30 taxable years following the effective date of a certificate of eligibil- 31 ity, the assessed value of improvements made since the effective date of 32 such certificate which are attributable exclusively to industrial 33 construction work described in approved plans; and (b) for all other 34 years, the assessed value of such improvements made before the fourth 35 taxable status date following the effective date of such certificate 36 plus any equalization increases or minus any equalization decreases in 37 the assessed value of the property so improved (excluding the land) 38 occurring subsequent to the fourth taxable status date following the 39 effective date of such certificate but before the fourteenth taxable 40 status date following the effective date of such certificate. For 41 purposes of the preceding sentence: no adjustment shall be made to the 42 assessed value of the improvements referred to in subparagraphs (a) and 43 (b) of this paragraph for any portion of an equalization increase or 44 decrease which is being phased in pursuant to section eighteen hundred 45 five of the real property tax law subsequent to the effective date of 46 the certificate of eligibility if such increase or decrease occurred 47 prior to such effective date; with respect to any taxable year, an 48 adjustment for an equalization increase or decrease shall reflect only 49 the portion of such increase or decrease which is being phased in during 50 such taxable year or which was phased in during a prior taxable year; no 51 adjustment for an equalization decrease shall reduce the exemption base 52 to an amount less than the assessed value of the improvements referred 53 to in subparagraphs (a) and (b) of this paragraph, and, to the extent 54 that any such decrease would reduce the exemption base below such 55 amount, such decrease shall reduce the taxable portion of the assessed 56 value; and no adjustment shall be made for an equalization increase or

S. 8578 241

1 decrease if the improvements referred to in subparagraphs (a) and (b) of 2 this paragraph do not result in a physical increase in the assessed 3 value of the property. 4 (5) For purposes of computing the exemption: (a) pursuant to subdivi- 5 sion e.1 of section 11-257 of this part, "exemption base" shall mean, 6 with respect to property that is the subject of a certificate of eligi- 7 bility with an effective date of July first, nineteen hundred ninety- 8 five or after and that is located in the new construction exemption area 9 specified in paragraph one of subdivision e of section 11-258 of this 10 part: for any taxable year following the effective date of a certificate 11 of eligibility, the assessed value of improvements made since the effec- 12 tive date of such certificate which are attributable exclusively to the 13 construction of a new building or structure that meets the requirements 14 set forth in subdivision i of section 11-259 of this part as described 15 in approved plans, provided such improvements are made within thirty-six 16 months of the effective date of such certificate or by December thirty- 17 first, nineteen hundred ninety-nine, whichever is earlier; and (b) 18 pursuant to subdivision e.1 of section 11-257 of this part, "exemption 19 base" shall mean, with respect to property that is the subject of a 20 certificate of eligibility with an effective date of July first, nine- 21 teen hundred ninety-five or after and that is located in the new 22 construction exemption area specified in paragraph two of subdivision e 23 of section 11-258 of this part: for any taxable year following the 24 effective date of a certificate of eligibility, the assessed value of 25 improvements made since the effective date of such certificate which are 26 attributable exclusively to the construction of a new building or struc- 27 ture that meets the requirements set forth in subdivision i of section 28 11-259 of this part as described in approved plans, provided such 29 improvements are made within forty-two months of the effective date of 30 such certificate. 31 (6) For purposes of this subdivision "equalization increase or 32 decrease" means an increase or decrease in the assessed value of proper- 33 ty which is not attributable to construction work, fire, demolition, 34 destruction or other change in the physical characteristics of the prop- 35 erty (excluding gradual physical deterioration or obsolescence), or to a 36 change in the description or boundaries of the property. 37 j. "Industrial construction work" means the construction of a new 38 building or structure or the modernization, rehabilitation, expansion or 39 improvement of an existing building or structure for use as industrial 40 property. 41 k. "Industrial property" means nonresidential property on which will 42 exist after completion of industrial construction work a building or 43 structure wherein at least seventy-five per centum of the total net 44 square footage is used or immediately available and held out for use for 45 manufacturing activities involving the assembly of goods or the fabri- 46 cation or processing of raw materials. 47 l. "Initial assessed value" means the lesser of: (1) the taxable 48 assessed value of real property appearing on the books of the annual 49 record of the assessed valuation of real property on the effective date 50 of a recipient's certificate of eligibility; or (2) the assessed value 51 to which such assessment is thereafter reduced pursuant to application 52 to the tax commission or court order. Where the real property is used 53 for both residential and nonresidential purposes on the effective date 54 of such certificate of eligibility, the initial assessed value of such 55 real property, determined as provided in the preceding sentence, shall 56 be apportioned between the residential and nonresidential portions ther-

S. 8578 242

1 eof in such manner as shall properly reflect the initial assessed value 2 of each such portion. Such apportionment shall be in accordance with 3 rules promulgated by the department of finance. 4 m. "Manufacturing activity" means an activity involving the assembly 5 of goods or the fabrication or processing of raw materials. 6 n. "Minimum required expenditure" means expenditure for commercial, 7 renovation or industrial construction work in an amount equal to twenty 8 per centum of the initial assessed value; provided, however, that with 9 respect to a recipient who filed an application on or after July first, 10 nineteen hundred ninety-five for a certificate of eligibility for indus- 11 trial construction work or for commercial construction work in a special 12 exemption area or a regular exemption area, minimum required expenditure 13 means expenditure for such work in an amount equal to ten per centum of 14 the initial assessed value; provided, however, that with respect to a 15 recipient who filed an application on or after July first, nineteen 16 hundred ninety-five for a certificate of eligibility for industrial 17 construction work and for the purpose of receiving an abatement of real 18 property taxes in accordance with paragraph (3) of subdivision a of 19 section 11-257 of this part, minimum required expenditure means expendi- 20 ture for such work in an amount equal to twenty-five per centum of the 21 initial assessed value; and provided further that if the department of 22 finance, after consultation with the deputy mayor for finance and 23 economic development, determines that a greater expenditure is required 24 to encourage significant industrial and commercial development it may 25 establish by rule a higher percentage of initial assessed value, not to 26 exceed fifty per centum thereof, as the minimum required expenditure. 27 Expenditure for residential construction work shall not be included in 28 the minimum required expenditure; provided, however, that for mixed-use 29 property, expenditures for construction work related to the common areas 30 and systems of such property shall be allocated, in accordance with 31 rules promulgated by the department of finance, between the residential 32 and nonresidential portions of the property. If real property was used 33 for both residential and nonresidential purposes on the effective date 34 of the certificate of eligibility, the initial assessed value of such 35 real property, for purposes of this subdivision, shall be the initial 36 assessed value apportioned to the nonresidential portions thereof. 37 o. "Person" means an individual, corporation, partnership, associ- 38 ation, agency, trust, estate, foreign or domestic government or subdivi- 39 sion thereof, or other entity. 40 p. "Recipient" means an applicant to whom a certificate of eligibility 41 has been issued pursuant to this part, or the successor in interest of 42 such applicant, provided that where a person who has entered into a 43 lease or purchase agreement with the owner or lessee of exempt property 44 has been a co-applicant, such person or the successor in interest of 45 such person shall be the recipient. 46 q. "Regular exemption area" means an area in which a regular exemption 47 from taxes in accordance with section 11-257 of this part shall be 48 available to a recipient who performs commercial construction work. 49 r. "Residential construction work" means any construction, moderniza- 50 tion, rehabilitation, expansion or improvement of dwelling units other 51 than dwelling units in a hotel. 52 s. "Residential property" means property, other than property used for 53 hotel purposes, on which exists, or will exist upon completion of 54 construction work, a building or structure used for residential 55 purposes.

S. 8578 243

1 t. "Restricted activity" means any entertainment activity which the 2 department of finance has identified in regulations promulgated pursuant 3 to this part as an activity which, in the public interest, should not be 4 encouraged through the benefits of this part. 5 u. "Special exemption area" means an area in which the commission has 6 determined that a special exemption from real property taxes in accord- 7 ance with subdivision b of section 11-257 of this part shall be avail- 8 able to a recipient who performs commercial construction work and, in 9 addition, means the area specified in paragraph four of subdivision c of 10 section 11-258 of this part. 11 v. "Mixed-use property" means property on which exists, or will exist 12 upon completion of construction work, a building or structure used for 13 both residential and nonresidential purposes. 14 w. "Renovation construction work" means the modernization, rehabili- 15 tation, expansion or improvement of an existing building or structure, 16 or portion thereof, for use as commercial property in a renovation 17 exemption area where such modernization, rehabilitation, expansion or 18 improvement is physically and functionally integrated with the existing 19 building or structure, or portion thereof, does not increase the bulk of 20 the existing building or structure by more than thirty per centum and 21 does not increase the height of the existing building or structure by 22 more than thirty per centum. 23 x. "Renovation exemption area" means the area specified in paragraph 24 (4) of subdivision d of section 11-258 of this part in which a reno- 25 vation exemption from taxes in accordance with subdivision e of section 26 11-257 of this part shall be available to a recipient who performs reno- 27 vation construction work. 28 y. "New construction exemption areas" means the areas specified in 29 subdivision e of section 11-258 of this part in which an exemption from 30 real property taxes in accordance with subdivision e.1 of section 11-257 31 of this part shall be available to a recipient who constructs a new 32 building or structure that meets the requirements set forth in subdivi- 33 sion i of section 11-259 of this part. 34 § 11-257 Real property tax exemption; deferral of tax payments. The 35 city shall be divided into six classes of areas as provided in this part 36 and pursuant to designation of areas to be made by the temporary commer- 37 cial incentive area boundary commission. Within such areas, the follow- 38 ing benefits shall be available to qualified recipients: 39 a. (1) A recipient who, following the effective date of a certificate 40 of eligibility, has performed industrial construction work in any area 41 of the city shall be eligible for an exemption from real property taxes 42 as follows: For the first thirteen tax years, the recipient shall be 43 exempt from taxation on one hundred per centum of the exemption base. 44 For the following nine tax years, the recipient shall be exempt from 45 taxation on a percentage of the exemption base beginning at ninety per 46 centum thereof in the fourteenth tax year and decreasing by ten per 47 centum of said exemption base each year. 48 The following table shall illustrate the computation of the exemption 49 for industrial construction work:

50 Tax year following effective 51 date of certificate 52 of eligibility: Amount of exemption: 53 1 through 13 ............. Tax on 100% of exemption base 54 14 ........................ Tax on 90% of exemption base 55 15 ........................ Tax on 80% of exemption base

S. 8578 244

1 16 ........................ Tax on 70% of exemption base 2 17 ........................ Tax on 60% of exemption base 3 18 ........................ Tax on 50% of exemption base 4 19 ........................ Tax on 40% of exemption base 5 20 ........................ Tax on 30% of exemption base 6 21 ........................ Tax on 20% of exemption base 7 22 ........................ Tax on 10% of exemption base

8 (2) Notwithstanding paragraph one of this subdivision, a recipient who 9 filed an application for a certificate of eligibility for industrial 10 construction work in any area of such city on or after July first, nine- 11 teen hundred ninety-five, and who, following the effective date of such 12 certificate of eligibility, has performed such industrial construction 13 work shall be eligible for an exemption from real property taxes as 14 follows: for the first sixteen tax years, the recipient shall be exempt 15 from taxation on one hundred per centum of the exemption base. For the 16 following nine tax years, the recipient shall be exempt from taxation on 17 a percentage of the exemption base beginning at ninety per centum there- 18 of in the seventeenth tax year and decreasing by ten per centum of said 19 exemption base each year. 20 The following table shall illustrate the computation of the exemption 21 for industrial construction work pursuant to this paragraph:

22 Tax year following effective 23 date of certificate of 24 eligibility: Amount of exemption: 25 1 through 16.............. Tax on 100% of exemption base 26 17 ........................ Tax on 90% of exemption base 27 18 ........................ Tax on 80% of exemption base 28 19 ........................ Tax on 70% of exemption base 29 20 ........................ Tax on 60% of exemption base 30 21 ........................ Tax on 50% of exemption base 31 22 ........................ Tax on 40% of exemption base 32 23 ........................ Tax on 30% of exemption base 33 24 ........................ Tax on 20% of exemption base 34 25 ........................ Tax on 10% of exemption base

35 (3)(a) A recipient who filed an application for a certificate of 36 eligibility for industrial construction work in any area of such city on 37 or after July first, nineteen hundred ninety-five, and who, following 38 the effective date of such certificate of eligibility, both commenced 39 and completed such work, shall be eligible for an abatement of real 40 property taxes as follows: for the first tax year immediately following 41 completion of such work, and for the second, third and fourth tax years 42 following completion of such work, the abatement shall equal fifty per 43 centum of the real property tax that was imposed on the property which 44 is the subject of the certificate of eligibility for the tax year imme- 45 diately preceding the effective date of such certificate of eligibility, 46 provided, however, that if such property was fully or partially exempt 47 from real property taxes during such tax year, then the abatement shall 48 equal fifty per centum of the real property tax that would have been 49 imposed on such property but for such full or partial exemption. For the 50 fifth and sixth tax years, the abatement shall equal forty per centum of 51 such amount; for the seventh and eighth tax years, the abatement shall 52 equal thirty per centum of such amount; for the ninth and tenth tax 53 years, the abatement shall equal twenty per centum of such amount; and

S. 8578 245

1 for the eleventh and twelfth tax years, the abatement shall equal ten 2 per centum of such amount. Notwithstanding any inconsistent provision of 3 this paragraph, a recipient shall not be eligible for an abatement for 4 the first tax year following completion of such work, unless the recipi- 5 ent submits proof satisfactory to the department of finance that such 6 work was completed on or before the taxable status date for such first 7 tax year no later than thirty days after such taxable status date. Where 8 the recipient fails to submit such proof in accordance with the forego- 9 ing sentence, a recipient shall not be eligible for an abatement until 10 the second tax year following completion of such work. In such case, a 11 recipient shall submit proof satisfactory to the department of finance 12 that such work was completed on or before the taxable status date for 13 such first tax year no later than thirty days after the taxable status 14 date for such second tax year. A recipient whose abatement begins in the 15 second tax year following completion of such work shall not thereby have 16 his or her twelve-year benefit period shortened. 17 The following table shall illustrate the computation of the abatement 18 for industrial construction work pursuant to this paragraph:

19 Tax year following completion 20 of industrial construction 21 work: Amount of abatement: 22 1 ...................................................50% 23 2 ...................................................50% 24 3 ...................................................50% 25 4 ...................................................50% 26 5 ...................................................40% 27 6 ...................................................40% 28 7 ...................................................30% 29 8 ...................................................30% 30 9 ...................................................20% 31 10 ..................................................20% 32 11 ..................................................10% 33 12 ..................................................10%

34 (b) If, due to a determination of the department of finance or tax 35 commission of such city or a court, the real property tax imposed on 36 such property for the tax year immediately preceding the effective date 37 of such certificate of eligibility is changed, then any abatement that 38 was granted in accordance with this paragraph prior to such reduction 39 shall be recalculated and any abatement to be granted in accordance with 40 this paragraph shall be based on the real property tax imposed on such 41 property for the tax year immediately preceding the effective date of 42 such certificate of eligibility, as changed by such determination. The 43 amount equal to the difference between the abatement originally granted 44 and the abatement as so recalculated shall be deducted from any refund 45 otherwise payable or remission otherwise due as a result of a change due 46 to such determination, and any balance of such amount remaining unpaid 47 after making any such deduction shall be paid to the department of 48 finance within thirty days from the date of mailing by the department of 49 finance of a notice of the amount payable. Such amount payable shall 50 constitute a tax lien on such property as of the date of such notice 51 and, if not paid within such thirty-day period, penalty and interest at 52 the rate applicable to delinquent taxes on such property shall be 53 charged and collected on such amount from the date of such notice to the 54 date of payment.

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1 (c) No property which is the subject of a certificate of eligibility 2 pursuant to this part shall receive more than one abatement pursuant to 3 this part and no abatement shall exceed one consecutive twelve-year 4 period as specified in subparagraph (a) of this paragraph. 5 (d) In no event shall an abatement granted pursuant to this part 6 exceed in any tax year the real property taxes imposed on the property 7 which is the subject of a certificate of eligibility pursuant to this 8 part. 9 (e) For the purpose of calculating an abatement of real property taxes 10 pursuant to this part, where a tax lot contains more than one building 11 or structure and not all of the buildings or structures comprising such 12 tax lot are the subject of a certificate of eligibility for industrial 13 construction work pursuant to this part, the real property taxes imposed 14 on such tax lot for the year immediately preceding the effective date of 15 such certificate of eligibility shall be apportioned among the build- 16 ings, structures and land comprising such tax lot and only such real 17 property taxes as are allocable to the property which is the subject of 18 the certificate of eligibility pursuant to this part shall be abated in 19 accordance with this paragraph. Such apportionment shall be in accord- 20 ance with rules promulgated by the department of finance. 21 (f) A recipient who filed an application for a certificate of eligi- 22 bility for industrial construction work in the commercial revitalization 23 area on or after July first, two thousand, and who, following the effec- 24 tive date of such certificate of eligibility, both commenced and 25 completed such work, shall be eligible for an abatement of real property 26 taxes in accordance with subparagraph (a) of this paragraph, provided, 27 however, that where the total net square footage of the industrial prop- 28 erty used or immediately available and held out for use for manufactur- 29 ing activities involving the assembly of goods or the fabrication or 30 processing of raw materials is less than seventy-five per centum of the 31 total net square footage of the industrial property, the abatement of 32 real property taxes shall be determined in accordance with rules promul- 33 gated by the department of finance. Notwithstanding the foregoing 34 sentence, no such abatement shall be allowed where the total net square 35 footage of the industrial property used or immediately available and 36 held out for use for such manufacturing activities after completion of 37 industrial construction work is less than the total net square footage 38 used or immediately available and held out for use for such manufactur- 39 ing activities before the commencement of such construction work. For 40 purposes of this subparagraph only, the term "industrial construction 41 work" shall mean the modernization, rehabilitation, expansion or 42 improvement of an existing building or structure for use as industrial 43 property and the term "industrial property" shall mean nonresidential 44 property on which will exist after completion of industrial construction 45 work a building or structure wherein at least twenty-five per centum of 46 the total net square footage is used or immediately available and held 47 out for use for manufacturing activities involving the assembly of goods 48 or the fabrication or processing of raw materials. 49 b. (1) A recipient who, following the effective date of a certificate 50 of eligibility, has performed commercial construction work in a special 51 exemption area shall be eligible for an exemption from real property 52 taxes as follows: For the first thirteen tax years, the recipient shall 53 be exempt from taxation on one hundred per centum of the exemption base. 54 For the following nine tax years, the recipient shall be exempt from 55 taxation on a percentage of the exemption base beginning at ninety per

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1 centum thereof in the fourteenth tax year and decreasing by ten per 2 centum of said exemption base each year. 3 The following table shall illustrate the computation of the exemption 4 for commercial construction work in a special exemption area:

5 Tax year following effective 6 date of certificate 7 of eligibility: Amount of exemption: 8 1 through 13 ............. Tax on 100% of exemption base 9 14 ........................ Tax on 90% of exemption base 10 15 ........................ Tax on 80% of exemption base 11 16 ........................ Tax on 70% of exemption base 12 17 ........................ Tax on 60% of exemption base 13 18 ........................ Tax on 50% of exemption base 14 19 ........................ Tax on 40% of exemption base 15 20 ........................ Tax on 30% of exemption base 16 21 ........................ Tax on 20% of exemption base 17 22 ........................ Tax on 10% of exemption base

18 (2) Notwithstanding paragraph one of this subdivision, a recipient who 19 filed an application for a certificate of eligibility for commercial 20 construction work in a special exemption area on or after July first, 21 nineteen hundred ninety-five, and who, following the effective date of 22 such certificate of eligibility, has performed such commercial 23 construction work shall be eligible for an exemption from real property 24 taxes as follows: For the first sixteen tax years, the recipient shall 25 be exempt from taxation on one hundred per centum of the exemption base. 26 For the following nine tax years, the recipient shall be exempt from 27 taxation on a percentage of the exemption base beginning at ninety per 28 centum thereof in the seventeenth tax year and decreasing by ten per 29 centum of said exemption base each year. 30 The following table shall illustrate the computation of the exemption 31 for commercial construction work in a special exemption area pursuant to 32 this paragraph:

33 Tax year following effective 34 date of certificate 35 of eligibility: Amount of exemption: 36 1 through 16 ............. Tax on 100% of exemption base 37 17 ........................ Tax on 90% of exemption base 38 18 ........................ Tax on 80% of exemption base 39 19 ........................ Tax on 70% of exemption base 40 20 ........................ Tax on 60% of exemption base 41 21 ........................ Tax on 50% of exemption base 42 22 ........................ Tax on 40% of exemption base 43 23 ........................ Tax on 30% of exemption base 44 24 ........................ Tax on 20% on exemption base 45 25 ........................ Tax on 10% of exemption base

46 c. (1) A recipient who, following the effective date of a certificate 47 of eligibility, has performed commercial construction work in a regular 48 exemption area shall be eligible for an exemption from real property 49 taxes as follows: For the first eight tax years, the recipient shall be 50 exempt from taxation on one hundred per centum of the exemption base. 51 For the following four tax years, the recipient shall be exempt from 52 taxation on a percentage of the exemption base beginning at eighty per

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1 centum thereof in the ninth tax year and decreasing by twenty per centum 2 of said exemption base each year. 3 The following table shall illustrate the computation of the exemption 4 for commercial construction work in a regular exemption area:

5 Tax year following effective 6 date of certificate 7 of eligibility: Amount of exemption: 8 1 through 8 .............. Tax on 100% of exemption base 9 9 ......................... Tax on 80% of exemption base 10 10 ........................ Tax on 60% of exemption base 11 11 ........................ Tax on 40% of exemption base 12 12 ........................ Tax on 20% of exemption base

13 (2) Notwithstanding paragraph one of this subdivision, a recipient who 14 filed an application for a certificate of eligibility for commercial 15 construction work in a regular exemption area on or after July first, 16 nineteen hundred ninety-five, and who, following the effective date of 17 such certificate of eligibility, has performed such commercial 18 construction work shall be eligible for an exemption from real property 19 taxes as follows: For the first eleven tax years, the recipient shall be 20 exempt from taxation on one hundred per centum of the exemption base. 21 For the following four tax years, the recipient shall be exempt from 22 taxation on a percentage of the exemption base beginning at eighty per 23 centum thereof in the twelfth tax year and decreasing by twenty per 24 centum of said exemption base each year. 25 The following table shall illustrate the computation of the exemption 26 for commercial construction work in a regular exemption area pursuant to 27 this paragraph:

28 Tax year following effective 29 date of certificate 30 of eligibility: Amount of exemption: 31 1 through 11 ............. Tax on 100% of exemption base 32 12 ........................ Tax on 80% of exemption base 33 13 ........................ Tax on 60% of exemption base 34 14 ........................ Tax on 40% of exemption base 35 15 ........................ Tax on 20% of exemption base

36 d. Except as provided in paragraphs two and three of subdivision d of 37 section 11-258 of this part, a recipient who, following the effective 38 date of a certificate of eligibility, has performed commercial 39 construction work in a deferral area shall be eligible for a deferral of 40 tax payments as follows: For the first three tax years following the 41 effective date of a certificate of eligibility, the tax payment on one 42 hundred per centum of the exemption base shall be deferred. For the 43 following four tax years, the tax payment on a percentage of the 44 exemption base beginning at eighty per centum thereof in the fourth tax 45 year and decreasing by twenty per centum each year shall be deferred. 46 The total amount of tax payments deferred pursuant to this part shall be 47 paid subsequently over the course of ten tax years as follows: Commenc- 48 ing in the eleventh tax year following the effective date of the certif- 49 icate of eligibility, through and including the twentieth tax year 50 following such effective date, an amount equal to ten per centum of the 51 total amount of tax payments deferred pursuant to this section shall be

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1 added to the amount of tax otherwise assessed and payable in each such 2 tax year on the property subject to such deferral. 3 The following table shall illustrate the computation of deferral and 4 payment of taxes for commercial construction work in a deferral area:

5 Tax year following 6 effective date of 7 certificate of 8 eligibility: Amount of tax payments to be deferred or paid: 9 1 through 3 ......Deferral of tax payment on 100% of the exemption base 10 4 ................ Deferral of tax payment on 80% of the exemption base 11 5 ................ Deferral of tax payment on 60% of the exemption base 12 6 ................ Deferral of tax payment on 40% of the exemption base 13 7 ................ Deferral of tax payment on 20% of the exemption base 14 8 through 10 ..... No tax payments are to be deferred and no deferred 15 tax payments are required to be made 16 11 through 20 .... Payment each year of 10% of total dollar amount of 17 tax payments deferred pursuant to this part

18 e. A recipient who, following the effective date of a certificate of 19 eligibility, has performed renovation construction work in a renovation 20 exemption area shall be eligible for an exemption from real property 21 taxes as follows: For the first eight tax years, the recipient shall be 22 exempt from taxation on one hundred per centum of the exemption base. 23 For the following four tax years, the recipient shall be exempt from 24 taxation on a percentage of the exemption base beginning at eighty per 25 centum thereof in the ninth tax year and decreasing by twenty per centum 26 of said exemption base each year. 27 The following table shall illustrate the computation of the exemption 28 for renovation construction work in a renovation exemption area:

29 Tax year following effective 30 date of certificate 31 of eligibility: Amount of exemption: 32 1 through 8 .............. Tax on 100% of exemption base 33 9 ......................... Tax on 80% of exemption base 34 10 ........................ Tax on 60% of exemption base 35 11 ........................ Tax on 40% of exemption base 36 12 ........................ Tax on 20% of exemption base

37 e.1. A recipient who, following the effective date of a certificate of 38 eligibility, constructs a new building or structure that meets the 39 requirements set forth in subdivision i of section 11-259 of this part 40 in the new construction exemption area specified in paragraph one, two 41 or three of subdivision e of section 11-258 of this part shall be eligi- 42 ble for an exemption from real property taxes as follows: for the first 43 four tax years, the recipient shall be exempt from taxation on one 44 hundred per centum of the exemption base. For the following four tax 45 years, the recipient shall be exempt from taxation on a percentage of 46 the exemption base beginning at eighty per centum thereof in the fifth 47 tax year and decreasing by twenty per centum of said exemption base each 48 year. 49 The following table shall illustrate the computation of the exemption 50 for the construction of a new building or structure that meets the 51 requirements set forth in subdivision i of section 11-259 of this part

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1 in the new construction exemption area specified in paragraph one, two 2 or three of subdivision e of section 11-258 of this part:

3 Tax year following effective 4 date of certificate 5 of eligibility: Amount of exemption: 6 1 through 4 .............. Tax on 100% of exemption base 7 5 ......................... Tax on 80% of exemption base 8 6 ......................... Tax on 60% of exemption base 9 7 ......................... Tax on 40% of exemption base 10 8 ......................... Tax on 20% of exemption base

11 f. There shall be no exemption from or deferral of payment of real 12 property taxes available pursuant to this part to any person who 13 performs commercial or renovation construction work in an excluded area. 14 g. The benefits of this part shall be granted exclusively for indus- 15 trial, commercial or renovation construction work described in approved 16 plans. No benefits shall be granted for residential construction work. 17 Any parcel which is partly located in an excluded area shall be deemed 18 to be entirely located in such area. 19 h. No benefits pursuant to this part shall be granted for work which 20 is the subject of a certificate of eligibility issued pursuant to part 21 three of this subchapter. 22 § 11-258 Temporary commercial incentive area boundary commission; 23 classes of area; excluded areas. a. There shall be a temporary commer- 24 cial incentive area boundary commission to consist of the deputy mayor 25 for economic development and planning, the commissioner of finance, the 26 chair of the city planning commission, the director of management and 27 budget, the borough presidents, the speaker of the city council and a 28 public member appointed by the mayor to serve at the mayor's pleasure. 29 Each member except the public member shall have the power to designate 30 an alternate to represent him or her at commission meetings to exercise 31 all the rights and powers of such member, including the right to vote, 32 provided that such designation be made in writing to the chair of the 33 commission. The deputy mayor for economic development and planning shall 34 be the chair of the commission. Each borough president shall be entitled 35 to vote only on the designation of areas within his or her borough. 36 Commission members who shall be officers or employees of the city shall 37 serve without compensation but shall be reimbursed for expenses neces- 38 sarily incurred in the performance of their duties. Any other commission 39 member shall receive as exclusive compensation for his or her services 40 one hundred dollars per diem, provided, however, that the total compen- 41 sation paid to any such member shall not exceed twelve hundred dollars 42 for any calendar year. A majority of members of such commission entitled 43 to vote on a matter shall constitute a quorum for such issue. Decisions 44 shall be made by majority vote of those present entitled to vote on a 45 matter. 46 b. (1) The commission shall meet in nineteen hundred ninety-two, nine- 47 teen hundred ninety-five and nineteen hundred ninety-nine to determine 48 the boundaries of the various areas which it is authorized to designate 49 pursuant to this section. The areas designated by the commission in 50 effect as of December thirty-first, nineteen hundred ninety-one shall 51 remain in effect until the first taxable status date after the city 52 council approves a new designation pursuant to paragraph four of this 53 subdivision.

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1 (2) Not later than October first of each year when areas are to be 2 designated, the commission shall publish notice of proposed boundaries 3 of areas to be designated, and the date, not earlier than five nor later 4 than fifteen days following the publication of such notice, on which the 5 commission will hold a public hearing to hear all persons interested in 6 the designation of areas. The notice required by this paragraph shall be 7 published in the City Record and a newspaper of general circulation in 8 the city, and copies thereof shall be forwarded to each council member 9 and community board. 10 (3) The commission shall make such designation, and notify the city 11 council of such designation, not later than November first of each year 12 when areas are to be designated. The designation shall be effective as 13 provided in paragraph four of this subdivision. 14 (4) Within thirty days after the first stated meeting of the city 15 council following the receipt of notice of such designation, the city 16 council may, by majority vote, disapprove such designation. If, within 17 such thirty-day period, the city council fails to act or fails to act by 18 the required vote, the city council shall be deemed to have approved 19 such designation. Such designation shall be effective as of the first 20 taxable status date after the city council approves such designation and 21 shall remain in effect until the first taxable status date after the 22 city council approves a new designation pursuant to this paragraph. 23 c. (1) The commission may designate any area other than the area lying 24 south of the center line of ninety-sixth street in the borough of 25 Manhattan to be a special exemption area if it determines that market 26 conditions in the area are such that the availability of a special 27 exemption is required in order to encourage commercial construction work 28 in such area. In making such determination, the commission shall consid- 29 er, among other factors, the existence in such area of a special need 30 for commercial and job development, high unemployment, economic distress 31 or unusually large numbers of vacant, underutilized, unsuitable or 32 substandard structures, or other substandard, unsanitary, deteriorated 33 or deteriorating conditions, with or without tangible blight. 34 (2) Any area in the city, which the commission has not designated as a 35 special exemption area shall be a regular exemption area. 36 (3) On or after January first, nineteen hundred ninety-two, the 37 commission shall not designate any area to be either a deferral area or 38 an excluded area, nor shall the commission make any new designation in 39 any urban renewal area designated pursuant to article fifteen of the 40 general municipal law so as to reduce the level of benefits available 41 pursuant to this title in such area. 42 (4) Notwithstanding any other provision of this part, any area in the 43 city designated as an empire zone in accordance with article eighteen-b 44 of the general municipal law, which the commission has not designated as 45 a special exemption area, shall be a special exemption area as of July 46 first, nineteen hundred ninety-five or as of the date of the designation 47 of such area as an empire zone, whichever is later. 48 § 11-259 Eligibility for benefits. a. A recipient of a certificate of 49 eligibility with an effective date of June thirtieth, nineteen hundred 50 ninety-two or before must make one-half the minimum required expenditure 51 within eighteen months of the effective date of such recipient's certif- 52 icate of eligibility, and make the minimum required expenditure within 53 thirty-six months of the effective date of such certificate to be eligi- 54 ble to receive the benefits of this part. A recipient of a certificate 55 of eligibility with an effective date of July first, nineteen hundred 56 ninety-two or after must make one-half the minimum required expenditure

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1 within thirty months of the effective date of such recipient's certif- 2 icate of eligibility, and make the minimum required expenditure within 3 sixty months of the effective date of such certificate to be eligible to 4 receive the benefits of this part. Any recipient who shall fail to make 5 such expenditures shall become ineligible and shall pay, with interest, 6 any taxes for which an exemption or deferral was claimed pursuant to 7 this section. This subdivision shall not apply to the recipient of a 8 certificate of eligibility for construction of a new building or struc- 9 ture that meets the requirements set forth in subdivision i of section 10 11-259 of this part in a new construction exemption area. 11 b. No benefits pursuant to this part shall be granted for construction 12 work on any condominium unit unless such unit is in a building or struc- 13 ture which, if viewed as a whole and as if it were under single owner- 14 ship, would qualify as commercial or industrial property. The minimum 15 required expenditure applicable to any recipient of a certificate of 16 eligibility for construction work on a condominium unit shall be equal 17 to the minimum expenditure which would apply if a certificate of eligi- 18 bility were issued for construction work on the entire property where 19 such unit is located. Nothing in this subdivision shall be construed to 20 prevent owners of condominium units in the same property from forming an 21 association to be a recipient. This subdivision shall not apply to any 22 applicant whose property would be, or recipient whose property is, the 23 subject of a certificate of eligibility with an effective date of July 24 first, nineteen hundred ninety-two or after. 25 c. No benefits pursuant to this part shall be granted for any 26 construction work unless the applicant filed an application for such 27 benefits on or before the date of issuance of a building permit for such 28 work. The requirements of this subdivision may be satisfied where the 29 applicant's architect, contractor or other representative authorized to 30 file the application for such building permit files with the department 31 of finance on behalf of the applicant a preliminary application contain- 32 ing such information as the department of finance shall prescribe by 33 regulation. 34 d. No benefits pursuant to this part shall be granted to any recipient 35 for construction work on property any part of which is to be used for a 36 restricted activity. 37 e. No benefits pursuant to this part shall be granted for any 38 construction work unless the applicant shall file, together with the 39 application, an affidavit setting forth the following information: 40 (1) a statement that within the seven years immediately preceding the 41 date of application for a certificate of eligibility, neither the appli- 42 cant, nor any person owning a substantial interest in the property as 43 defined in paragraph four of this subdivision, nor any officer, director 44 or general partner of the applicant or such person was finally adjudi- 45 cated by a court of competent jurisdiction to have violated section two 46 hundred thirty-five of the real property law or any section of article 47 one hundred fifty of the penal law or any similar arson law of another 48 state with respect to any building, or was an officer, director or 49 general partner of a person at the time such person was finally adjudi- 50 cated to have violated such law; 51 (2) a statement setting forth any pending charges alleging violation 52 of section two hundred thirty-five of the real property law or any 53 section of article one hundred fifty of the penal law or any similar 54 arson law of another jurisdiction with respect to any building by the 55 applicant or any person owning a substantial interest in the property as

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1 defined in paragraph four of this subdivision, or any officer, director 2 or general partner of the applicant or such person; and 3 (3) a statement that the applicant has posted notice in a conspicuous 4 place at the premises which are the subject of the application and 5 published notice in a newspaper of general circulation in the city, in 6 such form as shall be prescribed by the department of finance, stating 7 that persons having information concerning any violation by the appli- 8 cant or a person having a substantial interest in the property as 9 defined in paragraph four of this subdivision has violated section two 10 hundred thirty-five of the real property law or any section of article 11 one hundred fifty of the penal law or any similar arson law of another 12 jurisdiction may submit such information to the department of finance to 13 be considered in determining the applicant's eligibility for benefits. 14 (4) "Substantial interest" as used in this subdivision shall mean 15 ownership and control of an interest of ten per centum or more in a 16 property or of any person owning a property. 17 f. If any person described in the statement required by paragraph two 18 of subdivision e of this section is finally adjudicated by a court of 19 competent jurisdiction to be guilty of any charge listed in such state- 20 ment, the recipient shall cease to be eligible for benefits pursuant to 21 this part and shall pay with interest any taxes for which an exemption, 22 abatement or deferral was claimed pursuant to this part. 23 g. In addition to any other qualifications for exemption from or 24 abatement or deferral of payment of taxes set forth in this part, an 25 applicant must be: 26 (1) obligated to pay real property tax on the property for which an 27 exemption, abatement or deferral is sought, whether such obligation 28 arises because of record ownership of such property, or because the 29 obligation to pay such tax has been assumed by contract; or 30 (2) the record owner or lessee of property which is exempt from real 31 property taxation who has entered into an agreement to sell or lease 32 such property to another person. Such person shall be a co-applicant 33 with such owner or lessee. 34 h. A co-applicant with a public entity shall be an eligible recipient 35 pursuant to this part, provided that for such period as the property 36 which is the subject of the certificate of eligibility is exempt from 37 real property taxation because it is owned or controlled by a public 38 entity no benefits shall be available to such recipient pursuant to this 39 part. Such recipient shall receive benefits pursuant to this part when 40 such property ceases to be eligible for exemption pursuant to other 41 provisions of law, as follows: the recipient shall, commencing with the 42 date such tax exemption ceases, and continuing until the expiration of 43 the benefit period pursuant to this part, receive the benefits to which 44 such recipient is entitled in the corresponding tax year pursuant to 45 this part. 46 i. (1) No benefits pursuant to this part shall be granted for 47 construction of a new building or structure in a new construction 48 exemption area unless such building or structure meets the requirements 49 set forth in subparagraphs two and three of this paragraph and, in addi- 50 tion, meets at least two of the five requirements set forth in subpara- 51 graphs four through eight of this paragraph. 52 (2) The height of at least fifty per centum of the floors in such 53 building or structure shall be not less than twelve feet, nine inches 54 measured from the top of the slab comprising the floor to the bottom of 55 the slab comprising the ceiling;

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1 (3) Such building or structure shall be served by fiber optic telecom- 2 munications wiring and shall contain vertical penetrations for the 3 distribution of fiber optic cabling to individual tenants on each floor; 4 (4) The total square footage of such building or structure is not less 5 than five hundred thousand gross square feet; 6 (5) A minimum of two hundred thousand gross square feet or twenty-five 7 per centum of such building or structure is comprised of floors of not 8 less than forty thousand gross square feet; 9 (6) At least ten per centum of the gross square footage of such build- 10 ing or structure is comprised of floors that contain no more than eight 11 structural columns, excluding any columns within the core or on the 12 periphery of such building or structure; 13 (7) The electrical capacity of such building or structure is not less 14 than six watts per net square foot; 15 (8) Emergency backup power sufficient to accommodate a need of six 16 watts per net square foot is available in at least two hundred thousand 17 gross square feet or twenty-five per centum of such building or struc- 18 ture. 19 j. No benefits pursuant to this part shall be granted for construction 20 work performed pursuant to a building permit issued after July thirty- 21 first, two thousand eight, except that if a building permit is issued on 22 or before July thirty-first, two thousand eight for construction work on 23 a building or structure described in an application for a certificate of 24 eligibility filed on or before June thirtieth, two thousand eight, 25 construction work performed as described in such application pursuant to 26 any additional building permit issued on or after August first, two 27 thousand eight shall be eligible for benefits pursuant to this part in 28 accordance with this subdivision. 29 (1) Except as provided in paragraph two of this subdivision, all 30 construction work performed pursuant to any such application shall be 31 completed on or before December thirty-first, two thousand thirteen. No 32 benefits shall be granted for construction work performed after such 33 date, and any exemption granted pursuant to this part in relation to 34 property on which such construction work was performed shall not exceed 35 the amount of the exemption in effect for such property on the tax roll 36 for which the taxable status date is January fifth, two thousand four- 37 teen. 38 (2) All construction work performed pursuant to any such application 39 for the construction of a new building or structure in the new 40 construction exemption area specified in paragraph three of subdivision 41 e of section 11-258 of this part shall be completed in accordance with 42 paragraph four of subdivision i of this section and, if not completed in 43 accordance with such subparagraph, shall not be eligible for benefits 44 pursuant to this part. 45 (3) For purposes of this subdivision, construction work as described 46 in an application for a certificate of eligibility shall be deemed 47 completed on the date on which the department of buildings issues a 48 temporary or final certificate of occupancy or, if such construction 49 work does not require the issuance of a certificate of occupancy, the 50 date on which the applicant and the applicant's architect or profes- 51 sional engineer for such construction work submit to the department of 52 finance an affidavit certifying that such construction work has been 53 completed. For purposes of this subdivision, a demolition permit shall 54 be deemed to be a building permit issued for construction work. 55 § 11-260 Application for certificate of eligibility. a. Application 56 for a certificate of eligibility pursuant to this part may be made imme-

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1 diately and continuing until June thirtieth, two thousand eight; and 2 provided, further, however, that no benefits pursuant to this part shall 3 be granted for construction work performed pursuant to a building permit 4 issued after July thirty-first, two thousand eight. Such application 5 shall state whether it is for industrial, commercial or renovation 6 construction work, and shall be filed with the department of finance. In 7 addition to any other information required by such department, the 8 application shall include cost estimates or bids for the proposed 9 construction and an affidavit of a professional engineer or architect of 10 the applicant's choice, certifying that detailed plans for the 11 construction work have been submitted to the department of buildings. 12 Such application shall also state that the applicant agrees to comply 13 with and be subject to the rules issued from time to time by the depart- 14 ment of finance to secure compliance with all applicable city, state and 15 federal laws or which implement mayoral directives and executive orders 16 designed to ensure equal employment opportunity. Such application shall 17 also certify that all taxes currently due and owing on the property 18 which is the subject of the application have been paid or are currently 19 being paid in timely installments pursuant to written agreement with the 20 department of finance. 21 b. The burden of proof shall be on the applicant to show by clear and 22 convincing evidence that the requirements for granting an exemption from 23 or abatement or deferral of payment of taxes pursuant to this part have 24 been satisfied. The department of finance shall have the authority to 25 require that statements in connection with the application be made under 26 oath. 27 c. Upon receipt of an application, the department of finance shall 28 send written notice thereof to the council member representing the 29 district where the proposed construction work is to take place. 30 d. The department of finance shall issue a certificate of eligibility 31 upon determining that the applicant satisfies the requirements for 32 industrial, commercial or renovation construction work in an area where 33 benefits are available for such work. Such certificate shall state 34 whether such benefits are to be granted for industrial, commercial or 35 renovation construction work, and in which class of area the property is 36 located. The effective date of such certificate, except as provided in 37 paragraph two or paragraph four of subdivision c of section 11-259 of 38 this part, shall be the earlier of (1) the date on which a building 39 permit for the construction work is issued by the department of build- 40 ings, or (2) the last day before the effective date of any designation 41 of boundaries by the commission which changes the class of area in which 42 the property is located so as to reduce the level of benefits for 43 commercial construction work on such property. Where the effective date 44 of the certificate of eligibility is July first, nineteen hundred nine- 45 ty-two or after, the benefits granted for industrial, commercial or 46 renovation construction work pursuant to this part shall be in accord- 47 ance with the provisions of this part. Where the effective date of the 48 certificate of eligibility is June thirtieth, nineteen hundred ninety- 49 two or before, the benefits granted for industrial or commercial 50 construction work pursuant to this part shall be in accordance with the 51 provisions of this part as it was in effect until June thirtieth, nine- 52 teen hundred ninety-two. No recipient whose property is the subject of 53 a certificate of eligibility for commercial construction work in a 54 deferral area shall be eligible to apply for a certificate of eligibil- 55 ity for renovation construction work on the same property, where the 56 renovation construction work is the same as, or similar to, the commer-

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1 cial construction work for which the deferral area certificate was 2 issued, until three years after the effective date of the deferral area 3 certificate. No recipient shall receive a tax deferral and a tax 4 exemption for the same expenditure on eligible construction work. 5 e. A copy of the certificate of eligibility shall be filed by the 6 department of finance in the manner prescribed for recording a mortgage 7 pursuant to section two hundred ninety-one-d of the real property law. 8 f. The department of finance may provide by rule for reasonable admin- 9 istrative charges or fees necessary to defray expenses in administering 10 the benefit program provided by this part. 11 § 11-261 Reporting requirement; termination of benefits. a. Upon 12 approval by the department of buildings of the plans submitted in 13 connection with the building permit and any amendments to such plans, 14 the recipient shall file with the department of finance a narrative 15 description of such approved plans describing the industrial, commercial 16 or renovation construction work for which such recipient seeks benefits 17 pursuant to this part. 18 b. For the duration of the benefit period the recipient shall file 19 annually with the department of finance, on or before the taxable status 20 date, a certificate of continuing use stating the purposes for which the 21 property described in the certificate of eligibility is being used and 22 the net square footage allotted to each such purpose. Such certificate 23 of continuing use shall be on a form prescribed by the department of 24 finance and shall state the total number of workers employed on the 25 property and the number of such workers who are city residents. The 26 department of finance shall have authority to terminate benefits pursu- 27 ant to this part upon failure of a recipient to file such certificate by 28 the taxable status date. The burden of proof shall be on the recipient 29 to establish continuing eligibility for benefits and the department of 30 finance shall have the authority to require that statements made in such 31 certificate shall be made under oath. 32 c. A recipient shall file an amendment to the latest certificate of 33 continuing use prior to (1) converting square footage within property 34 which is the subject of a certificate of eligibility for industrial 35 construction work from use for the manufacturing activities described in 36 such certificate of continuing use where such conversion results in less 37 than sixty-five per centum of total net square footage being used or 38 held out for use for manufacturing activities; or (2) converting any 39 portion of property which is the subject of a certificate of eligibility 40 to use for any restricted activity or as residential property. 41 d. No later than eighteen months after the effective date of a certif- 42 icate of eligibility with an effective date of June thirtieth, nineteen 43 hundred ninety-two or before, the recipient shall present evidence to 44 the department of finance demonstrating that the recipient has made 45 one-half of the minimum required expenditure. Not later than thirty-six 46 months after the effective date of such certificate, such recipient 47 shall present evidence to such department demonstrating that the recipi- 48 ent has made the minimum required expenditure. Not later than thirty 49 months after the effective date of a certificate of eligibility with an 50 effective date of July first, nineteen hundred ninety-two or after, the 51 recipient shall present evidence to the department of finance demon- 52 strating that the recipient has made one-half of the minimum required 53 expenditure. Such evidence shall be presented in the form and manner 54 prescribed by such department. The burden of proof shall be on the 55 recipient to show by clear and convincing evidence that the required 56 expenditures have been made. This subdivision shall not apply to the

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1 recipient of a certificate of eligibility for construction of a new 2 building or structure that meets the requirements set forth in subdivi- 3 sion i of section 11-259 of this part in a new construction exemption 4 area. 5 e. A recipient of a certificate of eligibility for construction of a 6 new building or structure in a new construction exemption area shall 7 present evidence to the department of finance demonstrating that the 8 requirements of subdivision i of section 11-259 of this part have been 9 met. Such evidence shall be presented in the form and manner and at the 10 time prescribed by such department. The burden of proof shall be on the 11 recipient to show by clear and convincing evidence that such require- 12 ments have been met. 13 § 11-262 Conversion of property. a. Any recipient whose property is 14 the subject of a certificate of eligibility for commercial or renovation 15 construction work, and who, prior to the expiration of the benefit peri- 16 od, uses such property as industrial property, shall continue to receive 17 benefits for commercial or renovation construction work as the case may 18 be. 19 b. Any recipient whose property is the subject of a certificate of 20 eligibility for industrial construction work, and who, prior to the 21 expiration of the benefit period, uses such property as commercial prop- 22 erty, shall cease to be eligible for further exemption or abatement for 23 industrial construction work as of the last date to which such recipient 24 proves by clear and convincing evidence that such property was used as 25 industrial property, and shall pay with interest any taxes for which an 26 exemption or abatement was claimed after such date, except that: 27 (1) a recipient of a certificate of eligibility for industrial 28 construction work in a special exemption area who would have been eligi- 29 ble to receive a certificate of eligibility for commercial construction 30 work at the time such recipient applied for benefits shall continue to 31 receive an exemption for industrial construction; and 32 (2) a recipient of a certificate of eligibility for industrial 33 construction work in a regular exemption area who would have been eligi- 34 ble to receive a certificate of eligibility for commercial construction 35 work at the time such recipient applied for benefits shall, commencing 36 with the date of conversion to commercial property and continuing until 37 the expiration of the benefit period for commercial construction work, 38 receive any exemption which such recipient would have received in the 39 corresponding tax year pursuant to a certificate of eligibility for 40 commercial construction work; and 41 (3) a recipient of a certificate of eligibility for industrial 42 construction work in any area of the city on whose property at least 43 sixty-five per centum of the net square footage continues to be used or 44 held out for use for manufacturing activities after conversion to 45 commercial property, shall not be required to pay the pro rata share of 46 tax for which an exemption was claimed during the tax year in which such 47 conversion occurred. 48 c. Except as provided in subdivision d of this section, any recipient 49 whose property is the subject of a certificate of eligibility for 50 commercial, industrial or renovation construction work, and who uses 51 such property as residential property or for any restricted activity 52 prior to the expiration of the benefit period, shall cease to be eligi- 53 ble for further exemption, abatement or deferral as of the date such 54 property was first used as residential property or for any restricted 55 activity. In the case of property in an area that was designated as an 56 exemption area at the time the certificate of eligibility was issued,

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1 such recipient shall pay with interest any taxes for which an exemption 2 was claimed after such date, including the pro rata share of tax for 3 which any exemption was claimed during the tax year in which such use 4 occurred. In the case of industrial property, such recipient shall pay 5 with interest any taxes for which an exemption or abatement was claimed 6 after such date, including the pro rata share of tax for which any 7 exemption or abatement was claimed during the tax year in which such use 8 occurred. In the case of property in an area that was designated as a 9 deferral area at the time the certificate of eligibility was issued, all 10 deferred tax payments on the property shall become due and payable imme- 11 diately. 12 d. Notwithstanding subdivision c of this section, any recipient whose 13 property is the subject of a certificate of eligibility for commercial 14 or renovation construction work with an effective date of July first, 15 nineteen hundred ninety-two or after, and who, prior to the expiration 16 of the benefit period, uses a portion of such property as residential 17 property, shall cease to be eligible for further exemption for commer- 18 cial or renovation construction work for that portion of such property 19 used as residential property as of the date such portion of the property 20 was first used as residential property. Such recipient shall pay, with 21 interest, any taxes for which an exemption was claimed after such date 22 attributable to that portion of the property used as residential proper- 23 ty, including the pro rata share of tax for which such exemption was 24 claimed during the tax year in which such use occurred. Such recipient 25 shall continue to receive an exemption for commercial or renovation 26 construction work for that portion of the property which continues to be 27 used as commercial property. 28 § 11-263 Administration of the benefit program. The department of 29 finance shall have, in addition to any other functions, powers and 30 duties which have been or may be conferred on it by law, the following 31 functions, powers and duties: 32 (1) To publicize the availability of benefits pursuant to this part 33 for industrial, commercial and renovation construction work. 34 (2) To receive and review applications for certificates of eligibil- 35 ity, issue such certificates where authorized pursuant to section 11-260 36 of this part, and record the issuance of such certificates as prescribed 37 in such section. 38 (3) To receive evidence of expenditures made for construction, and 39 where such expenditures do not equal the amount required to qualify for 40 exemption from or abatement or deferral of tax payments to take appro- 41 priate action, including but not limited to denying, reducing, suspend- 42 ing, terminating or revoking benefits pursuant to this part. 43 (4) To enter and inspect property to determine whether it is indus- 44 trial or commercial or mixed-use and to determine whether (a) any such 45 property is being used for any restricted use, or (b) any property which 46 is the subject of a certificate of eligibility for industrial 47 construction work is being used as commercial property, or (c) any 48 industrial or commercial property is being used as residential or mixed- 49 use property, or (d) all or part of the nonresidential portion of mixed- 50 use property is being used as residential property. 51 (5) To collect all real property taxes for which payment is deferred 52 pursuant to this part. 53 (6) To collect all real property taxes, with interest, due and owing 54 as a result of reduction, suspension, termination or revocation of any 55 exemption from or abatement or deferral of taxes granted pursuant to 56 this part.

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1 (7) To make and promulgate regulations to carry out the purposes of 2 this part including, but not limited to, regulations requiring appli- 3 cants to publish notice of their applications, defining manufacturing 4 and commercial activities and specifying the nature of work for which 5 expenses may be included in the minimum required expenditure, provided, 6 however, that any regulation increasing the minimum required expenditure 7 shall not apply to any person who is a recipient on the effective date 8 of such regulation. Such regulations shall include a requirement that 9 with respect to the construction work recipients and their contractors 10 shall be equal opportunity employers and shall also provide that persons 11 employed in the construction work shall implement a training program for 12 economically disadvantaged persons enrolled or eligible to be enrolled 13 in training programs approved by the department of labor, with partic- 14 ular reference to city residents. 15 § 11-264 Tax lien; interest rate. a. All taxes plus interest required 16 to be paid retroactively pursuant to this part shall constitute a tax 17 lien as of the date it is determined such taxes and interest are owed. 18 All interest shall be calculated from the date the taxes would have been 19 due but for the exemption, abatement or deferral claimed pursuant to 20 this part at three per centum above the applicable rate of interest 21 imposed by the city generally for non-payment of real property tax on 22 such date. 23 b. All taxes for which payment is deferred pursuant to section 11-257 24 of this part shall constitute a tax lien as of the date they are due and 25 payable in accordance with the provisions of that section. 26 § 11-265 Penalties for non-compliance, false statements and omissions. 27 a. The department of finance may deny, reduce, suspend, revoke or termi- 28 nate any exemption from or abatement or deferral of tax payments pursu- 29 ant to this part whenever: 30 (1) a recipient fails to comply with the requirements of this part or 31 the rules and regulations promulgated by the department of finance 32 pursuant thereto; or 33 (2) an application, certificate, report or other document delivered by 34 an applicant or recipient hereunder contains a false or misleading 35 statement as to a material fact or omits to state any material fact 36 necessary in order to make the statements therein not false or mislead- 37 ing, and may declare any applicant or recipient who makes such false or 38 misleading statement or omission to be ineligible for future exemption, 39 abatement or deferral pursuant to this part for the same or other prop- 40 erty. 41 b. Notwithstanding any other law to the contrary, a recipient shall be 42 personally liable for any taxes owed pursuant to this part whenever such 43 recipient fails to comply with such law and rules or makes such false or 44 misleading statement or omission, and the department of finance deter- 45 mines that such act was due to the recipient's willful neglect, or that 46 under the circumstances such act constituted a fraud on the department 47 of finance or a buyer or prospective buyer of the property. The remedy 48 provided herein for an action in personam shall be in addition to any 49 other remedy or procedure for the enforcement of collection of delin- 50 quent taxes provided by any general, special or local law. Any lease 51 provision which obligates a tenant to pay taxes which become due because 52 of willful neglect or fraud by the recipient, or otherwise relieve or 53 indemnify the recipient from any personal liability arising hereunder, 54 shall be void as against public policy except where the imposition of 55 such taxes or liability is occasioned by actions of the tenant in 56 violation of the lease.

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1 § 11-266 Code violations; suspension of benefits. a. If a court, or 2 the environmental control board of the preceding municipality with 3 respect to matters within its jurisdiction, finds that at the property 4 which is the subject of a certificate of eligibility there has been a 5 violation of any of the provisions of the building, fire and air 6 pollution control codes of the preceding municipality set forth in 7 subdivision b of this section, all benefits pursuant to such certificate 8 shall be suspended unless within one hundred eighty days after the 9 department of finance has sent notice of such finding to the recipient, 10 and all other persons having a financial interest in the property who 11 have filed a timely request for such notice in such form as may be 12 prescribed by the department of finance, the recipient submits to the 13 department of finance, certification from the department of buildings, 14 the fire department or the department of environmental protection 15 respectively that the underlying code violation has been cured. If the 16 recipient fails to submit the required certification within the one 17 hundred eighty day period, the period of suspension shall be effective 18 retroactively to the time of the finding by the court or the environ- 19 mental control board. The suspension of benefits shall continue until 20 the recipient submits to the department of finance the required certif- 21 ication that the violation has been cured. 22 If the original finding of violation or the denial of certification is 23 appealed and a court or appropriate governmental agency finally deter- 24 mines that the finding of violation or denial of certification was 25 invalid, any benefits lost pursuant to this section to which the recipi- 26 ent was entitled shall be restored retroactively. 27 As applied to a recipient who is eligible for deferral of tax payments 28 pursuant to subdivision d of section 11-257 of this part, suspension of 29 benefits shall be deferred by operation of such section and interest at 30 the rate charged by the department of finance for overdue taxes shall be 31 charged on the amount of any tax payments already deferred by operation 32 of such section. The interest charged shall accrue from the beginning of 33 the period of suspension. 34 b. The provisions of subdivision a of this section shall apply to 35 violations of the following provision of the code of the preceding muni- 36 cipality: 37 (1) section 27-4260 of the preceding municipality; 38 (2) section 27-4265 of the preceding municipality; 39 (3) section 27-4267 of the preceding municipality; 40 (4) section 27-954 of the preceding municipality; 41 (5) section 27-339 of the preceding municipality; 42 (6) subdivision (c) of section 27-353 of the preceding municipality; 43 (7) paragraph twelve of subdivision (f) of section 27-972 of the 44 preceding municipality; 45 (8) paragraph ten of subdivision (g) of section 27-972 of the 46 preceding municipality; 47 (9) subdivision (c) of section 27-975 of the preceding municipality; 48 (10) subdivision (c) of section 27-989 of the preceding munici- 49 pality; 50 (11) the following provisions to the extent applicable to cabarets 51 as defined in article two of subchapter two of the building code of 52 the preceding municipality: 53 (a) section 27-542 of the preceding municipality; 54 (b) subparagraph d of paragraph two of subdivision (b) of section 55 27-547 of the preceding municipality;

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1 (c) paragraph three of subdivision (a) of section 27-549 of the 2 preceding municipality; 3 (d) subdivision (b) of section 27-549 of the preceding municipality; 4 (12) section 27-127 of the preceding municipality when the violation 5 concerns an unsafe condition on a facade of a building which exceeds 6 six stories in height; 7 (13) section five hundred one of reference standard 13-1 of the 8 preceding municipality; 9 (14) section one thousand three of reference standard 13-1 of the 10 preceding municipality; 11 (15) paragraph six of subdivision (b) of section 24-178 of the 12 preceding municipality; and 13 (16) section 24-185 of the preceding municipality. 14 § 11-267 Annual report. The department of finance shall submit an 15 annual report to the council, on April first of each year, concerning 16 the status of the program established pursuant to this part and its 17 effects in the city, including information on certificates of eligibil- 18 ity issued and jobs created in each area where benefits are available. 19 CHAPTER 3 20 TAX LIENS AND TAX SALES 21 § 11-301 When taxes, assessments, sewer rents, sewer surcharges and 22 water rents to be liens on land assessed. All taxes and all assessments 23 and all sewer rents, sewer surcharges and water rents, and the interest 24 and charges thereon, which may be laid or may have heretofore been laid, 25 upon any real estate now in the city, shall continue to be, until paid, 26 a lien thereon, and shall be preferred in payment to all other charges. 27 The words "water rents" whenever they are used in this chapter shall 28 include uniform annual charges and extra and miscellaneous charges for 29 the supply of water, charges in accordance with meter rates, minimum 30 charges for the supply of water by meter, annual service charges and 31 charges for meters and their connections and for their setting, repair 32 and maintenance, penalties and fines and all lawful charges for the 33 supply of water imposed pursuant to the New York city municipal water 34 finance authority act, which is set forth in title two-A of article five 35 of the public authorities law. Charges for expense of meters, their 36 connections, setting, repair or maintenance shall not be due or become a 37 charge or lien on the premises where a water meter shall be installed or 38 against which a charge shall be made, until such charge shall have been 39 definitely fixed by the commissioner of environmental protection, and an 40 entry of the amount thereof shall have been made with the date of such 41 entry in the book in which the charges for water supplied by meter 42 against such premises are to be entered. A charge in accordance with 43 meter rates or minimum charges for the supply of water measured by 44 meter, and a service charge shall not be due or become a lien or charge 45 upon the premises where such meter is installed until an entry shall 46 have been made indicating that such premises are metered, with the date 47 of such entry in the book in which the charges for water by meter meas- 48 urement against such premises are to be entered. The words "sewer rents" 49 when used in this chapter shall mean any rents or charges imposed pursu- 50 ant to section 24-514 of the code of the preceding municipality or 51 pursuant to the New York city municipal water finance authority act, 52 which is set forth in title two-A of article five of the public authori- 53 ties law. The words "sewer surcharges" when used in this chapter shall 54 mean the charges imposed pursuant to section 24-523 of the code of the 55 preceding municipality or pursuant to the New York city municipal water 56 finance authority act, which is set forth in title two-A of article five

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1 of the public authorities law. Whenever an increase in the amount of 2 uniform annual charges or extra or miscellaneous charges shall have been 3 made or a charge shall have been made for water services for any build- 4 ing completed subsequent to the first day of January in each year, the 5 amount of such increase of the charge or new charge for such new build- 6 ing shall not be due or become a lien or charge against the premises 7 until the amounts thereof shall have been entered with the date of such 8 entries, respectively, in the books in which the uniform annual charges 9 and extra or miscellaneous charges against such premises are to be 10 entered. The words "tax lien" when used in this chapter shall mean the 11 lien arising pursuant to the provisions of this chapter or pursuant to 12 the New York city municipal water finance authority act, which is set 13 forth in title two-A of article five of the public authorities law, as a 14 result of the nonpayment of taxes, assessments, sewer rents, sewer 15 surcharges, water rents, any other charges that are made a lien subject 16 to the provisions of this chapter, the costs of any advertisements and 17 notices given pursuant to this chapter, any other charges that are due 18 and payable, a surcharge pursuant to section 11-332 of this chapter if 19 the tax lien is sold, interest and penalties thereon and the right of 20 the city to receive such amounts. The words "tax lien certificate" when 21 used in this chapter shall mean the instrument evidencing a tax lien and 22 executed by the commissioner of finance or his or her designee at such 23 time as such lien is transferred to a purchaser upon sale of such lien 24 by the city. 25 § 11-302 Interest rates not to be reduced. The commissioner of 26 finance shall not reduce the rate of interest upon any taxes or assess- 27 ment below the amount fixed by law. 28 § 11-302.1 Error in record of payment of tax or assessment. (a) If the 29 records of the department of finance show a charge as paid due to a 30 misapplied payment or other error, and the department later corrects the 31 records, interest shall not be imposed until after the department (i) 32 corrects the error and (ii) sends a statement of account or other simi- 33 lar bill or notice stating the amount due and when the charge must be 34 paid to avoid the accrual of interest. 35 (b) The provisions of this section shall not apply to an installment 36 of tax or an assessment for which payment, made electronically, by 37 check, or by other means, was dishonored. 38 (c) The provisions of this section shall not apply where the error in 39 the records of the department was made as a result of fraud or other 40 criminal conduct by the taxpayer or any person acting on his or her 41 behalf or at his or her request. 42 § 11-303 Arrears to be provided for in assessment rolls. There shall 43 be ruled in the yearly assessment rolls of the taxes in each section or 44 ward, a column headed "arrears," in which the commissioner of finance 45 shall annually before any taxes for the year are collected, cause to be 46 entered the word "arrears" opposite to the ward, lot, town, block and 47 map numbers on which any arrears of taxes, sewer rents, sewer surcharges 48 or water rents shall be due, or on which any assessment shall remain 49 unpaid which was due or confirmed one month prior to the first of July, 50 then last past. 51 § 11-304 Bills for taxes to show arrears. There shall be ruled a 52 column for "arrears" in every bill rendered for taxes for lots on which 53 such arrears or assessments, sewer rents, sewer surcharges or water 54 rents, and interest and penalties thereon, may be due as aforesaid, or 55 may have been sold and yet be redeemable, in which shall be written in a 56 conspicuous place, "arrears". The columns for arrears indicate lots

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1 sold for arrears, or to be sold therefor; arrears to be paid and lots 2 redeemed at the office of the city collector. 3 § 11-305 Commissioner of finance to publish notice of confirmation of 4 assessments. It shall be the duty of the commissioner of finance to 5 give public notice, by advertisement, for at least ten days, in the City 6 Record and as soon as practicable and within ten days after the confir- 7 mation of any assessment, that the same has been confirmed, specifying 8 the title of such assessment, and the date of its confirmation, and also 9 the date of entry in the record of titles of assessments kept in the 10 department of finance, addressed as a class to all persons, owners of 11 property affected by any such assessment, that unless the amount 12 assessed for benefit on any person or property shall be paid within 13 ninety days after the date of the entry of any such assessment, interest 14 shall be thereafter collected thereon as provided in section 11-306 of 15 this chapter. 16 § 11-306 Interest to be charged if assessments unpaid for ninety days; 17 payment in installments. If any assessment shall remain unpaid for the 18 period of ninety days after the date of the entry thereof on the record 19 of titles of assessments, it shall be the duty of the commissioner of 20 finance or his or her designee to charge, collect and receive interest 21 thereon, at the rate of seven percent per annum, to be calculated to the 22 date of payment from the date when such assessment became a lien as 23 provided by section three hundred fourteen of the New York city charter 24 in force at the time of the adoption of the New York city charter by 25 referendum in the year nineteen hundred sixty-one, provided, however, 26 that the city collector shall accept and credit as payments on account 27 of assessments now or hereafter levied against any parcel or plot of 28 property, such sums of money not less than twenty-five dollars or multi- 29 ples thereof in amount as may be tendered for payment on account of any 30 assessment now or hereafter levied against any property. Upon requisi- 31 tion by the commissioner of finance for the assessed valuation of the 32 property affected by any assessment, the president of the tax commis- 33 sion, or any tax commissioner duly assigned by him or her, shall forth- 34 with certify the same to the commissioner of finance. 35 § 11-307 Payments in installments of assessments heretofore or here- 36 after confirmed. Upon the application in writing of the owner of a 37 parcel of real property affected by an unpaid assessment heretofore or 38 hereafter confirmed the amount of which is one hundred dollars or more, 39 the commissioner of finance shall divide the assessment upon such parcel 40 into fifteen parts or, if the application so requests, into five parts, 41 as nearly equal as may be, or if the amount of such assessment is fifty 42 dollars or more but less than one hundred dollars the commissioner of 43 finance shall divide the assessment upon such parcel into five parts as 44 nearly equal as may be. One part thereof in any event shall be due and 45 payable, and in each case as many more of such parts shall be due and 46 payable as years may have elapsed since the entry of such original 47 assessment for collection. Such parts thereof with interest at the rate 48 of seven percent per annum on the amount of the assessment unpaid shall 49 be paid at the time of application as a condition of the extension of 50 time of payment of the remainder as provided in this section. Upon 51 payment of such parts and interests, the balance of such assessments 52 shall cease to be a lien upon such real property except as hereinafter 53 provided; and the remaining parts shall be paid in annual installments 54 as herein provided. Of such installments the first, with interest at 55 the rate of four percent thereon, and on the installments thereafter to 56 become due, from the date of payment of the parts of such assessment

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1 paid as hereinbefore provided, shall become due and payable and be a 2 lien on the real property assessed, on the next ensuing anniversary of 3 the date of entry of the assessment in the record of titles of assess- 4 ments confirmed; and one, with interest at the rate of four percent per 5 annum thereon and on the installments thereafter to become due shall 6 become due and payable and be a lien upon the real property assessed, 7 annually thereafter. After the time herein specified for annual 8 installments and interest to become due, the amount of the lien thereon 9 shall bear interest at the rate of seven percent per annum. Any 10 installment assessment shall not be further divided into installments. 11 The first installment of an assessment divided within the ninety-day 12 period provided by section 11-306 of this chapter during which assess- 13 ment may be paid without interest shall not be subject to interest, but 14 the second installment with interest at the rate of four percent per 15 annum from the original date of entry shall become due and payable and 16 be a lien upon the real property on the anniversary date of entry of the 17 assessment and the remaining installments with interest shall become due 18 and payable and be a lien on the real property as hereinbefore provided. 19 The installments not due with interest at the rate of four percent per 20 annum to the date of payment may be paid at any time. The provisions of 21 this chapter with reference to the sale of tax liens shall apply to the 22 several unpaid installments and the interest thereon in the same manner 23 as if each installment and the interest thereon had been imposed as an 24 assessment payable in one payment, at the time such installment became a 25 lien. In the event of the acquisition by condemnation by the city for 26 public purposes any property upon which there are installments not due, 27 such installments shall become due as of the date of the entry of the 28 final order of the supreme court or the confirmation of the report of 29 the commissioners in the condemnation proceedings, and shall be set off 30 against an award that may be made for the property acquired. 31 When an award for damage shall accrue to the same person who is or was 32 at the time the assessment was confirmed liable for the assessments for 33 benefit on the abutting property in the same proceedings, only the 34 portion of the assessment in excess of such award may be considered in 35 levying in installments under the provisions of this section. Except as 36 provided in this section, no such annual installment shall be a lien or 37 deemed to be an encumbrance upon the title to the real property assessed 38 until it becomes due as herein provided. 39 § 11-308 Apportionment of assessment. If a sum of money in gross has 40 been or shall be assessed upon any lands or premises in the city, any 41 person or persons claiming any divided or undivided part thereof may pay 42 such part of the sums of money so assessed, also of the interest and 43 charges due or charged thereon, as the commissioner of finance may deem 44 to be just and equitable. The remainder of the sum of money so 45 assessed, together with the interest and charges, shall be a lien upon 46 the residue of the land and premises only, and the tax lien upon such 47 residue may be sold in pursuance of the provisions of this chapter, to 48 satisfy the residue of such assessment, interest, or charges thereon, in 49 the same manner as though the residue of such assessment had been 50 imposed upon such residue of such land or premises. 51 § 11-309 Notifying taxpayers of assessments. a. The owner of any lot, 52 piece or parcel of land in the city of Staten Island or any person 53 interested in such lot, piece or parcel, may file with the department of 54 finance, a statement containing a brief description of such land, 55 together with the section, block and lot number thereof, or such other 56 identifying information as at the time is established by the department

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1 of finance, and a statement of the applicant's interest therein, togeth- 2 er with a written request that such lot, piece or parcel of land be 3 registered in the name of the applicant. In such statement the applicant 4 shall designate a post office address to which notifications addressed 5 to such applicant shall be sent. A brief description of such lot, piece 6 or parcel of land corresponding to the description thereof in the state- 7 ment so filed, together with the name of the applicant and his or her 8 post office address and the date of such application, shall thereupon be 9 registered in the department of finance. 10 b. As soon as any assessment for a local improvement shall have been 11 confirmed, including assessments confirmed by a court of record, and the 12 list thereof shall have been entered and filed in the department of 13 finance, such assessment list shall be examined and thereupon, within 14 twenty days after such entry there shall be mailed a notice addressed to 15 each person in whose name any lot, piece or parcel of land, affected by 16 such assessment, is registered, at the post office address registered in 17 the records of the department of finance, which notice shall contain the 18 brief description of the lot, piece or parcel of land registered in the 19 name of the person to whom such notice is addressed, together with the 20 amount assessed thereon, date of entry, and title of the improvement for 21 which such assessment is made, and a statement of the rate of interest 22 or penalty imposed for the nonpayment of such assessment, and the date 23 from which the interest or penalty will be computed. Failure to comply 24 with the provisions herein however, shall in no manner affect the valid- 25 ity or collectability of any assessment heretofore or hereafter 26 confirmed, nor shall any claim arise or exist against the comptroller, 27 the commissioner of finance, or any officer of the city by reason of 28 such failure. 29 c. The commissioner of finance or his or her designee shall for the 30 purpose of this section provide appropriate records for each section of 31 the city, included within the respective boroughs, as the same shall 32 appear upon the tax maps of the city. 33 § 11-310 Water charges and sewer rents to be transmitted to commis- 34 sioner of finance. The commissioner of environmental protection shall 35 cause to be transmitted to the commissioner of finance an account of all 36 water rents, charges, fines and penalties and all sewer rents, charges, 37 fines and penalties as the same become due or accrue. 38 § 11-311 Sewer surcharges to be transmitted to commissioner of 39 finance. The commissioner of environmental protection shall cause to be 40 transmitted to the commissioner of finance an account of all sewer 41 surcharges, fines and penalties as the same become due or accrue. 42 § 11-312 Water rents; when payable; penalty for nonpayment. a. One- 43 half (i) the uniform annual water charges and extra and miscellaneous 44 charges for water not metered and (ii) annual service charges shall 45 become due and payable, in advance if entered on January first, nineteen 46 hundred seventy-four for the period commencing January first, nineteen 47 hundred seventy-four and ending June thirtieth, nineteen hundred seven- 48 ty-four. Commencing on June thirtieth, nineteen hundred seventy-four, 49 uniform annual water charges and extra and miscellaneous charges for 50 water not metered and annual service charges shall be due and payable in 51 advance on the thirtieth day of June in each year, if entered. If any of 52 such rents and charges which become due and payable on or before June 53 thirtieth, nineteen hundred seventy-six shall not have been paid to the 54 commissioner of finance or his or her designee on or before the last day 55 of the month following the month of entry, it shall be the duty of the 56 commissioner of finance or his or her designee to charge, collect and

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1 receive interest thereon to be calculated at the rate of seven percent 2 per annum from the date when such rents and charges became due and paya- 3 ble to December thirty-first, nineteen hundred seventy-six, and at the 4 rate of fifteen percent per annum from January first, nineteen hundred 5 seventy-seven to the date of payment. If any of such rents and charges 6 which shall become due and payable on or after June thirtieth, nineteen 7 hundred seventy-seven are not paid to the commissioner of finance or his 8 or her designee on or before the last day of the month following the 9 month of entry, it shall be the duty of the commissioner of finance or 10 his or her designee to charge, collect and receive interest thereon to 11 be calculated at the rate of fifteen percent per annum from the date 12 when such rents and charges became due and payable to the date of 13 payment. If not so entered and payable, but entered at any time subse- 14 quent thereto, they shall be due and payable when entered and notice 15 thereof shall be mailed within five days of such entry to the premises 16 against which they are imposed addressed to either the owner or the 17 occupant and, if entered on or before December thirty-first, nineteen 18 hundred seventy-six but not paid on or before the last day of the month 19 following the month of entry, it shall be the duty of the commissioner 20 of finance or his or her designee to charge, collect and receive inter- 21 est thereon to be calculated at the rate of seven percent per annum from 22 the date of entry to December thirty-first, nineteen hundred seventy- 23 six, and at the rate of fifteen percent per annum from January first, 24 nineteen hundred seventy-seven to the date of payment; if entered on or 25 after January first, nineteen hundred seventy-seven but not paid on or 26 before the last day of the month following the month of entry, it shall 27 be the duty of the commissioner of finance or his or her designee to 28 charge, collect and receive interest thereon to be calculated at the 29 rate of fifteen percent per annum from the date of entry to the date of 30 payment. 31 b. All charges for meters and their connections and for their setting, 32 repair and maintenance, and all charges in accordance with meter rates 33 for supply of water measured by meter, including minimum charges for the 34 supply of water measured by meter, shall be due and payable when 35 entered, and notice thereof shall be mailed within five days of such 36 entry stating the amount due and the nature of the rent or charge to the 37 last known address of the person whose name appears on the record of 38 such rents and charges as being the owner, occupant or agent or, where 39 no name appears, to the premises addressed to either the owner or the 40 occupant, and if entered on or before December thirty-first, nineteen 41 hundred seventy-six but not paid on or before the last day of the month 42 following the month of entry, it shall be the duty of the commissioner 43 of finance or his or her designee to charge, collect and receive inter- 44 est thereon to be calculated at the rate of seven percent per annum from 45 the date of entry to December thirty-first, nineteen hundred seventy- 46 six, and at the rate of fifteen percent per annum from January first, 47 nineteen hundred seventy-seven to the date of payment; if entered on or 48 after January first, nineteen hundred seventy-seven but not paid on or 49 before the thirtieth day following the date of entry, it shall be the 50 duty of the commissioner of finance or his or her designee to charge, 51 collect and receive interest thereon to be calculated at the rate of 52 fifteen percent per annum from the date of entry to the date of payment. 53 § 11-313 Sewer rents; when payable; penalty for nonpayment. a. As used 54 in this section: 55 1. The term "metered premises" shall mean premises, or any part there- 56 of, (a) to which water is supplied by the municipal water supply system

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1 or by a private water company, and (b) at which the quantity of water 2 supplied is measured by a water meter. 3 2. The term "unmetered premises" shall mean premises, or any part 4 thereof, (a) to which water is supplied by the municipal water supply 5 system or by a private water company, and (b) at which the quantity of 6 water supplied is not measured by a water meter. 7 b. The sewer rents charged against metered premises in accordance with 8 the provisions of paragraphs two and three of subdivision b of section 9 24-514 of the code of the preceding municipality and the rules duly 10 promulgated pursuant to such section, including the minimum rents for 11 the use of the sewer system, charged pursuant to such section and rules, 12 and the sewer rents charged against any premises in accordance with the 13 provisions of paragraphs four and five of subdivision b of section 14 24-514 of the code of the preceding municipality and rules duly promul- 15 gated pursuant to such section, including the minimum rents for the use 16 of the sewer system, charged pursuant to such section and rules shall 17 become due and shall become a charge or lien on the premises when the 18 amount thereof shall have been fixed by the commissioner of environ- 19 mental protection, and an entry thereof shall have been made against 20 such premises with the date of such entry, in the book in which sewer 21 rents are to be entered. The sewer surcharges charged against any prem- 22 ises pursuant to section 24-523 of the code of the preceding munici- 23 pality shall become due and shall become a charge or lien on the prem- 24 ises when the amount thereof shall have been fixed by the commissioner 25 of environmental protection and an entry thereof shall have been made 26 against such premises in the book in which sewer surcharges are to be 27 entered. A notice thereof, stating the amount due and the nature of the 28 rent, surcharge or charge shall be mailed, within five days after such 29 entry, to the last known address of the person whose name appears upon 30 the records in the office of the department of finance as being the 31 owner, occupant or agent or, where no name appears, to the premises 32 addressed to either the owner or the occupant. If such rent, surcharge 33 or charge shall have been entered on or before December thirty-first, 34 nineteen hundred seventy-six but not paid on or before the last day of 35 the month following the month of entry, it shall be the duty of the 36 commissioner of finance or his or her designee to charge, collect and 37 receive interest thereon to be calculated at the rate of seven percent 38 per annum from the date of entry to December thirty-first, nineteen 39 hundred seventy-six, and at the rate of fifteen percent per annum from 40 January first, nineteen hundred seventy-seven to the date of payment; if 41 entered on or after January first, nineteen hundred seventy-seven but 42 not paid on or before the thirtieth day following the date of entry, it 43 shall be the duty of the commissioner of finance or his or her designee 44 to charge, collect and receive interest thereon to be calculated at the 45 rate of fifteen percent per annum from the date of entry to the date of 46 payment. The rents or charges for the use of the sewer system charged 47 during any specified period of time pursuant to the provisions of 48 section 24-514 of the code of the preceding municipality and the rules 49 promulgated thereunder shall be computed, in accordance with the 50 provisions of such section and the rules duly promulgated thereunder, on 51 the basis of water rents or charges computed for the same period. 52 c. Sewer rents charged against unmetered premises in accordance with 53 the provisions of paragraphs two and three of subdivision b of section 54 24-514 of the code of the preceding municipality and the rules duly 55 promulgated pursuant to such section, for the use of the sewer system 56 during the one-year period commencing on the first day of July of each

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1 year, shall be due and payable and shall become a charge or lien on the 2 premises on the first day of January following such first day of July, 3 if entered, except that commencing on June thirtieth, nineteen hundred 4 seventy-four such sewer rents shall be due and payable in advance on the 5 thirtieth day of June in each year, if entered, and shall become a 6 charge or lien on the premises on such date. If any of such rents or 7 charges which became due and payable on or before June thirtieth, nine- 8 teen hundred seventy-six shall not have been paid to the commissioner of 9 finance or his or her designee within thirty days after such first day 10 of January, or, commencing on the thirtieth day of June, nineteen 11 hundred seventy-four, on or before the last day of the month following 12 the month of entry, it shall be the duty of the commissioner of finance 13 or his or her designee to charge, collect and receive interest thereon 14 to be calculated at the rate of seven percent per annum from the date 15 when such charges became due and payable to December thirty-first, nine- 16 teen hundred seventy-six, and at the rate of fifteen percent per annum 17 from January first, nineteen hundred seventy-seven to the date of 18 payment. If any of such rents or charges which shall become due and 19 payable on or after June thirtieth, nineteen hundred seventy-seven are 20 not paid to the commissioner of finance or his or her designee on or 21 before the last day of the month following the month of entry, it shall 22 be the duty of the commissioner of finance or his or her designee to 23 charge, collect and receive interest thereon to be calculated at the 24 rate of fifteen percent per annum from the date when such rents or 25 charges became due and payable to the date of payment. If not so entered 26 and payable, but entered at any time subsequent thereto, they shall be 27 due and payable and shall become a charge or lien on the premises when 28 entered and notice thereof shall be mailed within five days after such 29 entry, to the last known address of the person whose name appears upon 30 the records in the department of finance as the owner or the occupant or 31 if no name appears, to the premises addressed to either the owner or 32 occupant. If any of such rents or charges which were entered on or 33 before December thirty-first, nineteen hundred seventy-six but not paid 34 on or before the last day of the month following the month of entry, it 35 shall be the duty of the commissioner of finance or his or her designee 36 to charge, collect and receive interest thereon to be calculated at the 37 rate of seven percent per annum from the date of entry to December thir- 38 ty-first, nineteen hundred seventy-six, and at the rate of fifteen 39 percent per annum from January first, nineteen hundred seventy-seven to 40 the date of payment; if entered on or after January first, nineteen 41 hundred seventy-seven but not paid on or before the last day of the 42 month following the month of entry, it shall be the duty of the commis- 43 sioner of finance or his or her designee to charge, collect and receive 44 interest thereon to be calculated at the rate of fifteen percent per 45 annum from the date of entry to the date of payment. The sewer rents 46 charged against unmetered premises for the use of the sewer system 47 during the one-year period commencing on the first day of July of each 48 year shall be computed in accordance with the provisions of section 49 24-514 of the code of the preceding municipality and the rules duly 50 promulgated thereunder, upon the basis of water rents or charges 51 computed for the same period. 52 d. Whenever an increase in the amount of the sewer rent charged 53 against unmetered premises shall have been made or a charge shall have 54 been made for sewer services for any building completed subsequent to 55 the first day of July in each year, the amount of such increase of the 56 charge or new charge for such new building shall not be due or become a

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1 lien or charge against the premises until the amounts thereof shall have 2 been entered with the date of such entries, respectively, in the books 3 in which sewer rents charged against such premises are to be entered. 4 e. No later than the twenty-fifth day of May in each year, the banking 5 commission shall transmit a written recommendation to the council of a 6 proposed interest rate to be charged for nonpayment of sewer rents. In 7 making such recommendations the commission shall consider the prevailing 8 interest rates charged for commercial loans extended to prime borrowers 9 by commercial banks operating in the city and shall propose a rate of at 10 least six per centum per annum greater than such rates. The council may 11 by resolution adopt an interest rate to be charged for nonpayment of 12 sewer rents pursuant to section 11-224 of the code and, for nonpayment 13 of sewer rents that become due and payable on or after July first, two 14 thousand five, pursuant to section 11-224.1 of the code, and may specify 15 in such resolution the date on which such interest rate is to take 16 effect. 17 § 11-314 Notice of rules and regulations; penalty for nonpayment; 18 water supply cut off. The rates and charges for supply of water, the 19 annual service charges and minimum charges, the sewer rents, the sewer 20 surcharges, the rules and regulations concerning the use of water, all 21 other rules and regulations affecting users of water or concerning 22 charges for supply of water, restrictions of the use of water, installa- 23 tion of meters, and all rules and regulations affecting property 24 connected with the sewer system, penalties and fines for violations of 25 rules and regulations shall be printed on each bill and permit so far as 26 in the judgment of the commissioner of environmental protection they are 27 applicable. This section and such printing and the printing of this 28 section on such bills and permits shall be sufficient notice to owners, 29 tenants or occupants of premises to authorize the imposition and recov- 30 ery of any charges, surcharges and fines imposed under such rules and 31 regulations and of any penalties imposed in pursuance of this chapter in 32 addition to cutting off the supply of water. Where water charges payable 33 in advance or sewer rents or charges payable as provided in subdivision 34 c of section 11-313 of this chapter, are not paid within the period 35 covered by such charges or rents, and a notice of such nonpayment is 36 mailed by the commissioner of finance to the premises addressed to 37 "owner or occupant," the commissioner of environmental protection may 38 shut off the supply of water to such premises. Where water charges not 39 payable in advance or sewer rents, sewer surcharges or charges payable 40 as provided in subdivisions b and d of section 11-313 of this chapter 41 have been made by the department and remain unpaid for more than thirty 42 days or where the commissioner of environmental protection has certified 43 that there is a flagrant and continued violation of a provision or 44 provisions of section 24-523 of the code or of any rule or regulation 45 promulgated pursuant thereto or of any order of the commissioner of 46 environmental protection issued pursuant thereto, after notice thereof 47 mailed to the premises addressed to "owner or occupant," the commission- 48 er of environmental protection may shut off the supply of water to the 49 premises. 50 § 11-315 Enforcement of collection of sewer rents, sewer surcharges 51 and water rents. Sewer rents, sewer surcharges, charges, penalties and 52 fines, and interest thereon, and water rents, charges, penalties and 53 fines, and interest thereon, shall after they are payable to the commis- 54 sioner of finance or his or her designee be enforced in the manner 55 provided in this chapter and chapter four of this title. In addition to 56 collecting sewer rents, sewer surcharges, charges, penalties and fines

S. 8578 270

1 and interest thereon and water rents, charges, penalties and fines and 2 interest thereon in the manner provided in this chapter and chapter four 3 of this title, the city may maintain an action for their recovery 4 against the person for whose benefit or by whom the water is taken or 5 used or for whose benefit or by whom sewer service is used. 6 § 11-316 Bills of arrears of taxes, assessments, sewer rents, sewer 7 surcharges and water rents, any other charges that are made a lien 8 subject to the provisions of this chapter, and interest and penalties 9 thereon to be furnished when requested. The commissioner of finance or 10 his or her designee, upon the written request of the owner, the proposed 11 vendee under a contract of sale, a mortgagee, any person having a vested 12 or contingent interest in any lot or lots or their duly authorized 13 agent, or any person who has made a filing pursuant to section 11-309 of 14 this chapter shall furnish a bill of all arrears of taxes on any lot or 15 lots due prior to the first of September, then last past, of sewer 16 rents, sewer surcharges and water rents, assessments, any other charges 17 that are made a lien subject to the provisions of this chapter, and 18 interest and penalties thereon, which are due and payable. Upon the 19 payment of such bill which shall be called a bill of arrears the receipt 20 of the commissioner of finance or his or her designee thereon shall be 21 conclusive evidence of such payment. The commissioner of finance or his 22 or her designee shall cause to be kept an account of amounts so 23 collected, and the certificate of the commissioner of finance or his or 24 her designee, that there are no tax liens on such lot or lots, shall 25 forever free such lot or lots from all liens of taxes, sewer rents, 26 sewer surcharges or water rents, assessments, any other charges that are 27 made a lien subject to the provisions of this chapter, and interest and 28 penalties thereon that are due and payable prior to the date of such 29 receipt or certificate, but not from the lien of any tax lien duly sold 30 and not theretofore satisfied. 31 § 11-317 Fees for searches to be added to bills. Fees for such search- 32 es shall be included in the bills mentioned in section 11-316 of this 33 chapter, and also charges for certificates, which shall be given by the 34 commissioner of finance or his or her designee respecting lots on which 35 there may be no arrears when searches are required. Such fees shall be 36 regulated by local law. 37 § 11-318 Fee for certified search and bill of arrears. A fee of twen- 38 ty-five dollars shall be paid to and collected by the commissioner of 39 finance or his or her designee on his or her furnishing a certified 40 search and bill of arrears on each lot or piece of property mentioned or 41 referred to in the written request therefor. The commissioner of finance 42 shall be authorized to waive or reduce such fee in connection with any 43 sale of a tax lien or tax liens pursuant to this chapter. 44 § 11-319 Sales of tax liens. a. A tax lien or tax liens on a property 45 or any component of the amount thereof may be sold by the city as 46 authorized by subdivision b of this section, when such tax lien or tax 47 liens shall have remained unpaid in whole or in part for one year, 48 provided, however, that a tax lien or tax liens on any class one proper- 49 ty or any class two property that is a residential condominium or resi- 50 dential cooperative, as such classes of property are defined in subdivi- 51 sion one of section eighteen hundred two of the real property tax law, 52 may be sold by the city only when the real property tax component of 53 such tax lien or tax liens shall have remained unpaid in whole or in 54 part for three years and, in the case of any such class one property 55 that is not vacant land or any such class two property that is a resi- 56 dential condominium or residential cooperative, as such classes of prop-

S. 8578 271

1 erty are defined in subdivision one of section eighteen hundred two of 2 the real property tax law, equals or exceeds the sum of five thousand 3 dollars, or, in the case of any class two residential property owned by 4 a company organized pursuant to article eleven of the private housing 5 finance law that is not a residential condominium or a residential coop- 6 erative, as such classes of property are defined in subdivision one of 7 section eighteen hundred two of the real property tax law, for two 8 years, and equals or exceeds the sum of five thousand dollars, or, in 9 the case of abandoned class one property or abandoned class two property 10 that is a residential condominium or residential cooperative, for eigh- 11 teen months, and after such sale, shall be transferred, in the manner 12 provided by this chapter, and provided, further, however, that (i) the 13 real property tax component of such tax lien may not be sold pursuant to 14 this subdivision on any: (A) residential real property in class one that 15 is receiving an exemption pursuant to section 11-245.3 or 11-245.4 of 16 this title, or pursuant to section four hundred fifty-eight of the real 17 property tax law with respect to real property purchased with payments 18 received as prisoner of war compensation from the United States govern- 19 ment, or pursuant to paragraph (b) or (c) of subdivision two of section 20 four hundred fifty-eight-a of the real property tax law, or where the 21 owner of such residential real property in class one is receiving bene- 22 fits in accordance with department of finance memorandum 05-3, or any 23 successor memorandum thereto, relating to active duty military person- 24 nel, or where the owner of such residential real property in class one 25 has been allowed a credit pursuant to subsection (e) of section six 26 hundred six of the tax law for the calendar year in which the date of 27 the first publication, pursuant to subdivision a of section 11-320 of 28 this chapter, of the notice of sale, occurs or for the calendar year 29 immediately preceding such date; or (B) real property that was granted 30 an exemption pursuant to section four hundred twenty-a, four hundred 31 twenty-b, four hundred forty-six, or four hundred sixty-two of the real 32 property tax law in one of the two fiscal years preceding the date of 33 such sale, provided that: (1) such exemption was granted to such real 34 property upon the application of a not-for-profit organization that owns 35 such real property on or after the date on which such real property was 36 conveyed to such not-for-profit organization; (2) the real property tax 37 component of such lien arose on or after the date on which such real 38 property was conveyed to such not-for-profit organization; and (3) such 39 not-for-profit organization is organized or conducted for one of the 40 purposes described in paragraph a or paragraph b of subdivision one of 41 section 11-246 of this title, and (ii) the sewer rents component, sewer 42 surcharges component or water rents component of such tax lien may not 43 be sold pursuant to this subdivision on any one family residential real 44 property in class one or on any two or three family residential real 45 property in class one that is receiving an exemption pursuant to section 46 11-245.3 or 11-245.4 of this title, or pursuant to section four hundred 47 fifty-eight of the real property tax law with respect to real property 48 purchased with payments received as prisoner of war compensation from 49 the United States government, or pursuant to paragraph (b) or (c) of 50 subdivision two of section four hundred fifty-eight-a of the real prop- 51 erty tax law, or where the owner of any two or three family residential 52 real property in class one is receiving benefits in accordance with 53 department of finance memorandum 05-3, or any successor memorandum ther- 54 eto, relating to active duty military personnel, or where the owner of 55 any two or three family residential real property in class one has been 56 allowed a credit pursuant to subsection (e) of section six hundred six

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1 of the tax law for the calendar year in which the date of the first 2 publication, pursuant to subdivision a of section 11-320 of this chap- 3 ter, of the notice of sale, occurs or for the calendar year immediately 4 preceding such date. A tax lien or tax liens on any property classified 5 as a class two property, except a class two property that is a residen- 6 tial condominium or residential cooperative, or a class two residential 7 property owned by a company organized pursuant to article eleven of the 8 private housing finance law that is not a residential condominium or a 9 residential cooperative, or class three property, as such classes of 10 property are defined in subdivision one of section eighteen hundred two 11 of the real property tax law, shall not be sold by the city unless such 12 tax lien or tax liens include a real property tax component as of the 13 date of the first publication, pursuant to subdivision a of section 14 11-320 of this chapter, of the notice of sale. Notwithstanding any 15 provision of this subdivision to the contrary, any such tax lien or tax 16 liens that remain unpaid in whole or in part after such date may be sold 17 regardless of whether such tax lien or tax liens include a real property 18 tax component. A tax lien or tax liens on a property classified as a 19 class four property, as such class of property is defined in subdivision 20 one of section eighteen hundred two of the real property tax law, shall 21 not be sold by the city unless such tax lien or tax liens include a real 22 property tax component or sewer rents component or sewer surcharges 23 component or water rents component or emergency repair charges compo- 24 nent, where such emergency repair charges accrued on or after January 25 first, two thousand six and are made a lien pursuant to section 27-2144 26 of this code, as of the date of the first publication, pursuant to 27 subdivision a of section 11-320 of this chapter, of the notice of sale, 28 provided, however, that any tax lien or tax liens that remain unpaid in 29 whole or in part after such date may be sold regardless of whether such 30 tax lien or tax liens include a real property tax component, sewer rents 31 component, sewer surcharges component, water rents component or emergen- 32 cy repair charges component. For purposes of this subdivision, the words 33 "real property tax" shall not include an assessment or charge upon prop- 34 erty imposed pursuant to section 25-411 of this code. A sale of a tax 35 lien or tax liens shall include, in addition to such lien or liens that 36 have remained unpaid in whole or in part for one year, or, in the case 37 of any class one property or class two property that is a residential 38 condominium or residential cooperative, when the real property tax 39 component of such lien or liens has remained unpaid in whole or in part 40 for three years, or, in the case of any class two residential property 41 owned by a company organized pursuant to article eleven of the private 42 housing finance law that is not a residential condominium or a residen- 43 tial cooperative, when the real property tax component of such lien or 44 liens has remained unpaid in whole or in part for two years, and equals 45 or exceeds the sum of five thousand dollars, any taxes, assessments, 46 sewer rents, sewer surcharges, water rents, any other charges that are 47 made a lien subject to the provisions of this chapter, the costs of any 48 advertisements and notices given pursuant to this chapter, any other 49 charges that are due and payable, a surcharge pursuant to section 11-332 50 of this chapter, and interest and penalties thereon or such component of 51 the amount thereof as shall be determined by the commissioner of 52 finance. The commissioner of finance may promulgate rules defining 53 "abandoned" property, as such term is used in this subdivision. 54 a-1. A subsequent tax lien or tax liens on a property or any component 55 of the amount thereof may be sold by the city pursuant to this chapter, 56 provided, however, that notwithstanding any provision in this chapter to

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1 the contrary, such tax lien or tax liens may be sold regardless of 2 whether such tax lien or tax liens have remained unpaid in whole or in 3 part for one year and, notwithstanding any provision in this chapter to 4 the contrary, in the case of any class one property or class two proper- 5 ty that is a residential condominium or residential cooperative or, 6 beginning January first, two thousand twelve, in the case of any class 7 two residential property owned by a company organized pursuant to arti- 8 cle eleven of the private housing finance law that is not a residential 9 condominium or a residential cooperative, such tax lien or tax liens may 10 be sold if the real property tax component of such tax lien or tax liens 11 has remained unpaid in whole or in part for one year, and provided, 12 further, however, that (i) the real property tax component of such tax 13 lien may not be sold pursuant to this subdivision on any residential 14 real property in class one that is receiving an exemption pursuant to 15 section 11-245.3 or 11-245.4 of this title, or pursuant to section four 16 hundred fifty-eight of the real property tax law with respect to real 17 property purchased with payments received as prisoner of war compen- 18 sation from the United States government, or pursuant to paragraph (b) 19 or (c) of subdivision two of section four hundred fifty-eight-a of the 20 real property tax law, or where the owner of such residential real prop- 21 erty in class one is receiving benefits in accordance with department of 22 finance memorandum 05-3, or any successor memorandum thereto, relating 23 to active duty military personnel, or where the owner of such residen- 24 tial real property in class one has been allowed a credit pursuant to 25 subsection (e) of section six hundred six of the tax law for the calen- 26 dar year in which the date of the first publication, pursuant to subdi- 27 vision a of section 11-320 of this chapter, of the notice of sale, 28 occurs or for the calendar year immediately preceding such date and (ii) 29 the sewer rents component, sewer surcharges component or water rents 30 component of such tax lien may not be sold pursuant to this subdivision 31 on any one family residential real property in class one or on any two 32 or three family residential real property in class one that is receiving 33 an exemption pursuant to section 11-245.3 or 11-245.4 of this title, or 34 pursuant to section four hundred fifty-eight of the real property tax 35 law with respect to real property purchased with payments received as 36 prisoner of war compensation from the United States government, or 37 pursuant to paragraph (b) or (c) of subdivision two of section four 38 hundred fifty-eight-a of the real property tax law, or where the owner 39 of any two or three family residential real property in class one is 40 receiving benefits in accordance with department of finance memorandum 41 05-3, or any successor memorandum thereto, relating to active duty mili- 42 tary personnel, or where the owner of any two or three family residen- 43 tial real property in class one has been allowed a credit pursuant to 44 subsection (e) of section six hundred six of the tax law for the calen- 45 dar year in which the date of the first publication, pursuant to subdi- 46 vision a of section 11-320 of this chapter, of the notice of sale, 47 occurs or for the calendar year immediately preceding such date. For 48 purposes of this subdivision, the term "subsequent tax lien or tax 49 liens" shall mean any tax lien or tax liens on property that become such 50 on or after the date of sale of any tax lien or tax liens on such prop- 51 erty that have been sold pursuant to this chapter, provided that the 52 prior tax lien or tax liens remain unpaid as of the date of the first 53 publication, pursuant to subdivision a of section 11-320 of this chap- 54 ter, of the notice of sale of the subsequent tax lien or tax liens. A 55 subsequent tax lien or tax liens on any property classified as a class 56 two property, except a class two property that is a residential condo-

S. 8578 274

1 minium or residential cooperative, or a class two residential property 2 owned by a company organized pursuant to article eleven of the private 3 housing finance law that is not a residential condominium or a residen- 4 tial cooperative, or class three property, as such classes of property 5 are defined in subdivision one of section eighteen hundred two of the 6 real property tax law, shall not be sold by the city unless such tax 7 lien or tax liens include a real property tax component as of the date 8 of the first publication, pursuant to subdivision a of section 11-320 of 9 this chapter, of the notice of sale. Notwithstanding any provision of 10 this subdivision to the contrary, any such tax lien or tax liens that 11 remain unpaid in whole or in part after such date may be sold regardless 12 of whether such tax lien or tax liens include a real property tax compo- 13 nent. A subsequent tax lien or tax liens on a property classified as a 14 class four property, as such class of property is defined in subdivision 15 one of section eighteen hundred two of the real property tax law, shall 16 not be sold by the city unless such tax lien or tax liens include a real 17 property tax component or sewer rents component or sewer surcharges 18 component or water rents component or emergency repair charges compo- 19 nent, where such emergency repair charges accrued on or after January 20 first, two thousand six and are made a lien pursuant to section 27-2144 21 of this code, as of the date of the first publication, pursuant to 22 subdivision a of section 11-320 of this chapter, of the notice of sale, 23 provided, however, that any tax lien or tax liens that remain unpaid in 24 whole or in part after such date may be sold regardless of whether such 25 tax lien or tax liens include a real property tax component, sewer rents 26 component, sewer surcharges component, water rents component or emergen- 27 cy repair charges component. For purposes of this subdivision, the words 28 "real property tax" shall not include an assessment or charge upon prop- 29 erty imposed pursuant to section 25-411 of this code. Nothing in this 30 subdivision shall be deemed to limit the rights conferred by section 31 11-332 of this chapter on the holder of a tax lien certificate with 32 respect to a subsequent tax lien. 33 a-2. In addition to any sale authorized pursuant to subdivision a or 34 subdivision a-1 of this section and notwithstanding any provision of 35 this chapter to the contrary, beginning on December first, two thousand 36 seven, the water rents, sewer rents and sewer surcharges components of 37 any tax lien on any class of real property, as such real property is 38 classified in subdivision one of section eighteen hundred two of the 39 real property tax law, may be sold by the city pursuant to this chapter, 40 where such water rents, sewer rents or sewer surcharges component of 41 such tax lien, as of the date of the first publication, pursuant to 42 subdivision a of section 11-320 of this chapter, of the notice of sale: 43 (i) shall have remained unpaid in whole or in part for one year and (ii) 44 equals or exceeds the sum of one thousand dollars or, beginning on March 45 first, two thousand eleven, in the case of any two or three family resi- 46 dential real property in class one, for one year, and equals or exceeds 47 the sum of two thousand dollars, or, beginning on January first, two 48 thousand twenty-one, in the case of any two or three family residential 49 real property in class one, for one year, and equals or exceeds the sum 50 of three thousand dollars, or, beginning on January first, two thousand 51 twelve, in the case of any class two residential property owned by a 52 company organized pursuant to article eleven of the private housing 53 finance law that is not a residential condominium or a residential coop- 54 erative, as such class of property is defined in subdivision one of 55 section eighteen hundred two of the real property tax law, for two 56 years, and equals or exceeds the sum of five thousand dollars; provided,

S. 8578 275

1 however, that such water rents, sewer rents or sewer surcharges compo- 2 nent of such tax lien may not be sold pursuant to this subdivision on 3 any one family residential real property in class one or on any two or 4 three family residential real property in class one that is receiving an 5 exemption pursuant to section 11-245.3 or 11-245.4 of this title, or 6 pursuant to section four hundred fifty-eight of the real property tax 7 law with respect to real property purchased with payments received as 8 prisoner of war compensation from the United States government, or 9 pursuant to paragraph (b) or (c) of subdivision two of section four 10 hundred fifty-eight-a of the real property tax law, or where the owner 11 of any two or three family residential real property in class one is 12 receiving benefits in accordance with department of finance memorandum 13 05-3, or any successor memorandum thereto, relating to active duty mili- 14 tary personnel, or where the owner of any two or three family residen- 15 tial real property in class one has been allowed a credit pursuant to 16 subsection (e) of section six hundred six of the tax law for the calen- 17 dar year in which the date of the first publication, pursuant to subdi- 18 vision a of section 11-320 of this chapter, of the notice of sale, 19 occurs or for the calendar year immediately preceding such date. After 20 such sale, any such water rents, sewer rents or sewer surcharges compo- 21 nent of such tax lien may be transferred in the manner provided by this 22 chapter. 23 a-3. In addition to any sale authorized pursuant to subdivision a or 24 subdivision a-1 of this section and notwithstanding any provision of 25 this chapter to the contrary, beginning on December first, two thousand 26 seven, a subsequent tax lien on any class of real property, as such real 27 property is classified in subdivision one of section eighteen hundred 28 two of the real property tax law, may be sold by the city pursuant to 29 this chapter, regardless of whether such subsequent tax lien, or any 30 component of the amount thereof, shall have remained unpaid in whole or 31 in part for one year, and regardless of whether such subsequent tax 32 lien, or any component of the amount thereof, equals or exceeds the sum 33 of one thousand dollars or beginning on March first, two thousand elev- 34 en, in the case of any two or three family residential real property in 35 class one, a subsequent tax lien on such property may be sold by the 36 city pursuant to this chapter, regardless of whether such subsequent tax 37 lien, or any component of the amount thereof, shall have remained unpaid 38 in whole or in part for one year, and regardless of whether such subse- 39 quent tax lien, or any component of the amount thereof, equals or 40 exceeds the sum of two thousand dollars, or, beginning on January first, 41 two thousand twenty-one, in the case of any two or three family residen- 42 tial real property in class one, a subsequent tax lien on such property 43 may be sold by the city pursuant to this chapter, regardless of whether 44 such subsequent tax lien, or any component of the amount thereof, shall 45 have remained unpaid in whole or in part for one year, and regardless of 46 whether such subsequent tax lien, or any component of the amount there- 47 of, equals or exceeds the sum of three thousand dollars, or, beginning 48 on January first, two thousand twelve, in the case of any class two 49 residential property owned by a company organized pursuant to article 50 eleven of the private housing finance law that is not a residential 51 condominium or a residential cooperative, as such class of property is 52 defined in subdivision one of section eighteen hundred two of the real 53 property tax law, a subsequent tax lien on such property may be sold by 54 the city pursuant to this chapter, regardless of whether such subsequent 55 tax lien, or any component of the amount thereof, shall have remained 56 unpaid in whole or in part for two years, and regardless of whether such

S. 8578 276

1 subsequent tax lien, or any component of the amount thereof, equals or 2 exceeds the sum of five thousand dollars; provided, however, that such 3 subsequent tax lien may not be sold pursuant to this subdivision on any 4 one family residential real property in class one or on any two or three 5 family residential real property in class one that is receiving an 6 exemption pursuant to section 11-245.3 or 11-245.4 of this title, or 7 pursuant to section four hundred fifty-eight of the real property tax 8 law with respect to real property purchased with payments received as 9 prisoner of war compensation from the United States government, or 10 pursuant to paragraph (b) or (c) of subdivision two of section four 11 hundred fifty-eight-a of the real property tax law, or where the owner 12 of any two or three family residential real property in class one is 13 receiving benefits in accordance with department of finance memorandum 14 05-3, or any successor memorandum thereto, relating to active duty mili- 15 tary personnel, or where the owner of any two or three family residen- 16 tial real property in class one has been allowed a credit pursuant to 17 subsection (e) of section six hundred six of the tax law for the calen- 18 dar year in which the date of the first publication, pursuant to subdi- 19 vision a of section 11-320 of this chapter, of the notice of sale, 20 occurs or for the calendar year immediately preceding such date. After 21 such sale, any such subsequent tax lien, or any component of the amount 22 thereof, may be transferred in the manner provided by this chapter. For 23 purposes of this subdivision, the term "subsequent tax lien" shall mean 24 the water rents, sewer rents or sewer surcharges component of any tax 25 lien on property that becomes such on or after the date of sale of any 26 water rents, sewer rents or sewer surcharges component of any tax lien 27 on such property that has been sold pursuant to this chapter, provided 28 that the prior tax lien remains unpaid as of the date of the first 29 publication, pursuant to subdivision a of section 11-320 of this chap- 30 ter, of the notice of sale of the subsequent tax lien. Nothing in this 31 subdivision shall be deemed to limit the rights conferred by section 32 11-332 of this chapter on the holder of a tax lien certificate with 33 respect to a subsequent tax lien. 34 a-4. In addition to any sale authorized pursuant to subdivision a, 35 a-1, a-2 or a-3 of this section and notwithstanding any provision of 36 this chapter to the contrary, beginning on March first, two thousand 37 eleven, the emergency repair charges component or alternative enforce- 38 ment expenses and fees component, where such emergency repair charges 39 accrued on or after January first, two thousand six and are made a lien 40 pursuant to section 27-2144 of this code, or where such alternative 41 enforcement expenses and fees are made a lien pursuant to section 42 27-2153 of this code, of any tax lien on any class of real property, as 43 such real property is defined in subdivision one of section eighteen 44 hundred two of the real property tax law, may be sold by the city pursu- 45 ant to this chapter, where such emergency repair charges component or 46 alternative enforcement expenses and fees component of such tax lien, as 47 of the date of the first publication, pursuant to subdivision a of 48 section 11-320 of this chapter, of the notice of sale: (i) shall have 49 remained unpaid in whole or in part for one year and (ii) equals or 50 exceeds the sum of one thousand dollars or, beginning on January first, 51 two thousand twelve, in the case of any class two residential property 52 owned by a company organized pursuant to article eleven of the private 53 housing finance law that is not a residential condominium or a residen- 54 tial cooperative, as such class of property is defined in subdivision 55 one of section eighteen hundred two of the real property tax law, for 56 two years, and equals or exceeds the sum of five thousand dollars;

S. 8578 277

1 provided, however, that such emergency repair charges component or 2 alternative enforcement expenses and fees component of such tax lien may 3 only be sold pursuant to this subdivision on any one, two or three fami- 4 ly residential real property in class one, where such one, two or three 5 family residential property in class one is not the primary residence of 6 the owner. After such sale, any such emergency repair charges component 7 or alternative enforcement expenses and fees component of such tax lien 8 may be transferred in the manner provided by this chapter. 9 a-5. In addition to any sale authorized pursuant to subdivision a, 10 a-1, a-2 or a-3 of this section and notwithstanding any provision of 11 this chapter to the contrary, beginning on March first, two thousand 12 eleven, a subsequent tax lien on any class of real property, or begin- 13 ning on January first, two thousand twelve in the case of any class two 14 residential property owned by a company organized pursuant to article 15 eleven of the private housing finance law that is not a residential 16 condominium or a residential cooperative, a subsequent tax lien on such 17 property, may be sold by the city pursuant to this chapter, regardless 18 of the length of time such subsequent tax lien, or any component of the 19 amount thereof, shall have remained unpaid, and regardless of the amount 20 of such subsequent tax lien. After such sale, any such subsequent tax 21 lien, or any component of the amount thereof, may be transferred in the 22 manner provided by this chapter. For purposes of this subdivision, the 23 term "subsequent tax lien" shall mean the emergency repair charges 24 component or alternative enforcement expenses and fees component, where 25 such emergency repair charges accrued on or after January first, two 26 thousand six and are made a lien pursuant to section 27-2144 of this 27 code, or where such alternative enforcement expenses and fees are made a 28 lien pursuant to section 27-2153 of this code, of any tax lien on prop- 29 erty that becomes such on or after the date of sale of any emergency 30 repair charges component or alternative enforcement expenses and fees 31 component, of any tax lien on such property that has been sold pursuant 32 to this chapter, provided that the prior tax lien remains unpaid as of 33 the date of the first publication, pursuant to subdivision a of section 34 11-320 of this chapter, of the notice of sale of the subsequent tax 35 lien. Nothing in this subdivision shall be deemed to limit the rights 36 conferred by section 11-332 of this chapter on the holder of a tax lien 37 certificate with respect to a subsequent tax lien. 38 a-6. Notwithstanding any provision of this chapter to the contrary, 39 beginning on September first, two thousand seventeen, a lien that 40 includes civil penalties for a violation of section 28-201.1 of this 41 code where such civil penalties accrued on or after July first, two 42 thousand seventeen, and became a lien pursuant to section 28-204.6.6 of 43 this code, may be sold by the city pursuant to this chapter, where such 44 civil penalties component of such lien, as of the date of the first 45 publication, pursuant to subdivision a of section 11-320 of this chap- 46 ter, of the notice of sale (i) shall have remained unpaid in whole or in 47 part for one year or more and (ii) equals or exceeds the sum of one 48 thousand dollars. After such sale, any such civil penalties component of 49 such lien may be transferred in the manner provided by this chapter. 50 b. The commissioner of finance, on behalf of the city, may sell tax 51 liens, either individually, in combinations, or in the aggregate, pursu- 52 ant to the procedures provided herein. The commissioner of finance shall 53 establish the terms and conditions of a sale of a tax lien or tax liens. 54 1. (i) The commissioner of finance may, in his or her discretion, sell 55 a tax lien or tax liens through a competitive sale. In addition to the 56 advertisement and notice required to be provided pursuant to section

S. 8578 278

1 11-320 of this chapter, the commissioner of finance or his or her desig- 2 nee shall cause to be published a notice of intention to sell a tax lien 3 or tax liens through a competitive sale, which notice shall include the 4 terms and conditions for such sale, the criteria by which bids shall be 5 evaluated, and a request for any other information or documents that the 6 commissioner of finance may require. Such notice shall be published in 7 one newspaper of general circulation in the city, not less than fifteen 8 days prior to the date designated by the commissioner for the submission 9 of bids. 10 (ii) The commissioner of finance may, in his or her discretion, estab- 11 lish criteria for the eligibility of bidders pursuant to section 12 11-321.1 of this chapter. 13 (iii) The commissioner of finance may reject any or all bids, or may 14 accept any combination of bids in a competitive sale. 15 2. (i) The commissioner of finance may, in his or her discretion, sell 16 a tax lien or tax liens through a negotiated sale. In addition to the 17 advertisement and notice required to be provided pursuant to section 18 11-320 of this chapter, the commissioner of finance or his or her desig- 19 nee shall cause to be published a notice of intention to sell a tax lien 20 or tax liens through a negotiated sale, which notice shall advise that a 21 request for statements of interest is available at the office of the 22 department of finance, and which may require the submission of any 23 information or documents that the commissioner deems appropriate, 24 provided, however, that if the negotiated sale is to a trust or other 25 entity created by the city or in which the city has an ownership or 26 residual interest, then the requirement that the notice advise that a 27 request for statements of interest is available at the office of the 28 department of finance shall not apply. Such notice shall be published in 29 one newspaper of general circulation in the city, not less than fifteen 30 days prior to the date designated by the commissioner for the receipt of 31 statements of interest, or if the negotiated sale is to such trust or 32 other entity, then such notice shall be published not less than fifteen 33 days prior to the date of sale. For purposes of this subparagraph, the 34 words "date of sale" shall have the same meaning provided in subdivision 35 e of section 11-320 of this chapter. 36 (ii) The commissioner of finance may engage in a negotiated sale in 37 accordance with criteria to be established pursuant to section 11-321.1 38 of this chapter. 39 (iii) The commissioner of finance may execute a purchase and sale 40 agreement and other necessary agreements with a designated purchaser or 41 purchasers to complete a negotiated sale. 42 3. The commissioner of finance may establish a minimum price for the 43 sale of tax liens that may be at a discount from or premium to the lien 44 amount. Notwithstanding the preceding sentence, the commissioner of 45 finance may not establish a minimum price for the sale of an individual 46 tax lien that is at a discount from the lien amount. The commissioner of 47 finance shall sell such tax liens at a purchase price that, in the 48 determination of such commissioner, is in the best interests of the 49 city. The commissioner of finance, in his or her discretion, may accept 50 cash or cash equivalent in immediately available funds, or other consid- 51 eration acceptable to the commissioner, or any combination thereof in 52 payment for a tax lien or tax liens. 53 4. The amount of a tax lien that is sold pursuant to this chapter 54 shall be the unpaid amount of the lien as of the date of sale, including 55 any interest and penalties thereon, any taxes, assessments, sewer rents, 56 sewer surcharges, water rents, any other charges that are made a lien

S. 8578 279

1 subject to the provisions of this chapter, the costs of any advertise- 2 ments and notices given pursuant to this chapter, any other charges that 3 are due and payable, any surcharge pursuant to section 11-332 of this 4 chapter, and interest and penalties thereon, or such component of the 5 amount thereof as shall be determined by the commissioner of finance, 6 notwithstanding the amount paid for purchase of the tax lien or compo- 7 nent of the amount thereof. For purposes of this paragraph, the words 8 "date of sale" shall have the same meaning provided in subdivision y of 9 section 11-320 of this chapter. 10 5. (i) The commissioner of finance may, subsequent to the offer for 11 sale of any tax lien or tax liens and the failure to complete such sale, 12 offer such tax lien or tax liens for sale again to any other person or 13 persons who satisfied the terms and conditions of the sale without 14 providing any additional advertisements or notices pursuant to this 15 chapter. 16 (ii) Notwithstanding subparagraph (i) of this paragraph, any tax lien 17 that was noticed for sale pursuant to this chapter, but was not sold on 18 the original date of sale, may be sold without any additional advertise- 19 ments or notices pursuant to this chapter if the subsequent date of sale 20 is within six months of the second publication, pursuant to subdivision 21 a of section 11-320 of this chapter, of the notice of the original date 22 of sale. If the subsequent date of sale is more than six months after 23 the second publication, pursuant to subdivision a of section 11-320 of 24 this chapter, of the notice of the original date of sale, then the 25 commissioner of finance, or his or her designee, shall provide notice of 26 the subsequent date of sale pursuant to subdivision b of section 11-320 27 of this chapter. No other additional advertisements or notices shall be 28 necessary prior to the date of sale. 29 6. The rate of interest on any tax lien certificate shall be the rate 30 adopted for nonpayment of taxes on real property, pursuant to subdivi- 31 sion (e) of section 11-224.1 of this title, that is in effect on January 32 first of the year in which the tax lien is sold. 33 7. It is the intent of the city that a sale of a tax lien or tax liens 34 pursuant to this chapter shall be a sale and not a borrowing. 35 8. Whenever any tax lien purchased at a tax lien sale is found to be 36 invalid, void or defective in whole or in part, or not to conform to any 37 representation or warranty with respect thereto, made by the commission- 38 er of finance in connection with the sale thereof, by judgment or decree 39 of a court of competent jurisdiction or by determination of the commis- 40 sioner of finance, the commissioner of finance may, in his or her 41 discretion, substitute for such tax lien or portion thereof another tax 42 lien that has a value equivalent to the value of the tax lien or portion 43 thereof found to be invalid, void, defective, or not to so conform, or 44 may refund such value of the tax lien or portion thereof found to be 45 invalid, void, defective, or not to so conform, or may use a combination 46 of substitution and refund. No other remedy shall be available to a 47 purchaser of a tax lien which is found to be invalid, void, defective, 48 or not to conform to a representation or warranty with respect thereto 49 made by the commissioner of finance in connection with the sale thereof, 50 in whole or in part. Whenever a tax lien of such equivalent value is to 51 be substituted for a tax lien that has been found invalid, void, defec- 52 tive, or not to so conform, in whole or in part, pursuant to this 53 section, the commissioner of finance or his or her designee shall 54 provide mailed notice of the intention to substitute such lien of such 55 equivalent value to any person required to be notified pursuant to 56 section 11-320(b) of this chapter.

S. 8578 280

1 9. The commissioner of finance may establish requirements for a 2 purchaser of a tax lien to provide any information and documents that 3 the commissioner of finance deems necessary, including information 4 concerning the collection and enforcement of tax liens. The commission- 5 er of finance shall require the purchaser of a tax lien to provide the 6 owner of property on which a tax lien has been sold pursuant to this 7 chapter a detailed itemization of taxes, interest, surcharges, and fees 8 charged to such owner on all tax lien statements of amounts due or bill 9 of charges. Such fees shall be bona fide, reasonable and, in the case of 10 attorneys' fees, customary. 11 10. (i) On and after January first, two thousand twelve, no tax lien 12 shall be sold pursuant to this chapter on any class two residential 13 property owned by a company organized pursuant to article eleven of the 14 private housing finance law that is a residential condominium or resi- 15 dential cooperative. If, notwithstanding the foregoing sentence, any 16 such tax lien is sold in error pursuant to this chapter on and after 17 January first, two thousand twelve on such property, then the provisions 18 of paragraph eight of this subdivision shall apply to such sale, includ- 19 ing the authority of the commissioner of finance to substitute for such 20 tax lien another tax lien that has a value equivalent to the value of 21 such tax lien or to refund the value of such tax lien. For the purposes 22 of this paragraph, property owned by such company shall be limited to 23 property owned for the purpose, as set forth in section five hundred 24 seventy-one of the private housing finance law, of providing housing for 25 families and persons of low income. 26 (ii) No later than May first, two thousand eleven, the commissioner of 27 finance, in consultation with the commissioner of housing preservation 28 and development, shall notify by mail any class two residential property 29 owned by a company organized pursuant to article eleven of the private 30 housing finance law that is not a residential condominium or residential 31 cooperative, of the authority of the commissioner of finance to sell the 32 tax liens on such property. Such notification shall include information 33 relating to the lien sale process, including, but not limited to, 34 actions homeowners can take if a lien is sold on such property; the type 35 of debt that can be sold in a lien sale; a timeline of statutory notifi- 36 cations required pursuant to section 11-320 of this chapter; a clear, 37 concise explanation of the consequences of the sale of a tax lien; the 38 telephone number and electronic mail address of the employee or employ- 39 ees designated pursuant to subdivision f of section 11-320 of this chap- 40 ter; a conspicuous statement that the owner of the property may enter 41 into a payment plan for exclusion from the tax lien sale; and credits 42 and property tax exemptions that may exclude a property from a tax lien 43 sale and any other credit or residential real property tax exemption 44 information, which, in the discretion of the commissioner of finance, 45 should be included in such notification. 46 Upon such property owner's written request, or verbal request to 311 47 or any employee designated pursuant to subdivision f of section 11-320 48 of this chapter, a Chinese, Korean, Russian or Spanish translation of 49 such notice shall be provided promptly to such property owner. 50 11. No later than the first of September in the year next succeeding 51 the effective date of this section, the appropriate agency shall promul- 52 gate rules identifying or describing any existing procedures governing 53 challenges to the validity of any real property tax, sewer rent, sewer 54 surcharge, water rent, emergency repair charge or alternative enforce- 55 ment expense or fee.

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1 12. On or after January first, two thousand fifteen and before January 2 first, two thousand seventeen, no tax lien shall be sold pursuant to 3 this chapter on the following properties: (i) properties enrolled in the 4 city's Build It Back Program; and (ii) properties defined as "eligible 5 real property" pursuant to subdivision three of section four hundred 6 sixty-seven-g of the real property tax law. If, notwithstanding the 7 foregoing sentence, any such tax lien is sold in error pursuant to this 8 chapter during such time period on properties described in subparagraph 9 (i) or (ii) of this paragraph, then the provisions of paragraph eight of 10 this subdivision shall apply to such sale, including the authority of 11 the commissioner of finance to substitute for such tax lien another tax 12 lien that has a value equivalent to the value of such tax lien or to 13 refund the value of such lien. 14 13. Notwithstanding any provision of this chapter to the contrary, no 15 tax lien shall be sold pursuant to this chapter on any of the following 16 properties: (i) any real property for which the owner in good faith has 17 submitted an application that is pending with the department of finance 18 for a real property tax exemption pursuant to section four hundred twen- 19 ty-a, four hundred twenty-b, four hundred forty-six, or four hundred 20 sixty-two of the real property tax law; and (ii) any real property for 21 which the owner has in good faith filed an appeal with the tax commis- 22 sion of a denial of any such application and such appeal is pending. 23 There shall be a rebuttable presumption that an application or an appeal 24 referenced in the preceding sentence was not submitted in good faith 25 where, within the twenty-four months preceding the submission of such 26 application or such appeal, the period for the filing of an appeal of a 27 denial by the department of finance of a previous application for a real 28 property tax exemption pursuant to section four hundred twenty-a, four 29 hundred twenty-b, four hundred forty-six, or four hundred sixty-two of 30 the real property tax law has expired. 31 § 11-320 Notice of sale to be advertised and mailed. a. 1. The tax 32 lien on property in the city shall not be sold pursuant to section 33 11-319 of this chapter unless notice of such sale as provided herein has 34 been published twice, the first publication to be in a newspaper of 35 general circulation in the city, not less than ninety days preceding the 36 date of the sale, and the second publication to be in a publication 37 designated by the commissioner of finance, not less than ten days 38 preceding the date of the sale. Such publication shall include a 39 description by block and lot or by such other identification as the 40 commissioner of finance may deem appropriate, of the property upon which 41 the tax lien exists that may be included in the sale, and a statement 42 that a list of the tax liens that may be included in the sale is avail- 43 able for inspection in the office of the city register and the office of 44 the county clerk. The commissioner of finance shall file such list in 45 the office of the city register and the office of the county clerk not 46 less than ninety days prior to the date of sale. 47 2. Not less than ninety days preceding the date of the sale, the 48 commissioner of finance shall post online, to the extent such informa- 49 tion is available, the borough, block and lot of any property on which a 50 lien has been or will be noticed for sale in accordance with paragraph 51 one of this subdivision and that, in one or more of the five fiscal 52 years preceding the date of the sale, was in receipt of a real property 53 tax exemption pursuant to section four hundred twenty-a, four hundred 54 twenty-b, four hundred forty-six or four hundred sixty-two of the real 55 property tax law and, in addition, shall post online, to the extent such 56 information is available, the borough, block and lot of any vacant land

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1 classified as class one or class four pursuant to section eighteen 2 hundred two of the real property tax law on which a lien has been or 3 will be noticed for sale in accordance with paragraph one of this subdi- 4 vision. Any failure to comply with this paragraph shall not affect the 5 validity of any sale of tax liens pursuant to this chapter. 6 b. 1. A tax lien shall not be sold unless the commissioner of finance, 7 or his or her designee, notifies the owner of record at the address of 8 record and any other person who has registered pursuant to section 9 11-309 of this chapter, or pursuant to section 11-416 or 11-417 of this 10 title, by first class mail, of the intention to sell the tax lien. If no 11 such registrations have been filed then such commissioner, or his or her 12 designee, shall notify the person whose name and address, if any, 13 appears in the latest annual record of assessed valuations, by first 14 class mail, of the intention to sell the tax lien. Such mailed notice 15 shall include a description of the property by block and lot and such 16 other identifying information as the commissioner of finance may deem 17 appropriate, the amount of the tax lien, including all taxes, assess- 18 ments, sewer rents, sewer surcharges, water rents, any other charges 19 that are made a lien subject to the provisions of this chapter, as well 20 as an estimate of the costs of any advertisements and notices given 21 pursuant to this chapter, any other charges that are due and payable on 22 the date specified in such publication, a surcharge pursuant to section 23 11-332 of this chapter if the tax lien is sold, and interest and penal- 24 ties thereon, and shall be mailed to such owner and such other persons 25 four times: not less than ninety, sixty, thirty and ten days prior to 26 the date of sale. Such notice shall state that if default continues to 27 be made in payment of the amounts due on such property, the tax lien on 28 such property shall be sold as provided in section 11-319 of this chap- 29 ter. If, notwithstanding such notice, the owner shall continue to refuse 30 or neglect to pay the amounts due on such property, the commissioner of 31 finance may sell the tax lien on such property as provided in section 32 11-319 of this chapter. 33 2. (i) Such notices shall also include, with respect to any property 34 owner in class one or class two, as such classes of property are defined 35 in subdivision one of section eighteen hundred two of the real property 36 tax law, an exemption eligibility checklist. The exemption eligibility 37 checklist shall also be posted on the website of the department of 38 finance no later than the first business day after March fifteenth of 39 every year prior to the date of sale, and shall continue to be posted on 40 such website until ten days prior to the date of sale. Within ten busi- 41 ness days of receipt of a completed exemption eligibility checklist from 42 such property owner, provided that such receipt occurs prior to the date 43 of sale of any tax lien or tax liens on his or her property, the depart- 44 ment of finance shall review such checklist to determine, based on the 45 information provided by the property owner, whether such property owner 46 could be eligible for any exemption, credit or other benefit that would 47 entitle them to be excluded from a tax lien sale and, if the department 48 determines that such property owner could be eligible for any such 49 exemption, credit or other benefit, shall mail such property owner an 50 application for the appropriate exemption, credit or other benefit. If, 51 within twenty business days of the date the department mailed such 52 application, the department of finance has not received a completed 53 application from such property owner, such department shall mail such 54 property owner a second application, and shall telephone the property 55 owner, if the property owner has included his or her telephone number on 56 the exemption eligibility checklist.

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1 (ii) Any such property owner who returns to the department of finance 2 a completed exemption eligibility checklist prior to the date of sale of 3 any tax lien or tax liens on his or her property and who subsequently 4 submits a completed application for the appropriate exemption, credit or 5 other benefit either prior to, on or up to ninety days after such sale, 6 shall have his or her application reviewed by the department of finance. 7 If, prior to the date of sale, the department of finance determines that 8 such property owner is qualified for such exemption, credit or other 9 benefit or will be qualified as of the date of sale, then the tax lien 10 or tax liens on his or her property shall not be sold on such date. If, 11 on or after the date of sale, the department of finance determines that 12 such property owner is or was qualified for such exemption, credit or 13 other benefit as of the date of sale, then any tax lien or tax liens on 14 his or her property that were sold shall be deemed defective. 15 (iii) Not later than thirty days prior to such date of sale, the 16 department of finance shall submit to the council a list, disaggregated 17 by council district, of all properties for which property owners 18 returned a completed eligibility checklist to the department of finance 19 at least thirty-five days prior to the date of sale, but for which prop- 20 erty owners have not yet submitted a completed application for the 21 appropriate exemption, credit or other benefit. 22 (iv) Not later than thirty days after such date of sale, the depart- 23 ment of finance shall submit to the council a list, disaggregated by 24 council district, of all properties for which property owners returned a 25 completed eligibility checklist to the department of finance prior to 26 the date of sale, but for which property owners have not yet submitted a 27 completed application for the appropriate exemption, credit or other 28 benefit. 29 (v) Upon the written or verbal request of such property owner, the 30 department of finance shall provide prompt assistance to such property 31 owner in completing an application for the appropriate exemption, credit 32 or other benefit. 33 2-a. If, prior to the date of sale, the department of finance confirms 34 that a property is the subject of (i) a judicial proceeding or (ii) an 35 investigation or a prosecution by any agency or office of the United 36 States or any state or subdivision thereof with regard to the ownership 37 of such property arising from the fraudulent transmittal of a deed 38 relating to such property, such department shall remove such property 39 from the sale, provided that the owner of such property has provided an 40 affidavit to such department and any such other documentation required 41 by such department to establish that such property is the subject of 42 such a proceeding, investigation or prosecution. Any such removal shall 43 relate only to the sale of a tax lien or tax liens for which the owner 44 has received notice pursuant to paragraph one of subdivision b of this 45 section. Failure by the department of finance to remove such property 46 shall not affect the validity of any sale of tax liens pursuant to this 47 chapter. 48 3. The notice provided not less than ninety days prior to the date of 49 sale shall also include information relating to the lien sale process, 50 including, but not limited to, actions homeowners can take if a lien is 51 sold on such property; the type of debt that can be sold in a lien sale; 52 a timeline of statutory notifications required pursuant to this section; 53 a clear, concise explanation of the consequences of the sale of a tax 54 lien; the telephone number and electronic mail address of the employee 55 or employees designated pursuant to subdivision f of this section; a 56 conspicuous statement that the owner of the property may enter into a

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1 payment plan for exclusion from the tax lien sale; and credits and prop- 2 erty tax exemptions that may exclude certain class one real property 3 from a tax lien sale. Such notice shall also include information on the 4 following real property tax exemptions, credits or other benefits: 5 (i) the senior citizen homeowner exemption pursuant to section 6 11-245.3 of this title; 7 (ii) the exemption for persons with disabilities pursuant to section 8 11-245.4 of this title; 9 (iii) the exemption for veterans pursuant to section four hundred 10 fifty-eight of the real property tax law, with respect to real property 11 purchased with payments received as prisoner of war compensation from 12 the United States government; 13 (iv) the exemption for veterans pursuant to paragraph (b) or (c) of 14 subdivision two of section four hundred fifty-eight-a of the real prop- 15 erty tax law; 16 (v) the state circuit breaker income tax credit pursuant to subsection 17 (e) of section six hundred six of the tax law; and 18 (vi) the active duty military personnel benefit pursuant to department 19 of finance memorandum 05-3, or any successor memorandum thereto. 20 Upon such property owner's written request, or verbal request to 311 21 or any employee designated pursuant to subdivision f of this section, a 22 Chinese, Korean, Russian or Spanish translation of such notice shall be 23 provided promptly to such property owner. 24 4. Such notice shall also include, with respect to a property that was 25 in receipt of a real property tax exemption pursuant to section four 26 hundred twenty-a, four hundred twenty-b, four hundred forty-six, or four 27 hundred sixty-two of the real property tax law in one or more of the 28 three fiscal years preceding the date of the notice provided not less 29 than ninety days prior to the date of sale, or with respect to a proper- 30 ty in class four, as such class of property is defined in subdivision 31 one of section eighteen hundred two of the real property tax law, infor- 32 mation relating to the initial application and renewal process for such 33 property tax exemptions, and other actions available to the owner of 34 such property in the event such property is noticed for sale pursuant to 35 this subdivision, including, if available, an adjustment or cancellation 36 of back taxes. Upon request of the owner of such property, a translation 37 of such notice in any of the top ten languages most commonly spoken 38 within the city as determined by the department of city planning shall 39 be provided to such owner. 40 5. The department of finance and the department of environmental 41 protection shall, to the extent practicable, contact by telephone or 42 electronic mail any person who (i) has registered their telephone number 43 or electronic mail address with such departments and (ii) has received 44 the ninety-day notice described in paragraph one of this subdivision. 45 Any such contact shall be made within a time period reasonably proximate 46 to the mailing of such notice, shall inform such person of the intention 47 to sell a tax lien and shall provide such other information as the 48 respective commissioner deems appropriate, which may include, but need 49 not be limited to, the telephone numbers and electronic mail addresses 50 of the employees designated pursuant to subdivision f of this section. 51 The department of finance shall contact by electronic mail any person 52 who has registered pursuant to subdivision a of section 11-245.8 of this 53 title to receive information about the outreach sessions described in 54 subdivision j of this section and provide such information within a time 55 period reasonably proximate to the scheduled outreach session. Failure 56 by the department of finance or the department of environmental

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1 protection to contact any such person by telephone or electronic mail 2 shall not affect the validity of any sale of tax liens pursuant to this 3 chapter. 4 c. Such notices shall advise the owner of such property of his or her 5 continued obligation to pay the amounts due on such property. No other 6 notices or demands shall be required to be made to the owner of such 7 property to authorize the sale of a tax lien or tax liens on such prop- 8 erty pursuant to section 11-319 of this chapter. 9 c-1. Where a tax lien on property in the city has been noticed for 10 sale pursuant to subdivision b of this section and such lien, prior to 11 the date of sale, has been paid or is otherwise determined by the 12 commissioner of finance not to be eligible to be sold, such commissioner 13 shall promptly provide written notification to the owner of such proper- 14 ty that such lien will not be or was not included in such sale and the 15 reason therefor. 16 d. 1. The commissioner of finance or his or her designee shall, within 17 ninety days after the delivery of the tax lien certificate, notify any 18 person who was required to be notified of such sale pursuant to subdivi- 19 sion (b) of section 11-320 of this chapter, by first class mail, that 20 such sale has occurred. Such notice shall state the date of the sale of 21 the tax lien, the name and address of the purchaser of the tax lien, the 22 amount of such lien, a description of the property by block and lot and 23 such other identifying information as the commissioner of finance or his 24 or her designee shall deem appropriate, and the terms and conditions of 25 the tax lien certificate, including the right to satisfy the lien within 26 the time periods specified in this chapter. Such notice shall also 27 include the telephone number and electronic mail address of the employee 28 or employees designated pursuant to subdivision f of this section. 29 2. Any written communication from the purchaser of the tax lien or 30 liens to an owner of property, on which a tax lien has been sold pursu- 31 ant to the provisions of this chapter, shall include the following 32 information: 33 (i) an explanation of the roles of the purchaser of the tax lien and 34 the employee or employees designated pursuant to subdivision f of this 35 section; 36 (ii) the names and contact information, including the telephone 37 number, electronic mail and mailing addresses of such persons; and 38 (iii) a statement informing such owner that he or she may be eligible 39 to enter into a forbearance agreement with the purchaser of such tax 40 lien. 41 3. The requirement to send such written communication shall be subject 42 to federal, state and local debt collection laws. 43 4. Failure to provide notice pursuant to this subdivision shall not 44 affect the validity of any sale of a tax lien or tax liens pursuant to 45 this chapter. 46 e. The words "date of sale" when used in this section shall mean: 47 (1) for a negotiated sale, the date of signing of the tax lien 48 purchase agreement, and (2) for a competitive sale, the date designated 49 by the commissioner of finance for the submission of bids. 50 f. The commissioner of finance shall designate an employee of the 51 department to respond to inquiries from owners of property for which a 52 tax lien has been sold or noticed for sale pursuant to subdivision a of 53 this section and shall designate an employee of the department to 54 respond to inquiries from owners sixty-five years of age or older of 55 property for which a tax lien has been sold or noticed for sale pursuant 56 to subdivision a of this section. The commissioner of environmental

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1 protection shall designate at least one employee of the department of 2 environmental protection to respond to inquiries from owners of property 3 for which a tax lien containing a water rents, sewer rents or sewer 4 surcharges component has been sold or noticed for sale pursuant to 5 subdivision a of this section. The telephone numbers and electronic mail 6 addresses of employees designated pursuant to this subdivision shall be 7 posted online and shall be included on all publications and notices 8 required by subdivisions a and b of this section. Failure to include 9 such numbers and addresses on all such publications and notices shall 10 not affect the validity of any sale of tax liens pursuant to this chap- 11 ter. 12 g. No later than one hundred twenty days after the tax lien sale, the 13 commissioner of finance shall submit to the council a list of all prop- 14 erties, identified by block and lot, noticed for sale pursuant to subdi- 15 vision b of this section. Such list shall also include a description of 16 the disposition of such properties that shall include, but not be limit- 17 ed to, whether an owner entered into a payment plan with the city pursu- 18 ant to section 11-322 or 11-322.1 of this chapter, whether an owner 19 satisfied the tax lien or liens, whether ownership of the property was 20 transferred, provided that such information is available to the city, or 21 whether the property was distressed, as defined in subdivision four of 22 section 11-401 of this title, or removed from the sale pursuant to the 23 discretion of the commissioner of housing preservation and development. 24 h. 1. On a quarterly basis, a purchaser of tax liens shall provide to 25 the council a list of all properties on which tax liens have been sold 26 where, subsequent to such sale, there has been a transfer of ownership 27 of the property, provided that a purchaser of tax liens has knowledge of 28 such transfers, for the following groups: 29 (i) all properties on which liens for emergency repair charges or 30 alternative enforcement expenses and fees have been sold to such 31 purchaser pursuant to subdivision a-4 of section 11-319 of this chapter; 32 and 33 (ii) all class two residential property owned by a company organized 34 pursuant to article eleven of the private housing finance law that is 35 not a residential condominium or a residential cooperative on which any 36 tax lien has been sold pursuant to subdivision a, a-2 or a-4 of section 37 11-319 of this chapter. 38 2. When available, a purchaser of tax liens shall include the names 39 and contact information of the new owners of record of such properties. 40 i. On a quarterly basis, a purchaser of tax liens shall provide to the 41 council a property status report. For each property, such report shall 42 include: (1) information about such property, including property tax 43 class; property type; description of the tax lien or tax liens that have 44 been sold to such purchaser on such property pursuant to this chapter, 45 including the amount of the tax lien or tax liens, the costs of any 46 advertisements and notices given pursuant to this chapter; the amount of 47 the surcharge pursuant to section 11-332 of this chapter; and the amount 48 of interest and penalties thereon; and (2) the status of the tax lien or 49 tax liens, including foreclosure information, if applicable; whether the 50 property owner entered into an installment agreement; whether the prop- 51 erty owner is current on such installment agreement; and whether the tax 52 lien or tax liens on such property have been deemed defective, and, if 53 so, the reason any such lien or liens were deemed defective. Each prop- 54 erty listed in the report shall be identified by block and lot. 55 j. (1) At the request of a council member, the commissioner of 56 finance, in consultation with the commissioner of housing preservation

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1 and development and the commissioner of environmental protection, may 2 conduct outreach sessions in the district of such council member, 3 provided, however, that, the commissioner of finance shall conduct such 4 outreach sessions in the ten council districts with the greatest number 5 of properties for which a notice of intention to sell a tax lien has 6 been mailed ninety days prior to the date of sale pursuant to paragraph 7 one of subdivision b of this section, and provided, further, however, 8 that, such commissioner shall conduct additional outreach sessions in 9 the five council districts with the greatest number of properties for 10 which a notice of intention to sell a tax lien has been mailed ninety 11 days prior to the date of sale pursuant to such paragraph. To the extent 12 practicable, the commissioner of finance shall schedule the outreach 13 sessions in the five council districts described in the preceding 14 sentence such that one occurs prior to the mailing of the notice of 15 intention to sell a tax lien that is required to be mailed thirty days 16 prior to the date of sale pursuant to paragraph one of subdivision b of 17 this section and one occurs subsequent to such mailing. The scope of 18 such outreach sessions shall include, but need not be limited to, (i) 19 actions property owners can take if a lien is sold on such property; 20 (ii) the type of tax lien or tax liens that can be sold in a tax lien 21 sale; (iii) installment agreement information, including informing 22 attendees in such outreach sessions of their option to enter into an 23 installment agreement for exclusion from the tax lien sale with no down 24 payment, with options for income-based installment agreements or 25 installment agreements with a term of up to ten years; (iv) credits and 26 property tax exemptions that may exclude a property from a tax lien 27 sale; (v) distribution of a customer survey to property owners who have 28 received notice of the intention to sell a tax lien on their property, 29 in order to determine the circumstances that led to the creation of the 30 lien; and (vi) any other credit or residential real property tax 31 exemption information, which, in the discretion of the commissioner of 32 finance, should be included in such outreach sessions. (2) The commis- 33 sioner of finance shall make a good faith effort to have a financial 34 counselor available at such outreach sessions. No later than ninety days 35 after the tax lien sale, the commissioner of finance shall submit to the 36 council a report on the number of outreach sessions performed in each 37 council district during the ninety-day period preceding the tax lien 38 sale. Such report shall include: (i) the number of installment agree- 39 ments begun by property owners or, as defined in subdivision b of 40 section 11-322 of this chapter, other eligible persons acting on behalf 41 of property owners at each outreach session; (ii) the number of property 42 tax exemption applications begun at each outreach session; (iii) the 43 total number of attendees at each outreach session; (iv) the number of 44 outreach sessions at which a financial counselor was available; (v) the 45 number of property owners, or other eligible persons acting on behalf of 46 property owners, who consulted a financial counselor at each outreach 47 session at which a financial counselor was available; and (vi) the 48 results of such surveys. Such report and the results of each outreach 49 session shall be disaggregated by council district. 50 k. The commissioner of finance shall post online the information 51 reported to the council pursuant to subdivisions h and i of this 52 section, provided that no information shall be posted online that 53 specifically identifies any property or property owner, except by zip 54 code and a randomly generated identifier. 55 § 11-321 Continuation of sale; notice required. A sale of a tax lien 56 or tax liens may be continued from time to time, if necessary, until all

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1 the tax liens on the property so advertised and noticed shall be sold 2 unless such sale is canceled or postponed in accordance with section 3 11-322 or 11-322.1 of this chapter. If a sale of a tax lien or tax liens 4 is continued, the commissioner of finance, or his or her designee, shall 5 give such notice as is practicable of such continuation. 6 § 11-322 Postponement or cancellation of sales; installment agree- 7 ments. a. It shall be lawful for the commissioner of finance, or his or 8 her designee, to postpone or cancel any proposed sale of a tax lien or 9 tax liens on property that shall have been advertised and noticed for 10 sale prior to the date of sale. For purposes of this section, the words 11 "date of sale" shall have the same meaning provided in subdivision e of 12 section 11-320 of this chapter. The city shall not be liable for any 13 damages as a result of cancellation or postponement of a proposed sale 14 of a tax lien or tax liens, nor shall any cause of action arise from 15 such cancellation or postponement. 16 b. In accordance with rules promulgated by the commissioners of 17 finance and environmental protection, a property owner, or other eligi- 18 ble person, as defined by rule, acting on behalf of an owner, may enter 19 into agreements with the departments of finance and environmental 20 protection for the payment in installments of any delinquent real prop- 21 erty taxes, assessments, sewer rents, sewer surcharges, water rents, or 22 any other charges that are made a lien subject to the provisions of this 23 chapter. The proposed sale of a tax lien or tax liens on property shall 24 be cancelled when a property owner, or other eligible person acting on 25 behalf of an owner, enters into an agreement with the respective agency 26 for the payment of any such lien. Such rules shall also provide that 27 such property owners or such other eligible persons be given information 28 regarding eligibility for real property tax exemption programs prior to 29 entering into such agreements. As used in this subdivision, the term 30 "other eligible person" shall include a fiduciary, as defined in para- 31 graph three of subdivision (a) of section 11-1.1 of the estates, powers 32 and trusts law, acting with respect to the administration of the proper- 33 ty of an estate of a decedent who owned the real property as to which an 34 agreement under this subdivision is sought, or on behalf of a benefici- 35 ary of such real property from such estate. Any rules promulgated in 36 accordance with this subdivision defining "other eligible person" shall 37 include in such definition the means by which a beneficiary of real 38 property of the estate of a decedent who owned real property as to which 39 an agreement under this subdivision is sought meets the definition of 40 "other eligible person". Such means shall include the furnishing of any 41 death certificates or other relevant documents that substantiate the 42 claim of a beneficiary that they are the legal owner of the property. 43 Notwithstanding any other provision of this section, no more than one 44 such agreement with each respective agency may be in effect for a prop- 45 erty at any one time. 46 1. If payments required from a property owner, or other eligible 47 person acting on behalf of an owner, pursuant to such an agreement are 48 not made for a period of six months, such property owner, or such other 49 eligible person, shall be in default of such agreement, and the tax lien 50 or tax liens on the subject property may be sold, provided, however, 51 that such default may be cured upon such property owner's, or such other 52 eligible person's, bringing all installment payments and all current 53 charges that are outstanding at the time of the default to a current 54 status, which shall include, but not be limited to, any outstanding 55 interest and fees, prior to the date of sale, provided, however, that 56 such property owner, or such other eligible person, may elect to cure

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1 such default by entering into a new installment agreement with a down 2 payment of twenty percent or more, of all delinquent real property 3 taxes, assessments, sewer rents, sewer surcharges, water rents and other 4 charges that are made a lien subject to the provisions of this chapter, 5 including any outstanding interest and fees, prior to the date of sale. 6 If such default is not cured prior to the date of sale, such property 7 owner, and any other eligible person acting on behalf of an owner, shall 8 not be eligible to enter into an installment agreement for the subject 9 property for five years, unless there is a finding of extenuating 10 circumstances by the department that entered into the installment agree- 11 ment with the property owner or such other eligible person. Notwith- 12 standing the prohibition against entering into an installment agreement 13 for the subject property for five years, a property owner, or such other 14 eligible person, who has defaulted on an installment agreement and whose 15 lien has been sold and, subsequent to the sale of the lien, whose prop- 16 erty on which the lien was sold is subject to another tax lien that is 17 eligible to be sold, may elect to enter into another installment agree- 18 ment with respect to such other lien before the end of such five-year 19 period, provided that such property owner, or such other eligible 20 person, makes a down payment of twenty percent or more, of all delin- 21 quent real property taxes, assessments, sewer rents, sewer surcharges, 22 water rents and other charges that are made a lien subject to the 23 provisions of this chapter, including any outstanding interest and fees, 24 prior to the date of the sale. No such property owner, or such other 25 eligible person, may make the election that is authorized pursuant to 26 this paragraph to enter into an installment agreement with a down 27 payment more than once for the subject property. The standards relating 28 to defaults and cures of defaults of installment agreements set forth in 29 this paragraph apply to installment agreements entered into pursuant to 30 such election. 31 2. An installment agreement shall provide for payments by the property 32 owner, or other eligible person acting on behalf of an owner, on a quar- 33 terly or monthly basis, for a period not less than eight years and not 34 more than ten years, provided that a property owner, or other eligible 35 person acting on behalf of an owner, may elect a period less than eight 36 years. Except as provided in paragraph one of this subdivision, there 37 shall be no down payment required upon the property owner's, or such 38 other eligible person's, entering into the installment agreement with 39 the respective department, but the property owner, or other eligible 40 person acting on behalf of an owner, may elect to make a down payment. 41 With respect to installment agreements with the commissioner of environ- 42 mental protection, the determination of whether payments shall be on a 43 quarterly or monthly basis shall be in the discretion of such commis- 44 sioner, except as provided in paragraph three of this subdivision. With 45 respect to installment agreements with the commissioner of finance, the 46 determination of whether payments shall be on a quarterly or monthly 47 basis shall be in the discretion of the property owner, or other eligi- 48 ble person acting on behalf of an owner. 49 3. Beginning on January first, two thousand twelve, any property owner 50 who has entered into an installment agreement with the commissioner of 51 environmental protection pursuant to this subdivision and who has auto- 52 mated meter reading shall receive a consolidated monthly bill for 53 current sewer rents, sewer surcharges and water rents and any payment 54 due under such installment agreement. 55 4. No later than September first, two thousand eleven, the commission- 56 ers of finance and environmental protection shall promulgate rules

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1 governing installment agreements, including but not limited to, the 2 terms and conditions of such agreements, the payment schedules, and the 3 definition and consequences of default; no later than June first, two 4 thousand fourteen, the commissioners of finance and environmental 5 protection shall promulgate rules governing eligibility of owners or 6 other eligible persons acting on behalf of owners to enter into install- 7 ment agreements. 8 5. All installment agreements executed on or after March first, two 9 thousand fifteen shall include a conspicuous statement that if payments 10 required from a property owner pursuant to such an agreement are not 11 made for a period of six months, such property owner shall be in default 12 of such agreement, and the tax lien or tax liens on the subject property 13 may be sold, provided, however, that such default may be cured upon such 14 property owner's bringing all installment payments and all current 15 charges that are outstanding at the time of the default to a current 16 status, which shall include, but not be limited to, any outstanding 17 interest and fees, prior to the date of sale. Such statement shall also 18 include a notification that if such default is not cured prior to the 19 date of sale, such property owner shall not be eligible to enter into an 20 installment agreement for the subject property for five years, unless 21 there is a finding of extenuating circumstances in accordance with rules 22 promulgated by the department that entered into the installment agree- 23 ment with the property owner. Such statement shall include the defi- 24 nition of extenuating circumstances. All installment agreements shall 25 also include a statement describing the conditions under which the prop- 26 erty owner, or any other eligible person acting on behalf of an owner, 27 may be eligible, after default, to enter into another installment agree- 28 ment after such default, in accordance with paragraph one of this subdi- 29 vision. 30 6. If a property owner, or other eligible person acting on behalf of 31 an owner, who has entered into an installment agreement with the depart- 32 ment of finance, fails to make a payment pursuant to such agreement, 33 then the department of finance shall, after the first missed payment, 34 mail a letter to the property owner, or other eligible person acting on 35 behalf of an owner, stating that such owner, or other eligible person, 36 is at risk of being in default of such agreement. The letter shall be 37 mailed after the first missed payment if the department has not received 38 payment within two weeks of the due date. 39 c. No later than January thirty-first, two thousand twenty-four, and 40 no later than every January thirty-first thereafter, the department of 41 finance shall submit a report to the mayor and to the speaker of the 42 council on real property with an assessed value of two hundred fifty 43 thousand dollars or less for which: (A) the owner of such real property 44 has entered into an agreement pursuant to this section for the payment 45 in installments of real property taxes, assessments or other charges 46 that are made a lien subject to the provisions of chapter three of this 47 title other than water rents, sewer rents, or sewer surcharges; and (B) 48 such unpaid taxes are subject to the interest rate described in subdivi- 49 sion e of section 11-313 of this chapter for the preceding calendar 50 year, including, but not limited to the following data: 51 1. the number of such agreements executed during the preceding calen- 52 dar year; 53 2. the number of such agreements that were in effect on December thir- 54 ty-first of the preceding calendar year;

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1 3. the number of applications for such agreements that were received 2 during the preceding calendar year, and the number of such applications 3 that were not approved; 4 4. the average amount of property taxes and charges subject to such 5 agreements; and 6 5. the number of such agreements that entered into default and the 7 number of defaults that were cured. 8 § 11-322.1 Hardship installment agreements. a. Definitions. For 9 purposes of this section, the following terms have the following mean- 10 ings: 11 1. Applicant. The term "applicant" means a property owner who files an 12 application for an installment agreement under this section. Such term 13 includes a property owner who has entered into an installment agreement 14 after filing such an application. 15 2. Default. The term "default" means that an installment payment 16 required under the installment agreement entered into under this section 17 remains unpaid in whole or in part for six months from the date payment 18 is required to be made, or any other tax or charge that becomes due on 19 the property during the term of such agreement remains unpaid in whole 20 or in part for six months. 21 3. Department. The term "department" means the department of finance. 22 4. Dwelling unit. The term "dwelling unit" means a unit in a condomin- 23 ium used primarily for residential purposes. 24 5. Fair market value. The term "fair market value" means the fair 25 market value of property as determined by the department or the fair 26 market value as determined by an appraisal obtained by the applicant 27 pursuant to paragraph four of subdivision g of this section, provided 28 that such appraisal shall be subject to review, and may be rejected, by 29 the department. 30 6. Income. The term "income" means the adjusted gross income for 31 federal income tax purposes as reported on an applicant's federal or 32 state income tax return for the applicable income tax year, subject to 33 any subsequent amendments or revisions; provided that if no such return 34 was filed for the applicable income tax year, "income" means the 35 adjusted gross income that would have been so reported if such a return 36 had been filed. 37 7. Income tax year. The term "income tax year" means the most recent 38 calendar year or fiscal year for which an applicant filed a federal or 39 state income tax return. 40 8. Net equity. The term "net equity" means the fair market value of 41 property minus any liabilities outstanding against such property, such 42 as mortgages, outstanding property taxes, water and sewer charges, and 43 any other liens on such property. 44 9. Property. The term "property" means real property classified as 45 class one pursuant to section eighteen hundred two of the real property 46 tax law or a dwelling unit in a condominium. 47 10. Property owner. The term "property owner" means an owner of real 48 property classified as class one pursuant to section eighteen hundred 49 two of the real property tax law or of a dwelling unit in a condominium, 50 or other eligible person, as defined in subdivision (i) of section 40-03 51 of title nineteen of the rules of the city of New York, acting on behalf 52 of such owner. 53 b. A property owner who satisfies the requirements described in subdi- 54 vision c and d, e or f of this section may enter into an agreement with 55 the department pursuant to this section for the payment in installments 56 of real property taxes, assessments or other charges that are made a

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1 lien subject to the provisions of this chapter, except for sewer rents, 2 sewer surcharges or water rents. The entry into an installment agreement 3 pursuant to this section shall not suspend the accrual of interest 4 charged against the property pursuant to section 11-301 of this chapter. 5 A property owner may only have one installment agreement with the 6 department in effect at any one time. 7 c. Eligibility requirements for an installment agreement under this 8 section. To be eligible to enter into an installment agreement pursuant 9 to this section, an applicant must demonstrate that the following 10 requirements are met: 11 1. The applicant is a property owner. 12 2. The property shall have been the primary residence of the applicant 13 for an uninterrupted period of not less than one year immediately 14 preceding the date the application for the installment agreement is 15 submitted and continues to be the primary residence of the applicant 16 through the date the installment agreement is entered into. Hospitali- 17 zation or a temporary stay in a nursing home or rehabilitation facility 18 for a period of not more than three years shall not be considered a 19 change in primary residence. 20 3. The combined income of the applicant and of all the additional 21 property owners may not exceed eighty-six thousand four hundred dollars 22 for the income tax year immediately preceding the date of the applica- 23 tion for the installment agreement. The department shall promulgate 24 rules that establish a process for an applicant to seek an exception 25 from the requirement that income information from all additional proper- 26 ty owners be provided in cases of hardship. 27 d. Eligibility requirement for senior low-income installment agree- 28 ment. In addition to the requirements set forth in subdivision c of this 29 section, to be eligible to enter into a senior low-income installment 30 agreement pursuant to subdivision l of this section, an applicant must 31 be sixty-five years of age or older when the application is submitted. 32 e. Eligibility requirement for fixed length income-based installment 33 agreement. To be eligible to enter into a fixed length income-based 34 installment agreement pursuant to subdivision m of this section, an 35 applicant must satisfy the requirements set forth in subdivision c of 36 this section. 37 f. Eligibility requirements for extenuating circumstances income-based 38 installment agreement. In addition to the requirements set forth in 39 subdivision c of this section, for an applicant to be eligible to enter 40 into an extenuating circumstances income-based installment agreement 41 pursuant to subdivision n of this section, the department must make a 42 finding of extenuating circumstances pursuant to the process described 43 in paragraph four of subdivision (e) of section 40-03 of title nineteen 44 of the rules of the city of New York. 45 g. Initial application procedure. 1. An initial application for an 46 installment agreement under this section shall include: 47 (a) for installment agreements that provide for the payment of taxes 48 and charges that will accrue after the date of the installment agree- 49 ment, a title search identifying all mortgages and other liens on the 50 property; and 51 (b) the signature of a primary resident of the property, and if such 52 primary resident does not hold an ownership interest of at least fifty 53 percent in the subject property, the signature of any other owner of the 54 property who, in combination with such primary resident, holds an owner- 55 ship interest of at least fifty percent in such property, consenting to 56 the application for an installment agreement.

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1 2. A complete application must be submitted to, and approved by, the 2 department. 3 3. An applicant may select a monthly or quarterly payment schedule and 4 may also select the amount that is required to be paid under the appli- 5 cable installment agreement pursuant to the options available pursuant 6 to subdivision l, m or n of this section. 7 4. An applicant who is the property owner of a dwelling unit in a 8 condominium may submit an appraisal obtained by such applicant of the 9 fair market value of such dwelling unit provided that: 10 (a) the valuation date of such appraisal is a date within, and such 11 appraisal shall have been prepared no more than, twelve months prior to 12 submission of an application; 13 (b) the cost of such appraisal shall be borne by such applicant; and 14 (c) the cost of such appraisal may not be included in the amount 15 subject to the installment agreement. 16 h. Renewal. 1. An installment agreement under this section shall 17 terminate unless an applicant files a renewal application each year. At 18 least sixty days before one year from the date such installment agree- 19 ment was entered into or renewed, the department shall mail each appli- 20 cant a renewal application, provided, however, that upon any such 21 renewal application being made by the applicant, any installment agree- 22 ment then in effect with respect to such applicant shall be deemed 23 renewed until such time as the department shall have found such appli- 24 cant to be either eligible or ineligible for the renewal of the install- 25 ment agreement but in no event for more than six additional months. 26 2. To renew an installment agreement under this section, an applicant 27 must submit a renewal application to the department on or before one 28 year from the date such installment agreement was entered into and each 29 year thereafter for which renewal is sought. To be eligible to renew 30 such agreement, an applicant must demonstrate that: 31 (a) the property continues to be the primary residence of such appli- 32 cant and such residence has been uninterrupted since the date the 33 initial installment agreement was entered into; and 34 (b) the combined income of such applicant and of all the additional 35 property owners does not exceed fifty-eight thousand three hundred nine- 36 ty-nine dollars for the income tax year immediately preceding the date 37 of the renewal of such installment agreement, except that an applicant 38 for the renewal of a fixed length income-based installment agreement 39 pursuant to subdivision m of this section is not required to submit 40 income information. 41 i. Effects of installment agreement on tax lien and tax lien sale. 1. 42 The execution of an installment agreement pursuant to this section shall 43 not suspend the accrual of liens, interest and other charges against the 44 property, which continue to accrue in accordance with applicable law. 45 2. A property for which an application has been submitted that 46 contains proof of income and, for a senior low-income installment agree- 47 ment described in subdivision l of this section, proof of age, and that 48 is signed, but is otherwise incomplete, shall be withdrawn from the next 49 tax lien sale. Such property, however, may be included in the tax lien 50 sale subsequent to the next tax lien sale if a completed application is 51 not submitted within forty-five days from the date of the additional 52 information request notice sent to the applicant by the department or if 53 the completed application is denied. 54 j. Amount subject to installment agreement. 1. Each approved install- 55 ment agreement shall set forth terms of repayment, including (a) the 56 frequency of payments, (b) the percentage of the taxes and charges that

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1 forms the basis of the required payment for the senior low-income 2 installment agreement described in subdivision l of this section, or the 3 percentage of the combined income of the property owners for the income 4 tax year immediately preceding the initial application that forms the 5 basis of the required payment for the installment agreement for the 6 fixed length income-based and the extenuating circumstances income-based 7 installment agreements described in subdivisions m and n respectively, 8 (c) the payment schedule, and (d) the payment amount. 9 2. A lien sold in a tax lien sale before the date of an application 10 for an installment agreement is not eligible to be included in an 11 installment agreement under this section. 12 3. The applicant may choose to include the cost of the title search 13 required to be submitted with an application pursuant to subparagraph 14 (a) of paragraph one of subdivision g of this section in the amount 15 subject to the installment agreement. If an applicant chooses to include 16 such cost, the applicant may either select a title company to conduct 17 the required search and present documentation to the department of the 18 cost, or direct the department to use a title company selected by the 19 department. The department shall pay the cost of the title search and be 20 reimbursed by the applicant through the addition of the cost to the 21 amount subject to the installment agreement. The applicant shall make 22 such reimbursement in the first year of the installment agreement, in 23 monthly or quarterly payments, consistent with the payment frequency 24 selected for the installment agreement. The cost of the title search 25 shall bear interest at the same rate as the interest on unpaid real 26 property tax as provided in section 11-224.1 of this title. 27 4. (a) Any time the amount of the liens on a property subject to an 28 installment agreement under this section exceeds twenty-five percent of 29 the net equity in such property, the applicant shall pay all taxes and 30 charges imposed against the property that exceed twenty-five percent of 31 the net equity in the property as such taxes and charges become due, in 32 addition to the payment amount set forth in the installment agreement. 33 (b) Notwithstanding subparagraph (a) of this paragraph and provided 34 that section five hundred eighty-one of the real property tax law is in 35 effect in the same form as such section was in effect as of the effec- 36 tive date of this section, for property that is a dwelling unit in a 37 condominium subject to an installment agreement under this section and 38 for which an appraisal has not been obtained pursuant to paragraph four 39 of subdivision g of this section, any time the amount of the liens 40 subject to such agreement exceeds fifty percent of the net equity in 41 such property, the applicant shall pay all taxes and charges imposed 42 against such property that exceed fifty percent of the net equity in 43 such property as such taxes and charges become due, in addition to the 44 payment amount set forth in the installment agreement. For property that 45 is a dwelling unit in a condominium and for which an appraisal has been 46 obtained pursuant to paragraph four of subdivision g of this section, 47 any time the amount of the liens subject to an installment agreement 48 under this section exceeds the higher of (i) fifty percent of the net 49 equity in such property based on the fair market value determined by the 50 department; or (ii) twenty-five percent of the net equity in such prop- 51 erty based on the fair market value determined by the appraisal obtained 52 by the applicant, the applicant shall pay all taxes and charges imposed 53 against such property that exceed the higher of the amounts described by 54 clauses (i) and (ii) of this subparagraph as such taxes and charges 55 become due, in addition to the payment amount set forth in the install- 56 ment agreement.

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1 (c) The department shall provide each applicant with a written projec- 2 tion at the time the installment agreement is entered into as to when 3 the twenty-five or fifty percent threshold, as determined pursuant to 4 subparagraphs (a) and (b) of this paragraph, will be exceeded. The 5 department shall also notify each property owner in writing when the 6 amount of the liens exceeds such threshold. Failure by the department to 7 provide an applicant with such projection or to notify a property owner 8 when the amount of the liens exceeds the applicable threshold, however, 9 shall not affect the validity of the installment agreement that has been 10 entered into, nor shall any claim arise or exist against the commission- 11 er of finance or any officer or agency of the city by reason of such 12 failure to provide such projection or such notification. 13 5. If at any time the department determines that the fair market value 14 of a property subject to an installment agreement under this section has 15 increased, an applicant may request that the net equity in such property 16 be recalculated and the net equity amount included in such installment 17 agreement be adjusted to reflect the recalculated net equity in such 18 property. 19 6. If the combined income of all of the property owners exceeds 20 fifty-eight thousand three hundred ninety-nine dollars for the income 21 tax year immediately preceding the date of making a renewal application 22 pursuant to subdivision h of this section, the applicant shall pay all 23 taxes and charges imposed against the property after the date of such 24 renewal application as such taxes and charges become due, in addition to 25 the payment amount set forth in such installment agreement. 26 k. Termination of installment agreement. 1. An installment agreement 27 shall be terminated when any of the following occurs: 28 (a) The property whose liens are the subject of such installment 29 agreement is no longer the primary residence of the applicant. An appli- 30 cant whose installment agreement has been terminated because of such 31 reason may apply to enter into an installment agreement pursuant to 32 section 11-322 of this chapter. 33 (b) The fixed term of the installment agreement expires. An applicant 34 whose installment agreement has been terminated because of such expira- 35 tion may apply to enter into an installment agreement pursuant to 36 section 11-322 of this chapter or to this section. 37 (c) The applicant is deceased. 38 (d) The applicant opts out of an installment agreement without a fixed 39 term as described in paragraph one of subdivision l of this section. An 40 applicant who opts out of such agreement may apply to enter into an 41 installment agreement pursuant to section 11-322 of this chapter or to 42 this section. 43 (e) The applicant does not file a timely renewal application in 44 accordance with the provisions of subdivision h of this section. 45 (f) The applicant is in default and has not cured such default as 46 provided in subparagraph (a) of paragraph three of this subdivision 47 prior to the next tax lien sale. 48 (g) The applicant has defaulted on the installment agreement and has 49 cured such default by entering into a new installment agreement pursuant 50 to clause two or three of subparagraph (a) of paragraph three of this 51 subdivision. 52 2. If an installment agreement is terminated, all taxes and charges 53 that accrued before such termination are required to be paid. If such 54 taxes and charges are not paid within nine months of such termination, 55 the tax lien or tax liens on such property may be sold. Notwithstanding 56 the preceding sentence, if an agreement is terminated pursuant to

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1 subparagraph (c) of paragraph one of this subdivision, a surviving 2 spouse has eighteen months from the death of the applicant to pay all 3 taxes and charges on such property before the tax lien or tax liens on 4 such property may be sold. If such surviving spouse is a property owner 5 he or she may enter into a separate installment agreement pursuant to 6 section 11-322 of this chapter or subdivision l, m or n of this section, 7 as long as he or she meets the eligibility requirements for the respec- 8 tive installment agreement. 9 3. (a) An applicant may cure a default by: 10 (i) bringing all installment payments and all current charges, includ- 11 ing but not limited to any interest and fees, that are outstanding at 12 the time of the default to a current status prior to the date of the tax 13 lien sale; 14 (ii) entering into a new installment agreement with a down payment of 15 twenty percent or more, of all delinquent real property taxes, assess- 16 ments, sewer rents, sewer surcharges, water rents and other charges that 17 are made a lien subject to the provisions of this chapter, including any 18 outstanding interest and fees, prior to the date of such sale; or 19 (iii) entering into a new installment agreement under this section if 20 the department has made a finding of extenuating circumstances pursuant 21 to the process described in paragraph four of subdivision (e) of section 22 40-03 of title nineteen of the rules of the city of New York. 23 (b) If a default is not cured prior to the date of the tax lien sale, 24 such applicant shall not be eligible to enter into an installment agree- 25 ment for the subject property for five years, unless the department has 26 made a finding of extenuating circumstances pursuant to the process 27 described in paragraph four of subdivision (e) of section 40-03 of title 28 nineteen of the rules of the city of New York. 29 (c) Notwithstanding the prohibition in subparagraph (b) of this para- 30 graph against entering into an installment agreement for the subject 31 property for five years, an applicant who has defaulted on an install- 32 ment agreement and whose lien has been sold and, after the sale of the 33 lien, whose property on which the lien was sold is subject to another 34 tax lien that is eligible to be sold, may apply to enter into another 35 installment agreement with respect to such other lien before the end of 36 such five-year period, provided that such applicant makes a down payment 37 of twenty percent or more, of all delinquent real property taxes, 38 assessments, sewer rents, sewer surcharges, water rents and other charg- 39 es that are made a lien subject to the provisions of this chapter, 40 including any outstanding interest and fees, prior to the date of the 41 tax lien sale. An applicant shall not be eligible to enter an install- 42 ment agreement with a down payment under this subparagraph more than 43 once for the subject property. 44 (d) If a property owner who has entered into an installment agreement 45 with the department pursuant to this section fails to make a payment 46 pursuant to such agreement, the department shall, after the first missed 47 payment, mail a letter or send an email, when such address is known, to 48 the property owner stating that such owner is at risk of being in 49 default of such agreement. The letter or email shall be sent after the 50 first missed payment if the department has not received payment within 51 two weeks of the due date. Failure by the department to mail such letter 52 or send such email, however, shall not affect the validity of the 53 installment agreement that has been entered into, nor shall any claim 54 arise or exist against the commissioner of finance or any officer or 55 agency of the city by reason of such failure to mail such letter or send 56 such email.

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1 l. Senior low-income installment agreement. 1. At the option of the 2 applicant, a senior low-income installment agreement may provide for 3 payments for a fixed period of time or for payments without a fixed 4 period of time. If the applicant selects an installment agreement with a 5 fixed time period, the applicant may select the term of the agreement. 6 The applicant may switch from an installment agreement without a fixed 7 time period to an installment agreement with a fixed time period, or 8 from an installment agreement with a fixed time period to an installment 9 agreement without a fixed time period, at any point. 10 2. A senior low-income installment agreement shall provide for the 11 payment of both a percentage of taxes and charges that have accrued, if 12 any, and a percentage of taxes and charges that will accrue after the 13 date of the installment agreement. The applicant may elect to pay an 14 installment amount based on zero percent, twenty-five percent, fifty 15 percent or seventy-five percent of the annual taxes and charges that 16 have accrued, if any, and that will accrue. If the applicant selects an 17 agreement with a fixed time period, the required payment shall be based 18 on the percentage selected and the term selected. If the applicant 19 selects an agreement without a fixed time period, the required payment 20 shall be based on the percentage selected for prospective taxes and 21 charges and a partial or full payment of the percentage of taxes and 22 charges that have accrued, if any. The applicant may adjust the payment 23 percentage at any point during the installment agreement, but may not 24 make more than one such adjustment during any six-month period. 25 m. Fixed length income-based installment agreement. 1. At the option 26 of the applicant, a fixed length income-based installment agreement 27 pursuant to this subdivision may provide for the payment of (a) only 28 taxes and charges that have accrued or (b) taxes and charges that have 29 accrued and taxes and charges that will accrue over the next fiscal 30 year. If option (a) is selected, the applicant shall pay all taxes and 31 charges that become due on the property after the installment agreement 32 is entered into in addition to the payment schedule provided in the 33 installment agreement. If option (b) is selected, the applicant shall 34 pay all taxes and charges that will accrue on the property after the 35 installment agreement has been in effect for one year in addition to the 36 payment schedule provided in the installment agreement. 37 2. The annual payment amount required pursuant to an installment 38 agreement described by this subdivision shall be based on a percentage 39 of the combined income of all of the property owners for the income tax 40 year immediately preceding the initial application for such installment 41 agreement. The applicant may select a percentage of two percent, four 42 percent, six percent or eight percent of such combined income. The 43 installment payment shall be calculated by dividing the annual payment 44 amount by twelve or four, depending on whether a monthly or quarterly 45 payment schedule is selected. The term of the agreement shall be calcu- 46 lated by dividing the taxes and charges included in the agreement pursu- 47 ant to paragraph one of this subdivision by the installment payment 48 determined by the calculation described in this paragraph. 49 3. An applicant may adjust the payment percentage at any point during 50 the installment agreement, but may not make more than one such adjust- 51 ment during any six-month period. 52 n. Extenuating circumstances income-based installment agreement. 1. 53 An extenuating circumstances income-based installment agreement shall 54 provide for the payment, during the period of such agreement, of a 55 percentage of taxes and charges that have accrued on the property and

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1 taxes and charges that accrue after the date of the installment agree- 2 ment. 3 2. The annual payment amount required pursuant to an installment 4 agreement described by this subdivision shall be based on a percentage 5 of the combined income of all of the property owners for the income tax 6 year immediately preceding the initial application for an installment 7 agreement. The applicant may select a percentage of two percent, four 8 percent, six percent, or eight percent of such combined income. Such 9 installment payment shall be calculated by dividing the annual payment 10 amount by twelve or four, depending on whether a monthly or quarterly 11 payment schedule is selected. The installment agreement shall be for a 12 term of one year but may be extended on a yearly basis if the department 13 determines that the extenuating circumstances continue. 14 3. An applicant may adjust the payment percentage at any point during 15 the installment agreement, but may not make more than one such adjust- 16 ment during any six-month period. 17 o. After an applicant has entered into an installment agreement with 18 the department pursuant to this section, the department shall record the 19 entry of such agreement on the automated city register information 20 access system. Failure by the department to record such agreement, 21 however, shall in no manner affect the validity of such agreement, nor 22 shall any claim arise or exist against the commissioner of finance or 23 any officer or agency of the city by reason of such failure to record. 24 p. All installment agreements executed pursuant to this section on or 25 after the effective date of this subdivision shall include: 26 1. a statement that if payments required from an applicant pursuant to 27 such an agreement are not made for a period of six months, such appli- 28 cant shall be in default of such agreement, and the tax lien or tax 29 liens on the subject property may be sold, provided, however, that such 30 default may be cured upon such applicant's bringing all installment 31 payments and all current charges that are outstanding at the time of the 32 default to a current status, which shall include, but not be limited to, 33 any outstanding interest and fees, prior to the date of the tax lien 34 sale; 35 2. a notification that if such default is not cured prior to the date 36 of the tax lien sale, such property owner shall not be eligible to enter 37 into an installment agreement for the subject property for five years, 38 unless a finding of extenuating circumstances has been made by the 39 department pursuant to the process described in paragraph four of subdi- 40 vision (e) of section 40-03 of title nineteen of the rules of the city 41 of New York; 42 3. the definition of extenuating circumstances pursuant to such para- 43 graph; 44 4. a statement describing the conditions under which the property 45 owner may be eligible, after default, to enter into another installment 46 agreement in accordance with paragraph three of subdivision k of this 47 section; and 48 5. the date by which the applicant must submit a renewal application 49 each year. 50 q. Every January thirty-first, the department shall submit to the 51 speaker of the council a report on the usage of the installment agree- 52 ments set forth in this section in the prior calendar year, including, 53 but not limited to the following data, disaggregated by installment 54 agreement type: 55 1. the number of new installment agreements executed;

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1 2. the number of installment agreements in effect on December thirty- 2 first of each year; 3 3. the number of applications for installment agreements received, the 4 number of applications not approved, and the reasons for disapproval; 5 4. for the senior low-income installment agreements, the number of new 6 installment agreements executed at zero percent, twenty-five percent, 7 fifty percent and seventy-five percent; 8 5. for the fixed length and extenuating circumstances income-based 9 installment agreements, the number of new installment agreements 10 executed at two percent, four percent, six percent or eight percent; 11 6. the average amount of property taxes and charges addressed by the 12 installment agreement; 13 7. the number of installment agreements that entered into default, the 14 number of defaults that were cured and the method by which they were 15 cured; 16 8. the number of installment agreements that were terminated, by 17 reason of termination; 18 9. the number of installment agreements that were renewed, including 19 whether such renewal occurred before or during the six-month period 20 described in paragraph one of subdivision h of this section; and 21 10. the number of installment agreements where the amount of liens on 22 the subject property exceeded the applicable percent of the net equity 23 in such property. 24 r. The department shall publicize the availability of the installment 25 agreements set forth in this section so as to maximize public awareness 26 of such agreements. 27 § 11-323 Commissioner of finance to conduct sale. The commissioner of 28 finance or his or her designee shall conduct the sales hereinbefore 29 provided to be made, or the commissioner may, in his or her discretion, 30 contract with any other person to conduct competitive sales of tax 31 liens. 32 § 11-324 Deposits and forfeits. The commissioner of finance may 33 require from each purchaser of a tax lien or tax liens, in cash or cash 34 equivalent in immediately available funds in the discretion of such 35 commissioner, a deposit of at least five per cent of the cash portion of 36 the sale price of the tax lien or tax liens purchased by him or her, as 37 liquidated damages, on a date determined by the commissioner of finance. 38 The balance shall be paid to the commissioner of finance in cash or cash 39 equivalent in immediately available funds or such other consideration 40 acceptable to the commissioner of finance or any combination thereof, in 41 his or her discretion. For purposes of this chapter "cash equivalent" 42 shall mean a cashier's check, bank check, certified check, money order, 43 or such other paper instrument as the commissioner of finance shall 44 prescribe. Such deposit and balance may also be paid by electronic funds 45 transfer. For purposes of this chapter, "electronic funds transfer" 46 shall mean any transfer of funds, other than a transaction originated by 47 check, draft or similar paper instrument, which is initiated using a 48 format prescribed by the commissioner of finance. A tax lien certificate 49 shall be made and delivered to the purchaser upon payment of the sale 50 price. In case any purchaser shall default in any obligation under the 51 terms and conditions of the tax lien sale, then the amount deposited by 52 the purchaser shall be forfeited to the city, and the tax lien or tax 53 liens upon the property affected by such purchase may be sold again at 54 the discretion of the commissioner of finance pursuant to section 11-319 55 of this chapter. All deposits forfeited as aforesaid shall be paid into 56 the general fund.

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1 § 11-327 Tax lien certificates; operation. A tax lien certificate 2 shall operate to transfer and assign the tax lien upon the property 3 described therein for the taxes, assessments, sewer rents, sewer 4 surcharges, water rents, any other charges that are made a lien subject 5 to the provisions of this chapter, the costs of any notices and adver- 6 tisements given pursuant to this chapter, any other charges that are due 7 and payable, a surcharge pursuant to section 11-332 of this chapter, and 8 interest and penalties thereon. 9 § 11-328 Contents of a tax lien certificate. A tax lien certificate 10 shall contain a transfer and assignment by the city of the tax lien sold 11 to the purchaser, the date of the sale, the aggregate amount of the tax 12 lien so transferred, and the items of taxes, assessments, sewer rents, 13 sewer surcharges, water rents, any other charges that are made a lien 14 subject to the provisions of this chapter, the costs of any advertise- 15 ments and notices given pursuant to this chapter, any other charges that 16 are due and payable, a surcharge pursuant to section 11-332 of this 17 chapter, and interest and penalties thereon comprising the tax lien, the 18 rate of interest which the tax lien certificate will bear, the date when 19 the amounts under such tax lien are due pursuant to section 11-332 of 20 this chapter, and a description of the property affected by the tax 21 lien, which description shall include the designation of such property 22 on the tax map, by its lot number and the number of the block in which 23 it is contained, and such other identifying information as the commis- 24 sioner of finance or his or her designee may deem proper to add. For 25 purposes of this section, the words "date of sale" shall have the same 26 meaning provided in subdivision (e) section 11-320 of this chapter. Each 27 tax lien certificate shall be executed by the commissioner of finance or 28 his or her designee by manual or facsimile signature and shall be 29 acknowledged by the manual or facsimile signature of the officer 30 subscribing the same in the manner in which a deed is required to be 31 acknowledged to be recorded in the county in which the property affected 32 is situated. The commissioner of finance may designate an agent for 33 purposes of authenticating any such signature. 34 § 11-330 Record of tax lien certificates. The commissioner of finance 35 or his or her designee, shall keep in his or her office a public record 36 of sales of tax liens, and a copy of each tax lien certificate issued by 37 such commissioner or his or her designee. Assignments of tax lien 38 certificates duly acknowledged may be filed and recorded in the office 39 of the commissioner of finance or his or her designee. A tax lien 40 certificate and any assignment thereof, duly acknowledged, shall be 41 deemed conveyances under article eight of the real property law, and may 42 be recorded in the office of the recording officer of any county in 43 which the real property which it affects is situated. Tax lien certif- 44 icates and all assignments thereof shall be recorded by recording offi- 45 cers in the same manner as mortgages and assignments thereof, but with- 46 out payment of tax under article eleven of the tax law. Neither the tax 47 lien nor the rights transferred or created by a tax lien certificate 48 shall be impaired by failure of a recording officer to record a tax lien 49 certificate made by the city through the commissioner of finance or his 50 or her designee. 51 § 11-331 Records to be competent evidence. The record in the office of 52 the commissioner of finance or his or her designee of sales of tax 53 liens, of a tax lien certificate, and of a copy of a tax lien certif- 54 icate, and of an assignment of a tax lien certificate, a record of a tax 55 lien certificate in the office of a recording officer, and of an assign- 56 ment of a tax lien certificate, duly acknowledged, in the office of a

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1 recording officer, shall each be evidence in any court in the state 2 without further proof. A transcript of any record enumerated in this 3 section, duly certified, shall be evidence in any court in the state 4 with like effect as the original instrument of record. 5 § 11-332 Rights of purchaser of tax lien. a. Any purchaser of a tax 6 lien or tax liens shall stand in the same position as the city and shall 7 have all the rights and remedies that the city would have had if the tax 8 lien or tax liens had not been sold. 9 b. The aggregate amount of each tax lien transferred pursuant to this 10 chapter shall be due and payable one year from the date of the sale. 11 Until such aggregate amount is fully paid and discharged, the holder of 12 the tax lien certificate shall be entitled to receive interest on such 13 aggregate amount from the date of sale, and semi-annually at the rate of 14 interest applicable in accordance with section 11-319 of this chapter. 15 If such aggregate amount is partially paid, the holder of the tax lien 16 certificate shall be entitled to receive interest only on the amount 17 that remains unpaid. Notwithstanding the foregoing sentence, the holder 18 of the tax lien certificate shall be entitled to receive and retain a 19 surcharge equal to five percent of the lien arising pursuant to the 20 provisions of this chapter as a result of the nonpayment of taxes, 21 assessments, sewer rents, sewer surcharges, water rents, any other 22 charges that are made a lien subject to the provisions of this chapter, 23 the costs of any advertisements and notices given pursuant to this chap- 24 ter, any other charges that are due and payable, and interest and penal- 25 ties thereon. Any amounts due shall be paid directly to the holder of 26 the tax lien certificate. At the option of the holder of any tax lien 27 certificate the aggregate amount thereof shall become subject to fore- 28 closure after default in the payment of interest for thirty days or 29 after default for six months after the date of sale stated in the tax 30 lien certificate in accordance with subdivision (d) of section 11-320 31 and section 11-328 of this chapter in the payment of any taxes, assess- 32 ments, sewer rents, sewer surcharges, water rents, any other charges 33 that are made a lien subject to the provisions of this chapter, or the 34 interest or penalties thereon which become a lien on or after the date 35 of sale of the tax lien transferred by such tax lien certificate. At his 36 or her option, the holder of the tax lien certificate may satisfy any 37 such subsequent tax lien on the same property, and shall, by virtue of 38 such satisfaction, be deemed to be in the same position as if he or she 39 were a purchaser of a tax lien certificate for such subsequent tax lien, 40 provided, however, that such holder shall not be entitled to receive a 41 five percent surcharge on such subsequent tax lien pursuant to this 42 section. The rate of interest on such subsequent lien shall be the rate 43 of interest applicable to tax lien certificates pursuant to section 44 11-319 of this chapter. The commissioner of finance or his or her desig- 45 nee, at the request of the purchaser of such subsequent lien, shall 46 issue a tax lien certificate for such lien pursuant to sections 11-327 47 and 11-328 of this chapter. Upon issuance of such certificate, the 48 commissioner of finance or his or her designee shall provide such notice 49 as is required pursuant to section 11-320(d) of this chapter. Failure to 50 provide notice pursuant to this subdivision shall not affect the validi- 51 ty of any transfer of a subsequent tax lien or tax liens pursuant to 52 this subdivision. Any person having a legal or beneficial interest in 53 property affected by a tax lien certificate may satisfy the same at any 54 time upon payment of the amounts due with interest at the rate applica- 55 ble in accordance with section 11-319 of this chapter. Upon satisfaction 56 of the tax lien, the holder thereof shall issue to the person who satis-

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1 fied such tax lien a certificate of discharge, certifying that the tax 2 lien has been paid or has been otherwise satisfied, in such recordable 3 form as has been approved by the commissioner of finance. For purposes 4 of this section, the words "date of sale" shall have the same meaning 5 provided in subdivision (e) of section 11-320 of this chapter. 6 § 11-333 Discharge of tax lien. A tax lien sold pursuant to the 7 provisions of this chapter may be discharged by presenting the certif- 8 icate of discharge issued by the holder of the tax lien pursuant to 9 section 11-332 of this chapter to the recording officer of the county in 10 which the real property that it affects is situated, and any recording 11 officer to whom such certificate of discharge is presented shall record 12 the same. 13 § 11-334 Exemption from taxation. Tax liens and tax lien certificates 14 shall be exempt from taxation by the state or any local subdivisions 15 thereof, except from the taxes imposed by article ten of the tax law. 16 The real property affected by any tax lien shall not be exempt from 17 taxation by reason of this section. 18 § 11-335 Foreclosure of tax liens. If the amount of any tax lien which 19 shall have been transferred by a tax lien certificate shall not be paid 20 when under its terms and the provisions of section 11-332 of this chap- 21 ter such amount shall be due, the holder of such tax lien certificate 22 may maintain an action in the supreme court to foreclose such tax lien. 23 The holder of such tax lien certificate shall notify the commissioner of 24 finance or his or her designee in writing whenever he or she commences 25 such action at the time of filing of such action, and shall notify the 26 commissioner of finance in writing of the resolution of such action, 27 including any settlement of such action, within thirty days of such 28 resolution. In an action to foreclose a tax lien any person shall be a 29 proper party of whom the plaintiff alleges that such person has or may 30 have or that the plaintiff has reason to believe that such person has or 31 may have an interest in or claim upon the property affected by the tax 32 lien. A plaintiff in an action to foreclose a tax lien shall recover 33 reasonable attorney's fees for maintaining such action. Except as other- 34 wise provided in this chapter an action to foreclose a tax lien shall be 35 regulated by the provisions of the civil practice law and rules and by 36 all other provisions of law, and rules of practice applicable to actions 37 to foreclose mortgages on real property. The people of the state of New 38 York or the city of Staten Island may be made party to an action to 39 foreclose a tax lien in the same manner as a natural person. Where the 40 people of the state of New York or the city of Staten Island are made a 41 party defendant the complaint shall set forth, in addition to the other 42 matters required to be set forth by law, detailed facts showing the 43 particular nature of the interest in or the lien on such property of the 44 people of the state of New York or the city of Staten Island, and 45 detailed facts showing the particular nature of the interest in or the 46 lien on such property which plaintiff has reason to believe that the 47 people of the state of New York or the city of Staten Island have or may 48 have in such property, and the reason for making the people of the state 49 of New York or the city of Staten Island a party defendant. Upon failure 50 to state such facts the complaint shall be dismissed as to the people of 51 the state or the city of Staten Island. 52 § 11-336 Pleading tax lien certificate. Whenever a cause of action, 53 defense or counterclaim, is for the foreclosure of a tax lien, or is in 54 any manner founded upon a tax lien or a tax lien certificate, the 55 production in evidence of an instrument executed by the commissioner of 56 finance or his or her designee in the form prescribed in section 11-328

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1 of this chapter for a tax lien certificate subscribed by or in behalf of 2 the commissioner of finance or his or her designee shall be presumptive 3 evidence that the lien purported to be transferred by such an instrument 4 was a valid and enforceable lien, and that it has been duly assigned to 5 the purchaser, and it shall not be necessary to plead or prove any act, 6 proceeding, notice or action, preceding the delivery of such tax lien 7 certificate nor to establish the validity of the tax lien transferred by 8 such tax lien certificate. If a party or person in interest in any such 9 action or proceeding claims that a tax lien is irregular or invalid, or 10 that there is any defect therein or that a tax lien certificate is 11 irregular, invalid or defective, such invalidity, irregularity or defect 12 must be specifically pleaded or set forth, and must be established 13 affirmatively by the party or person pleading or setting forth the same. 14 § 11-337 Judgment upon tax lien. In every action for the foreclosure 15 of a tax lien, and in every action or proceeding in which a cause of 16 action, defense or counterclaim is in any manner founded upon a tax lien 17 or a tax lien certificate, such tax lien certificate and the tax lien 18 which it transfers shall be presumed to be regular and valid and effec- 19 tual to transfer to the purchaser named therein a valid and enforceable 20 tax lien. Unless in such an action or proceeding such tax lien or tax 21 lien certificate be found to be invalid, they shall be adjudged to be 22 enforceable and valid, for the amount thereof and the interest to which 23 the holder may be entitled and a tax lien transferred by a tax lien 24 certificate effectual to transfer such tax lien to the purchaser named 25 therein. 26 § 11-338 Judgment of foreclosure of tax lien; sale. In an action to 27 foreclose a tax lien, unless the defendants obtain judgment, the plain- 28 tiff shall be entitled to a judgment establishing the validity of the 29 tax lien so far as the same shall not be adjudged invalid and of the tax 30 lien certificate and directing the sale of the real, personal or mixed 31 property affected thereby, or such part thereof as shall be sufficient 32 to discharge the tax lien, or such items thereof as shall not be 33 adjudged invalid together with the expense of the sale, and the costs of 34 the action. 35 § 11-339 City may purchase at sale. At a sale pursuant to judgment in 36 an action to foreclose a tax lien or at any sale free of tax liens, the 37 city, without authorization other than hereby given, may purchase any 38 property that is the subject of the sale. 39 § 11-340 Effect of judgment foreclosing tax lien. Every final judg- 40 ment in an action to foreclose a tax lien shall be binding upon, and 41 every conveyance upon a sale pursuant thereto, shall transfer to and 42 vest in the purchaser all the right, title, interest and estate in and 43 claim upon the real property affected by such judgment, of the plain- 44 tiff, each defendant upon whom the summons is served, each person claim- 45 ing from, through or under such a defendant by title accruing after the 46 filing of notice of pendency of the action or after the entry of judg- 47 ment and filing of the judgment roll in the proper county clerk's 48 office, and each person not in being when the judgment is rendered, who 49 afterwards may become entitled to a beneficial interest attaching to, or 50 an estate or interest in such real property or any portion thereof, 51 provided that the person presumptively entitled to such beneficial 52 interest, estate or interest is a party to such action or bound by such 53 judgment. So much of section three hundred seventeen of the civil prac- 54 tice law and rules as requires the court to allow a defendant to defend 55 an action after final judgment shall not apply to an action to foreclose 56 a tax lien. Delivery of the possession of real property affected by a

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1 judgment to foreclose a tax lien may be compelled in the manner 2 prescribed in section two hundred twenty-one of the real property 3 actions and proceedings law. 4 § 11-341 Surplus. Any surplus of the proceeds of the sale, after 5 paying the expenses of the sale, and all taxes, assessments, sewer 6 rents, sewer surcharges, water rents, any other charges made a lien 7 subject to the provisions of this chapter, the costs of any advertise- 8 ments and notices given pursuant to this chapter, any other charges that 9 are due and payable, any surcharge pursuant to section 11-332 of this 10 chapter and interest and penalties thereon, including such amounts which 11 accrued or became a lien on and after the date of sale of the tax lien 12 or tax liens and up to and including the date of the sale of the proper- 13 ty in foreclosure, and satisfying the amount of such tax lien or tax 14 liens and interest and the costs of the action, must be paid into court, 15 for the use of the person or persons entitled thereto. If any part of 16 the surplus remains in court for the period of three months, and no 17 application has been made therefor, the court must, and, if an applica- 18 tion therefor is pending, the court may direct such surplus to be 19 invested at interest, for the benefit of the person or persons entitled 20 thereto, to be paid upon the direction of the court. 21 § 11-342 Foreclosed tax lien not arrears. Any party to an action to 22 foreclose a tax lien or any purchaser or any party in interest may give 23 notice of such foreclosure to the city collector and after such notice 24 the items which constituted the tax lien thus foreclosed shall not be 25 entered by the city collector in any yearly assessment-roll, so long as 26 the judgment of foreclosure of such lien remains in force. 27 § 11-347 Corporation counsel to protect city in all proceedings relat- 28 ing to tax liens. It shall be the duty of the corporation counsel to 29 protect the interest of the city in all matters, actions and proceedings 30 relating to tax liens and tax lien certificates; to intervene on behalf 31 of the city or to make the city a party to any action in which the 32 corporation counsel believes it to be to the interest of the city so to 33 do, by reason of any matter arising under or relating to any tax lien or 34 tax lien certificate, or advertisement of sale of tax liens. The corpo- 35 ration counsel in his or her discretion may represent the purchaser of a 36 tax lien or the holder of a tax lien certificate in any action in which 37 the corporation counsel believes it to be in the interest of the city so 38 to do, by reason of any matter arising under or relating to any tax lien 39 or tax lien certificate, or advertisement of sale of tax liens. All 40 costs recovered in any action or proceeding conducted or defended by the 41 corporation counsel pursuant to this section shall belong to the city 42 and shall be collected, applied and disposed of in the same manner as 43 are other costs recovered by the city. 44 § 11-349 Lost tax lien certificate; delivery of duplicate in case of. 45 Whenever any tax lien certificate given by the commissioner of finance 46 or his or her designee, as in this chapter provided, shall be lost, the 47 commissioner of finance or his or her designee may receive evidence of 48 such loss, and on satisfactory proof of the fact may direct the 49 execution and delivery of a duplicate to such person or persons who 50 shall appear entitled thereto, and may also, in the commissioner's 51 discretion, require a bond of indemnity to the city. 52 § 11-350 Affidavits of publication and mailing of necessary notices to 53 be preserved. It shall be the duty of the commissioner of finance or his 54 or her designee to procure, preserve and register at the department of 55 finance, affidavits of the publication and mailing of all the advertise- 56 ments and notices by this chapter required to be published and mailed,

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1 and such affidavits shall be presumptive proof of such publication and 2 mailing in all the courts of this state. 3 § 11-353 Cancellation of taxes, assessments, water rents, sewer rents, 4 sewer surcharges, any charges that are made a lien subject to the 5 provisions of this chapter, the costs of any advertisements and notices 6 given pursuant to this chapter, any other charges that are due and paya- 7 ble, a surcharge pursuant to section 11-332 of this chapter, and inter- 8 est and penalties thereon. Whenever the city has heretofore or shall 9 hereafter become vested with title to property acquired by virtue of tax 10 enforcement foreclosure proceedings, or by deed in lieu thereof, the 11 commissioner of finance, or his or her designee, shall cancel all unpaid 12 real estate taxes, tax lien certificates, assessments, water rents, 13 sewer rents, sewer surcharges, any charges that are made a lien subject 14 to the provisions of this chapter, the costs of any advertisements and 15 notices given pursuant to this chapter, any other charges that are due 16 and payable, a surcharge pursuant to section 11-332 of this chapter, and 17 interest and penalties thereon upon which the foreclosure action was 18 predicated. Upon the sale of such property and the conveyance of the 19 title thereof by the city, the commissioner of finance, or his or her 20 designee, shall cancel all unpaid real estate taxes, assessments, water 21 rents, sewer rents, sewer surcharges, any charges that are made a lien 22 subject to the provisions of this chapter, the costs of any advertise- 23 ments and notices given pursuant to this chapter, any other charges that 24 are due and payable, a surcharge pursuant to section 11-332 of this 25 chapter, and interest and penalties thereon that shall have accrued 26 during the period between the date of the last unpaid item upon which 27 the foreclosure action was predicated and the date of conveyance of 28 title. The commissioner of finance, or his or her designee, shall enter 29 notations of such cancellations in the appropriate records for each such 30 parcel of property. 31 § 11-354 Additional method to enforce payment of tax liens held by the 32 city. (a) Notwithstanding any other provision of law and notwithstanding 33 any omission to hold a tax lien sale, whenever any tax, assessment, 34 sewer rent, sewer surcharge, water rent, any charge that is made a lien 35 subject to the provisions of this chapter or chapter four of this title, 36 or interest and penalties thereon, has been due and unpaid for a period 37 of at least one year from the date on which the tax, assessment or other 38 legal charge represented thereby became a lien, or in the case of any 39 class one property or any class two property that is a residential 40 condominium or residential cooperative, as such classes of property are 41 defined in subdivision one of section eighteen hundred two of the real 42 property tax law, or in the case of a multiple dwelling owned by a 43 company organized pursuant to article eleven of the private housing 44 finance law with the consent and approval of the department of housing 45 preservation and development, for a period of at least three years from 46 the date on which the tax, assessment or other legal charge became a 47 lien, the city, as owner of a tax lien, may maintain an action in the 48 supreme court to foreclose such lien. Such action shall be governed by 49 the procedures set forth in section 11-335 of this chapter; provided, 50 however, that such parcel shall only be sold to the highest responsible 51 bidder. Such purchaser shall be deemed qualified as a responsible bidder 52 pursuant to such criteria as are established in rules promulgated by the 53 commissioner of finance after consultation with the commissioner of 54 housing preservation and development. 55 (b) At a sale pursuant to a judgment in an action brought pursuant to 56 subdivision (a) of this section to foreclose a tax lien, the city may

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1 purchase property subject to such lien in accordance with the provisions 2 of section 11-339 of this chapter. 3 (c) The provisions of this section shall not affect any existing reme- 4 dy or procedure for the enforcement or foreclosure of tax liens provided 5 for in this code or any other law, but the remedy provided herein for 6 foreclosure of tax liens shall be in addition to any other remedies or 7 procedures provided by any general, special or local law. Notwithstand- 8 ing any other provision of this code, the commissioner of finance shall 9 be authorized to agree to forebear to commence an in rem action against 10 property which has an outstanding and unredeemed tax lien certificate 11 previously sold by the city and held by a third party pursuant to this 12 chapter. 13 § 11-355 Reporting. The commissioner of finance shall submit an annual 14 report to the council concerning the sale or sales of tax liens during 15 the preceding year pursuant to this chapter. Such report shall include 16 the following information regarding such sale or sales: a list of prop- 17 erties for which a tax lien or tax liens has or have been sold, includ- 18 ing identification of the particular tax lien or tax liens sold; the 19 proceeds received from the sale or sales of tax liens; identification of 20 the purchaser of and servicer for the tax lien or tax liens sold; a 21 report of servicer activities during the immediately preceding year; the 22 redemption rate for tax liens that have been sold; the delinquency rate 23 for real property taxes for the immediately preceding year; and any 24 other information pertinent to the sale of tax liens that may be 25 requested by the council and which is not made confidential pursuant to 26 section 11-208.1 of this code. Upon request by the council, information 27 provided in such report shall be arranged by community board. In addi- 28 tion to such report, the commissioner of finance shall from time to time 29 provide any other information pertinent to the sale of tax liens that 30 may be requested by the council and which is not made confidential 31 pursuant to section 11-208.1 of the code, including updated information 32 regarding the sale or sales of tax liens pursuant to this chapter. In 33 addition to such report, no later than August thirty-first, two thousand 34 twenty, the commissioner shall provide to the council a report listing 35 all properties on which liens have been sold during the period from 36 January first, two thousand fifteen through December thirty-first, two 37 thousand nineteen. The report shall indicate, based on records in the 38 office of the register, whether a transfer of or mortgage recorded on 39 any of such properties has occurred during such period after the sale of 40 any tax lien sold during such period.

41 CHAPTER 4 42 TAX LIEN FORECLOSURE BY ACTION IN REM

43 § 11-401 Definitions. Whenever used in this chapter, the following 44 terms shall mean: 45 1. "Tax lien." The lien arising as a result of the nonpayment of 46 taxes, assessments, sewer rents, sewer surcharges, water rents, any 47 other charges that are made a lien subject to the provisions of this 48 chapter or chapter three of this title, interest and penalties thereon, 49 and the right of the city to receive such amounts. 50 2. "Court." The supreme court. 51 3. "Class." Any class of real property defined in subdivision one of 52 section eighteen hundred two of the real property tax law, and any 53 subclassification of class two real property where such subclassifica-

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1 tion is established by rule of the commissioner of finance promulgated 2 pursuant to this subdivision. 3 4. "Distressed property." Any parcel of class one or class two real 4 property that is subject to a tax lien or liens that result from an 5 environmental control board judgment against the owner of such parcel 6 for a building code violation with a lien or liens to value ratio, as 7 determined by the commissioner of finance, equal to or greater than 8 twenty-five percent or any parcel of class one or class two real proper- 9 ty that is subject to a tax lien or liens with a lien or liens to value 10 ratio, as determined by the commissioner of finance, equal to or greater 11 than fifteen percent and that meets one of the following two criteria: 12 i. such parcel has an average of five or more hazardous or immediately 13 hazardous violations of record of the housing maintenance code per 14 dwelling unit; or 15 ii. such parcel is subject to a lien or liens for any expenses 16 incurred by the department of housing preservation and development for 17 the repair or the elimination of any dangerous or unlawful conditions 18 therein, pursuant to section 27-2144 of this code, in an amount equal to 19 or greater than one thousand dollars. 20 § 11-401.1 Procedures for distressed property. a. The commissioner of 21 finance shall, not less than sixty days preceding the date of the sale 22 of a tax lien or tax liens, submit to the commissioner of housing pres- 23 ervation and development a description by block and lot, or by such 24 other identification as the commissioner of finance may deem appropri- 25 ate, of any parcel of class one or class two real property on which 26 there is a tax lien that may be foreclosed by the city. The commissioner 27 of housing preservation and development shall determine, and direct the 28 commissioner of finance, not less than ten days preceding the date of 29 the sale of a tax lien or tax liens, whether any such parcel is a 30 distressed property as defined in subdivision four of section 11-401 of 31 this chapter. Any tax lien on a parcel so determined to be a distressed 32 property shall not be included in such sale. In connection with a subse- 33 quent sale of a tax lien or tax liens, the commissioner of finance may, 34 not less than sixty days preceding the date of the sale, resubmit to the 35 commissioner of housing preservation and development a description by 36 block and lot, or by such other identification as the commissioner of 37 finance may deem appropriate, of any parcel of class one or class two 38 real property that was previously determined to be a distressed property 39 pursuant to this paragraph and on which there is a tax lien that may be 40 included in such sale. The commissioner of housing preservation and 41 development shall determine, and direct the commissioner of finance, not 42 less than ten days preceding the date of the sale, whether such parcel 43 remains a distressed property. If the commissioner of housing preserva- 44 tion and development determines that the parcel is not a distressed 45 property, then the tax lien on the parcel may be included in the sale. 46 b. The commissioner of housing preservation and development may peri- 47 odically review whether a parcel of class one or class two real property 48 that is subject to subdivision c of this section or subdivision j of 49 section 11-412.1 of this chapter remains a distressed property. If the 50 commissioner determines that the parcel is not a distressed property as 51 defined in subdivision four of section 11-401 of this chapter, then the 52 parcel shall not be subject to such subdivisions. 53 c. Any parcel so determined to be a distressed property shall be 54 subject to an in rem foreclosure action, or in the case where the 55 commissioner of finance does not commence such action the commissioner 56 of housing preservation and development shall evaluate such parcel and

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1 take such action as he or she deems appropriate under the programs, 2 existing at the time of such evaluation, that are designed to encourage 3 the rehabilitation and preservation of existing housing, and shall moni- 4 tor or cause to be monitored the status of the property. The commission- 5 er of housing preservation and development, in his or her discretion, 6 shall cause an inspection to be conducted on any parcel so determined to 7 be a distressed property. In addition, the commissioner of housing pres- 8 ervation and development shall submit to the council a list of all 9 parcels so determined to be a distressed property within thirty days 10 from the date such parcels are identified as a distressed property. 11 § 11-402 Applicability of procedure of foreclosure in rem. a. The 12 provisions of this chapter shall be applicable only to tax liens owned 13 by the city. 14 b. The provisions of this chapter shall not affect any existing remedy 15 or procedure for the enforcement or foreclosure of tax liens provided 16 for in this code or any other law, but the remedy provided herein for 17 foreclosure by action in rem shall be in addition to any other remedies 18 or procedures provided by any general, special or local law. 19 c. The provisions of this chapter shall not affect pending actions or 20 proceedings, provided, however, that any pending action or proceeding 21 for the enforcement or foreclosure of tax liens may be discontinued, and 22 a new action may be instituted pursuant to the provisions of this chap- 23 ter, in respect to any such tax lien. 24 § 11-402.1 Inapplicability of article eleven of the real property tax 25 law to the enforcement of the collection of delinquent taxes. In accord- 26 ance with section six of chapter six hundred two of the laws of nineteen 27 hundred ninety-three and subdivision two of section eleven hundred four 28 of the real property tax law, it is hereby provided that the collection 29 of delinquent taxes shall continue to be enforced pursuant to chapters 30 three and four of title eleven of this code and other related provisions 31 of the charter and this code as such chapters three and four and such 32 related provisions may from time to time be amended and that article 33 eleven of the real property tax law shall not be applicable to the city. 34 § 11-403 Jurisdiction. The supreme court shall have jurisdiction of 35 actions authorized by this chapter. 36 § 11-404 Foreclosure by action in rem. a. Whenever it shall appear 37 that a tax lien or tax liens has or have been due and unpaid for a peri- 38 od of at least one year from the date on which the tax, assessment or 39 other legal charge represented thereby became a lien, such tax lien or 40 tax liens, except as provided in subdivision b of this section or other- 41 wise provided by this chapter, may be summarily foreclosed in the manner 42 provided in this chapter, notwithstanding the provisions of any general, 43 special or local law and notwithstanding any omission to hold a sale of 44 a tax lien or tax liens prior to such foreclosure. A bill of arrears or 45 any other instrument evidencing such tax lien or tax liens shall be 46 evidence of the fact that the tax lien or tax liens represented thereby 47 has not or have not been paid to the city or sold by it. 48 b. A tax lien on any class one property or any class two property that 49 is a residential condominium or residential cooperative, as such classes 50 of property are defined in subdivision one of section eighteen hundred 51 two of the real property tax law, and on any multiple dwelling owned by 52 a company organized pursuant to article eleven of the private housing 53 finance law with the consent and approval of the department of housing 54 preservation and development, shall not be foreclosed in the manner 55 provided in this chapter until such tax lien has been due and unpaid for

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1 a period of at least three years from the date on which the tax, assess- 2 ment or other legal charge represented thereby became a lien. 3 § 11-405 Preparation and filing of lists of delinquent taxes. a. The 4 commissioner of finance from time to time shall prepare a list, to be 5 known as a "list of delinquent taxes", of all parcels, or all parcels 6 within a particular class or classes, that are within a particular 7 section of a tax map or portion of a section of a tax map of the city 8 and on which there are tax liens subject to foreclosure pursuant to this 9 chapter, provided, however, that no such portion shall be smaller than a 10 block, as defined in subdivision d of section 11-204 of subchapter one 11 of chapter two of this title. Every such list shall bear a caption 12 containing the in rem action number of the city's tax foreclosure 13 proceeding, the section of a tax map or portion of a section of a tax 14 map, and where the action covers less than all parcels in a section of a 15 tax map or portion of a section of a tax map, the particular class or 16 classes, and shall contain a statement of the rate or rates at which 17 interest and penalties will be computed for the various liens it 18 includes. 19 b. Every such list shall set forth the parcels it includes separately 20 and number them serially. For each parcel it shall contain (1) a brief 21 description sufficient to identify the parcel, including section, block 22 and lot numbers, and the street and street number, if any, or in the 23 absence of such information the parcel or tract identification number 24 shown on a tax map or on a map filed in the county clerk's or register's 25 office and (2) a statement of the amounts and dates of all unpaid tax 26 liens which are subject to foreclosure under this chapter and of those 27 which have accrued thereafter. 28 c. (1) The commissioner of finance may exclude or thereafter remove 29 from such list any parcels (i) as to which questions the commissioner 30 deems meritorious have been raised regarding the validity of the liens, 31 (ii) as to which all the taxes and other charges which rendered said 32 parcels eligible for inclusion in said list have been paid, or (iii) 33 which are owned by an entity other than a company organized pursuant to 34 article eleven of the private housing finance law with the consent and 35 approval of the department of housing preservation and development and 36 which are not owner-occupied residential buildings of not more than five 37 residential units and as to which an agreement has been duly made, 38 executed and filed with such commissioner for the payment of the delin- 39 quent taxes, assessments or other legal charges, interest and penalties 40 in installments. The first installment shall be paid upon the filing of 41 the installment agreement with the commissioner and shall be in an 42 amount of not less than fifteen percent of such delinquent taxes, 43 assessments or other legal charges, interest and penalties. The remain- 44 ing installments, which shall be twice the number of unpaid quarters of 45 real estate taxes or the equivalent thereof but which shall in no event 46 exceed thirty-two in number, shall be payable quarterly on the first day 47 of July, October, January and April. For the purposes of calculating the 48 number of such remaining installments unpaid real estate taxes which 49 are, on and after July first, nineteen hundred eighty-two, due and paya- 50 ble on an other than quarterly basis shall be deemed to be payable on a 51 quarterly basis. 52 (2) The commissioner of finance may also exclude or thereafter remove 53 from such list any parcels which are owned by a company organized pursu- 54 ant to article eleven of the private housing finance law with the 55 consent and approval of the department of housing preservation and 56 development, and (i) as to which an agreement has been duly made,

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1 executed and filed with said commissioner for the payment of the delin- 2 quent taxes, assessments or other legal charges incurred prior to the 3 ownership of said parcel by said article eleven company, and the inter- 4 est and penalties thereon, in installments. The first installment there- 5 of shall be paid upon the filing of the installment agreement with the 6 commissioner and shall be in an amount of not less than ten percent of 7 such delinquent taxes, assessments or other legal charges and the inter- 8 est and penalty thereon. The remaining installments, which shall be 9 three times the number of unpaid quarters of real estate taxes or the 10 equivalent thereof but which shall in no event exceed forty-eight in 11 number shall be payable quarterly on the first days of July, October, 12 January and April. For the purposes of calculating the number of such 13 remaining installments unpaid real estate taxes which are, on and after 14 July first, nineteen hundred eighty-two due and payable on an other than 15 quarterly basis shall be deemed to be payable on a quarterly basis; and 16 (ii) as to which an agreement has been duly made, executed and filed 17 with said commissioner, for the payment of the delinquent taxes, assess- 18 ments or other legal charges incurred after the ownership of said parcel 19 by said article eleven company on the same terms as are provided in 20 paragraph one of this subdivision. 21 (3) The commissioner of finance may also exclude or thereafter remove 22 from such list any parcels which are owner-occupied residential build- 23 ings of not more than five residential units as to which an agreement 24 has been duly made, executed and filed with said commissioner for the 25 payment of the delinquent taxes, assessments, or other legal charges and 26 the interest and penalties thereon, in installments. The first install- 27 ment thereof shall be paid upon the filing of the installment agreement 28 with the commissioner and shall be in an amount not less than ten 29 percent of such delinquent taxes, assessment or other legal charges and 30 the interest and penalty thereon. The remaining installments, which 31 shall be three times the number of unpaid quarters of real estate taxes 32 or the equivalent thereof but which shall in no event exceed forty-eight 33 in number, shall be payable quarterly on the first days of July, Octo- 34 ber, January and April. For purposes of calculating the number of such 35 remaining installments unpaid real estate taxes which are, on and after 36 July first, nineteen hundred eighty-two, due and payable on an other 37 than quarterly basis shall be deemed to be payable on a quarterly basis. 38 (4) Notwithstanding paragraph one, two or three of this subdivision, 39 with respect to installment agreements duly made, executed and filed on 40 or after the date on which this paragraph takes effect, the commissioner 41 of finance may also exclude or thereafter remove from such list any 42 parcel that is (i) (A) a residential building containing not more than 43 five residential units, (B) a residential condominium unit, (C) a resi- 44 dential building held in a cooperative form of ownership, or (D) owned 45 by a company organized pursuant to article eleven of the state private 46 housing finance law with the consent and approval of the department of 47 housing preservation and development, and (ii) as to which an agreement 48 has been duly made, executed and filed with such commissioner for the 49 payment of the delinquent taxes, assessments or other legal charges, and 50 the interest and penalties thereon, in installments. The first install- 51 ment thereof shall be paid upon the filing of the installment agreement 52 with the commissioner and shall be in an amount equal to not less than 53 ten percent of the total amount of such delinquent taxes, assessments or 54 other legal charges and the interest and penalties thereon. The remain- 55 ing installments, which shall be three times the number of unpaid quar- 56 ters of real estate taxes or the equivalent thereof, but which shall in

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1 no event exceed thirty-two in number, shall be payable quarterly on the 2 first days of July, October, January and April. For the purposes of 3 calculating the number of such remaining installments, unpaid real 4 estate taxes that are due and payable on other than a quarterly basis 5 shall be deemed to be payable on a quarterly basis. 6 (5) Notwithstanding paragraph one, two or three of this subdivision, 7 with respect to installment agreements duly made, executed and filed on 8 or after the date on which this paragraph takes effect, the commissioner 9 of finance may also exclude or thereafter remove from such list any 10 parcel of class one or class two real property, other than a parcel 11 described in paragraph four of this subdivision, as to which an agree- 12 ment has been duly made, executed and filed with such commissioner for 13 the payment of the delinquent taxes, assessments or other legal charges, 14 and the interest and penalties thereon, in installments. The first 15 installment thereof shall be paid upon the filing of the installment 16 agreement with the commissioner and shall be in an amount equal to not 17 less than fifteen percent of the total amount of such delinquent taxes, 18 assessments or other legal charges and the interest and penalties there- 19 on. The remaining installments, which shall be twice the number of 20 unpaid quarters of real estate taxes or the equivalent thereof, but 21 which shall in no event exceed thirty-two in number, shall be payable 22 quarterly on the first days of July, October, January and April. For the 23 purposes of calculating the number of such remaining installments, 24 unpaid real estate taxes that are due and payable on other than a quar- 25 terly basis shall be deemed to be payable on a quarterly basis. 26 (6) Notwithstanding paragraph one, two or three of this subdivision, 27 with respect to installment agreements duly made, executed and filed on 28 or after the date on which this paragraph takes effect, the commissioner 29 of finance may also exclude or thereafter remove from such list any 30 parcel of class three or class four real property as to which an agree- 31 ment has been duly made, executed and filed with such commissioner for 32 the payment of the delinquent taxes, assessments or other legal charges, 33 and the interest and penalties thereon, in installments. The first 34 installment thereof shall be paid upon the filing of the installment 35 agreement with the commissioner and shall be in an amount equal to not 36 less than fifteen percent of the total amount of such delinquent taxes, 37 assessments or other legal charges and the interest and penalties there- 38 on. The remaining installments, which shall be twice the number of 39 unpaid quarters of real estate taxes or the equivalent thereof, but 40 which shall in no event exceed twenty in number, shall be payable quar- 41 terly on the first days of July, October, January and April. For the 42 purposes of calculating the number of such remaining installments, 43 unpaid real estate taxes that are due and payable on other than a quar- 44 terly basis shall be deemed to be payable on a quarterly basis. 45 (7) A parcel for which any such installment agreement or agreements 46 have been filed with the commissioner shall be excluded or removed from 47 the list of delinquent taxes before the commencement of the in rem 48 action based upon such list only if the amounts paid pursuant to such 49 agreement exceed the amount required to pay all taxes and charges which 50 render said parcel eligible for inclusion in the in rem action and there 51 has been no default in such agreement prior to the commencement of said 52 action as to either quarterly installments or current taxes, assessments 53 or other legal charges. 54 (8) As a condition to entering into any agreement under this section 55 or section 11-409 of this chapter, the commissioner shall have received 56 from the applicant, an affidavit stating that each tenant located on the

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1 parcel has been notified by certified mail that an application for an 2 installment agreement will be made and that a copy of a standard agree- 3 ment form has been included with such notification. Any false statement 4 in such affidavit shall not be grounds to cancel the agreement or affect 5 its validity in any way. 6 d. Two duplicate originals thereof, verified by the commissioner of 7 finance or a subordinate designated by the commissioner, shall be filed 8 in the office of the clerk of the county in which the parcels listed 9 therein are situated. Such filing shall constitute and have the same 10 force and effect as the filing and recording in such office of an indi- 11 vidual and separate notice of pendency of action and as the filing in 12 the supreme court in such county of an individual and separate complaint 13 by the city as to each parcel described in said list, to enforce the 14 payment of the delinquent taxes, assessments or other lawful charges 15 which have accumulated and become liens against such parcels. 16 e. Each county clerk with whom such a list of delinquent taxes is 17 filed shall, on the date of said filing, place and thereafter maintain 18 one duplicate original copy thereof, as separately and permanently bound 19 by the commissioner of finance, adjacent to and together with the block 20 index of notices of pendency of action and each county clerk shall, on 21 the date of said filing or as soon thereafter as with due diligence is 22 practicable, docket the parcels contained in the list of delinquent 23 taxes in said block index of notices of pendency of action, which shall 24 constitute due filing, recording and indexing of the separate notices 25 constituting said list of delinquent taxes in lieu of any other require- 26 ment under rule sixty-five hundred eleven of the civil practice law and 27 rules or otherwise. 28 f. The commissioner of finance shall file a copy of each list of 29 delinquent taxes, certified as such copy by him or her or a subordinate 30 designated by the commissioner, in the office of the corporation coun- 31 sel. 32 g. The validity of any proceeding hereunder shall not be affected by 33 any omission or error of the commissioner of finance in including or 34 excluding parcels from any such list or in the designation of a street 35 or street number or by any other similar omission or error. 36 § 11-406 Public notice of foreclosure. a. Upon the filing of a list of 37 delinquent taxes in the office of the county clerk, the commissioner of 38 finance forthwith shall cause a notice of foreclosure to be published at 39 least once a week for six successive weeks in the City Record and, 40 subject to section ninety-one of the judiciary law, in two newspapers, 41 one of which may be a law journal, to be designated by the commissioner 42 of finance, which are published in and are circulated throughout the 43 county in which the affected property is located. If there are no news- 44 papers published in such county, the commissioner of finance may desig- 45 nate newspapers published in the city of Staten Island which are circu- 46 lated throughout the affected county. 47 b. Such notice shall clearly indicate that it is a notice of foreclo- 48 sure of tax liens; the section of a tax map or portion of a section of a 49 tax map in which the properties subject to foreclosure are located and 50 where the area affected by the action includes less than all parcels in 51 a section of a tax map or portion of a section of a tax map, the partic- 52 ular class or classes contained therein, and by a general description 53 which need not contain measurements and direction; where and when the 54 list of delinquent taxes was filed; the general nature of the informa- 55 tion contained in the list; that the filing of the list constitutes 56 commencement of a foreclosure action by the city in the supreme court

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1 for the particular county and a notice of pendency of action against 2 each parcel listed; that such action is against the property only and no 3 personal judgment will be entered; that the list will be available for 4 inspection at the city collector's central office and at the borough 5 office of the city collector in which said property is located until a 6 specified date at least ten weeks after the date of first publication; 7 that until such date a parcel may be redeemed by paying all taxes and 8 charges contained in said list of delinquent taxes together with inter- 9 est and penalties thereon; that during said period of redemption and for 10 an additional period of twenty days after said last date for redemption 11 any person having any interest in or lien upon a parcel on the list may 12 file with the appropriate county clerk and serve upon the corporation 13 counsel a verified answer setting forth in detail the full name of said 14 answering party, the nature and amount of his or her interest or lien 15 and any legal defense against foreclosure; and that in the absence of 16 redemption or answer a judgment of foreclosure may be taken by default. 17 c. On or before the date of the first publication of such notice, the 18 commissioner of finance shall cause a copy of the notice to be mailed to 19 all owners, mortgagees, lienors or encumbrancers, who may be entitled to 20 receive such notice by virtue of any owner's registration or in rem card 21 filed in the office of the city collector pursuant to section 11-416 or 22 11-417 of this chapter. If such owner's registration or in rem cards 23 have not been filed in the office of the city collector then said notice 24 shall be mailed to the name and address, if any, appearing in the latest 25 annual record of assessed valuations. The commissioner of finance shall 26 cause to be inserted with such notice a statement substantially in the 27 following form: 28 "To the party to whom the enclosed notice is addressed: You are the 29 presumptive owner or lienor of one or more of the parcels mentioned and 30 described in the list referred to in the attached notice. Unless the 31 taxes and assessments and all other legal charges are paid, or an answer 32 is interposed; or an arrangement is made for payment of such taxes and 33 assessments and all other legal charges in installments, as provided by 34 statute, the ownership of said property will in due course pass to the 35 city of Staten Island as provided by the administrative code of the city 36 of Staten Island." 37 The failure of the commissioner of finance to mail such notice shall 38 not affect the validity of any proceeding brought pursuant to this chap- 39 ter as to any parcel other than the parcel with respect to which notice 40 was not mailed. 41 d. The commissioner of finance shall cause a copy of such notice to be 42 posted in the office of the commissioner of finance, in the county 43 courthouse of the county in which the property subject to such tax lien 44 is situated and at three other conspicuous places in the city in which 45 the affected properties are located. 46 § 11-407 Redemption. a. After the filing of a list of delinquent taxes 47 and until a date at least ten weeks after the first publication of the 48 public notice of foreclosure, as determined by the commissioner of 49 finance and specified in the said notice, a person claiming to have an 50 interest in any parcel in said list may redeem it by paying all taxes 51 and charges contained in said list of delinquent taxes together with 52 interest and penalties thereon. 53 b. Upon such redemption the commissioner of finance shall deliver to 54 the corporation counsel a certificate of redemption. The corporation 55 counsel shall file such certificate with the clerk of the county in 56 which said list was filed. The filing of such certificate shall consti-

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1 tute and be deemed a discontinuance of the in rem action as to the 2 affected parcel, and the county clerk shall thereupon note such redemp- 3 tion and discontinuance in the copy of the list of delinquent taxes 4 maintained by him or her adjacent to the county clerk's block index of 5 notices of pendency of action and shall cancel and discharge any 6 notations of the filing of said list of delinquent taxes as to said 7 parcel that may appear in any other books, records, indices and dockets 8 maintained in said clerk's office. The commissioner of finance shall 9 also deliver a duplicate original certificate of redemption to the 10 person who has redeemed. 11 c. When the time to redeem in an in rem tax foreclosure action has 12 expired, any person claiming to have an interest in a parcel included in 13 said action shall have the right to make a late redemption payment to 14 the commissioner of finance. Such late redemption payment shall consist 15 of all taxes and charges owing on said parcel, the lawful interest ther- 16 eon to the date of payment and a penalty of five percent of said payment 17 of taxes, charges and interest, which penalty may not exceed one thou- 18 sand dollars as to each parcel on which a late redemption payment is 19 being made. Such late redemption payment shall be made in cash or by 20 certified or bank check and shall be accepted by the commissioner of 21 finance at any time after the last day to redeem up to the date on which 22 the commissioner is advised by the corporation counsel that the prepara- 23 tion of the judgment of foreclosure in the in rem action has been 24 commenced. Upon receipt of such late redemption payment, the commission- 25 er of finance shall issue a certificate of withdrawal pursuant to the 26 provisions of section 11-413 of this chapter. 27 § 11-408 Filing of affidavits. All affidavits of filing, publication, 28 posting, mailing or other acts required by this chapter shall be made by 29 the person or persons performing such acts and shall be filed in the 30 office of the county clerk of the county in which the property subject 31 to such tax lien is situated and shall together with all other documents 32 required by this chapter to be filed in the office of such county clerk, 33 constitute and become a part of the judgment roll in such foreclosure 34 action. 35 § 11-409 Severance and trial of issues where answer is interposed; 36 installment agreements authorized after action commenced. a. If a duly 37 verified answer is served upon the corporation counsel not later than 38 twenty days after the last date for redemption, the answering defendant 39 shall have the right to a severance of the action, as to any parcel in 40 which the defendant has pleaded an interest, upon written demand there- 41 for filed with or made a part of his or her answer. 42 b. When such answer is interposed, the court shall summarily hear and 43 determine the issues raised by the complaint and answer in the same 44 manner as it hears and determines other actions, except as herein other- 45 wise provided. Proof that the taxes which made said property subject to 46 foreclosure hereunder together with interest and penalties thereon, were 47 paid before filing of the list of delinquent taxes or that the property 48 was not subject to tax shall constitute a complete defense. 49 c. No counterclaim may be asserted in an answer interposed in an 50 action brought pursuant to this chapter. Where a counterclaim is 51 asserted in an in rem answer the city may disregard that portion of the 52 answer and shall suffer no legal penalty or impediment in the prose- 53 cution of its in rem action for its failure to reply or respond thereto. 54 Where an answer contains only a counterclaim and no other defenses the 55 city may proceed to judgment of foreclosure against the property 56 affected without the need for moving against the answer.

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1 d. When a verified answer alleges a substantial equity over the city's 2 lien for taxes, the defendant may demand additional time in which to pay 3 the taxes and interest or to have the property sold with all taxes and 4 interest to be paid out of the proceeds of such sale. Upon such demand a 5 defendant shall have the right to an extension of time for such purpose 6 not in excess of six months from the last day to interpose an answer. 7 Where a mortgagee or lienor who has interposed such answer commences a 8 proceeding to foreclose his or her mortgage or lien and it appears that 9 with due diligence such proceeding cannot be concluded in time to allow 10 the payment of taxes within the aforesaid six month period, the court 11 may, on application before the end of said six month period, authorize 12 an additional period during which such proceeding may be concluded and 13 the taxes, together with interest and penalties, paid. 14 e. Where an answer of the type described in subdivision d of this 15 section is interposed and taxes are paid within the period set forth in 16 such subdivision, the commissioner of finance shall issue a certificate 17 of withdrawal as to the property on which such payment has been made 18 pursuant to the provisions of section 11-413 of this chapter. When taxes 19 are not paid within the period set forth in subdivision d of this 20 section, it shall be deemed that there was no equity over the city's tax 21 liens and the answer shall be deemed to be without merit. The city in 22 that event may proceed to judgment of foreclosure against such property 23 without moving against the answer. 24 f. All answers interposed in an action hereunder and all affidavits 25 and other papers pertaining to any litigation involving such answers or 26 to any proceeding brought pursuant to this chapter involving less than 27 an entire action shall bear a caption containing the in rem action 28 number of the city's tax foreclosure proceeding, the section of a tax 29 map or portion of a section of a tax map affected, and if the action 30 covers less than all parcels in the section of a tax map or portion of a 31 section of a tax map, the particular class or classes, and the serial, 32 section, block and lot numbers of the parcel or parcels in issue. 33 g. The corporation counsel, when submitting an in rem judgment roll 34 pursuant to the provisions of this chapter, may request a severance as 35 to any parcel on which an in rem answer or litigation is pending, or as 36 to which, before the preparation of said in rem judgment roll is 37 commenced, an agreement was duly made, executed and filed with the 38 commissioner of finance for the payment of the delinquent taxes, assess- 39 ments or other legal charges and interest and penalties in installments 40 as provided in subdivision c of section 11-405 of this chapter and there 41 has been no default in such agreement as to either quarterly install- 42 ments or current taxes, assessments or other legal charges. Where such 43 an agreement is entered into subsequent to the last date for redemption 44 specified in subdivision a of section 11-407 of this chapter, there 45 shall be paid to the commissioner of finance at the time the aforesaid 46 agreement is executed an amount equal to the penalty which would have 47 been payable under subdivision c of section 11-407 of this chapter had 48 the person executing the agreement made a late redemption payment. Such 49 amount shall be in addition to any installment payments required to be 50 made under the agreement and shall not be credited against any such 51 installment payments. Where a default occurs in such agreement as to 52 either quarterly installments or current taxes, assessments or other 53 legal charges, all payments made under the agreement shall be forfeited 54 and the city shall be entitled to acquire the parcel as to which the 55 default occurred. Where such default occurs before the submission of the 56 judgment roll, the parcels as to which such default occurs shall be

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1 included in said judgment roll among the parcels to be acquired by the 2 city. Where such default has occurred as to a parcel severed pursuant to 3 this subdivision, the corporation counsel shall cause to be entered a 4 supplemental judgment of foreclosure as to such parcel immediately on 5 notification by the commissioner of finance of such default. Where such 6 installment agreement is paid in full the commissioner of finance shall 7 discontinue the in rem action from which said parcel was severed by 8 issuing a certificate of withdrawal as to said parcel pursuant to the 9 provisions of section 11-413 of this chapter. 10 h. A party who has interposed an answer as to any parcel included in 11 an in rem tax foreclosure action, or any other party interested in such 12 parcel, shall have the right, at any time prior to the final disposition 13 of a motion to strike said answer, to pay all taxes, assessments and 14 other legal charges and interest owing on said parcel. An answering 15 party who makes such payment shall not be required to pay any penalty. 16 Where such payment is made by other than an answering party after the 17 expiration of the period of redemption, there shall be paid to the 18 commissioner of finance an additional amount equal to the penalty paya- 19 ble under subdivision c of section 11-407 of this chapter. Where all 20 delinquent taxes, assessments and other legal charges together with 21 lawful interest thereon and penalties, where required, are paid, the 22 commissioner of finance shall issue a certificate of withdrawal as to 23 said parcel pursuant to the provisions of section 11-413 of this chap- 24 ter. Said parties may also pay such taxes, assessments and other legal 25 charges and interest by an installment agreement. Where such agreement 26 is requested before the preparation of the aforesaid in rem judgment 27 roll is commenced, the terms of said agreement shall be consistent with 28 the provisions of subdivision g or i of this section, whichever is 29 applicable. Where such agreement is requested after judgment of foreclo- 30 sure has been entered in the in rem action in which the aforesaid answer 31 was interposed, said agreement shall require a first installment of 32 fifty percent of all taxes, assessments and other legal charges and 33 interest owing on said parcel, a penalty of five percent of all such 34 taxes, assessments and other legal charges and interest, which penalty 35 may not exceed one thousand dollars, and the payment of the balance of 36 such taxes, assessments and other legal charges and interest in four 37 equal quarterly installments together with all current taxes, assess- 38 ments and other legal charges that accrue during such period. The 39 request of an answering party for an installment agreement shall consti- 40 tute a withdrawal of such party's answer. An installment agreement 41 requested by an interested party other than the answering party shall 42 require the consent of said answering party which shall also constitute 43 a withdrawal of such party's answer. The severance provided for in this 44 section shall be continued during the term of all installment agreements 45 entered into pursuant to the provisions of this subdivision. Where a 46 default has occurred as to a parcel severed pursuant to this subdivi- 47 sion, the corporation counsel shall cause to be entered a supplemental 48 judgment of foreclosure as to such parcel immediately on notification by 49 the commissioner of finance of such default. Where such installment 50 agreement is paid in full, the commissioner of finance shall discontinue 51 the in rem action from which said parcel was severed by issuing a 52 certificate of withdrawal as to said parcel pursuant to the provisions 53 of section 11-413 of this chapter. 54 i. (1) Notwithstanding subdivision g of this section, this subdivision 55 shall apply with respect to installment agreements made, executed and 56 filed with the commissioner of finance on or after the date on which

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1 this subdivision takes effect. An installment agreement pursuant to this 2 subdivision may be made, executed and filed with such commissioner 3 during the period beginning on the date on which an action is commenced 4 as provided in subdivision d of section 11-405 of this chapter with 5 respect to the parcel that is the subject of such agreement and ending 6 on the date on which such commissioner is advised by the corporation 7 counsel that the preparation of the judgment of foreclosure in such in 8 rem action has been commenced. Notwithstanding anything to the contrary, 9 and except to the extent provided in paragraph two of this subdivision, 10 the provisions of paragraphs one through six of subdivision c of section 11 11-405 of this chapter shall not apply to any installment agreement 12 requested on or after the date on which this subdivision takes effect 13 and on or after the date on which an action is commenced as provided in 14 subdivision d of such section 11-405 with respect to the parcel that is 15 the subject of such requested agreement. 16 (2) An agreement entered into pursuant to this subdivision shall 17 provide for the payment in installments of the delinquent taxes, assess- 18 ments and other legal charges, and the interest and penalties thereon, 19 due and owing as of the date on which such agreement is requested. 20 Unless an eligible owner or other interested person requests an agree- 21 ment pursuant to the provisions of paragraph three of this subdivision, 22 the terms of such agreement with respect to a parcel shall be the same 23 as the terms that would be applicable to such parcel under paragraph 24 four, five or six, as the case may be, of subdivision c of section 25 11-405 of this chapter, except that, for purposes of the agreement 26 pursuant to this paragraph, the amount of the first installment shall be 27 equal to: (i) fifteen percent of the total amount due in the case of a 28 parcel described in paragraph four of subdivision c of section 11-405 of 29 this chapter; (ii) twenty percent of the total amount due in the case of 30 a parcel described in paragraph five of subdivision c of section 11-405 31 of this chapter; and (iii) twenty-five percent of the total amount due 32 in the case of a parcel described in paragraph six of subdivision c of 33 section 11-405 of this chapter. 34 (3) Instead of an agreement pursuant to paragraph two of this subdivi- 35 sion, an eligible owner or other interested party may request an agree- 36 ment pursuant to the following provisions: 37 (i) With respect to a parcel that is owned by a company organized 38 pursuant to article eleven of the state private housing finance law with 39 the consent and approval of the department of housing preservation and 40 development, such agreement shall provide for the payment in install- 41 ments of the delinquent taxes, assessments and other legal charges, and 42 the interest and penalties thereon, due and owing as of the date on 43 which such agreement is requested. The first installment thereof shall 44 be paid upon the filing of the installment agreement with the commis- 45 sioner of finance and shall be in an amount at least equal to, at the 46 applicant's election, either thirty-five percent or fifty percent of the 47 total amount of such delinquent taxes, assessments or other legal charg- 48 es and the interest and penalties thereon. The remaining installments, 49 which shall be three times the number of unpaid quarters of real estate 50 taxes or the equivalent thereof, but which shall in no event exceed 51 thirty-two in number, shall be payable quarterly on the first days of 52 July, October, January and April, together with interest at the rate or 53 rates determined as provided in subparagraph (iv) of this paragraph. For 54 the purposes of calculating the number of such remaining installments, 55 unpaid real estate taxes that are due and payable on other than a quar- 56 terly basis shall be deemed to be payable on a quarterly basis.

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1 (ii) With respect to a parcel, other than a parcel described in 2 subparagraph (i) of this paragraph, that is a residential building 3 containing not more than five residential units, a residential condomin- 4 ium unit or a residential building held in a cooperative form of owner- 5 ship, such agreement shall provide for the payment in installments of 6 the delinquent taxes, assessments and other legal charges, and the 7 interest and penalties thereon, due and owing as of the date on which 8 such agreement is requested. The first installment thereof shall be paid 9 upon the filing of the installment agreement with the commissioner of 10 finance and shall be in an amount at least equal to, at the applicant's 11 election, either twenty-five percent or fifty percent of the total 12 amount of such delinquent taxes, assessments or other legal charges and 13 the interest and penalties thereon. The remaining installments, which 14 shall be three times the number of unpaid quarters of real estate taxes 15 or the equivalent thereof, but which shall in no event exceed twenty in 16 number, shall be payable quarterly on the first days of July, October, 17 January and April together with interest at the rate or rates determined 18 as provided in subparagraph (iv) of this paragraph. For the purposes of 19 calculating the number of such remaining installments, unpaid real 20 estate taxes that are due and payable on other than a quarterly basis 21 shall be deemed to be payable on a quarterly basis. 22 (iii) With respect to any parcel of class one or class two real prop- 23 erty, other than a parcel described in subparagraph (i) or (ii) of this 24 paragraph, such agreement shall provide for the payment in installments 25 of the delinquent taxes, assessments and other legal charges, and the 26 interest and penalties thereon, due and owing as of the date on which 27 such agreement is requested. The first installment thereof shall be paid 28 upon the filing of the installment agreement with the commissioner of 29 finance and shall be in an amount at least equal to, at the applicant's 30 election, either thirty-five percent or fifty percent of the total 31 amount of such delinquent taxes, assessments or other legal charges and 32 the interest and penalties thereon. The remaining installments, which 33 shall be twice the number of unpaid quarters of real estate taxes or the 34 equivalent thereof, but which shall in no event exceed twenty in number, 35 shall be payable quarterly on the first days of July, October, January 36 and April, together with interest at the rate or rates determined as 37 provided in subparagraph (iv) of this paragraph. For the purposes of 38 calculating the number of such remaining installments, unpaid real 39 estate taxes that are due and payable on other than a quarterly basis 40 shall be deemed to be payable on a quarterly basis. 41 (iv) (A) Notwithstanding any higher rate of interest prescribed pursu- 42 ant to applicable law, and unless a lower rate of interest is applicable 43 to a delinquent amount owing on a parcel that is the subject of an 44 agreement pursuant to this paragraph, the interest payable together with 45 the remaining installments due under such agreement shall be: 46 (I) with respect to an agreement for which a twenty-five percent or 47 thirty-five percent down payment was made, calculated at a rate equal to 48 the sum of (a) the rate prescribed for the applicable period pursuant to 49 paragraph (i) of subdivision e of section 11-224.1 of this title and (b) 50 one-half of the difference between such rate and the rate prescribed for 51 such period pursuant to paragraph (ii) of subdivision e of section 52 11-224.1 of this title; or 53 (II) with respect to an agreement for which a fifty percent down 54 payment was made, calculated at a rate equal to the rate prescribed for 55 the applicable period pursuant to paragraph (i) of subdivision e of 56 section 11-224.1 of this title.

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1 (B) If a default occurs in any agreement executed pursuant to this 2 paragraph as to either quarterly installments or current taxes, assess- 3 ments or other legal charges, the rates of interest determined under 4 this subparagraph shall thereupon cease to be applicable and the commis- 5 sioner of finance shall thereafter charge, collect and receive interest 6 in the manner and at the rates otherwise prescribed pursuant to law. 7 (4) The corporation counsel, when submitting an in rem judgment roll 8 pursuant to the provisions of this chapter, may request a severance as 9 to any parcel as to which, before the preparation of said in rem judg- 10 ment roll is commenced, an agreement was duly made, executed and filed 11 with the commissioner of finance for the payment of all delinquent 12 taxes, assessments and other legal charges and interest and penalties in 13 installments as provided in this subdivision, and there has been no 14 default in such agreement as to either quarterly installments or current 15 taxes, assessments or other legal charges. Where such an agreement is 16 entered into subsequent to the last date for redemption specified in 17 subdivision a of section 11-407 of this chapter, there shall be paid to 18 the commissioner of finance at the time such agreements are executed an 19 amount equal to the penalty that would have been payable under subdivi- 20 sion c of section 11-407 of this chapter had the person executing the 21 agreement made a late redemption payment. Such amount shall be in addi- 22 tion to any installment payments required to be made under the agreement 23 and shall not be credited against any such installment payments. Where a 24 default occurs in such agreement as to either quarterly installments or 25 current taxes, assessments or other legal charges, all payments made 26 under the agreement shall be forfeited and the city shall be entitled to 27 obtain a judgment hereunder as to the parcel as to which the default 28 occurred. Where such default occurred before the submission of the judg- 29 ment roll, the parcels as to which such default occurs shall be included 30 in said judgment roll amount the parcels to be acquired by the city or 31 by a third party. Where such default has occurred as to a parcel severed 32 pursuant to this subdivision, the corporation counsel shall cause to be 33 entered a supplemental judgment of foreclosure as to such parcel imme- 34 diately on notification by the commissioner of finance of such default. 35 Where such installment agreement is paid in full, the commissioner of 36 finance shall discontinue the in rem action from which such parcel was 37 severed by issuing a certificate of withdrawal as to such parcel pursu- 38 ant to the provisions of section 11-413 of this chapter. 39 § 11-410 Preference over other actions. a. Any action brought pursuant 40 to this chapter shall be given preference over all other causes and 41 actions. 42 b. Actions brought pursuant to this chapter shall take precedence over 43 any proceeding brought to foreclose a mortgage or other lien involving 44 the same property. A parcel included in a list of delinquent taxes 45 which is sold in a mortgage foreclosure sale held after said list is 46 filed may not be sold subject to taxes even if judgment has not yet been 47 entered in the tax foreclosure action. All unpaid taxes and interest and 48 penalties thereon must be paid, in full or by installment agreement 49 pursuant to the provisions of this chapter, out of the proceeds of such 50 sale regardless of whether the mortgage foreclosure lis pendens was 51 filed before or after the filing of the tax foreclosure action, regard- 52 less of whether any party to the mortgage foreclosure proceeding has 53 interposed an answer in the tax foreclosure action and regardless of any 54 terms to the contrary in the judgment in the mortgage foreclosure 55 proceeding.

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1 § 11-411 Presumption of validity. It shall not be necessary for the 2 city to plead or prove the various steps, procedures and notices for the 3 assessment and levy of the taxes, assessments or other lawful charges 4 against the parcels set forth in the list of delinquent taxes and all 5 such taxes, assessments or other lawful charges and the lien thereof 6 shall be presumed to be valid. A defendant alleging any jurisdictional 7 defect or invalidity in such taxes, assessments or other lawful charges 8 or in the foreclosure thereof must particularly specify in his or her 9 answer such jurisdictional defect or invalidity and must affirmatively 10 establish such defense. A judgment of foreclosure granted in any 11 proceeding brought pursuant to this chapter, which contains recitals 12 that any acts were done or proceedings had which were necessary to give 13 the court jurisdiction or power to grant such judgment of foreclosure, 14 shall be presumptive evidence that such acts were duly performed or 15 proceedings duly had, if such judgment of foreclosure shall have been 16 duly entered or filed in the office of the clerk of the county in which 17 the proceeding was pending and wherein such judgment was granted. The 18 provisions of this chapter shall apply to and be valid and effective 19 with respect to all defendants even though one or more of them be 20 infants, incompetents, absentees or non-residents of the state of New 21 York. 22 § 11-412 Final judgment. a. The court shall determine upon proof and 23 shall make finding upon such proof whether there has been due compliance 24 by the city with the provisions of this chapter. 25 b. The court shall make a final judgment awarding to the city the 26 possession of any parcel described in the list of delinquent taxes not 27 redeemed or withdrawn as provided in this chapter and as to which no 28 answer is interposed as provided herein. In addition thereto, such judg- 29 ment shall contain a direction to the commissioner of finance to 30 prepare, execute and cause to be recorded a deed conveying to the city 31 full and complete title to such lands. Upon the execution of such deed, 32 the city shall be seized of an estate in fee simple absolute in such 33 land and all persons, including the state of New York, infants, incompe- 34 tents, absentees and non-residents who may have had any right, title, 35 interest, claim, lien or equity of redemption in or upon such lands 36 shall be barred and forever foreclosed of all such right, title, inter- 37 est, claim, lien or equity of redemption, except as otherwise provided 38 in section 11-424 of this chapter. The appointment and tenure of receiv- 39 ers, trustees or any other persons, including administrators under arti- 40 cle seven-A of the real property actions and proceedings law, appointed 41 by an order of a court to manage real property, shall terminate when 42 title to such property vests in the city pursuant to the provisions of 43 this chapter. After such termination, said receivers, trustees or admin- 44 istrators shall be accountable to the courts that appointed them for the 45 faithful performance of their fiduciary obligations during the term of 46 their appointment and to the city for any rents and income received by 47 them for any period subsequent to the date of the vesting of title in 48 the city. 49 If the city serves a tenant in possession of a dwelling unit with 50 notice of termination of tenancy on grounds other than non-payment of 51 rent, the acceptance of rent for the first forty-five days after termi- 52 nation of tenancy by anyone other than an employee of the department 53 designated by the department to receive such rent shall not be deemed or 54 construed as a waiver of the city's right to initiate and prosecute a 55 proceeding to terminate the tenancy for good cause.

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1 c. Every deed given pursuant to the provisions of this section shall 2 be presumptive evidence that the action and all proceedings therein and 3 all proceedings prior thereto from and including the assessment of the 4 lands affected and all notices required by law were regular and in 5 accordance with all provisions of law relating thereto. After two years 6 from the date of the recording of such deed, the presumption shall be 7 conclusive, unless at the time that this subdivision takes effect the 8 two year period since the recording of the deed has expired or less than 9 six months of such period of two years remains unexpired, in which case 10 the presumption shall become conclusive six months after this subdivi- 11 sion takes effect. No action to set aside such deed may be maintained 12 unless the action is commenced and a notice of pendency of the action is 13 filed in the office of the proper county clerk prior to the time that 14 the presumption becomes conclusive as aforesaid. 15 § 11-412.1 Special procedures relating to final judgment and release 16 of class one and class two real property. Notwithstanding any other 17 provision of law to the contrary: 18 a. The court shall determine upon proof and shall make a finding upon 19 such proof whether there has been due compliance by the city with the 20 applicable provisions of this chapter. 21 b. (1) The court shall make a final judgment authorizing the award of 22 possession of any parcel of class one or class two real property 23 described in the list of delinquent taxes not redeemed or withdrawn as 24 provided in this chapter and as to which no answer is interposed as 25 provided herein, and authorizing the commissioner of finance to prepare, 26 execute and cause to be recorded a deed conveying either to the city or 27 to a third party deemed qualified and designated by the commissioner of 28 housing preservation and development full and complete title to such 29 lands. Any such conveyance to a third party shall be for an existing 30 use. 31 (2) Such third party shall be deemed qualified and shall be designated 32 pursuant to such criteria as are established in rules promulgated by the 33 commissioner of housing preservation and development, provided, however, 34 that such criteria shall include but not be limited to: residential 35 management experience; financial ability; rehabilitation experience; 36 ability to work with government and community organizations; neighbor- 37 hood ties; and that the commissioner shall consider whether the third 38 party is a responsible legal tenant, not-for-profit organization or 39 neighborhood-based-for-profit individual or organization. The commis- 40 sioner shall not deem qualified any third party who has been finally 41 adjudicated by a court of competent jurisdiction, within seven years of 42 the date on which such third party would otherwise be deemed qualified, 43 to have violated any section of article one hundred fifty, one hundred 44 seventy-five, one hundred seventy-six, one hundred eighty, one hundred 45 eighty-five or two hundred of the penal law or any similar laws of 46 another jurisdiction, or who has been suspended or debarred from 47 contracting with the city or any agency of the city pursuant to section 48 335 of the charter during the period of such suspension or debarment. 49 The rules promulgated by the commissioner pursuant to this paragraph may 50 establish other bases for disqualification of a third party. 51 c. Following the expiration of the four-month period prescribed in 52 subdivision d of this section, but not more than eight months after the 53 date on which, pursuant to subdivision b of this section, the final 54 judgment authorizing the award of possession of a parcel of class one or 55 class two real property was entered, the commissioner of finance may 56 execute a deed, pursuant to subdivision b of this section, with respect

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1 to such parcel. The owner of said parcel shall continue to have all of 2 the rights, liabilities, responsibilities, duties and obligations of an 3 owner of such parcel, including, but not limited to, maintaining such 4 parcel in compliance with the housing maintenance, building and fire 5 codes, and all other applicable laws, unless and until the commissioner 6 of finance has prepared and executed a deed conveying to the city or to 7 a third party full and complete title to such parcel. Upon the execution 8 of such deed, the city or the third party shall be seized of an estate 9 in fee simple absolute in such land and all persons, including the state 10 of New York, infants, incompetents, absentees and non-residents who may 11 have had any right, title, interest, claim, lien or equity of redemption 12 in or upon such lands shall be barred and forever foreclosed of all such 13 right, title, interest, claim, lien or equity of redemption, except as 14 otherwise provided in subdivisions e and f of this section. The appoint- 15 ment and tenure of receivers, trustees or any other persons, including 16 administrators under article seven-A of the real property actions and 17 proceedings law, appointed by an order of a court to manage real proper- 18 ty, shall terminate when title to such property vests in the city or a 19 third party pursuant to the provisions of this chapter. After such 20 termination, said receivers, trustees or administrators shall be 21 accountable to the courts that appointed them for the faithful perform- 22 ance of their fiduciary obligations during the term of their appointment 23 and to the city or such third party for any rents and income received by 24 them for any period subsequent to the date of the vesting of title in 25 the city or such third party. 26 If the city serves a tenant in possession of a dwelling unit with 27 notice of termination of tenancy on grounds other than nonpayment of 28 rent, the acceptance of rent for the first forty-five days after termi- 29 nation of tenancy by anyone other than an employee of the department 30 designated by the department to receive such rent shall not be deemed or 31 construed as a waiver of the city's right to initiate and prosecute a 32 proceeding to terminate the tenancy for good cause. 33 d. Within four months after the date on which, pursuant to subdivision 34 b of this section, the final judgment authorizing the award of 35 possession of a parcel of class one or class two real property was 36 entered, any person claiming to have an interest in such parcel shall 37 have the right to make a payment to the commissioner of finance consist- 38 ing of all taxes, assessments and other legal charges owing on said 39 parcel, the lawful interest thereon to the date of payment and a penalty 40 of five percent of said payment of taxes, assessments and other legal 41 charges and interest, which penalty may not exceed one thousand dollars. 42 Such payment shall be made in cash or by certified or bank check. Within 43 such four-month period, such interested person may also request an 44 installment agreement from the commissioner of finance. Such agreement 45 shall require, in addition to full payment of the penalty specified in 46 this subdivision at the time such agreement is entered into, the payment 47 at such time of a first installment equal to fifty percent of all taxes, 48 assessments and other legal charges, and the lawful interest thereon, 49 then owing on such parcel, and the payment of the balance of such taxes, 50 assessments and other legal charges and interest in four equal quarterly 51 installments together with all current taxes, assessments and other 52 legal charges that accrue during such period. Upon receipt of payment in 53 full of the amount specified in this subdivision, the commissioner of 54 finance shall direct the corporation counsel to prepare and cause to be 55 entered an order discontinuing the in rem tax foreclosure action as to 56 said property, cancelling the notice of pendency of such action as to

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1 said property and vacating and setting aside the final judgment. Upon 2 the execution of an installment agreement and payment of the amounts due 3 at the time such agreement is executed as provided in this subdivision, 4 the commissioner of finance shall direct the corporation counsel to 5 prepare and cause to be entered an order vacating and setting aside the 6 final judgment. The entry of either such order shall restore all 7 parties, including owners, mortgagees and any and all lienors, receivers 8 and administrators and encumbrancers, to the status they held immediate- 9 ly before such final judgment was entered. Where the commissioner of 10 finance approves an application requesting an installment agreement 11 pursuant to this subdivision, the order vacating and setting aside the 12 final judgment shall provide that in the event of any default as to the 13 payment of either quarterly installments or current taxes, assessments 14 or other legal charges during the term of such agreement, all payments 15 under said agreement shall be forfeited and the corporation counsel, 16 immediately upon notification by the commissioner of finance of such 17 default, shall cause to be entered as to such property a supplemental 18 judgment of foreclosure in the in rem action which authorizes the 19 commissioner of finance to prepare, execute and cause to be recorded a 20 deed conveying either to the city or to a third party full and complete 21 title to such lands. Upon the entry of such supplemental judgment, the 22 provisions of subdivisions c through i of this section shall apply in 23 the same manner as such subdivisions would have applied had no payment 24 been made nor installment agreement executed during the four-month peri- 25 od specified in this subdivision. 26 e. 1. If the commissioner of finance has prepared, executed and caused 27 to be recorded a deed conveying to the city full and complete title to a 28 parcel of class one or class two real property acquired by in rem tax 29 foreclosure, the city's interest in such parcel may be released pursuant 30 to this subdivision on the application of any party who has an interest 31 in said parcel as either owner, mortgagee, lienor, or encumbrancer at 32 the time of the city's acquisition thereof where such application is 33 made at any time up to sixteen months from the date on which the deed by 34 which the city acquired title to said parcel was recorded. 35 2. Any such application shall be made in writing to the commissioner 36 of general services and shall be verified. It shall contain the informa- 37 tion required pursuant to paragraph one of subdivision b of section 38 11-424 of this chapter, the documents required by subdivision c of such 39 section, and shall be accompanied by the fees required by paragraphs 40 three and six of subdivision b of such section. The fee required by 41 paragraph three of subdivision b of section 11-424 of this chapter shall 42 not be refundable. 43 3. The city's interest in any such parcel shall be released only after 44 payment of the sums of money specified in subdivision d of section 45 11-424 of this chapter. 46 4. The provisions contained in subdivision g of section 11-424 of this 47 chapter shall govern such an application, except as follows: 48 (a) where such provisions are inconsistent with the provisions 49 contained in this subdivision, the provisions contained in this subdivi- 50 sion shall govern such application; and 51 (b) where the in rem foreclosure release board denies a written 52 request for an installment agreement that was filed in connection with 53 an application for release of the city's interest in a parcel of class 54 one or class two real property and such application was filed within 55 thirty days of the date of the city's acquisition of the property sought 56 to be released, the board may, in its discretion, authorize a release of

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1 the city's interest, provided that the applicant thereafter pays all the 2 amounts required to be paid pursuant to subdivision d of section 11-424 3 of this chapter within thirty days of the date on which a letter 4 requesting such payment is mailed or delivered to such applicant. 5 5. Upon receipt of all the amounts required to be paid pursuant to 6 this subdivision, the commissioner of finance shall direct the corpo- 7 ration counsel to prepare and cause to be entered an order discontinuing 8 the in rem tax foreclosure action as to said property, cancelling the 9 notice of pendency of such action as to said property and vacating and 10 setting aside the final judgment entered pursuant to subdivision b of 11 this section and the deed executed and recorded pursuant to such final 12 judgment as to said property. The entry of such order shall restore all 13 parties, including owners, mortgagees and any and all lienors, receivers 14 and administrators and encumbrancers, to the status they held immediate- 15 ly before the final judgment was entered, as if the in rem tax foreclo- 16 sure had never taken place, and shall render said property liable for 17 all taxes, deficiencies, management fees and liens which shall accrue 18 subsequent to those paid in order to obtain the release provided for in 19 this subdivision, or which were, for whatever reason, omitted from the 20 payment made to obtain said release. 21 f. If the commissioner of finance has prepared, executed and caused to 22 be recorded a deed conveying to the city full and complete title to a 23 parcel of class one or class two real property acquired by in rem tax 24 foreclosure and such parcel is entitled to an exemption under any of the 25 provisions of article four of the real property tax law during all or 26 part of the period covered by the tax items appearing on a list of 27 delinquent taxes, the owner of such parcel may apply for a release of 28 the city's interest in such exempt property under the provisions of 29 subdivision e of this section during the period of time set forth in 30 paragraph one of such subdivision and for an additional period up to ten 31 years from the date on which the deed by which the city acquired title 32 to said property was recorded. The application of such owner shall be 33 accompanied by the nonrefundable fee required by paragraph four of 34 subdivision b of section 11-424 of this chapter and shall contain, in 35 addition to the statements, searches and proofs required by subdivision 36 e of this section, a statement that an exemption under the real property 37 tax law is being claimed. Such application shall also state either that 38 it is accompanied by the written certificate of the comptroller setting 39 forth the precise period during which said property, while owned by such 40 application, and during the period after the city's acquisition up to 41 the date of the certificate if said property was still being used for an 42 exempt purpose after said acquisition, was entitled to an exemption and 43 the exact nature and extent of such exemption or that an application for 44 such written certificate has been filed with the comptroller. On issuing 45 such written certificate, the comptroller shall cancel those tax items 46 which have accrued during the period covered by the certificate to the 47 extent the applicant is entitled to an exemption as set forth in the 48 certificate. A release of the city's interest may be authorized only at 49 the discretion of the in rem foreclosure release board and, except as 50 otherwise provided in paragraph four of subdivision e of this section, 51 subject to all the restrictions set forth in subdivision g of section 52 11-424 of this chapter. A release to an exempt applicant shall be 53 effected only after said applicant has paid all of the amounts required 54 to be paid by subdivision d of section 11-424 of this chapter, except 55 for those tax items which have been canceled, in whole or in part, 56 pursuant to the comptroller's certificate, within thirty days of the

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1 date on which the letter requesting payment is mailed or delivered to 2 the applicant. 3 g. If the commissioner of finance has prepared, executed and caused to 4 be recorded a deed conveying to the city or to a third party full and 5 complete title to a parcel of class one or class two real property 6 acquired by in rem tax foreclosure, the provisions contained in subdivi- 7 sions f and i of section 11-424 of this chapter for the release of prop- 8 erty so acquired shall not be available. If the commissioner of finance 9 has prepared, executed and caused to be recorded a deed conveying to a 10 third party full and complete title to a parcel of class one or class 11 two real property acquired by in rem tax foreclosure, the provisions 12 contained in subdivisions e and f of this section for the release of 13 property so acquired shall not be available. 14 h. Every deed given pursuant to the provisions of this section shall 15 be presumptive evidence that the action and all proceedings therein and 16 all proceedings prior thereto from and including the assessment of the 17 lands affected and all notices required by law were regular and in 18 accordance with all provisions of law relating thereto. After four 19 months from the date of entry of the final judgment authorizing the 20 award of possession of any parcel of class one or class two real proper- 21 ty pursuant to the provisions of this section, the presumption shall be 22 conclusive. No action to set aside such deed may be maintained unless 23 the action is commenced and a notice of pendency of the action is filed 24 in the office of the property county clerk prior to the time that the 25 presumption becomes conclusive as aforesaid. Should any lawsuit or 26 proceeding be commenced to set aside a deed conveying to a third party a 27 parcel of class one or class two real property pursuant to the 28 provisions of this section, such third party shall send to the corpo- 29 ration counsel within ten days of their receipt a copy of any papers 30 served on such third party in such lawsuit or proceeding. 31 i. If the commissioner of finance does not execute a deed conveying to 32 the city or to a third party a parcel of class one or class two real 33 property within eight months after the entry of final judgment authoriz- 34 ing the award of possession of such parcel pursuant to subdivision b of 35 this section, the commissioner of finance shall direct the corporation 36 counsel to prepare and cause to be entered an order discontinuing the in 37 rem foreclosure action as to said property, canceling the notice of 38 pendency of such action as to said property and vacating and setting 39 aside said final judgment. The entry of such order shall restore all 40 parties, including owners, mortgagees and any and all lienors, receivers 41 and administrators and encumbrancers, to the status they held immediate- 42 ly before such final judgment was entered. 43 j. If the commissioner of finance directs the corporation counsel, 44 pursuant to subdivision i of this section, to prepare and cause to be 45 entered an order discontinuing the in rem foreclosure action with 46 respect to a parcel of class one or class two real property determined 47 to be distressed pursuant to section 11-401.1 of this chapter, the 48 commissioner of housing preservation and development shall evaluate the 49 parcel determined to be distressed and take such action as he or she 50 deems appropriate under the programs, existing at the time of such eval- 51 uation, that are designed to encourage the rehabilitation and preserva- 52 tion of existing housing, and shall monitor or cause to be monitored the 53 status of the property. The commissioner of housing preservation and 54 development shall maintain a register of properties determined to be 55 distressed.

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1 § 11-412.2 Council review of conveyance to a third party. The commis- 2 sioner of finance shall, prior to the execution of a deed conveying full 3 and complete title of any parcel of class one or class two real property 4 to a third party pursuant to subdivision c of section 11-412.1 of this 5 chapter, notify the council of the proposed conveyance. Within forty- 6 five days of such notification, the council may act by local law disap- 7 proving the proposed conveyance. In the event the council does not act 8 by local law within such forty-five day period, the council shall be 9 deemed to have approved the proposed conveyance. During such forty-five 10 day period or, if the city council acts by local law pursuant to this 11 section, during the period of time from the notification of the council 12 to the presentation to the mayor of such local law and during any addi- 13 tional period of time prescribed in section 37 of the charter, the 14 eight-month period provided in subdivisions c and i of section 11-412.1 15 of this chapter shall be tolled. 16 § 11-413 Withdrawal of parcels from foreclosure. a. The commissioner 17 of finance may, prior to final judgment, withdraw a parcel from a 18 proceeding under this chapter for any of the following reasons, (1) a 19 question which the commissioner deems meritorious has been raised as to 20 the validity of the tax liens affecting the parcel, (2) the city collec- 21 tor has accepted a payment of all taxes and interest which rendered the 22 parcel subject to foreclosure hereunder because the records in the 23 commissioner's office indicated that the principal amount of such taxes 24 was exceeded by the principal amount of subsequent taxes which would not 25 have rendered the parcel subject to foreclosure hereunder and which had 26 been paid prior to the commencement of said proceeding or (3) in cases 27 where the tax foreclosure action cannot be maintained such as, but not 28 limited thereto, where the charges which rendered a parcel subject to 29 foreclosure hereunder have been cancelled or were paid before the 30 commencement of the foreclosure proceeding but such payment was not 31 reported or did not clear for payment until after the commencement of 32 said proceeding, or where a name and address appearing on an owner's 33 registration card or an in rem card filed pursuant to section 11-416 or 34 11-417 of this chapter and contained in the files of the city collector 35 did not appear in the mailing list used by the commissioner of finance 36 for mailing notices of foreclosure in such proceeding. 37 b. To effectuate such withdrawal the commissioner of finance shall 38 deliver a certificate of withdrawal to the corporation counsel who shall 39 file it in the office of the county clerk in which the list of delin- 40 quent taxes was filed. The filing of such certificate with such county 41 clerk shall effect a discontinuance of the tax foreclosure action as to 42 the affected parcel, and the county clerk shall thereupon note such 43 withdrawal and discontinuance in the copy of the list of delinquent 44 taxes maintained by him or her adjacent to the county clerk's block 45 index of notices of pendency of action and shall cancel and discharge 46 any and all notations of the filing of said list of delinquent taxes as 47 to said parcel that may appear in any other books, records, indices and 48 dockets maintained in said clerk's office. 49 c. The commissioner of finance shall also deliver a duplicate original 50 certificate of withdrawal to the person entitled to such withdrawal. 51 d. The commissioner of finance shall recite the parcels so withdrawn 52 and the reasons for withdrawal in an affidavit of regularity to be 53 submitted by the commissioner in each action brought pursuant to this 54 chapter. 55 e. The commissioner of finance shall issue a certificate of withdrawal 56 whenever taxes and interest are paid, cancelled, liquidated or otherwise

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1 lawfully disposed of as to any parcel which was previously severed 2 pursuant to section 11-409 of this chapter because an answer or liti- 3 gation was pending. 4 § 11-414 Right of redemption not diminished. The period of time in 5 which any owner of, or other person having an interest in a parcel of 6 property may redeem from a sale of a transfer of tax lien is not hereby 7 diminished nor shall such period of time be diminished by the commence- 8 ment of any action brought pursuant to this chapter. 9 § 11-415 Priority of liens. Tax liens shall rank in priority as may 10 now, or as may hereafter, be provided by law. 11 § 11-416 Owner's registration cards; mailing tax bills and notices to 12 registered owners or their designees. a. The commissioner of finance 13 shall maintain a file of owner's registration cards submitted by owners 14 of real property. Each such owner's registration card shall be signed by 15 the owner or a duly authorized representative and shall state the date 16 on which it was filed, the owner's full name and post office address and 17 a description of the premises by reference to the section, block, and 18 lot numbers on the tax map. 19 b. The commissioner of finance shall mail bills for taxes, charges and 20 assessments to all owners who have filed owner's registration cards as 21 herein provided, but the failure of the commissioner of finance so to 22 mail such bill shall not invalidate or otherwise affect the tax, charge 23 or assessment represented thereby nor prevent the accruing of any inter- 24 est or penalty imposed for the non-payment thereof, nor prevent or stay 25 proceedings under this chapter, nor effect the title of the plaintiff or 26 any purchaser under such proceedings. 27 c. The commissioner of finance shall also mail notice of foreclosure 28 and any other process required by this chapter to all owners who have 29 filed owner's registration cards whenever the parcels as to which such 30 cards were filed are included in a list of delinquent taxes filed pursu- 31 ant to this chapter. The failure to receive such notice or process as 32 herein provided shall not affect the validity of any action or proceed- 33 ing brought pursuant to this chapter. 34 d. An owner who files an owner's registration card may also designate 35 thereon the full name and post office address of a mortgagee, lienor or 36 other person to receive bills and notices. Where such designation is 37 made, the commissioner of finance shall not mail any bills and notices 38 to the owner but shall mail all bills and notices to the owner's desig- 39 nee. 40 § 11-417 In rem cards; mailing notices to other interested persons. 41 a. The commissioner of finance shall, in addition to the file maintained 42 by him or her pursuant to section 11-416 of this chapter, maintain a 43 file of in rem cards submitted by any person having an interest in real 44 property who is not entitled to have tax bills mailed to him or her by 45 the commissioner of finance, including mortgagees, lienors, encumbranc- 46 ers and owners who have filed owner's registration cards designating 47 someone else to receive bills and notices. Each such in rem card shall 48 be signed by the person filing such card or a duly authorized represen- 49 tative, shall contain a description of the premises by reference to the 50 section, block and lot numbers on the tax map and shall state the date 51 on which said card was filed, the full name and post office address of 52 the person filing said card and the nature of the interest said person 53 has in said premises. 54 b. The commissioner of finance shall mail a notice of foreclosure and 55 any other process required by this chapter to each person who has filed 56 an in rem card whenever the parcels to which such cards refer are

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1 included in a list of delinquent taxes filed pursuant to this chapter. 2 However, failure to receive such notice or process shall not affect the 3 validity of any proceeding brought pursuant to this chapter. 4 § 11-418 Writ of assistance. The city, after acquiring title to prem- 5 ises under and pursuant to the terms and provisions of this chapter, 6 shall be entitled to a writ of assistance, with the same force and 7 effect as if the city had acquired the property by virtue of a mortgage 8 foreclosure. 9 § 11-419 Consolidation of actions. Actions or proceedings pending in 10 the courts, or otherwise, to cancel a sale of a tax lien on lands a lien 11 upon which is being foreclosed by action under this chapter, shall be 12 terminated upon the institution of a foreclosure action pursuant to this 13 chapter, and the rights and remedies of the parties in interest to such 14 pending actions or proceedings shall be determined by the court in such 15 foreclosure action. 16 § 11-420 Lands held for public use; right of sale. Whenever the city 17 shall become vested with the title to lands by virtue of a foreclosure 18 proceeding brought pursuant to the provisions of this chapter, such 19 lands shall, unless actually used for other than municipal purposes, be 20 deemed to be held by the city for a public use but for a period of not 21 more than three years from the date of the final judgment. The city is 22 hereby authorized to sell and convey such lands in the manner provided 23 by law for the sale and conveyance of other real property held and owned 24 by the city and not otherwise. 25 § 11-421 Certificate of sale as evidence. The transfer of tax lien or 26 any other written instrument representing a tax lien shall be presump- 27 tive evidence in all courts in all proceedings under this chapter by and 28 against the purchaser and his or her representatives, heirs and assigns, 29 of the truth of the statements therein, of the title of the purchaser to 30 the property therein described, and of the regularity and validity of 31 all proceedings had in reference to the taxes, assessments or other 32 legal charges for the nonpayment of which the tax lien was sold and the 33 sale thereof. After two years from the issuance of such certificate or 34 other written instrument, no evidence shall be admissible in any court 35 in a proceeding under this chapter to rebut such presumption unless the 36 holder thereof shall have procured such transfer of tax lien or such 37 other written instrument by fraud or had previous knowledge that it was 38 fraudulently made or procured. 39 § 11-422 Deed in lieu of foreclosure. The city may when authorized by 40 resolution of the successor agency, officer or employee of the former 41 board of estimate and in lieu of prosecuting an action to foreclose a 42 tax lien on any parcel pursuant to this chapter accept a conveyance of 43 the interest of any person having any right, title, interest, claim, 44 lien or equity of redemption in or to such parcel. 45 § 11-423 Sales and foreclosures of tax liens. Notwithstanding any of 46 the provisions of this chapter the city may continue to sell tax liens, 47 transfer the same to purchasers and become the purchaser at such sales 48 of tax liens in the manner provided by this title. 49 § 11-424 Application to the city for release of property acquired by 50 in rem tax foreclosure. a. (1) The city's interest in property acquired 51 by in rem tax foreclosure may be released pursuant to this section on 52 the application of any party who had an interest in said property as 53 either owner, mortgagee, lienor or encumbrancer at the time of the 54 city's acquisition thereof where such application is made at any time up 55 to two years from the date on which the deed by which the city acquired 56 title to said property was recorded.

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1 (2) Notwithstanding any inconsistent provision of paragraph one of 2 this subdivision to the contrary, the city's interest in property 3 acquired by in rem tax foreclosure may be released pursuant to this 4 section upon application of any party who had an interest in said prop- 5 erty as either owner, mortgagee, lienor or encumbrancer at the time of 6 the city's acquisition thereof where such application is made more than 7 two years after the date on which the deed by which the city acquired 8 title to said property was recorded provided such application is author- 9 ized by the council as hereinafter provided. An application for such 10 release and the documents required by subdivision c of this section in 11 support thereof shall be filed with the department of citywide adminis- 12 trative services in the manner provided in subdivision b of this 13 section. The department of citywide administrative services shall give 14 the council written notice of the receipt of each such filing. After 15 review and approval of the application by the corporation counsel as to 16 form and eligibility of the applicant, the department of citywide admin- 17 istrative services shall send a copy of such application to the in rem 18 foreclosure release board and to the council. Upon receipt of such 19 application, the in rem foreclosure release board shall take no further 20 action on such application unless the council adopts a resolution within 21 one hundred twenty days following the first stated meeting of the coun- 22 cil after receipt of such application authorizing the board to consider 23 such application. If the council fails to adopt a resolution within such 24 one hundred twenty-day period, the council shall be deemed to have 25 denied its authorization for the board to consider such application. A 26 resolution of the council pursuant to this paragraph shall describe the 27 property for which release is sought by borough, tax map, block and lot 28 number and shall specify that release of the city's interest in such 29 property is subject to the approval of the in rem foreclosure release 30 board and to all the conditions and restrictions set forth in this 31 section. 32 b. 1. Any such application shall be made in writing to the commission- 33 er of citywide administrative services and shall be verified. It shall 34 contain the name and address of the applicant and shall state the date 35 on which and the in rem action by which the city acquired title to the 36 property sought to be released. It shall also contain a statement speci- 37 fying the nature of the applicant's interest in the property and a full 38 description of the instrument from which the applicant's interest 39 derives including the date of execution, the date and place of the 40 recording or entry of said instrument and the parties thereto. In the 41 event the applicant's interest arises by reason of the death of a prior 42 owner, mortgagee, lienor or encumbrancer, then the application shall 43 also state the applicant's relationship to said decedent and shall 44 include whatever additional information may be necessary to prove the 45 applicant's right to make such application. 46 2. A fee of two hundred seventy-five dollars shall be paid on the 47 submission of any such application which is subject to the provisions of 48 subdivision f of this section, except that the fee for any such applica- 49 tion for the release of property improved by a one or two-family dwell- 50 ing shall be one hundred dollars. 51 3. A fee of five hundred fifty dollars shall be paid on the submission 52 of any such application which is subject to the provisions of subdivi- 53 sion g of this section, except that the fee for any such application for 54 the release of property improved by a one or two-family dwelling shall 55 be one hundred dollars.

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1 4. A fee of two hundred seventy-five dollars shall be paid on the 2 submission of any such application which is subject to the provisions of 3 subdivision h of this section within four months from the date on which 4 the deed by which the city acquired title to the subject property was 5 recorded, and a fee of five hundred and fifty dollars shall be paid on 6 the submission of any such application which is subject to the 7 provisions of such subdivision not within four months from such date; 8 except that the fee for any such application which is subject to the 9 provisions of such subdivision for the release of property improved by a 10 one or two-family dwelling shall be one hundred dollars. 11 5. The fees payable pursuant to paragraphs two, three and four of this 12 subdivision shall not be refundable. 13 6. In addition to the fees specified in paragraphs two, three and four 14 of this subdivision, there shall be paid on the submission of any appli- 15 cation which is subject to this section an amount at least equal to the 16 lesser of nine hundred dollars or the sum specified in paragraph one of 17 subdivision d of this section, which amount shall not be refundable, but 18 shall be applied in reduction of the sum specified in paragraph one of 19 subdivision d of this section; provided, however, that if a release 20 requires the authorization of the in rem foreclosure release board, and 21 such authorization is not given, such additional amount shall be 22 refunded to the applicant. 23 c. Each application shall be supported by the certified search of the 24 city register or by an official letter, certificate or certified search 25 of any title insurance or abstract company, organized and doing business 26 under the laws of this state. Such supporting instruments shall recite 27 the recording data both as to the deed by which the city acquired title 28 to the parcel sought to be released and the instrument from which the 29 applicant's interest derives. In the event the applicant's interest does 30 not appear of record but is derived by the death of an owner, mortgagee, 31 lienor or encumbrancer of record, then the application shall also be 32 supported by the affidavit of the applicant or other person having 33 information thereof, or by the duly written certificate or certification 34 of the county clerk or the clerk of any surrogate's or other court of 35 record, or by any other instrument or document required by the corpo- 36 ration counsel to substantiate the applicant's right to file such appli- 37 cation in compliance with the provisions of this section. 38 d. The city's interest shall be released only after payment, as to 39 each parcel to be released, of the following sums of money: 40 1. The principal amount due on all unpaid taxes, assessments, water 41 charges and sewer rents appearing on the list of delinquent taxes and 42 accruing thereafter together with interest at the rate or rates provided 43 by law. 44 2. Five percent of the amount paid pursuant to the preceding paragraph 45 but not exceeding one thousand dollars for each parcel. 46 3. Any deficiency which may result to the city after all payments made 47 by it for the repair, maintenance, and operation of the lands, real 48 estate or real property shall have been charged or debited in the appro- 49 priate accounts of the city and all rents, license fees and other moneys 50 collected by the city as a result of its operation of the said lands, 51 real estate or real property shall have been credited in such accounts. 52 Any contract for repair, maintenance, management or operation made by 53 the city on which it shall be liable, although payment thereon shall not 54 have been made, shall be deemed a charge or debit to such accounts as 55 though payment had been made. The amounts paid and collected by the city 56 as shown in its accounts and the necessity for making the several

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1 payments and contracts to be charged as herein provided shall be conclu- 2 sive upon the applicant. Where a deficiency under this subdivision shall 3 be created or increased by the failure of the city to collect rents, 4 license fees or other moneys to which the city may have been entitled, 5 the right to collect or to bring action for the same shall be assigned, 6 transferred and set over to the applicant by an instrument in writing. 7 4. Any and all costs and disbursements which shall have been awarded 8 to the city or to which it may have become entitled by operation of law 9 or which it may have paid or become liable for payment in connection 10 with any litigation between it and the applicant or any person having an 11 estate or interest in the lands, real estate or real property to be 12 released resulting directly or indirectly from the foreclosure by action 13 in rem of the delinquent taxes affecting said lands, real estate or real 14 property. 15 5. A reasonable monthly fee to be determined by the city, through the 16 department of citywide administrative services, for management services 17 and operations of the lands, real estate or real property by the city 18 prior to the release of said lands, real estate or property. 19 6. The city, through the department of citywide administrative 20 services, shall also require as additional consideration for such 21 release, the payment of all arrears on mortgages held by the city and 22 all liens accruing to it by operation of law including but not limited 23 to relocation and emergency repair liens. 24 e. The corporation counsel shall effect the release of the city's 25 interest in property acquired by in rem tax foreclosure, as provided for 26 in this section, by preparing and causing to be entered an order discon- 27 tinuing the in rem tax foreclosure action as to said property, cancel- 28 ling the notice of pendency of such action as to said property and 29 vacating and setting aside the in rem judgment of foreclosure and the 30 deed executed and recorded pursuant to such judgment of foreclosure as 31 to said property. The entry of such order shall restore all parties, 32 including owners, mortgagees and any and all lienors, receivers and 33 administrators and encumbrancers, to the status they held at the time 34 the city acquired title to said property, as if the in rem tax foreclo- 35 sure had never taken place, and shall render said property liable for 36 all taxes, deficiencies, management fees and liens which shall accrue 37 subsequent to those paid in order to obtain the release provided for in 38 this section, or which were, for whatever reason, omitted from the 39 payment made to obtain said release. 40 f. If an application pursuant to this section, and the documents 41 required by subdivision c of this section in support thereof, are filed 42 within four months after the date of the city's acquisition of the 43 subject property, said application shall be granted providing the corpo- 44 ration counsel approves the application as to form, timeliness and 45 eligibility of the applicant and providing the applicant has paid all 46 amounts required to be paid by subdivision d of this section within 47 thirty days of the date on which a letter requesting applicant to make 48 such payment is mailed or delivered to the applicant. The city shall not 49 sell or assign any property acquired by in rem tax foreclosure within 50 four months of said acquisition but this provision shall not prevent the 51 city from authorizing condemnation of such property or vesting title 52 thereto in a condemnation proceeding during said four month period. In 53 the event an application pursuant to this section is filed within four 54 months of the city's acquisition by in rem tax foreclosure and title to 55 the subject property vests in condemnation before the city's interest 56 therein has been released by the vacate order provided for herein, the

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1 applicant shall be entitled to the condemnation award for such property 2 without the entry of such vacate order, providing the corporation coun- 3 sel has approved the application as aforesaid and providing that the 4 amounts specified in subdivision d of this section, if not previously 5 paid, are deducted from said condemnation award, with taxes apportioned 6 to the date of the condemnation title vesting. 7 g. If an application for a release of the city's interest in property 8 acquired by in rem tax foreclosure, and the documents required by subdi- 9 vision c of this section in support thereof, have been filed within the 10 time allowed in paragraph one of subdivision a of this section, but more 11 than four months after the date of the city's acquisition or if an 12 application for such release has been authorized by a resolution of the 13 council pursuant to paragraph two of subdivision a of this section and 14 such application and the documents required by subdivision c of this 15 section in support thereof have been filed, the in rem foreclosure 16 release board may, in its discretion, authorize the release of the 17 city's interest in said property pursuant to this section, provided that 18 the application has been approved by the corporation counsel as to form, 19 timeliness and eligibility of the applicant and provided that the city 20 has not sold or otherwise disposed of said property and provided, 21 further, that said property has not been condemned or assigned to any 22 agency of the city and is not the subject of contemplated use for any 23 capital or urban renewal project of the city. The corporation counsel 24 shall effect such discretionary release only where the applicant, after 25 the board's authorization of the release, has paid all the amounts 26 required to be paid by subdivision d of this section within thirty days 27 of the date on which a letter requesting the applicant to make such 28 payment is mailed or delivered to the applicant. The in rem foreclosure 29 release board may also, in its discretion, authorize a release of the 30 city's interest in such property, pursuant to the above provisions, 31 whenever an application for such release, approved as to form, timeli- 32 ness and eligibility by the corporation counsel, has been filed at any 33 time during the period allowed in subdivision a of this section in which 34 the applicant has requested an installment agreement of the commissioner 35 of citywide administrative services for the payment of the amounts 36 required to be paid by subdivision d of this section provided that said 37 commissioner has approved such request. The commissioner of citywide 38 administrative services shall not approve any such request unless the 39 applicant shall have given notice by certified mail to each tenant 40 located on the parcel, of the request and shall have given such commis- 41 sioner an affidavit stating that such notice has been provided, within 42 thirty days after the request. Any false statement in such affidavit 43 shall not in any way affect the validity of the agreement, be grounds 44 for its cancellation or in any way affect the release of the city's 45 interest in the parcel. Such agreement shall require, in addition to 46 full payment of the amounts due under paragraphs two, three, four, five 47 and six of subdivision d of this section, a first installment of fifty 48 percent of the amount due under paragraph one of said subdivision d with 49 the balance of said amount to be paid in four equal quarterly install- 50 ments together with all current taxes, assessments or other legal charg- 51 es that accrue during such period; provided, however, that: (i) whenever 52 a request for an installment agreement is made of the commissioner of 53 citywide administrative services by a company organized pursuant to 54 article eleven of the private housing finance law with the consent and 55 approval of the department of housing preservation and development or 56 for a parcel which is an owner-occupied residential building of not more

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1 than five residential units, the commissioner of citywide administrative 2 services may, as to that portion of the amounts due under paragraph one 3 of subdivision d of this section which became due prior to the acquisi- 4 tion by the article eleven company of its interest in the property and 5 as to the amount due under paragraph one of subdivision d of this 6 section in the case of such an owner-occupied building, approve a 7 reduction of such first installment to an amount not less than ten 8 percent of the amount due under paragraph one of subdivision d of this 9 section and an increase in the number of the following equal quarterly 10 installments to a number which shall be equal to three times the number 11 of unpaid quarters of real estate taxes or the equivalent thereof but 12 which shall in no event exceed forty-eight, and (ii) notwithstanding 13 clause (i) of this paragraph, whenever an installment agreement is 14 requested on or after the date on which this clause takes effect with 15 respect to a parcel that, immediately prior to the city's acquisition 16 thereof by in rem tax foreclosure, was owned by a company organized 17 pursuant to article eleven of the state private housing finance law with 18 the consent and approval of the department of housing preservation and 19 development, or with respect to a parcel that is a residential building 20 containing not more than five residential units, a residential condomin- 21 ium unit or a residential building held in a cooperative form of owner- 22 ship, the commissioner of general services may, as to the amount due 23 under paragraph one of subdivision d of this section, approve an 24 installment agreement containing the terms relating to the required 25 percentage payment for the first installment and the required number of 26 subsequent quarterly installments, that would be applicable to such 27 parcel under paragraph two (but without regard to any reference therein 28 to paragraph three) of subdivision i of section 11-409 of this chapter. 29 For purposes of calculating the number of such following equal quarterly 30 installments, unpaid real estate taxes or the equivalent which are, on 31 and after July first, nineteen hundred eighty-two, due and payable on an 32 other than quarterly basis shall be deemed to be payable on a quarterly 33 basis. Where the in rem foreclosure release board denies an application 34 requesting an installment agreement the board shall authorize a release 35 of the city's interest, provided that the applicant thereafter pays all 36 the amounts required to be paid by subdivision d of this section within 37 thirty days of the date on which a letter requesting such payment is 38 mailed or delivered to the applicant only when said application and the 39 documents required by subdivision c of this section in support thereof 40 were filed within thirty days of the date of the city's acquisition of 41 the property sought to be released. Where the in rem foreclosure 42 release board denies an application requesting an installment agreement 43 which was filed more than thirty days after the date of the city's 44 acquisition, the board may, in its discretion, authorize a release of 45 the city's interest, provided that the applicant thereafter pays all the 46 amounts required to be paid by subdivision d of this section within 47 thirty days of the date on which a letter requesting such payment is 48 mailed or delivered to the applicant. Where the in rem foreclosure 49 release board approves an application requesting an installment agree- 50 ment, the order releasing the city's interest shall provide that in the 51 event of any default as to the payment of either quarterly installments 52 or current taxes, assessments or other legal charges during the term of 53 such agreement, as set forth in the board's resolution, all payments 54 made under said agreement shall be forfeited and the city shall be enti- 55 tled to reacquire the property so released. The corporation counsel 56 shall effect such reacquisition by causing to be entered as to such

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1 property a supplemental judgment of foreclosure in the in rem action by 2 which said property was originally acquired immediately on notification 3 by the commissioner of finance of such default. 4 h. An owner of property entitled to an exemption under any of the 5 provisions of article four of the real property tax law during all or 6 part of the period covered by the tax items appearing on a list of 7 delinquent taxes may apply for a release of the city's interest in such 8 exempt property under the provisions of this section during the periods 9 of time set forth herein and for an additional period up to ten years 10 from the date of the city's acquisition of said property by in rem fore- 11 closure. The application of such owner shall contain, in addition to the 12 statements, searches and proofs required by this section, a statement 13 that an exemption under the real property tax law is being claimed. Such 14 application shall also state either that it is accompanied by the writ- 15 ten certificate of the comptroller setting forth the precise period 16 during which said property, while owned by such applicant, and during 17 the period after the city's acquisition up to the date of the certif- 18 icate if said property was still being used for an exempt purpose after 19 said acquisition, was entitled to an exemption and the exact nature and 20 extent of such exemption or that an application for such written certif- 21 icate has been filed with the comptroller. On issuing such written 22 certificate, the comptroller shall cancel those tax items which have 23 accrued during the period covered by the certificate to the extent the 24 applicant is entitled to an exemption as set forth in the certificate. 25 Where an application by an exempt owner is filed more than four months 26 after the date of the city's acquisition of the subject property, a 27 release of the city's interest may be issued only at the discretion of 28 the in rem foreclosure release board and subject to all the restrictions 29 set forth in subdivision g of this section. A release to an exempt 30 applicant shall be effected only after said applicant has paid all the 31 amounts required to be paid by subdivision d of this section, except for 32 those tax items which have been cancelled, in whole or in part, pursuant 33 to the comptroller's certificate, within thirty days of the date on 34 which a letter requesting payment is mailed or delivered to the appli- 35 cant. 36 i. The corporation counsel shall also effect the release of the city's 37 interest in property acquired by in rem foreclosure, as provided for in 38 this action, whenever the commissioner of finance shall accept as to any 39 parcel so acquired, the payment provided for in paragraph two of subdi- 40 vision a of section 11-413 of this chapter. Said commissioner may accept 41 such payment at any time within four months of the date of the city's 42 acquisition and may further, subject to the approval of the in rem fore- 43 closure release board, accept such payment at any time more than four 44 months after the date of the city's acquisition but less than two years 45 from the date on which the city's deed was recorded providing said prop- 46 erty has not been sold or otherwise disposed of nor condemned or 47 assigned to any agency of the city and is not the subject of contem- 48 plated use of any capital or urban renewal project of the city. 49 § 11-424.1 In rem foreclosure release board. There shall be an in rem 50 foreclosure release board consisting of the mayor, the speaker of the 51 city council, the borough president, the corporation counsel and the 52 commissioner of finance. Members of the board may, by written authority 53 filed with the board and with the city clerk, appoint delegates to act 54 on their behalf as members of the board. The board shall have the power, 55 acting by resolution, to authorize the release of the city's interest in 56 property acquired by in rem tax foreclosure in accordance with sections

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1 11-412.1 and 11-424 of the code based upon a determination, in its 2 discretion, that such release would be in the best interests of the 3 city. The board shall act after a meeting at which the public has been 4 provided an opportunity to comment on the proposed action. A resolution 5 of the board authorizing a release of the city's interest in any proper- 6 ty shall be adopted only upon the affirmative vote of not less than a 7 majority of all the members of the board. The board may consider any 8 information it deems relevant to a determination. The board shall not be 9 required to state the reasons for its determination. 10 § 11-425 Agreements for payment of delinquent taxes and charges in 11 installments. a. During the period beginning on May ninth, nineteen 12 hundred seventy-seven and ending on June thirtieth, nineteen hundred 13 seventy-seven, the commissioner of finance or, when so specified herein- 14 after, the commissioner of general services, shall be authorized and 15 empowered to make and execute agreements in the circumstances and 16 subject to the terms, conditions and limitations set forth in this 17 section; provided, however, that if the commissioner of finance or, 18 where applicable, the commissioner of general services determines in his 19 or her sole discretion that good cause exists, he or she may make and 20 execute such agreements during an additional period ending not later 21 than July thirty-first, nineteen hundred seventy-seven. 22 b. (1) Whenever it shall appear that a tax lien on a parcel has been 23 due and unpaid for a period of at least six months from the date on 24 which the tax, assessment or other legal charge represented thereby 25 became a lien, the commissioner of finance may enter into an agreement 26 with the owner of such parcel or other person claiming to have an inter- 27 est therein providing for the payment of such delinquent taxes, assess- 28 ments or other legal charges and interest and penalties in installments, 29 the first of which shall be equal to at least fifteen percent of such 30 arrears and shall be payable upon the execution of such agreement. Each 31 remaining installment shall be equal to at least an amount produced by 32 dividing the balance of such arrears by a factor determined by multiply- 33 ing the number of quarters of such arrears by two hundred percent; 34 provided, however, in no event shall such factor be in excess of thir- 35 ty-two. Each such remaining installment shall be payable quarterly on 36 the first of July, October, January and April. 37 (2) If an agreement authorized by paragraph one of this subdivision is 38 executed prior to the time the commissioner of finance files in the 39 office of the county clerk a list of delinquent taxes covering the city 40 or portion of the city in which the subject parcel is located, such 41 parcel shall be excluded from such list of delinquent taxes, provided, 42 at the time such list is filed, there is no default in the agreement and 43 all current taxes, assessments or other legal charges have been paid as 44 they became due or within the period of grace provided by law. In the 45 event of any default in the agreement or any failure to make timely 46 payment of any current item, the parcel shall, if then delinquent for 47 the applicable period specified in section 11-404 of this chapter, be 48 eligible for inclusion in any list of delinquent taxes thereafter filed. 49 (3) If an in rem foreclosure action has been commenced against any 50 parcel prior to May ninth, nineteen hundred seventy-seven, the commis- 51 sioner of finance may, notwithstanding the provisions of paragraph three 52 of subdivision a of section 11-413 of this chapter, enter into an agree- 53 ment authorized and described in the foregoing provisions of this 54 section with respect to such parcel. However, if such an agreement is 55 entered into subsequent to the last date for redemption specified in 56 subdivision a of section 11-407 of this chapter, there shall be paid to

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1 the commissioner of finance at the time said agreement is executed an 2 amount equal to the penalty which would have been payable under subdivi- 3 sion c of section 11-407 of this chapter had the person executing the 4 agreement made a late redemption payment. Such amount shall be in addi- 5 tion to any installment payments required to be made under the agreement 6 and shall not be credited against any such installment payments. Any 7 parcel which is the subject of an agreement made pursuant to this para- 8 graph may, prior to final judgment, be withdrawn from the action, 9 provided there has been no default in the agreement, and provided 10 further that all current taxes, assessments or other legal charges are 11 paid when they become due or within the period of grace provided by law. 12 Such withdrawal shall be effected by the commissioner of finance in the 13 manner provided in section 11-413 of this chapter. 14 (4) Any person who, prior to May ninth, nineteen hundred seventy-sev- 15 en, has made, executed and filed with the commissioner of finance an 16 agreement pursuant to the provisions of paragraph three of subdivision a 17 of section 11-413 of this chapter, shall be permitted to make applica- 18 tion to the commissioner of finance for the purpose of having such 19 agreement cancelled and a new agreement executed as hereinabove 20 provided. 21 If an agreement executed prior to May ninth, nineteen hundred seven- 22 ty-seven is not cancelled as herein provided, any installments due and 23 payable under such agreement on or after July first, nineteen hundred 24 seventy-seven shall be subject to interest at the rate specified in 25 paragraph five of this subdivision, but only if, as of July first, nine- 26 teen hundred seventy-seven, there is no default in the agreement and all 27 current taxes, assessments or other legal charges have been paid within 28 the time allowed by law. Such rate of interest shall be calculated in 29 the manner and shall be subject to all the conditions provided in said 30 paragraph five. 31 (5) When an agreement has been entered into pursuant to this subdivi- 32 sion, the commissioner of finance shall, notwithstanding the rates of 33 interest prescribed in section 11-224, 11-312 or 11-313 of this title, 34 charge, collect and receive interest on the arrears due and payable 35 under such agreement, to be calculated at the rate of seven percent per 36 annum from July first, nineteen hundred seventy-seven to the date of 37 payment of each installment. Any interest accrued or accruing prior to 38 July first, nineteen hundred seventy-seven shall not be affected by the 39 provisions of this paragraph, but shall be charged, collected and 40 received in the manner and at the rates specified in section 11-224, 41 11-312 or 11-313 of this title. The seven percent rate of interest spec- 42 ified in this paragraph shall be applicable only if (i) there is no 43 default in the agreement entered into as provided in this section, and 44 (ii) all current taxes, assessments or other legal charges are paid as 45 they become due or within the period of grace provided by law. In the 46 event of any default or failure to make timely payment of any current 47 item, the seven percent rate of interest specified in this paragraph 48 shall thereupon cease to be applicable and the commissioner of finance 49 shall thereafter charge, collect and receive interest in the manner and 50 at the rates otherwise specified in this title. 51 (6) In addition to the terms and conditions required by the preceding 52 paragraphs of this subdivision to be included in agreements authorized 53 by this section, the commissioner of finance may in his or her 54 discretion include in such agreements such additional terms and condi- 55 tions, not inconsistent with this section, as he or she determines to be 56 necessary in order to properly carry out the provisions of this section.

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1 The commissioner may also adopt such rules and regulations as may be 2 necessary to carry out the provisions of this section. 3 c. (1) If, pursuant to the provisions of section 11-424 of this chap- 4 ter, an application for the release of property acquired by the city 5 through in rem tax foreclosure is made within the four-month period 6 specified in subdivision f of section 11-424 of this chapter, and 7 provided such application is made during the period specified in subdi- 8 vision a of this section, the provisions of this subdivision shall, at 9 the election of the applicant, apply with respect to such application 10 and the release sought thereby. 11 (2) At the time of filing the application for release, an applicant 12 who elects to have the provisions of this subdivision apply to him or 13 her, shall pay to the city the amounts specified in paragraphs two, 14 three and four of subdivision d of section 11-424 of this chapter, for 15 this purpose, the amount specified in paragraph two thereof shall be 16 deemed to be the amount which would have been required to be paid there- 17 under had this section not been in effect. Concurrent with the making of 18 such payment, the applicant shall enter into an agreement with the 19 commissioner of general services providing for the payment of all 20 current taxes, assessments or other legal charges on the property as 21 they become due or within the grace period provided by law, and, in 22 addition, providing for the payment of the amount specified in paragraph 23 one of subdivision d of section 11-424 of this chapter in installments, 24 the first of which shall be equal to at least twenty-five percent of 25 such amount and shall be payable upon the execution of such agreement. 26 The balance of such amount shall be payable in twelve equal quarterly 27 installments, each of which shall be paid quarterly on the first of 28 July, October, January and April. 29 (3) Pending approval by the corporation counsel of an application for 30 release as to form, timeliness and eligibility of the applicant, all 31 payments made pursuant to the preceding paragraph shall be held in 32 escrow; in the event the corporation counsel disapproves the applica- 33 tion, such payments shall be returned to the applicant, and the agree- 34 ment executed by the applicant shall thereupon be cancelled. 35 (4) In the case of any agreement made and executed pursuant to para- 36 graph two hereof, interest on any installment due and payable thereunder 37 shall, notwithstanding the rates of interest prescribed in section 38 11-224, 11-312 or 11-313 of this title, be charged, collected and 39 received at the rate of seven percent per annum from July first, nine- 40 teen hundred seventy-seven to the date of payment of each installment. 41 Any interest accrued or accruing prior to July first, nineteen hundred 42 seventy-seven shall not be affected by the provisions of this paragraph, 43 but shall be charged, collected and received in the manner and at the 44 rates specified in section 11-224, 11-312 or 11-313 of this title. The 45 seven percent rate of interest specified in this paragraph shall be 46 applicable only if (i) there is no default in the agreement entered into 47 as provided in this subdivision, and (ii) all current taxes, assessments 48 or other legal charges are paid as they become due or within the period 49 of grace provided by law. 50 (5) No release for which application has been made pursuant to this 51 subdivision shall be granted until the final payment under the agreement 52 herein provided is received by the city. Upon receipt of such final 53 payment by the city the corporation counsel shall effect the release in 54 the manner provided in section 11-424 of this chapter. In the event of 55 any default in an agreement executed as provided in this subdivision or 56 any failure to pay current taxes, assessments or other legal charges as

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1 they become due or within the grace period provided by law, such agree- 2 ment shall thereupon become void, the release process shall be termi- 3 nated, and all payments theretofore made shall be forfeited to the city. 4 (6) In addition to the terms and conditions required by the preceding 5 paragraphs of this subdivision to be included in agreements authorized 6 thereby, the commissioner of general services may in his or her 7 discretion include in such agreements such additional terms and condi- 8 tions, not inconsistent with this subdivision, as the commissioner 9 determines to be necessary in order to properly carry out the provisions 10 hereof. The commissioner of general services may also adopt such rules 11 and regulations as may be necessary to carry out the provisions of this 12 subdivision. 13 § 11-426 Agreements for payment of delinquent taxes and charges in 14 installments. a. During the period beginning on December second, nine- 15 teen hundred seventy-seven and ending on March thirty-first, nineteen 16 hundred seventy-eight, the commissioner of finance, or, when so speci- 17 fied hereinafter, the commissioner of general services, shall be author- 18 ized and empowered to make and execute agreements in the circumstances 19 and subject to the terms, conditions and limitations set forth in this 20 section. 21 b. (1) Whenever it shall appear that a tax lien on a parcel has been 22 due and unpaid for a period of at least six months from the date on 23 which the tax, assessment or other legal charge represented thereby 24 became a lien, the commissioner of finance may enter into an agreement 25 with the owner of such parcel or other person claiming to have an inter- 26 est therein providing for the payment of such delinquent taxes, assess- 27 ments or other legal charges and interest and penalties in installments, 28 the first of which shall be equal to at least fifteen percent of such 29 arrears and shall be payable upon the execution of such agreement. Each 30 remaining installment shall be equal to at least an amount produced by 31 dividing the balance of such arrears by a factor determined by multiply- 32 ing the number of quarters of such arrears by two hundred percent. In no 33 event, however, shall the factor referred to in the preceding sentence 34 be in excess of thirty-two. Each such remaining installment shall be 35 payable quarterly on the first of July, October, January and April. 36 (2) If an agreement authorized by paragraph one of this subdivision is 37 executed prior to the time the commissioner of finance files in the 38 office of the county clerk a list of delinquent taxes covering the city 39 or portion of the city in which the subject parcel is located, such 40 parcel shall be excluded from such list of delinquent taxes, provided, 41 at the time such list is filed, there is no default in the agreement and 42 all current taxes, assessments or other legal charges have been paid as 43 they became due or within the period of grace provided by law. In the 44 event of any default in the agreement or any failure to make timely 45 payment of any current item, the parcel shall, if then delinquent for 46 the applicable period specified in section 11-404 of this chapter, be 47 eligible for inclusion in any list of delinquent taxes thereafter filed. 48 (3) If an in rem foreclosure action has been commenced against any 49 parcel prior to December second, nineteen hundred seventy-seven, the 50 commissioner of finance may, notwithstanding the provisions of paragraph 51 three of subdivision a of section 11-413 of this chapter, enter into an 52 agreement authorized and described in the foregoing provisions of this 53 section with respect to such parcel. However, if such an agreement is 54 entered into subsequent to the last date for redemption specified in 55 subdivision a of section 11-407 of this chapter, there shall be paid to 56 the commissioner of finance at the time said agreement is executed an

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1 amount equal to the penalty which would have been payable under subdivi- 2 sion c of section 11-407 of this chapter had the person executing the 3 agreement made a late redemption payment. Such amount shall be in addi- 4 tion to any installment payments required to be made under the agreement 5 and shall not be credited against any such installment payments. Any 6 parcel which is the subject of an agreement made pursuant to this para- 7 graph may, prior to final judgment, be withdrawn from the action, 8 provided there has been no default in the agreement, and provided 9 further that all current taxes, assessments or other legal charges are 10 paid when they become due or within the period of grace provided by law. 11 Such withdrawal shall be effected by the commissioner of finance in the 12 manner provided in section 11-413 of this chapter. 13 (4) Any person who, prior to December second, nineteen hundred seven- 14 ty-seven, has made, executed and filed with the commissioner of finance 15 an agreement pursuant to the provisions of paragraph three of subdivi- 16 sion a of section 11-413 of this chapter, shall be permitted to make 17 application to the commissioner of finance for the purpose of having 18 such agreement cancelled and a new agreement executed as hereinabove 19 provided. 20 If an agreement executed prior to December second, nineteen hundred 21 seventy-seven is not cancelled as herein provided, any installments due 22 and payable under such agreement on or after April first, nineteen 23 hundred seventy-eight shall be subject to interest at the rate specified 24 in paragraph five of this subdivision, but only if, as of April first, 25 nineteen hundred seventy-eight, there is no default in the agreement and 26 all current taxes, assessments or other legal charges have been paid 27 within the time allowed by law. Such rate of interest shall be calcu- 28 lated in the manner and shall be subject to all the conditions provided 29 in said paragraph five. 30 (5) When an agreement has been entered into pursuant to this subdivi- 31 sion, the commissioner of finance shall, notwithstanding the rates of 32 interest prescribed in section 11-224, 11-312 or 11-313 of this title, 33 charge, collect and receive interest on the arrears due and payable 34 under such agreement to be calculated at the rate of seven percent per 35 annum from April first, nineteen hundred seventy-eight to the date of 36 payment of each installment. Any interest accrued or accruing prior to 37 April first, nineteen hundred seventy-eight shall not be affected by the 38 provisions of this paragraph, but shall be charged, collected and 39 received in the manner and at the rates specified in section 11-224, 40 11-312 or 11-313 of this title. The seven percent rate of interest spec- 41 ified in this paragraph shall be applicable only if (i) there is no 42 default in the agreement entered into as provided in this section, and 43 (ii) all current taxes, assessments or other legal charges are paid as 44 they become due or within the period of grace provided by law. In the 45 event of any default or failure to make timely payment of any current 46 item, the seven percent rate of interest specified in this paragraph 47 shall thereupon cease to be applicable and the commissioner of finance 48 shall thereafter charge, collect and receive interest in the manner and 49 at the rates otherwise specified in this title. 50 (6) In addition to the terms and conditions required by this subdivi- 51 sion to be included in agreements authorized by this section, the 52 commissioner of finance may, in his or her discretion, include in such 53 agreements such additional terms and conditions, not inconsistent with 54 this section, as such commissioner determines to be necessary in order 55 to properly carry out the provisions of this section. The commissioner

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1 of finance may also adopt such rules and regulations as may be necessary 2 to carry out the provisions of this section. 3 c. (1) If, pursuant to the provisions of section 11-424 of this chap- 4 ter, an application for the release of property acquired by the city 5 through in rem tax foreclosure is made within the four-month period 6 specified in subdivision f of section 11-424 of this chapter, and 7 provided such application is made during the period specified in subdi- 8 vision a of this section, the following provisions of this subdivision 9 shall, at the election of the applicant, apply with respect to such 10 application and the release sought thereby. 11 (2) At the time of filing the application for release, an applicant 12 who elects to have the provisions of this subdivision apply to him or 13 her, shall pay to the city the amounts specified in paragraphs two, 14 three and four of subdivision d of section 11-424 of this chapter, for 15 this purpose, the amount specified in such paragraph two shall be deemed 16 to be the amount which would have been required to be paid thereunder 17 had this section not been in effect. Concurrent with the making of such 18 payment, the applicant shall enter into an agreement with the commis- 19 sioner of general services providing for the payment of all current 20 taxes, assessments or other legal charges on the property as they become 21 due or within the grace period provided by law, and, in addition, 22 providing for the payment of the amount specified in paragraph one of 23 subdivision d of section 11-424 of this chapter in installments, the 24 first of which shall be equal to at least twenty-five percent of such 25 amount and shall be payable upon the execution of such agreement. The 26 balance of such amount shall be payable in twelve equal quarterly 27 installments, each of which shall be paid quarterly on the first of 28 July, October, January and April. 29 (3) Pending approval by the corporation counsel of an application for 30 release as to form, timeliness and eligibility of the applicant, all 31 payments made pursuant to the preceding paragraph shall be held in 32 escrow; in the event the corporation counsel disapproves the applica- 33 tion, such payments shall be returned to the applicant, and the agree- 34 ment executed by him or her shall thereupon be cancelled. 35 (4) In the case of any agreement made and executed pursuant to such 36 paragraph two, interest on any installment due and payable thereunder 37 shall, notwithstanding the rates of interest prescribed in section 38 11-224, 11-312 or 11-313 of this title, be charged, collected and 39 received at the rate of seven percent per annum from April first, nine- 40 teen hundred seventy-eight to the date of payment of each installment. 41 Any interest accrued or accruing prior to April first, nineteen hundred 42 seventy-eight shall not be affected by the provisions of this paragraph, 43 but shall be charged, collected and received in the manner and at the 44 rates specified in section 11-224, 11-312 or 11-313 of this title. The 45 seven percent rate of interest specified in this paragraph shall be 46 applicable only if (i) there is no default in the agreement entered into 47 as provided in this subdivision, and (ii) all current taxes, assessments 48 or other legal charges are paid as they become due or within the period 49 of grace provided by law. 50 (5) No release for which application has been made pursuant to this 51 subdivision shall be granted until the final payment under the agreement 52 herein provided is received by the city. Upon receipt of such final 53 payment by the city the corporation counsel shall effect the release in 54 the manner provided in section 11-424 of this chapter. In the event of 55 any default in an agreement executed as provided in this subdivision or 56 any failure to pay current taxes, assessments or other legal charges as

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1 they become due or within the grace period provided by law, such agree- 2 ment shall thereupon become void, the release process shall be termi- 3 nated, and all payments theretofore made shall be forfeited to the city. 4 (6) In addition to the terms and conditions required by this subdivi- 5 sion to be included in agreements authorized thereby, the commissioner 6 of general services may, in his or her discretion, include in such 7 agreements such additional terms and conditions, not inconsistent with 8 this subdivision, as the commissioner determines to be necessary in 9 order to properly carry out the provisions hereof. The commissioner of 10 general services may also adopt such rules and regulations as may be 11 necessary to carry out the provisions of this subdivision. 12 § 11-427 Agreements for payment of delinquent taxes and charges in 13 installments. a. During the period beginning September first, nineteen 14 hundred seventy-eight and ending December thirty-first, nineteen hundred 15 seventy-eight, the commissioner of finance, or, when so specified here- 16 inafter, the commissioner of general services, shall be authorized and 17 empowered to make and execute agreements in the circumstances and 18 subject to the terms, conditions and limitations set forth in this 19 section; provided, however, that if the commissioner of finance or, 20 where applicable, the commissioner of general services, determines in 21 his or her sole discretion that good cause exists, he or she may make 22 and execute such agreements during an additional period ending not later 23 than January thirty-first, nineteen hundred seventy-nine. 24 b. (1) (i) Whenever it shall appear that a tax lien on a parcel has 25 been due and unpaid for a period of at least six months from the date on 26 which the tax, assessment or other legal charge represented thereby 27 became a lien, the commissioner of finance may enter into an agreement 28 with the owner of such parcel or other person claiming to have an inter- 29 est therein providing for the payment of such delinquent taxes, assess- 30 ments or other legal charges and interest and penalties in installments, 31 the first of which shall be equal to at least fifteen percent of such 32 arrears and shall be payable upon the execution of such agreement. Each 33 remaining installment shall be equal to at least an amount produced by 34 dividing the balance of such arrears by a factor determined by multiply- 35 ing the number of quarters of such arrears by two. 36 (ii) In no event, however, shall the factor referred to in subpara- 37 graph (i) of this paragraph be in excess of thirty-two. Each such 38 remaining installment shall be payable quarterly on the first of July, 39 October, January and April. 40 (2) If an agreement authorized by paragraph one of this subdivision is 41 executed prior to the time the commissioner of finance files in the 42 office of the county clerk a list of delinquent taxes covering the city 43 or portion of the city in which the subject parcel is located, such 44 parcel shall be excluded from such list of delinquent taxes, provided, 45 at the time such list is filed, there is no default in the agreement and 46 all current taxes, assessments or other legal charges were paid as they 47 became due or within the period of grace provided by law. In the event 48 of any default in the agreement or any failure to make timely payment of 49 any current item, the parcel shall, if then delinquent for the applica- 50 ble period specified in section 11-404 of this chapter, be eligible for 51 inclusion in any list of delinquent taxes thereafter filed. 52 (3) If an in rem foreclosure action has been commenced against any 53 parcel prior to September first, nineteen hundred seventy-eight, the 54 commissioner of finance may, notwithstanding the provisions of paragraph 55 three of subdivision a of section 11-413 of this chapter, enter into an 56 agreement authorized and described in the foregoing provisions of this

S. 8578 342

1 section with respect to such parcel. However, if such an agreement is 2 entered into subsequent to the last date for redemption specified in 3 subdivision a of section 11-407 of this chapter, there shall be paid to 4 the commissioner of finance at the time said agreement is executed an 5 amount equal to the penalty which would have been payable under subdivi- 6 sion c of section 11-407 of this chapter had the person executing the 7 agreement made a late redemption payment. Such amount shall be in addi- 8 tion to any installment payments required to be made under the agreement 9 and shall not be credited against any such installment payments. Any 10 parcel which is the subject of an agreement made pursuant to this para- 11 graph may, prior to final judgment, be withdrawn from the action, 12 provided there has been no default in the agreement, and provided 13 further that all current taxes, assessments or other legal charges are 14 paid when they become due or within the period of grace provided by law. 15 Such withdrawal shall be effected by the commissioner of finance in the 16 manner provided in section 11-413 of this chapter. 17 (4) Any person who, prior to September first, nineteen hundred seven- 18 ty-eight, has made, executed and filed with the commissioner of finance 19 an agreement pursuant to the provisions of paragraph three of subdivi- 20 sion a of section 11-413 of this chapter, shall be permitted to make 21 application to the commissioner of finance for the purpose of having 22 such agreement cancelled and a new agreement executed as hereinabove 23 provided. 24 If an agreement executed prior to September first, nineteen hundred 25 seventy-eight is not cancelled as herein provided, any installments due 26 and payable under such agreement on or after February first, nineteen 27 hundred seventy-nine shall be subject to interest at the rate specified 28 in paragraph six of this subdivision, but only if, as of February first, 29 nineteen hundred seventy-nine, there is no default in the agreement and 30 all current taxes, assessments or other legal charges have been paid 31 within the time allowed by law. Such rate of interest shall be calcu- 32 lated in the manner and shall be subject to all the conditions provided 33 in paragraph six of this subdivision. 34 (5) Notwithstanding the preceding paragraphs of this subdivision, no 35 owner of, or other person claiming to have an interest in, any parcel 36 shall be eligible to enter into an agreement authorized by such para- 37 graphs where such parcel was included in an in rem foreclosure action 38 but was severed therefrom pursuant to the judgment of foreclosure in 39 such action because an answer was still pending as to such parcel. The 40 commissioner of finance may, however, on notice to the corporation coun- 41 sel, enter into an agreement with such owner or other interested person 42 providing for the payment of all current taxes, assessments or other 43 legal charges on the parcel as they become due or within the grace peri- 44 od provided by law, and, in addition, providing for payment of the 45 amount of all delinquent taxes, assessments or other legal charges and 46 interest due as of the date the agreement is executed in installments, 47 the first of which shall be equal to at least twenty-five percent of 48 such amount and shall be payable upon the execution of such agreement, 49 and the balance of which shall be payable in twelve equal quarterly 50 installments, each of which shall be paid on the first of July, October, 51 January and April. In addition, there shall be paid to the commissioner 52 of finance at the time such agreement is executed a penalty equal to 53 five percent of the amount of the delinquent taxes, assessments or other 54 legal charges and interest due as of the date of the agreement, which 55 penalty shall not exceed five hundred dollars. Any installments due and 56 payable on or after February first, nineteen hundred seventy-nine under

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1 an agreement described in this paragraph shall be subject to interest at 2 the rate specified in paragraph six of this subdivision, but only if, as 3 of February first, nineteen hundred seventy-nine, there is no default in 4 the agreement and all current taxes, assessments or other legal charges 5 have been paid within the time allowed by law. Such rate of interest 6 shall be calculated in the manner and shall be subject to all the condi- 7 tions provided in paragraph six of this subdivision. 8 Upon receipt of the final payment due under an agreement executed 9 pursuant to this paragraph, the commissioner of finance shall discontin- 10 ue the in rem action pending with respect to the parcel which is the 11 subject of such agreement, and shall cancel the lis pendens pertaining 12 thereto by issuing a certificate of withdrawal pursuant to section 13 11-413 of this chapter. In the event of any default in such agreement or 14 any failure to pay current taxes, assessments or other legal charges as 15 they become due or within the grace period provided by law, such agree- 16 ment and the answer which was the basis for the severance of the subject 17 parcel from the in rem action shall both be deemed null and void and the 18 city shall be entitled to acquire title to such parcel by entry of an 19 appropriate supplemental judgment of foreclosure in such in rem action 20 without further notice to the answering party. 21 (6) When an agreement has been entered into pursuant to this subdivi- 22 sion, the commissioner of finance shall, notwithstanding the rates of 23 interest prescribed in section 11-224, 11-312 or 11-313 of this title, 24 charge, collect and receive interest on the arrears due and payable 25 under such agreement, to be calculated at the rate of seven percent per 26 annum from February first, nineteen hundred seventy-nine to the date of 27 payment of each installment. Any interest accrued or accruing prior to 28 February first, nineteen hundred seventy-nine shall not be affected by 29 the provisions of this paragraph, but shall be charged, collected and 30 received in the manner and at the rates specified in section 11-224, 31 11-312 or 11-313 of this title. The seven percent rate of interest spec- 32 ified in this paragraph shall be applicable only if (i) there is no 33 default in the agreement entered into as provided in this section, and 34 (ii) all current taxes, assessments or other legal charges are paid as 35 they become due or within the period of grace provided by law. In the 36 event of any default or failure to make timely payment of any current 37 item, the seven percent rate of interest specified in this paragraph 38 shall thereupon cease to be applicable and the commissioner of finance 39 shall thereafter charge, collect and receive interest in the manner and 40 at the rates otherwise specified in this chapter. 41 (7) In addition to the terms and conditions required by this subdivi- 42 sion to be included in agreements authorized by this section, the 43 commissioner of finance may, in his or her discretion, include in such 44 agreements such additional terms and conditions, not inconsistent with 45 this section, as the commissioner determines to be necessary in order to 46 properly carry out the provisions of this section. The commissioner may 47 also adopt such rules and regulations as may be necessary to carry out 48 the provisions of this section. 49 c. (1) If, pursuant to the provisions of section 11-424 of this chap- 50 ter, an application for the release of property acquired by the city 51 through in rem tax foreclosure has been filed within the four-month 52 period specified in subdivision f of such section, and the sixty-day 53 period for payment referred to in such subdivision has not expired prior 54 to the commencement of the period specified in subdivision a of this 55 section, the provisions of this subdivision shall, at the election of 56 the applicant, apply with respect to such application and the release

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1 sought thereby, provided notice of such election is given to the commis- 2 sioner of general services during the period specified in subdivision a 3 of this section, but in no event later than the last day of the sixty- 4 day period referred to in subdivision f of section 11-424 of this chap- 5 ter. 6 (2) An applicant who elects to have the provisions of this subdivision 7 apply to him or her, shall, at the time such applicant notifies the 8 commissioner of general services of his or her election, pay to the city 9 the amounts specified in paragraphs two, three and four of subdivision d 10 of section 11-424 of this chapter; for this purpose, the amount speci- 11 fied in paragraph two thereof shall be deemed to be the amount which 12 would have been required to be paid thereunder had this section not been 13 in effect. Concurrent with the making of such payment, the applicant 14 shall enter into an agreement with the commissioner of general services 15 providing for the payment of all current taxes, assessments or other 16 legal charges on the property as they become due or within the grace 17 period provided by law, and, in addition, providing for the payment of 18 the amount specified in paragraph one of subdivision d of section 11-424 19 of this chapter in installments, the first of which shall be equal to at 20 least twenty-five percent of such amount and shall be payable upon the 21 execution of such agreement. The balance of such amount shall be payable 22 in twelve equal quarterly installments, each of which shall be paid 23 quarterly on the first of July, October, January and April. 24 (3) Pending approval by the corporation counsel of an application for 25 release as to form, timeliness and eligibility of the applicant, all 26 payments made pursuant to paragraph three of this subdivision shall be 27 held in escrow; in the event the corporation counsel disapproves the 28 application, such payments shall be returned to the applicant, and the 29 agreement executed by him or her shall thereupon be cancelled. 30 (4) In the case of any agreement made and executed pursuant to para- 31 graph two of this subdivision, interest on any installment due and paya- 32 ble thereunder shall, notwithstanding the rates of interest prescribed 33 in section 11-224, 11-312 or 11-313 of this title, be charged, collected 34 and received at the rate of seven percent per annum from February first, 35 nineteen hundred seventy-nine to the date of payment of each install- 36 ment. Any interest accrued or accruing prior to February first, nineteen 37 hundred seventy-nine shall not be affected by the provisions of this 38 paragraph, but shall be charged, collected and received in the manner 39 and at the rates specified in section 11-224, 11-312 or 11-313 of this 40 title. The seven percent rate of interest specified in this paragraph 41 shall be applicable only if (i) there is no default in the agreement 42 entered into as provided in this subdivision, and (ii) all current 43 taxes, assessments or other legal charges are paid as they become due or 44 within the period of grace provided by law. 45 (5) No release for which application has been made pursuant to subdi- 46 vision f of section 11-424 of this chapter shall be granted until the 47 final payment under the agreement herein provided is received by the 48 city. Upon receipt of such final payment by the city the corporation 49 counsel shall effect the release in the manner provided in section 50 11-424 of this chapter. In the event of any default in an agreement 51 executed as provided in this subdivision or any failure to pay current 52 taxes, assessments or other legal charges as they become due or within 53 the grace period provided by law, such agreement shall thereupon become 54 void, the release process shall be terminated and all payments thereto- 55 fore made shall be forfeited to the city.

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1 (6) In addition to the terms and conditions required by this subdivi- 2 sion to be included in agreements authorized thereby, the commissioner 3 of general services may, in his or her discretion, include in such 4 agreements such additional terms and conditions, not inconsistent with 5 this subdivision, as the commissioner determines to be necessary in 6 order to properly carry out the provisions hereof. The commissioner of 7 general services may also adopt such rules and regulations as may be 8 necessary to carry out the provisions of this subdivision. 9 § 11-428 Disposition of proceeds of sales of properties acquired by 10 city through tax enforcement foreclosure proceedings. The proceeds of 11 the sale of real property acquired through tax enforcement foreclosure 12 proceedings, or by deed in lieu thereof, including subsequent receipts 13 in diminution of purchase money mortgages accepted at the time of sale, 14 shall be applied as follows: 15 a. The amount of the unpaid real estate taxes accrued against such 16 property from the first of January or the first of July, whichever first 17 immediately precedes the date on which title vested in the city to the 18 date of conveyance of title by the city, without interest or penalties 19 thereon, shall be credited to the tax deficiency account. 20 b. The balance, if any, remaining after deduction of the amount speci- 21 fied in paragraph a hereof, shall be paid into the funds hereinafter 22 specified in the following order: 23 1. A sum equal to the amount of the unpaid assessments for local 24 improvements accrued against such property at the date of commencement 25 of the foreclosure proceeding and up to the date of conveyance of title 26 by the city, without interest or penalties thereon, shall be paid into 27 the appropriate assessment funds. 28 2. A sum equal to the amount of unpaid sewer rents, including interest 29 and penalties thereon, accrued against such property at the date of 30 commencement of the foreclosure proceedings and up to the date of 31 conveyance of title by the city shall be paid into the sewer fund. 32 3. The amount of the brokerage fee and other expenses expended by the 33 city in connection with such sale shall be paid into the fund or code to 34 which such fee was charged. 35 4. The balance of such proceeds, if any, and the interest on any 36 purchase money mortgage accepted by the city at the time of such sale 37 shall be paid into the general fund. In the event that any part of such 38 balance is represented by bonds and mortgages, such bonds and mortgages 39 may be deposited in the tax appropriation and general fund stabilization 40 reserve fund and a sum equal to the amount of the cash represented by 41 such bonds and mortgages shall in such event be transferred from the tax 42 appropriation and general fund stabilization reserve fund to the general 43 fund.

44 CHAPTER 5 45 CITY UNINCORPORATED BUSINESS INCOME TAX

46 § 11-501 Meaning of terms. (a) General. Unless a different meaning is 47 clearly required, any term used in this chapter shall have the same 48 meaning as when used in a comparable context in the laws of the United 49 States relating to federal income taxes, and any reference in this chap- 50 ter to the laws of the United States shall mean the provisions of the 51 internal revenue code of nineteen hundred fifty-four, and amendments 52 thereto, and other provisions of the laws of the United States relating 53 to federal income taxes, as the same are included in this chapter as an 54 appendix or as included by reference to an appendix of another chapter

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1 enacted by the same law as enacts this chapter. (The quotation of the 2 aforesaid laws of the United States is intended to make them a part of 3 this chapter and to avoid constitutional uncertainties which might 4 result if such laws were merely incorporated by reference. The quotation 5 of a provision of the federal internal revenue code or of any other law 6 of the United States shall not necessarily mean that it is applicable to 7 or has relevance to this chapter.) 8 (b) "State", "this state" or "the state" when used in this chapter 9 shall mean the state of New York. 10 (c) "Local income taxes", when used in this chapter shall mean an 11 income tax imposed by a political subdivision of a state. 12 (d) "Commissioner of finance" when used in this chapter shall mean the 13 commissioner of finance of the city. 14 (e) "Department of finance" when used in this chapter shall mean the 15 department of finance of the city. 16 (f) "Tax appeals tribunal" when used in this chapter shall mean the 17 tax appeals tribunal established by section one hundred sixty-eight of 18 the charter of the preceding municipality as it existed January first, 19 two thousand nine. 20 (g) "Unincorporated business entire net income" when used in this 21 chapter shall mean the excess of the unincorporated business gross 22 income of an unincorporated business over its unincorporated business 23 deductions. 24 (h) "Investment capital" when used in this chapter shall mean invest- 25 ments of the unincorporated business in stocks, bonds and other securi- 26 ties, corporate and governmental (excluding governmental stocks, bonds 27 and other securities the interest or dividends from which are fully 28 exempt from tax under this chapter, other than any such governmental 29 stock, bond or other security which is sold or otherwise disposed of 30 during the taxable year in a transaction which results in a gain or loss 31 which is included in computing unincorporated business entire net income 32 for the taxable year), not held for sale to customers in the regular 33 course of business, provided, however, that in the discretion of the 34 commissioner of finance, there shall be deducted from investment capital 35 any liabilities of the unincorporated business which are directly or 36 indirectly attributable to investment capital. 37 (i) "Investment income" when used in this chapter shall mean income, 38 gains and losses from investment capital, to the extent included in 39 computing unincorporated business entire net income, less, in the 40 discretion of the commissioner of finance, any deductions allowable in 41 computing unincorporated business entire net income which are directly 42 or indirectly attributable to investment capital or investment income, 43 provided, however, that in no case shall investment income exceed unin- 44 corporated business entire net income. 45 (j) "Business capital" when used in this chapter shall mean all assets 46 of the unincorporated business other than investment capital, less 47 liabilities of the unincorporated business not deducted from investment 48 capital, except that cash on hand and on deposit shall be treated as 49 investment capital or as business capital as the taxpayer may elect. 50 (k) "Business income" when used in this chapter shall mean unincorpo- 51 rated business entire net income minus investment income. 52 (l) "Dealer" when used in this chapter shall mean an individual or 53 unincorporated entity that (A) holds or disposes of property that is 54 stock in trade of the taxpayer, inventory or is otherwise held for sale 55 to customers in the ordinary course of the taxpayer's trade or business, 56 or (B) regularly offers to enter into, assume, offset, assign or other-

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1 wise terminate positions in property with customers in the ordinary 2 course of the taxpayer's trade or business, provided, however, an indi- 3 vidual or unincorporated entity shall not be treated as a dealer based 4 solely on such individual's or entity's ownership of an interest in an 5 entity that is a dealer, and provided, further, that an unincorporated 6 entity shall not be treated as a dealer based solely on the ownership by 7 a dealer of an interest in that unincorporated entity. 8 (m) "Unincorporated entity" when used in this chapter shall include an 9 entity classified as a partnership for federal income tax purposes 10 regardless of whether the entity is formed as a corporation, joint-stock 11 company, joint-stock association, body corporate or body politic or 12 whether the entity is organized under a federal or state statute, or 13 under a statute of a federally recognized Indian tribe, or under a stat- 14 ute of a country other than the United States that describes or refers 15 to the entity as incorporated. 16 § 11-502 Unincorporated business defined. (a) General. An unincorpo- 17 rated business means any trade, business, profession or occupation 18 conducted, engaged in or being liquidated by an individual or unincorpo- 19 rated entity, including a partnership, a fiduciary, a corporation in 20 liquidation or an unincorporated entity that has made the election 21 permitted under paragraph (b) of subdivision one of section 11-602 of 22 this title (but only for the period during which such election is in 23 effect), but not including any entity subject to tax under chapter six 24 of this title and not including any entity doing an insurance business 25 as a member of the New York insurance exchange described in paragraph 26 one of subsection (b) of section six thousand two hundred one of the 27 insurance law. Unincorporated businesses subject to tax under a local 28 law of the city imposing a tax on utilities shall not be subject to tax 29 under this chapter; provided, however, that unincorporated businesses, 30 other than (1) utility businesses subject to the supervision of the 31 state department of public service and (2) for taxable years beginning 32 on or after August first, two thousand two, utilities as defined in 33 subdivision six of section 11-1101 of this title, which are subject to 34 tax under a local law of the city imposing a tax on vendors of utility 35 services shall be subject to tax under this chapter on that percentage 36 of their entire net income allocable to the city under section 11-508 of 37 this chapter which their receipts other than those taxable under such 38 local law taxing vendors of utility services is of their total receipts. 39 If an individual or an unincorporated entity carries on wholly or partly 40 in the city two or more unincorporated businesses, all such businesses 41 shall be treated as one unincorporated business for the purposes of this 42 chapter. For purposes of this chapter, an unincorporated entity shall be 43 treated as carrying on any trade, business, profession or occupation 44 carried on in whole or in part in the city by any other unincorporated 45 entity in which the first unincorporated entity owns an interest, and 46 the ownership by an unincorporated entity of an interest in another 47 unincorporated entity that is not carrying on any trade, business, 48 profession, or occupation in whole or in part in the city shall not be 49 deemed the conduct of an unincorporated business by the first unincorpo- 50 rated entity. Notwithstanding anything to the contrary in the preceding 51 sentence, for taxable years beginning on or after August first, two 52 thousand two, an unincorporated business that is a partner in a partner- 53 ship subject to tax under a local law of the city imposing a tax on 54 utilities, as defined in subdivision six of section 11-1101 of this 55 title, shall not be considered to be carrying on the trade, business, 56 profession or occupation carried on by such partnership.

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1 (b) Services as employee. The performance of services by an individual 2 as an employee or as an officer or director of a corporation, society, 3 association, or political entity, or as a fiduciary, shall not be deemed 4 an unincorporated business, unless such services constitute part of a 5 business regularly carried on by such individual. 6 (c) Purchase and sale for own account. (1) Definitions. (A) Property. 7 For purposes of this subdivision, property shall mean real and personal 8 property, including but not limited to, property qualifying as invest- 9 ment capital within the meaning of subdivision (h) of section 11-501 of 10 this chapter, other stocks, notes, bonds, debentures, or other evidences 11 of indebtedness, interest rate, currency, or equity notional principal 12 contracts, foreign currencies, interests in, or derivative financial 13 instruments (including options, forward or futures contracts, short 14 positions, and similar financial instruments) in any property described 15 above, and any commodity traded on or subject to the rules of a board of 16 trade or commodity exchange, provided, however, property shall not 17 include: (i) debt instruments issued by the taxpayer; (ii) accounts 18 receivable held by a factor; (iii) property held as stock in trade, 19 inventory or otherwise held for sale to customers in the ordinary course 20 of the taxpayer's trade or business; (iv) debt instruments acquired in 21 the ordinary course of the taxpayer's trade or business for funds 22 loaned, services rendered or for the sale, rental or other transfer of 23 property by the taxpayer; (v) interests in unincorporated entities; or 24 (vi) positions in property described above entered into, assumed, 25 offset, assigned or terminated by a dealer with respect to such posi- 26 tions in property. 27 (B) Investor. For purposes of this subdivision, a taxpayer shall be 28 treated as acquiring, holding or disposing of an interest in an unincor- 29 porated entity as an investor if: (i) the unincorporated entity meets 30 the requirements of subparagraph (B) of paragraph four of this subdivi- 31 sion and the taxpayer does not receive a distributive share of such 32 entity's income, gain, loss, deduction, credit and basis from a business 33 carried on in whole or in part in the city that is materially greater 34 than its distributive share of any other item of income, gain, loss 35 deduction, credit or basis of such entity; or (ii) with respect to any 36 other unincorporated entity, the taxpayer is neither a general partner 37 nor authorized under the entity's governing instrument to manage or 38 participate in, nor managing, nor participating in, the day-to-day busi- 39 ness of the unincorporated entity. 40 (2) An individual or other unincorporated entity, except a dealer as 41 defined in subdivision (1) of section 11-501 of this chapter, shall not 42 be deemed engaged in an unincorporated business solely by reason of (A) 43 the purchase, holding and sale for his, her or its own account of prop- 44 erty, as defined in paragraph one of this subdivision, or the entry 45 into, assumption, offset, assignment, or other termination of a position 46 in any property so defined, or both, (B) the acquisition, holding or 47 disposition, other than in the ordinary course of a trade or business, 48 of interests in unincorporated entities engaged solely in activities 49 described in subparagraph (A), (B) or (C) of this paragraph, or (C) any 50 combination of the activities described in subparagraphs (A) and (B) of 51 this paragraph and any other activity not otherwise constituting the 52 conduct of an unincorporated business subject to the tax imposed by this 53 chapter, but this paragraph shall not apply if the unincorporated entity 54 is taxable as a corporation for federal income tax purposes. 55 (3) Notwithstanding anything to the contrary, the receipt by an indi- 56 vidual or other unincorporated entity of twenty-five thousand dollars or

S. 8578 349

1 less of gross receipts during the taxable year (determined without 2 regard to any deductions) from an unincorporated business wholly or 3 partly carried on within the city by such individual or unincorporated 4 entity shall not cause such individual or other unincorporated entity to 5 be treated as not engaged solely in the activities described in subpara- 6 graph (A), (B) or (C) of paragraph two of this subdivision. 7 (4) (A) If a taxpayer that is an unincorporated entity is primarily 8 engaged in (i) activities described in subparagraph (A), (B) or (C) of 9 paragraph two of this subdivision, or (ii) the acquisition, holding or 10 disposition, other than in the ordinary course of a trade or business, 11 of interests as an investor in unincorporated entities carrying on any 12 unincorporated business in whole or in part in the city, or both, the 13 activities described in subparagraph (A), (B), or (C) of paragraph two 14 of this subdivision carried on by the taxpayer or by any unincorporated 15 entity primarily engaged in the activities described in clause (i) or 16 (ii) of this subparagraph in which the taxpayer owns an interest shall 17 not be deemed an unincorporated business carried on by the taxpayer. 18 (B) For purposes of subparagraph (A) of this paragraph, an unincorpo- 19 rated entity will be treated as primarily engaged in activities 20 described in clause (i) or (ii) of subparagraph (A) of this paragraph, 21 or both, if at least ninety percent of the value of its total assets is 22 represented by assets described in subparagraph (C) of this paragraph. 23 (C) For purposes of subparagraph (B) of this paragraph, assets 24 described in this subparagraph include: 25 (i) property as defined in paragraph one of this subdivision; 26 (ii) interests in unincorporated entities not carrying on any unincor- 27 porated business in whole or in part in the city; and 28 (iii) interests in unincorporated entities carrying on an unincorpo- 29 rated business in whole or in part in the city held by the taxpayer as 30 an investor, as defined in paragraph one of this subdivision. 31 (D) For purposes of determining whether a taxpayer meets the require- 32 ments of subparagraph (B) of this paragraph, the value of assets 33 described in subparagraph (C) of this paragraph shall be the average 34 monthly gross value of the assets of the taxpayer. For purposes of this 35 paragraph, the value of assets of the taxpayer that consist of real 36 property or marketable securities shall be the fair market value thereof 37 and the value of assets other than real property or marketable securi- 38 ties shall be the value thereof shown on the books and records of the 39 taxpayer in accordance with generally accepted accounting principles. In 40 case it shall appear to the commissioner of finance that the use of 41 gross value in determining whether the requirements of subparagraph (B) 42 of this paragraph are met, improperly or inaccurately reflects the 43 taxpayer's primary activities, the commissioner of finance is authorized 44 in his or her discretion and in such manner as he or she may determine, 45 to reduce the gross value of the taxpayer's assets by liabilities 46 attributable thereto or to eliminate assets, so as to properly and accu- 47 rately reflect the taxpayer's primary activities. 48 (d) Holding, leasing or managing real property. An owner of real prop- 49 erty, a lessee or a fiduciary shall not be deemed engaged in an unincor- 50 porated business solely by reason of holding, leasing or managing real 51 property. If an owner of real property or lessee or fiduciary (except a 52 dealer holding real property primarily for sale to customers in the 53 ordinary course of his or her trade or business) who is holding, leasing 54 or managing real property is also carrying on an unincorporated business 55 in whole or in part in the city, whether or not such unincorporated 56 business is carried on at or is connected with such real property, such

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1 holding, leasing or managing of real property shall not be deemed an 2 unincorporated business if, and only to the extent that, such real prop- 3 erty is held, leased or managed for the purpose of producing rental 4 income from such real property or gain upon the sale or other disposi- 5 tion of such real property. For purposes of this subdivision, the 6 conduct by such owner, lessee or fiduciary, at such real property, of a 7 trade, business, profession or occupation, including, but not limited 8 to, a garage, restaurant, laundry or health club, shall be deemed to be 9 an incident to the holding, leasing or managing of such real property, 10 and shall not be deemed the conduct of an unincorporated business, if 11 such trade, business, profession or occupation is conducted solely for 12 the benefit of tenants at such real property, as an incidental service 13 to such tenants, and is not open or available to the general public, 14 provided, however, if any such owner, lessee or fiduciary operates a 15 garage, parking lot or other similar facility at such real property that 16 is open or available to the general public, the provision by any such 17 owner, lessee or fiduciary of the service of parking, garaging or stor- 18 ing of motor vehicles on a monthly or longer term basis shall be deemed 19 to be an incident to the holding, leasing or managing of such real prop- 20 erty, and shall not be deemed the conduct of an unincorporated business 21 if, and only to the extent that, such monthly or longer term parking, 22 garaging or storing service is provided to tenants at such real property 23 as an incidental service to such tenants. If an owner, lessee or fiduci- 24 ary holding, leasing or managing real property operates at such real 25 property a garage, parking lot or other similar facility that is open or 26 available to the public, each such owner, lessee or fiduciary shall 27 file, together with and as a part of the returns required under section 28 11-514 of this chapter, a report or schedule for each such garage, park- 29 ing lot or other similar facility, or in the discretion of the commis- 30 sioner, make a separate entry on such returns, identifying the specific 31 location and address, license number and licensed capacity of each such 32 garage, parking lot or other similar facility, and shall include such 33 additional information, data and other matters relating to the provision 34 of such monthly or longer term parking, garaging or storing service to 35 tenants as shall be prescribed by the commissioner of finance. If the 36 separate information required to be reported by any owner, lessee or 37 fiduciary holding, leasing or managing real property for any garage, 38 parking lot or other similar facility at such real property that is open 39 or available to the public is not contained in the returns required 40 under section 11-514 of this chapter, or in any amended returns, in any 41 material respect, the provision of parking, garaging or storing service 42 to tenants at such real property shall be deemed the conduct of an unin- 43 corporated business and not incident to the holding, leasing or managing 44 of such real property. 45 (e) Sales representative. An individual, other than one who maintains 46 an office or who employs one or more assistants or who otherwise regu- 47 larly carries on a business, shall not be deemed engaged in an unincor- 48 porated business solely by reason of selling goods, wares, merchandise 49 or insurance for more than one enterprise. For purposes of this subdi- 50 vision, space utilized solely for the display of merchandise and/or for 51 the maintenance and storage of records normally used in the course of 52 business shall not be deemed an office, and the employment of clerical 53 and secretarial assistance shall not be deemed the employment of assist- 54 ants. 55 (f) Exempt trusts and organizations. A trust or other unincorporated 56 organization which by reason of its purposes or activities is exempt

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1 from federal income tax shall not be deemed an unincorporated business 2 regardless of whether subject to federal income tax on unrelated busi- 3 ness taxable income. 4 § 11-503 Imposition of tax. (a) General. A tax at the rate of four 5 percent is hereby imposed for each taxable year, beginning with taxable 6 years ending after January first, nineteen hundred sixty-six, on the 7 unincorporated business taxable income of every unincorporated business 8 wholly or partly carried on within the city. This tax shall be in addi- 9 tion to any other taxes imposed. 10 (b) Credit against tax. (1) For each taxable year beginning after 11 nineteen hundred eighty-six but before nineteen hundred ninety-six: 12 (A) if the tax computed under subdivision (a) of this section is six 13 hundred dollars or less, a credit shall be allowed for the entire amount 14 of such tax; 15 (B) if the tax computed under subdivision (a) of this section exceeds 16 six hundred dollars but is less than eight hundred dollars, a credit 17 shall be allowed in the amount determined by multiplying such tax by a 18 fraction the numerator of which is eight hundred dollars minus the 19 amount of such tax and the denominator of which is two hundred dollars; 20 or 21 (C) if the tax computed under subdivision (a) of this section is eight 22 hundred dollars or more, no credit shall be allowed. 23 (2) For each taxable year beginning in nineteen hundred ninety-six: 24 (A) if the tax computed under subdivision (a) of this section is eight 25 hundred dollars or less, a credit shall be allowed for the entire amount 26 of such tax; 27 (B) if the tax computed under subdivision (a) of this section exceeds 28 eight hundred dollars but is less than one thousand dollars, a credit 29 shall be allowed in the amount determined by multiplying such tax by a 30 fraction the numerator of which is one thousand dollars minus the amount 31 of such tax and the denominator of which is two hundred dollars; or 32 (C) if the tax computed under subdivision (a) of this section is one 33 thousand dollars or more, no credit shall be allowed. 34 (3) For each taxable year beginning after nineteen hundred ninety-six 35 but before two thousand nine: 36 (A) if the tax computed under subdivision (a) of this section is one 37 thousand eight hundred dollars or less, a credit shall be allowed for 38 the entire amount of such tax; 39 (B) if the tax computed under subdivision (a) of this section exceeds 40 one thousand eight hundred dollars but is less than three thousand two 41 hundred dollars, a credit shall be allowed in the amount determined by 42 multiplying such tax by a fraction the numerator of which is three thou- 43 sand two hundred dollars minus the amount of such tax and the denomina- 44 tor of which is one thousand four hundred dollars; or 45 (C) if the tax computed under subdivision (a) of this section is three 46 thousand two hundred dollars or more, no credit shall be allowed. 47 (3-a) For each taxable year beginning after two thousand eight: 48 (A) if the tax computed under subdivision (a) of this section is three 49 thousand four hundred dollars or less, a credit shall be allowed for the 50 entire amount of such tax; 51 (B) if the tax computed under subdivision (a) of this section exceeds 52 three thousand four hundred dollars but is less than five thousand four 53 hundred dollars, a credit shall be allowed in the amount determined by 54 multiplying such tax by a fraction the numerator of which is five thou- 55 sand four hundred dollars minus the amount of such tax and the denomina- 56 tor of which is two thousand dollars; or

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1 (C) if the tax computed under subdivision (a) of this section is five 2 thousand four hundred dollars or more, no credit shall be allowed. 3 (4) If separate partnerships, joint ventures or other unincorporated 4 entities have substantially the same partners or members, each of such 5 partners or members has substantially the same interest in each of such 6 partnerships, joint ventures or other unincorporated entities, and such 7 partnerships, joint ventures or other unincorporated entities are 8 engaged in substantially the same business or businesses or in substan- 9 tially related businesses, all of such partnerships, joint ventures or 10 other unincorporated entities shall be treated as one unincorporated 11 business for purposes of this subdivision. The provisions of this para- 12 graph shall not be construed to limit or affect the meaning or applica- 13 tion of any other provision of this chapter. 14 (5) Notwithstanding anything to the contrary, the credit allowable 15 under this subdivision shall be taken prior to any other credit allowed 16 by this section. 17 (c) Credit relating to stock transfer tax. (1) In addition to any 18 other credit permitted under this section, a taxpayer shall be allowed a 19 credit, to be credited or refunded in the manner hereinafter provided in 20 this subdivision, against the tax imposed by this chapter after the 21 allowance of any other credit under this section. The amount of such 22 credit shall be fifty percent of the tax incurred in market making tran- 23 sactions under the provisions of article twelve of the tax law on such 24 transactions subject to such tax occurring on and after August first, 25 nineteen hundred seventy-six and paid by such taxpayer, except when such 26 tax shall have been paid pursuant to section two hundred seventy-nine-a 27 of the tax law. 28 (2) For purposes of this subdivision: 29 a. the term "taxpayer" shall mean any unincorporated business subject 30 to tax under this chapter registered with the United States securities 31 and exchange commission in accordance with subsection (b) of section 32 fifteen of the securities exchange act of nineteen hundred thirty-four, 33 as amended, and acting as a dealer in a transaction described in subpar- 34 agraph b of this paragraph, and 35 b. the term "market making transaction" shall mean any transaction 36 involving a sale, including a short sale, by a dealer of shares or 37 certificates subject to the tax imposed by article twelve of the tax 38 law, provided such shares or certificates are sold: 39 (i) as stock in trade or inventory or as property held for sale in the 40 ordinary course of such dealer's trade or business including transfers 41 which are part of an underwriting, 42 (ii) in (a) a bona fide arbitrage transaction; (b) a bona fide hedge 43 transaction involving a long or short position in any equity security 44 and a long or short position in a security entitling the holder to 45 acquire or sell such equity security; or (c) a risk arbitrage trans- 46 action in connection with a merger, acquisition, tender offer, recap- 47 italization, reorganization, or similar transaction, or 48 (iii) to offset a transaction made in error. 49 Provided, however, that, except as to subclause (c) of clause (ii) of 50 subparagraph b of this paragraph, the term "market making transaction" 51 shall not include any sale of shares or certificates identified in such 52 dealer's records as a security held for investment within the meaning of 53 section twelve hundred thirty-six of the internal revenue code. 54 (3) The credit allowed under this subdivision for any taxable year 55 shall be deemed to be an overpayment of tax by the taxpayer to be cred- 56 ited or refunded in accordance with the provisions of section 11-526 of

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1 this chapter, except as otherwise provided in subdivision (g) of 2 sections 11-512 and 11-514 of this chapter; provided, however, that the 3 provisions of this chapter notwithstanding, the amount to be refunded 4 pursuant to this subdivision shall not be paid prior to the first day of 5 the eighth month following the close of the taxable year, and the 6 provisions of subdivision (c) of section 11-528 of this chapter notwith- 7 standing, interest shall be allowed and paid on the overpayment of the 8 credit under this subdivision from the first day of the eleventh month 9 following the close of the taxable year, or three months after a claim 10 for the credit or refund provided for in this subdivision has been 11 filed, whichever is later. 12 (4) Provided, however, that the credit provided under this subdivi- 13 sion shall be allowed only to the extent that the amount of credit 14 allowable with respect to market making transactions under the 15 provisions of this subdivision (determined without regard to the 16 provisions of this paragraph) exceeds fifty percent of all rebates 17 (provided for under the provisions of section two hundred eighty-a of 18 article twelve of the tax law) allowed for such taxes incurred in the 19 same market making transactions with respect to which the credit is 20 determined. No credit shall be allowed under this subdivision with 21 respect to any tax incurred in market making transactions occurring on 22 or after October first, nineteen hundred eighty-one. 23 (d) Credit relating to certain sales and compensating use taxes. (1) 24 In addition to the credits allowed by subdivisions (b) and (c) of this 25 section, a taxpayer shall be allowed a credit against the tax imposed by 26 this chapter to be credited or refunded in the manner hereinafter 27 provided in this section. The amount of such credit shall be the excess 28 of (A) the amount of sales and compensating use taxes imposed by section 29 eleven hundred seven of the tax law during the taxpayer's taxable year 30 which became legally due on or after and was paid on or after July 31 first, nineteen hundred seventy-seven, less any credit or refund of such 32 taxes, with respect to the purchase or use by the taxpayer of machinery 33 or equipment for use or consumption directly and predominantly in the 34 production of tangible personal property, gas, electricity, refriger- 35 ation or steam for sale, by manufacturing, processing, generating, 36 assembling, refining, mining or extracting, or telephone central office 37 equipment or station apparatus or comparable telegraph equipment for use 38 directly and predominantly in receiving at destination or initiating and 39 switching telephone or telegraph communication, but not including parts 40 with a useful life of one year or less or tools or supplies used in 41 connection with such machinery, equipment or apparatus over (B) the 42 amount of any credit for such sales and compensating use taxes allowed 43 or allowable against the taxes imposed by subchapter two of chapter six 44 of this title, for any periods embraced within the taxable year of the 45 taxpayer under this chapter. 46 (2) The credit allowed under this section for any taxable year shall 47 be deemed to be an overpayment of tax by the taxpayer to be credited or 48 refunded, without interest, in accordance with the provisions of section 49 11-526 of this chapter. 50 (3) Where the taxpayer receives a refund or credit of any tax imposed 51 under section eleven hundred seven of the tax law for which the taxpayer 52 had claimed a credit under the provisions of this section in a prior 53 taxable year, the amount of such tax refund or credit shall be added to 54 the tax imposed by this section, and such amount shall be subtracted in 55 computing unincorporated business taxable income for the taxable year.

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1 (e) Credit relating to the annual increase in certain payments to a 2 landlord by a taxpayer relocating industrial and commercial employment 3 opportunities. (1) In addition to any other credit allowed by this 4 section, a taxpayer shall be allowed a credit against the tax imposed by 5 this chapter to be credited or refunded, without interest, in the manner 6 hereinafter provided in this section. 7 (A) Where a taxpayer shall have relocated to the city from a location 8 outside the state, and by such relocation shall have created a minimum 9 of one hundred industrial or commercial employment opportunities, and 10 where such taxpayer shall have entered into a written lease for the 11 relocation premises, the terms of which lease provide for increased 12 additional payments to the landlord which are based solely and directly 13 upon any increase or addition in real estate taxes imposed on the leased 14 premises, the taxpayer upon approval and certification by the industrial 15 and commercial incentive board as hereinafter provided shall be entitled 16 to a credit against the tax imposed by this chapter. The amount of such 17 credit shall be: An amount equal to the annual increased payments actu- 18 ally made by the taxpayer to the landlord which are solely and directly 19 attributable to an increase or addition to the real estate tax imposed 20 upon the leased premises. Such credit shall be allowed only to the 21 extent that the taxpayer has not otherwise claimed said amount as a 22 deduction against the tax imposed by this chapter. 23 The industrial and commercial incentive board in approving and certi- 24 fying to the qualifications of the taxpayer to receive the tax credit 25 provided for herein shall first determine that the applicant has met the 26 requirements of this section, and further, that the granting of the tax 27 credit to the applicant is in the "public interest." In determining 28 that the granting of the tax credit is in the public interest, the board 29 shall make affirmative findings that: the granting of the tax credit to 30 the applicant will not effect an undue hardship on similar taxpayers 31 already located within the city; the existence of this tax incentive has 32 been instrumental in bringing about the relocation of the applicant to 33 the city; and the granting of the tax credit will foster the economic 34 recovery and economic development of the city. 35 The tax credit, if approved and certified by the industrial and 36 commercial incentive board, must be utilized annually by the taxpayer 37 for the length of the term of the lease or for a period not to exceed 38 ten years from the date of relocation, whichever period is shorter. 39 (B) Definitions: When used in this section, "Employment opportunity" 40 means the creation of a full time position of gainful employment for an 41 industrial or commercial employee and the actual hiring of such employee 42 for the said position. 43 "Industrial employee" means one engaged in the manufacture or assembl- 44 ing of tangible goods or the processing of raw materials. 45 "Commercial employee" means one engaged in the buying, selling or 46 otherwise providing of goods or services other than on a retail basis. 47 "Retail" means the selling or otherwise disposing or furnishing of 48 tangible goods or services directly to the ultimate user or consumer. 49 "Full time position" means the hiring of an industrial or commercial 50 employee in a position of gainful employment where the number of hours 51 worked by such employee is not less than thirty hours during any given 52 week. 53 "Industrial and commercial incentive board" means the board created 54 pursuant to subchapter two of chapter two of this title. 55 (2) The credit allowed under this section for any taxable year shall 56 be deemed to be an overpayment of tax by the taxpayer to be credited or

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1 refunded, without interest, in accordance with the provisions of section 2 11-526 of this chapter. 3 (f) Credit relating to certain expenses involved in the cost of relo- 4 cating industrial and commercial employment opportunities. (1) In 5 addition to any other credit allowed by this section, a taxpayer shall 6 be allowed a credit against the tax imposed by this chapter to be cred- 7 ited or refunded in the manner hereinafter provided in this section. 8 The amount of such credit shall be: 9 (A) A maximum of three hundred dollars for each commercial employment 10 and a maximum of five hundred dollars for each industrial employment 11 opportunity relocated to the city from an area outside the state. Such 12 credit shall be allowed to a taxpayer who relocates a minimum of ten 13 employment opportunities. The credit shall be allowed against employment 14 opportunity relocation costs incurred by the taxpayer. Such credit shall 15 be allowed only to the extent that the taxpayer has not claimed a 16 deduction for allowable employment opportunity relocation costs. The 17 credit allowed hereunder may be taken by the taxpayer in whole or in 18 part in the year in which the employment opportunity is relocated by 19 such taxpayer or either of the two years succeeding such event; 20 provided, however, that no credit shall be allowed under this subdivi- 21 sion to a taxpayer for industrial employment opportunities relocated to 22 premises (i) that are within an industrial business zone established 23 pursuant to section 22-626 of the code of the preceding municipality and 24 (ii) for which a binding contract to purchase or lease was first entered 25 into by the taxpayer on or after July first, two thousand five. 26 The commissioner of finance is empowered to promulgate rules and regu- 27 lations and to prescribe the form of application to be used. 28 (B) Definitions: When used in this section, "Employment Opportunity" 29 means the creation of a full time position of gainful employment for an 30 industrial or commercial employee and the actual hiring of such employee 31 for the said position. 32 "Industrial Employee" means one engaged in the manufacture or assembl- 33 ing of tangible goods or the processing of raw materials. 34 "Commercial Employee" means one engaged in the buying, selling or 35 otherwise providing of goods or services other than on a retail basis. 36 "Retail" means the selling or otherwise disposing of tangible goods 37 directly to the ultimate user or consumer. 38 "Full Time Position" means the hiring of an industrial or commercial 39 employee in a position of gainful employment where the number of hours 40 worked by such employee is not less than thirty hours during any given 41 work week. 42 "Employment Opportunity Relocation Costs" means the costs incurred by 43 the taxpayer in moving furniture, files, papers and office equipment 44 into the city from a location outside the state; the costs incurred by 45 the taxpayer in the moving from a location outside the state; the costs 46 of installation of telephones and other communications equipment 47 required as a result of the relocation to the city from a location 48 outside the state; the cost incurred in the purchase of office furniture 49 and fixtures required as a result of the relocation to the city from a 50 location outside the state; and the cost of renovation of the premises 51 to be occupied as a result of the relocation provided, however, that 52 such renovation costs shall be allowable only to the extent that they do 53 not exceed seventy-five cents per square foot of the total area utilized 54 by the taxpayer in the occupied premises. 55 (2) The credit allowed under this section for any taxable year shall 56 be deemed to be an overpayment of tax by the taxpayer to be credited or

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1 refunded without interest, in accordance with the provisions of section 2 11-526 of this chapter. 3 (i) Relocation and employment assistance credit. (1) In addition to 4 any other credit allowed by this section, a taxpayer that has obtained 5 the certifications required by chapter six-B of title twenty-two of the 6 code of the preceding municipality shall be allowed a credit against the 7 tax imposed by this chapter. The amount of the credit shall be the 8 amount determined by multiplying five hundred dollars or, in the case of 9 a taxpayer that has obtained pursuant to chapter six-B of such title 10 twenty-two a certification of eligibility dated on or after July first, 11 nineteen hundred ninety-five, one thousand dollars or, in the case of an 12 eligible business that has obtained pursuant to chapter six-B of such 13 title twenty-two a certification of eligibility dated on or after July 14 first, two thousand, for a relocation to eligible premises located with- 15 in a revitalization area defined in subdivision (n) of section 22-621 of 16 the code of the preceding municipality, three thousand dollars, by the 17 number of eligible aggregate employment shares maintained by the taxpay- 18 er during the taxable year with respect to particular premises to which 19 the taxpayer has relocated; provided, however, with respect to a relo- 20 cation for which no application for a certificate of eligibility is 21 submitted prior to July first, two thousand three, to eligible premises 22 that are not within a revitalization area, if the date of such relo- 23 cation as determined pursuant to subdivision (j) of section 22-621 of 24 the code of the preceding municipality is before July first, nineteen 25 hundred ninety-five, the amount to be multiplied by the number of eligi- 26 ble aggregate employment shares shall be five hundred dollars, and with 27 respect to a relocation for which no application for a certificate of 28 eligibility is submitted prior to July first, two thousand three, to 29 eligible premises that are within a revitalization area, if the date of 30 such relocation as determined pursuant to subdivision (j) of such 31 section is before July first, nineteen hundred ninety-five, the amount 32 to be multiplied by the number of eligible aggregate employment shares 33 shall be five hundred dollars, and if the date of such relocation as 34 determined pursuant to subdivision (j) of such section is on or after 35 July first, nineteen hundred ninety-five, and before July first, two 36 thousand, one thousand dollars; provided, however, that no credit shall 37 be allowed for the relocation of any retail activity or hotel services; 38 provided, further, that no credit shall be allowed under this subdivi- 39 sion to any taxpayer that has elected pursuant to subdivision (d) of 40 section 22-622 of the code of the preceding municipality to take such 41 credit against a gross receipts tax imposed under chapter eleven of this 42 title; and provided that in the case of an eligible business that has 43 obtained pursuant to chapter six-B of such title twenty-two certif- 44 ications of eligibility for more than one relocation, the portion of the 45 total amount of eligible aggregate employment shares to be multiplied by 46 the dollar amount specified in this paragraph for each such certif- 47 ication of a relocation shall be the number of total attributed eligible 48 aggregate employment shares determined with respect to such relocation 49 pursuant to subdivision (o) of section 22-621 of the code of the preced- 50 ing municipality. For purposes of this subdivision, the terms "eligible 51 aggregate employment shares," "relocate," "retail activity" and "hotel 52 services" shall have the meanings ascribed by section 22-621 of the code 53 of the preceding municipality. 54 (2) The credit allowed under this subdivision with respect to eligible 55 aggregate employment shares maintained with respect to particular prem- 56 ises to which the taxpayer has relocated shall be allowed for the first

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1 taxable year during which such eligible aggregate employment shares are 2 maintained with respect to such premises and for any of the twelve 3 succeeding taxable years during which eligible aggregate employment 4 shares are maintained with respect to such premises; provided that the 5 credit allowed for the twelfth succeeding taxable year shall be calcu- 6 lated by multiplying the number of eligible aggregate employment shares 7 maintained with respect to such premises in the twelfth succeeding taxa- 8 ble year by the lesser of one and a fraction the numerator of which is 9 such number of days in the taxable year of relocation less the number of 10 days the eligible business maintained employment shares in the eligible 11 premises in the taxable year of relocation and the denominator of which 12 is the number of days in such twelfth succeeding taxable year during 13 which such eligible aggregate employment shares are maintained with 14 respect to such premises. Except as provided in paragraph four of this 15 subdivision, if the amount of the credit allowable under this subdivi- 16 sion for any taxable year exceeds the tax imposed for such year, the 17 excess may be carried over, in order, to the five immediately succeeding 18 taxable years and, to the extent not previously deductible, may be 19 deducted from the taxpayer's tax for such years. 20 (3) The credit allowable under this subdivision shall be deducted 21 after the credits allowed by subdivisions (b) and (j) of this section, 22 but prior to the deduction of any other credit allowed by this section. 23 (4) In the case of a taxpayer that has obtained a certification of 24 eligibility pursuant to chapter six-B of title twenty-two of the code of 25 the preceding municipality dated on or after July first, two thousand 26 for a relocation to eligible premises located within the revitalization 27 area defined in subdivision (n) of section 22-621 of the code of the 28 preceding municipality, the credits allowed under this subdivision, or 29 in the case of a taxpayer that has relocated more than once, the portion 30 of such credits attributed to such certification of eligibility pursuant 31 to paragraph one of this subdivision, against the tax imposed by this 32 chapter for the taxable year of such relocation and for the four taxable 33 years immediately succeeding the taxable year of such relocation, shall 34 be deemed to be overpayments of tax by the taxpayer to be credited or 35 refunded, without interest, in accordance with the provisions of section 36 11-526 of this chapter. For such taxable years, such credits or portions 37 thereof may not be carried over to any succeeding taxable year; 38 provided, however, that this paragraph shall not apply to any relocation 39 for which an application for a certification of eligibility was not 40 submitted prior to July first, two thousand three, unless the date of 41 such relocation is on or after July first, two thousand. 42 (j) (1) If a partner in an unincorporated business is taxable under 43 this chapter and is required to include in unincorporated business taxa- 44 ble income his, her or its distributive share of income, gain, loss and 45 deductions of, or guaranteed payments from, such unincorporated busi- 46 ness, such partner shall be allowed a credit against the tax imposed by 47 this chapter equal to the lesser of the amounts determined in subpara- 48 graphs (A) and (B) of this paragraph: 49 (A) The amount determined in this subparagraph is the product of (i) 50 the sum of (I) the tax imposed by this chapter on the unincorporated 51 business for its taxable year ending within or with the taxable year of 52 the partner and paid by the unincorporated business and (II) the amount 53 of any credit or credits taken by the unincorporated business under this 54 section (except the credit allowed by subdivision (b) of this section) 55 for its taxable year ending within or with the taxable year of the part- 56 ner, to the extent that such credits do not reduce such unincorporated

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1 business's tax below zero, and (ii) a fraction, the numerator of which 2 is the net total of the partner's distributive share of income, gain, 3 loss and deductions of, and guaranteed payments from, the unincorporated 4 business for such taxable year, and the denominator of which is the sum, 5 for such taxable year, of the net total distributive shares of income, 6 gain, loss and deductions of, and guaranteed payments to, all partners 7 in the unincorporated business for whom or which such net total, as 8 separately determined for each partner, is greater than zero. 9 (B) The amount determined in this subparagraph is the difference 10 between (i) the tax computed pursuant to this chapter on the unincorpo- 11 rated business taxable income of the partner, without allowance of any 12 credits allowed by this section, and (ii) the tax so computed, deter- 13 mined as if the partner had no such distributive share or guaranteed 14 payments with respect to the unincorporated business, provided, however, 15 that the amounts computed in clauses (i) and (ii) of this subparagraph 16 shall be computed with the following modifications: 17 (I) such amounts shall be computed without taking into account any 18 carryforward or carryback by the partner of a net operating loss; 19 (II) if, prior to taking into account any distributive share or guar- 20 anteed payments from any unincorporated business or any net operating 21 loss carryforward or carryback, the unincorporated business taxable 22 income of the partner is less than zero, such unincorporated business 23 taxable income shall be treated as zero; and 24 (III) if such partner's net total distributive share of income, gain, 25 loss and deductions of, and guaranteed payments from, any unincorporated 26 business is less than zero, such net total shall be treated as zero. The 27 amount determined in this subparagraph shall not be less than zero. 28 (2) (A) Notwithstanding anything to the contrary in paragraph one of 29 this subdivision, the credit or the sum of the credits that may be taken 30 by a partner for a taxable year under this subdivision with respect to 31 an unincorporated business or unincorporated businesses in which he, she 32 or it is a partner shall not exceed the tax imposed on the unincorporat- 33 ed business taxable income of such partner under this chapter for such 34 taxable year reduced by the credit allowed under subdivision (b) of this 35 section. If the credit allowed under paragraph one of this subdivision 36 or the sum of such credits exceeds such tax as so reduced, the amount of 37 the excess may be carried forward, in order, to each of the seven imme- 38 diately succeeding taxable years and, to the extent not previously 39 taken, shall be allowed as a credit in each of such years, provided, the 40 credit determined for the taxable year under paragraph one of this 41 subdivision shall be taken before taking any credit carryforward pursu- 42 ant to this paragraph and the credit carryforward attributable to the 43 earliest taxable year shall be taken before taking a credit carryforward 44 attributable to a subsequent taxable year. 45 (B) Notwithstanding anything to the contrary in subparagraph (A) of 46 this paragraph, in the case of a partner which is a partnership, no 47 credit carryforward to any taxable year shall be allowed unless one or 48 more of the partners therein during such taxable year were persons 49 having a proportionate interest or interests, amounting to at least 50 eighty percent of all such interests, in the unincorporated business 51 gross income and unincorporated business deductions of the partnership 52 which was allowed the credit for which a carryforward is claimed. In 53 such event, the carryforward allowable on account of such credit shall 54 not exceed the percentage of the amount otherwise allowable, determined 55 by dividing (i) the sum of the proportionate interests in the unincorpo- 56 rated business gross income and unincorporated business deductions of

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1 the partnership, for the year to which the credit is carried forward, 2 attributable to such partners, by (ii) the sum of such proportionate 3 interests owned by all partners for such taxable year. The amount by 4 which the carryforward otherwise allowable exceeds the amount allowable 5 pursuant to this subparagraph shall not be a carryforward to any other 6 taxable year. 7 (3) The credit allowed under this subdivision shall not be allowed to 8 a partner in an unincorporated business with respect to any tax paid by 9 the unincorporated business under this chapter for any taxable year 10 beginning before July first, nineteen hundred ninety-four. 11 (4) Notwithstanding anything to the contrary, the credit allowable 12 under this subdivision shall be taken after the credit allowed by subdi- 13 vision (b) of this section is taken, but before any other credit allowed 14 by this section is taken. 15 (5) The commissioner of finance of the city of Staten Island shall 16 convene a working group, consisting of representatives of the department 17 of finance of the city of Staten Island and representatives of affected 18 industries, and other persons the commissioner deems appropriate, to 19 study the treatment under the unincorporated business tax of income from 20 investment and real estate activities and the impact of the credit 21 permitted by this subdivision, including but not limited to cases where 22 interests in a taxpayer are held by another taxpayer subject to tax on 23 unincorporated business taxable income and the first taxpayer is enti- 24 tled to claim a deduction for a net operating loss carryover and the 25 second is not entitled to a corresponding deduction with the result, in 26 certain cases, that the net income allocated to the second taxpayer may 27 be subject to an effective rate of tax in excess of the rate imposed by 28 this chapter. In addition, the working group shall also study the tax 29 treatment of parking garages which are open or available to the general 30 public and which also provide available space to tenants. In conducting 31 such study, such working group shall take into account such factors as 32 economic development, tax administration and other goals of tax policy 33 and shall consider alternatives that would reduce disincentives for 34 investing in corporations and other entities engaged in business in the 35 city of Staten Island, such as exempting income from investment activ- 36 ities from the tax on unincorporated business taxable income. The 37 commissioner shall prepare a report based on the deliberations of the 38 working group on or before April fifteenth, nineteen hundred ninety- 39 five. 40 (k) Credit relating to certain sales and compensating use taxes on 41 certain services. (1) In addition to any other credit allowed by this 42 section, a taxpayer shall be allowed a credit against the tax imposed by 43 this chapter to be credited or refunded in the manner hereinafter 44 provided in this subdivision. The amount of such credit shall be equal 45 to the amount of sales and compensating use taxes imposed by section 46 eleven hundred seven of the tax law during the taxpayer's taxable year, 47 and the amount of any interest imposed in connection therewith, which 48 was paid after January first, nineteen hundred ninety-five, less any 49 credit or refund of such taxes (or such interest), with respect to the 50 purchase or use by the taxpayer of the services described in subdivision 51 (b) of section eleven hundred five-b of the tax law. 52 (2) The credit allowed under this subdivision for any taxable year 53 shall be deemed to be an overpayment of tax by the taxpayer to be cred- 54 ited or refunded, without interest, in accordance with the provisions of 55 section 11-526 of this chapter.

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1 (3) Where the taxpayer receives a refund or credit of any tax imposed 2 under section eleven hundred seven of the tax law, or of any interest 3 imposed in connection therewith, for which the taxpayer had claimed a 4 credit under this subdivision in a prior taxable year, the amount of 5 such tax, or such interest, refund or credit shall be added to the tax 6 imposed by this chapter, and such amount shall be subtracted in comput- 7 ing unincorporated business taxable income for the taxable year. 8 (l) Lower Manhattan relocation and employment assistance credit. (1) 9 In addition to any other credit allowed by this section, a taxpayer that 10 has obtained the certifications required by chapter six-C of title twen- 11 ty-two of the code of the preceding municipality shall be allowed a 12 credit against the tax imposed by this chapter. The amount of the credit 13 shall be the amount determined by multiplying three thousand dollars by 14 the number of eligible aggregate employment shares maintained by the 15 taxpayer during the taxable year with respect to eligible premises to 16 which the taxpayer has relocated; provided, however, that no credit 17 shall be allowed for the relocation of any retail activity or hotel 18 services; provided, further, that no credit shall be allowed under this 19 subdivision to any taxpayer that has elected pursuant to subdivision (d) 20 of section 22-624 of the code of the preceding municipality to take such 21 credit against a gross receipts tax imposed under chapter eleven of this 22 title. For purposes of this subdivision, the terms "eligible aggregate 23 employment shares", "eligible premises", "relocate", "retail activity" 24 and "hotel services" shall have the meanings ascribed by section 22-623 25 of the code of the preceding municipality. 26 (2) The credit allowed under this subdivision with respect to eligible 27 aggregate employment shares maintained with respect to eligible premises 28 to which the taxpayer has relocated shall be allowed for the taxable 29 year of the relocation and for any of the twelve succeeding taxable 30 years during which eligible aggregate employment shares are maintained 31 with respect to eligible premises; provided that the credit allowed for 32 the twelfth succeeding taxable year shall be calculated by multiplying 33 the number of eligible aggregate employment shares maintained with 34 respect to eligible premises in the twelfth succeeding taxable year by 35 the lesser of one and a fraction the numerator of which is such number 36 of days in the taxable year of relocation less the number of days the 37 taxpayer maintained employment shares in eligible premises in the taxa- 38 ble year of relocation and the denominator of which is the number of 39 days in such twelfth succeeding taxable year during which such eligible 40 aggregate employment shares are maintained with respect to such prem- 41 ises. 42 (3) Except as provided in paragraph four of this subdivision, if the 43 amount of the credit allowable under this subdivision for any taxable 44 year exceeds the tax imposed for such year, the excess may be carried 45 over, in order, to the five immediately succeeding taxable years and, to 46 the extent not previously deductible, may be deducted from the taxpay- 47 er's tax for such years. 48 (4) The credits allowed under this subdivision, against the tax 49 imposed by this chapter for the taxable year of the relocation and for 50 the four taxable years immediately succeeding the taxable year of such 51 relocation, shall be deemed to be overpayments of tax by the taxpayer to 52 be credited or refunded, without interest, in accordance with the 53 provisions of section 11-526 of this chapter. For such taxable years, 54 such credits or portions thereof may not be carried over to any succeed- 55 ing taxable year.

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1 (5) The credit allowable under this subdivision shall be deducted 2 after the credits allowed by subdivisions (b), (i) and (j) of this 3 section, but prior to the deduction of any other credit allowed by this 4 section. 5 (n) Industrial business zone tax credit. (1) For taxable years begin- 6 ning on or after January first, two thousand six, in addition to any 7 other credit allowed by this section, an eligible business that first 8 enters into a binding contract on or after July first, two thousand five 9 to purchase or lease eligible premises to which it relocates shall be 10 allowed a one-time credit against the tax imposed by this chapter to be 11 credited or refunded in the manner hereinafter provided in this subdivi- 12 sion. The amount of such credit shall be one thousand dollars per full- 13 time employee; provided, however, that the amount of such credit shall 14 not exceed the lesser of actual relocation costs or one hundred thousand 15 dollars. 16 (2) When used in this subdivision, the following terms shall have the 17 following meanings: 18 "Eligible business" means any business subject to tax under this chap- 19 ter that (A) has been conducting substantial business operations and 20 engaging primarily in industrial and manufacturing activities at one or 21 more locations within the city of Staten Island or outside the state of 22 New York continuously during the twenty-four consecutive full months 23 immediately preceding relocation, (B) has leased the premises from which 24 it relocates continuously during the twenty-four consecutive full months 25 immediately preceding relocation, (C) first enters into a binding 26 contract on or after July first, two thousand five to purchase or lease 27 eligible premises to which such business will relocate, and (D) will be 28 engaged primarily in industrial and manufacturing activities at such 29 eligible premises. 30 "Eligible premises" means premises located entirely within an indus- 31 trial business zone. For any eligible business, an industrial business 32 zone tax credit shall not be granted with respect to more than one 33 eligible premises. 34 "Full-time employee" means (A) one person gainfully employed in an 35 eligible premises by an eligible business where the number of hours 36 required to be worked by such person is not less than thirty-five hours 37 per week; or (B) two persons gainfully employed in an eligible premises 38 by an eligible business where the number of hours required to be worked 39 by each such person is more than fifteen hours per week but less than 40 thirty-five hours per week. 41 "Industrial business zone" means an area within the city of Staten 42 Island established pursuant to section 22-626 of the code of the preced- 43 ing municipality. 44 "Industrial business zone tax credit" means a credit, as provided for 45 in this subdivision, against a tax imposed under this chapter. 46 "Industrial and manufacturing activities" means activities involving 47 the assembly of goods to create a different article, or the processing, 48 fabrication, or packaging of goods. Industrial and manufacturing activ- 49 ities shall not include waste management or utility services. 50 "Relocation" means the physical relocation of furniture, fixtures, 51 equipment, machinery and supplies directly to an eligible premises, from 52 one or more locations of an eligible business, including at least one 53 location at which such business conducts substantial business operations 54 and engages primarily in industrial and manufacturing activities. For 55 purposes of this subdivision, the date of relocation shall be (A) the 56 date of the completion of the relocation to the eligible premises or (B)

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1 ninety days from the commencement of the relocation to the eligible 2 premises, whichever is earlier. 3 "Relocation costs" means costs incurred in the relocation of such 4 furniture, fixtures, equipment, machinery and supplies, including, but 5 not limited to, the cost of dismantling and reassembling equipment and 6 the cost of floor preparation necessary for the reassembly of the equip- 7 ment. Relocation costs shall include only such costs that are incurred 8 during the ninety-day period immediately following the commencement of 9 the relocation to an eligible premises. Relocation costs shall not 10 include any costs for structural or capital improvements or items 11 purchased in connection with the relocation. 12 (3) The credit allowed under this subdivision for any taxable year 13 shall be deemed to be an overpayment of tax by the taxpayer to be cred- 14 ited or refunded without interest, in accordance with the provisions of 15 section 11-526 of this chapter. 16 (4) The number of full-time employees for the purposes of calculating 17 an industrial business zone tax credit shall be the average number of 18 full-time employees, calculated on a weekly basis, employed in the 19 eligible premises by the eligible business in the fifty-two week period 20 immediately following relocation. 21 (5) The credit allowed under this subdivision must be taken by the 22 taxpayer in the taxable year in which such fifty-two week period ends. 23 (6) For the purposes of calculating entire net income in the taxable 24 year that an industrial business zone tax credit is allowed, a taxpayer 25 must add back the amount of the credit allowed under this subdivision, 26 to the extent of any relocation costs deducted in the current taxable 27 year or a prior taxable year in calculating federal taxable income. 28 (7) The credit allowed under this subdivision shall not be granted for 29 an eligible business for more than one relocation. Notwithstanding the 30 foregoing, an industrial business zone tax credit allowed under this 31 subdivision shall not be granted if the eligible business receives bene- 32 fits pursuant to chapter six-B or six-C of title twenty-two of the code 33 of the preceding municipality, through a grant program administered by 34 the business relocation assistance corporation, or through the Staten 35 Island city printers relocation fund grant. 36 (8) The commissioner of finance is authorized to promulgate rules and 37 regulations and to prescribe forms necessary to effectuate the purposes 38 of this subdivision. 39 The commissioner of finance is empowered to promulgate rules and regu- 40 lations and to prescribe the form of application to be used. 41 (B) Definitions: When used in this section, "Employment Opportunity" 42 means the creation of a full time position of gainful employment for an 43 industrial or commercial employee and the actual hiring of such employee 44 for the said position. 45 "Industrial Employee" means one engaged in the manufacture or assembl- 46 ing of tangible goods or the processing of raw materials. 47 "Commercial Employee" means one engaged in the buying, selling or 48 otherwise providing of goods or services other than on a retail basis. 49 "Retail" means the selling or otherwise disposing of tangible goods 50 directly to the ultimate user or consumer. 51 "Full Time Position" means the hiring of an industrial or commercial 52 employee in a position of gainful employment where the number of hours 53 worked by such employee is not less than thirty hours during any given 54 work week. 55 "Employment Opportunity Relocation Costs" means the costs incurred by 56 the taxpayer in moving furniture, files, papers and office equipment

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1 into the city from a location outside the state; the costs incurred by 2 the taxpayer in the moving from a location outside the state; the costs 3 of installation of telephones and other communications equipment 4 required as a result of the relocation to the city from a location 5 outside the state; the cost incurred in the purchase of office furniture 6 and fixtures required as a result of the relocation to the city from a 7 location outside the state; and the cost of renovation of the premises 8 to be occupied as a result of the relocation provided, however, that 9 such renovation costs shall be allowable only to the extent that they do 10 not exceed seventy-five cents per square foot of the total area utilized 11 by the taxpayer in the occupied premises. 12 (2) The credit allowed under this section for any taxable year shall 13 be deemed to be an overpayment of tax by the taxpayer to be credited or 14 refunded without interest, in accordance with the provisions of section 15 11-526 of this chapter. 16 (o) Biotechnology credit. (a)(1) A taxpayer that is a qualified emerg- 17 ing technology company, engages in biotechnologies, and meets the eligi- 18 bility requirements of this subdivision, shall be allowed a credit 19 against the tax imposed by this subchapter. The amount of credit shall 20 be equal to the sum of the amounts specified in subparagraphs three, 21 four and five of this paragraph, subject to the limitations in subpara- 22 graph seven of this paragraph and paragraph (b) of this subdivision. For 23 the purposes of this subdivision, "qualified emerging technology compa- 24 ny" shall mean a company located in city: (A) whose primary products or 25 services are classified as emerging technologies and whose total annual 26 product sales are ten million dollars or less; or (B) a company that has 27 research and development activities in city and whose ratio of research 28 and development funds to net sales equals or exceeds the average ratio 29 for all surveyed companies classified as determined by the National 30 Science Foundation in the most recent published results from its Survey 31 of Industry Research and Development, or any comparable successor survey 32 as determined by the department, and whose total annual product sales 33 are ten million dollars or less. For the purposes of this subdivision, 34 the definition of research and development funds shall be the same as 35 that used by the National Science Foundation in the aforementioned 36 survey. For the purposes of this subdivision, "biotechnologies" shall 37 mean the technologies involving the scientific manipulation of living 38 organisms, especially at the molecular and/or the sub-molecular genetic 39 level, to produce products conducive to improving the lives and health 40 of plants, animals, and humans; and the associated scientific research, 41 pharmacological, mechanical, and computational applications and services 42 connected with these improvements. Activities included with such appli- 43 cations and services shall include, but not be limited to, alternative 44 mRNA splicing, DNA sequence amplification, antigenetic switching bioaug- 45 mentation, bioenrichment, bioremediation, chromosome walking, cytogenet- 46 ic engineering, DNA diagnosis, fingerprinting, and sequencing, electro- 47 poration, gene translocation, genetic mapping, site-directed 48 mutagenesis, bio-transduction, bio-mechanical and bio-electrical engi- 49 neering, and bio-informatics. 50 (2) An eligible taxpayer shall (A) have no more than one hundred full- 51 time employees, of which at least seventy-five percent are employed in 52 the city, (B) have a ratio of research and development funds to net 53 sales, as referred to in section thirty-one hundred two-e of the public 54 authorities law, which equals or exceeds six percent during the calendar 55 year ending with or within the taxable year for which the credit is 56 claimed, and (C) have gross revenues, along with the gross revenues of

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1 its "affiliates" and "related members" not exceeding twenty million 2 dollars for the calendar year immediately preceding the calendar year 3 ending with or within the taxable year for which the credit is claimed. 4 For the purposes of this subdivision, "affiliates" shall mean those 5 corporations that are members of the same affiliated group, as defined 6 in section fifteen hundred four of the internal revenue code, as the 7 taxpayer. For the purposes of this subdivision, "related members" shall 8 mean a person, corporation, or other entity, including an entity that is 9 treated as a partnership or other pass-through vehicle for purposes of 10 federal taxation, whether such person, corporation or entity is a 11 taxpayer or not, where one such person, corporation or entity, or set of 12 related persons, corporations or entities, directly or indirectly owns 13 or controls a controlling interest in another entity. Such entity or 14 entities may include all taxpayers under chapters six, eleven and seven- 15 teen of this title, and subchapters two and three of this chapter. A 16 controlling interest shall mean, in the case of a corporation, either 17 thirty percent or more of the total combined voting power of all classes 18 of stock of such corporation, or thirty percent or more of the capital, 19 profits or beneficial interest in such voting stock of such corporation; 20 and in the case of a partnership, association, trust or other entity, 21 thirty percent or more of the capital, profits or beneficial interest in 22 such partnership, association, trust or other entity. 23 (3) An eligible taxpayer shall be allowed a credit for eighteen per 24 centum of the cost or other basis for federal income tax purposes of 25 research and development property that is acquired by the taxpayer by 26 purchase as defined in section 179(d) of the internal revenue code and 27 placed in service during the calendar year that ends with or within the 28 taxable year for which the credit is claimed. Provided, however, for the 29 purposes of this paragraph only, an eligible taxpayer shall be allowed a 30 credit for such percentage of the (A) cost or other basis for federal 31 income tax purposes for property used in the testing or inspection of 32 materials and products, (B) the costs or expenses associated with quali- 33 ty control of the research and development, (C) fees for use of sophis- 34 ticated technology facilities and processes, (D) fees for the production 35 or eventual commercial distribution of materials and products resulting 36 from the activities of an eligible taxpayer as long as such activities 37 fall under activities relating to biotechnologies. The costs, expenses 38 and other amounts for which a credit is allowed and claimed under this 39 paragraph shall not be used in the calculation of any other credit 40 allowed under this subchapter. For the purposes of this subdivision, 41 "research and development property" shall mean property that is used for 42 purposes of research and development in the experimental or laboratory 43 sense. Such purposes shall not be deemed to include the ordinary testing 44 or inspection of materials or products for quality control, efficiency 45 surveys, management studies, consumer surveys, advertising, promotions, 46 or research in connection with literary, historical or similar projects. 47 (4) An eligible taxpayer shall be allowed a credit for nine per centum 48 of qualified research expenses paid or incurred by the taxpayer in the 49 calendar year ending with or within the taxable year for which the cred- 50 it is claimed. For the purposes of this subdivision, "qualified research 51 expenses" shall mean expenses associated with in-house research and 52 processes, and costs associated with the dissemination of the results of 53 the products that directly result from such research and development 54 activities; provided, however, that such costs shall not include adver- 55 tising or promotion through media. In addition, costs associated with 56 the preparation of patent applications, patent application filing fees,

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1 patent research fees, patent examinations fees, patent post allowance 2 fees, patent maintenance fees, and grant application expenses and fees 3 shall qualify as qualified research expenses. In no case shall the cred- 4 it allowed under this paragraph apply to expenses for litigation or the 5 challenge of another entity's intellectual property rights, or for 6 contract expenses involving outside paid consultants. 7 (5) An eligible taxpayer shall be allowed a credit for qualified high- 8 technology training expenditures as described in this paragraph paid or 9 incurred by the taxpayer during the calendar year that ends with or 10 within the taxable year for which the credit is claimed. 11 (A) The amount of credit shall be one hundred percent of the training 12 expenses described in subparagraph (C) of this paragraph, subject to a 13 limitation of no more than four thousand dollars per employee per calen- 14 dar year for such training expenses. 15 (B) Qualified high-technology training shall include a course or 16 courses taken and satisfactorily completed by an employee of the taxpay- 17 er at an accredited, degree granting post-secondary college or universi- 18 ty in city that (i) directly relates to biotechnology activities, and 19 (ii) is intended to upgrade, retrain or improve the productivity or 20 theoretical awareness of the employee. Such course or courses may 21 include, but are not limited to, instruction or research relating to 22 techniques, meta, macro, or micro-theoretical or practical knowledge 23 bases or frontiers, or ethical concerns related to such activities. Such 24 course or courses shall not include classes in the disciplines of 25 management, accounting or the law or any class designed to fulfill the 26 discipline specific requirements of a degree program at the associate, 27 baccalaureate, graduate or professional level of these disciplines. 28 Satisfactory completion of a course or courses shall mean the earning 29 and granting of credit or equivalent unit, with the attainment of a 30 grade of "B" or higher in a graduate level course or courses, a grade of 31 "C" or higher in an undergraduate level courses or courses, or a similar 32 measure of competency for a course that is not measured according to a 33 standard grade formula. 34 (C) Qualified high-technology training expenditures shall include 35 expenses for tuition and mandatory fees, software required by the insti- 36 tution, fees for textbooks or other literature required by the institu- 37 tion offering the course or courses, minus applicable scholarships and 38 tuition or fee waivers not granted by the taxpayer or any affiliates of 39 the taxpayer, that are paid or reimbursed by the taxpayer. Qualified 40 high-technology expenditures do not include room and board, computer 41 hardware or software not specifically assigned for such course or cours- 42 es, late-charges, fines or membership dues and similar expenses. Such 43 qualified expenditures shall not be eligible for the credit provided by 44 this section unless the employee for whom the expenditures are disbursed 45 is continuously employed by the taxpayer in a full-time, full-year posi- 46 tion primarily located at a qualified site during the period of such 47 coursework and lasting through at least one hundred eighty days after 48 the satisfactory completion of the qualifying course-work. Qualified 49 high-technology training expenditures shall not include expenses for 50 in-house or shared training outside of a city higher education institu- 51 tion or the use of consultants outside of credit granting courses, 52 whether such consultants function inside of such higher education insti- 53 tution or not. 54 (D) If a taxpayer relocates from an academic business incubator facil- 55 ity partnered with an accredited post-secondary education institution 56 located within city, which provides space and business support services

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1 to taxpayers, to another site, the credit provided in this subdivision 2 shall be allowed for all expenditures referenced in subparagraph (C) of 3 this paragraph paid or incurred in the two preceding calendar years that 4 the taxpayer was located in such an incubator facility for employees of 5 the taxpayer who also relocate from said incubator facility to such city 6 site and are employed and primarily located by the taxpayer in city. 7 Such expenditures in the two preceding years shall be added to the 8 amounts otherwise qualifying for the credit provided by this subdivision 9 that were paid or incurred in the calendar year that the taxpayer relo- 10 cates from such a facility. Such expenditures shall include expenses 11 paid for an eligible employee who is a full-time, full-year employee of 12 said taxpayer during the calendar year that the taxpayer relocated from 13 an incubator facility notwithstanding (i) that such employee was 14 employed full or part-time as an officer, staff-person or paid intern of 15 the taxpayer when such taxpayer was located at such incubator facility 16 or (ii) that such employee was not continuously employed when such 17 taxpayer was located at the incubator facility during the one hundred 18 eighty day period referred to in subparagraph (C) of this paragraph, 19 provided such employee received wages or equivalent income for at least 20 seven hundred fifty hours during any twenty-four month period when the 21 taxpayer was located at the incubator facility. Such expenditures shall 22 include payments made to such employee after the taxpayer has relocated 23 from the incubator facility for qualified expenditures if such payments 24 are made to reimburse an employee for expenditures paid by the employee 25 during such two preceding years. The credit provided under this para- 26 graph shall be allowed in any taxable year that the taxpayer qualifies 27 as an eligible taxpayer. 28 (E) For purposes of this subdivision the term "academic year" shall 29 mean the annual period of sessions of a post-secondary college or 30 university. 31 (F) For the purposes of this subdivision the term "academic incubator 32 facility" shall mean a facility providing low-cost space, technical 33 assistance, support services and educational opportunities, including 34 but not limited to central services provided by the manager of the 35 facility to the tenants of the facility, to an entity located in city. 36 Such entity's primary activity must be in biotechnologies, and such 37 entity must be in the formative stage of development. The academic incu- 38 bator facility and the entity must act in partnership with an accredited 39 post-secondary college or university located in city. An academic incu- 40 bator facility's mission shall be to promote job creation, entrepreneur- 41 ship, technology transfer, and provide support services to incubator 42 tenants, including, but not limited to, business planning, management 43 assistance, financial-packaging, linkages to financing services, and 44 coordinating with other sources of assistance. 45 (6) An eligible taxpayer may claim credits under this subdivision for 46 three consecutive years. In no case shall the credit allowed by this 47 subdivision to a taxpayer exceed two hundred fifty thousand dollars per 48 calendar year for eligible expenditures made during such calendar year. 49 (7) The credit allowed under this subdivision for any taxable year 50 shall not reduce the tax due for such year to less than the amount 51 computed in subdivision (a) of this section. Provided, however, if the 52 amount of credit allowed under this subdivision for any taxable year 53 reduces the tax to such amount, any amount of credit not deductible in 54 such taxable year shall be treated as an overpayment of tax to be cred- 55 ited or refunded in accordance with the provisions of section 11-526 of

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1 this chapter; provided, however, that notwithstanding the provisions of 2 section 11-528 of this chapter, no interest shall be paid thereon. 3 (8) The credit allowed under this subdivision shall only be allowed 4 for taxable years beginning on or after January first, two thousand ten 5 and before January first, two thousand nineteen. 6 (b)(1) The percentage of the credit allowed to a taxpayer under this 7 subdivision in any calendar year shall be: 8 (A) If the average number of individuals employed full time by a 9 taxpayer in the city during the calendar year that ends with or within 10 the taxable year which the credit is claimed is at least one hundred 11 five percent of the taxpayer's base year employment, one hundred 12 percent, except that in no case shall the credit allowed under this 13 clause exceed two hundred fifty thousand dollars per calendar year. 14 Provided, however, the increase in base year employment shall not apply 15 to a taxpayer allowed a credit under this subdivision that was (I) 16 located outside of the city, (II) not doing business, or (III) did not 17 have any employees, in the year preceding the first year that the credit 18 is claimed. Any such taxpayer shall be eligible for one hundred percent 19 of the credit for the first calendar year that ends with or within the 20 taxable year for which the credit is claimed, provided that such taxpay- 21 er locates in the city, begins doing business in the city or hires 22 employees in the city during such calendar year and is otherwise eligi- 23 ble for the credit pursuant to the provisions of this subdivision. 24 (B) If the average number of individuals employed full time by a 25 taxpayer in the city during the calendar year that ends with or within 26 the taxable year for which the credit is claimed is less than one 27 hundred five percent of the taxpayer's base year employment, fifty 28 percent, except that in no case shall the credit allowed under this 29 clause exceed one hundred twenty five thousand dollars per calendar 30 year. In the case of an entity located in city receiving space and busi- 31 ness support services by an academic incubator facility, if the average 32 number of individuals employed full time by such entity in the city 33 during the calendar year in which the credit allowed under this subdivi- 34 sion is claimed is less than one hundred five percent of the taxpayer's 35 base year employment, the credit shall be zero. 36 (2) For the purposes of this subdivision, "base year employment" means 37 the average number of individuals employed full-time by the taxpayer in 38 the city in the year preceding the first calendar year that ends with or 39 within the taxable year for which the credit is claimed. 40 (3) For the purposes of this subdivision, average number of individ- 41 uals employed full-time shall be computed by adding the number of such 42 individuals employed by the taxpayer at the end of each quarter during 43 each calendar year or other applicable period and dividing the sum so 44 obtained by the number of such quarters occurring within such calendar 45 year or other applicable period. 46 (4) Notwithstanding anything contained in this section to the contra- 47 ry, the credit provided by this subdivision shall be allowed against the 48 taxes authorized by this chapter for the taxable year after reduction by 49 all other credits permitted by this chapter. 50 (p) Beer production credit. (1) A taxpayer subject to tax under this 51 chapter, that is registered as a distributor under article eighteen of 52 the tax law, and that produces sixty million or fewer gallons of beer in 53 this state in the taxable year, shall be allowed a credit against the 54 tax imposed by this chapter in the amount specified in paragraph two of 55 this subdivision. Provided, however, that no credit shall be allowed for 56 any beer produced in excess of fifteen million five hundred thousand

S. 8578 368

1 gallons in the taxable year. Notwithstanding anything in this title to 2 the contrary, if a partnership is allowed a credit under this subdivi- 3 sion, a taxpayer that is a partner in such partnership shall not be 4 allowed a credit under this subdivision for any taxable year that 5 includes the last day of the taxable year for which the partnership is 6 allowed such credit. 7 (2) The amount of the credit per taxpayer per taxable year for each 8 gallon of beer produced in the city on or after January first, two thou- 9 sand seventeen shall be determined as follows: 10 (i) for the first five hundred thousand gallons of beer produced in 11 the city in the taxable year, the credit shall equal twelve cents per 12 gallon; and 13 (ii) for each gallon of beer produced in the city in the taxable year 14 in excess of five hundred thousand gallons, the credit shall equal three 15 and eighty-six one hundredths cents per gallon. The credit allowed under 16 this subdivision for any taxable year shall be treated as an overpayment 17 of tax to be credited or refunded in accordance with the provisions of 18 section 11-526 of this chapter; provided, however, that notwithstanding 19 the provisions of section 11-528 of this chapter, no interest shall be 20 paid thereon. 21 (q) Credit for the provision of child care. In addition to any other 22 credit allowed under this section, a taxpayer whose application for a 23 credit authorized by section 11-144 of this title has been approved by 24 the department of finance shall be allowed a credit against the tax 25 imposed by this chapter. The amount of the credit shall be determined as 26 provided in such section. To the extent the amount of the credit allowed 27 by this subdivision exceeds the amount of tax due pursuant to this chap- 28 ter, as calculated without such credit, such excess amount shall be 29 treated as an overpayment of tax to be credited or refunded in accord- 30 ance with the provisions of section 11-526 of this chapter, provided, 31 however, that notwithstanding the requirements of section 11-528 of this 32 chapter to the contrary, no interest shall be paid thereon. 33 § 11-504 Taxable years to which tax applies; tax for taxable years 34 beginning prior to and ending after January first, nineteen hundred 35 sixty-six. (a) General. The tax imposed by section 11-503 of this 36 chapter, with any modification permitted by subdivision (b) of this 37 section, is imposed for each taxable year beginning with taxable years 38 ending on or after January first, nineteen hundred sixty-six. 39 (b) Alternate methods for determining tax for taxable years ending on 40 or after January first, nineteen hundred sixty-six. (1) The tax for any 41 taxable year ending on or after January first, nineteen hundred sixty- 42 six and before December thirty-first, nineteen hundred sixty-six, shall 43 be an amount equal to the tax which would have been imposed had section 44 11-503 of this chapter been in effect for the entire taxable year, 45 multiplied by the number of months, or major portions thereof, in such 46 taxable year which occur after December thirty-first, nineteen hundred 47 sixty-five and divided by the number of months, or major portions there- 48 of, in such taxable year. 49 (2) In lieu of the method of computation of tax prescribed in para- 50 graph one of this subdivision, if the taxpayer maintained adequate 51 records for the portion of any taxable year ending on or after January 52 first, nineteen hundred sixty-six, and before December thirty-first, 53 nineteen hundred sixty-six, which falls within the calendar year nine- 54 teen hundred sixty-six, the tax for such taxable year at the election of 55 the taxpayer may be computed on the basis of the unincorporated business 56 taxable income which the taxpayer would have reported had he or she

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1 filed a federal income tax return for a taxable year beginning January 2 first, nineteen hundred sixty-six and ending with the close of such 3 taxable year ending before December thirty-first, nineteen hundred 4 sixty-six. Such taxable year beginning January first, nineteen hundred 5 sixty-six and ending before December thirty-first, nineteen hundred 6 sixty-six shall be deemed, unless clearly indicated otherwise, to be the 7 taxable year of the taxpayer. For purposes of this paragraph, the unin- 8 corporated business exemptions allowable under section 11-510 of this 9 chapter, the credit allowable under subdivision (b) of section 11-503 of 10 this chapter and any net operating loss deduction as modified pursuant 11 to subdivision (b) of section 11-507 of this chapter shall each be 12 reduced by the same part of such exemptions, credit, or net operating 13 loss deduction, as the case may be, as the number of months, or major 14 portions thereof, in the taxable year occurring before January first, 15 nineteen hundred sixty-six is of the number of months, or major portions 16 thereof, in such taxable year. Except as provided in paragraph two, the 17 tax for such period ending before December thirty-first, nineteen 18 hundred sixty-six, shall be computed in accordance with the other 19 provisions of this chapter. 20 § 11-505 Unincorporated business taxable income. The unincorporated 21 business taxable income of an unincorporated business shall be the 22 excess of its unincorporated business entire net income allocated to the 23 city, less the amount of: 24 (1) Its deductions under section 11-509 of this chapter not subject to 25 allocation; and 26 (2) Its unincorporated business exemptions under section 11-510 of 27 this chapter. 28 § 11-506 Unincorporated business gross income. (a) (1) General. 29 Unincorporated business gross income of an unincorporated business means 30 the sum of the items of income and gain of the business, of whatever 31 kind and in whatever form paid, includible in gross income for the taxa- 32 ble year for federal income tax purposes, including income and gain from 33 any property employed in the business, or from liquidation of the busi- 34 ness, or from collection of installment obligations of the business, or 35 from the sale or other disposition by an unincorporated entity of an 36 interest in another unincorporated entity if and to the extent such 37 income or gain is attributable to a trade, business, profession or occu- 38 pation carried on in whole or in part in the city by such other unincor- 39 porated entity, with the modifications specified in this section. 40 (2) The character of a partner's distributive share of gross income, 41 gains, losses and deductions of an unincorporated entity shall be deter- 42 mined as if such gross income, gains, losses and deductions were real- 43 ized directly by such partner regardless of how the interest in the 44 unincorporated entity was acquired and regardless of whether the 45 distributive share is proportionate to the partner's capital interest in 46 the unincorporated entity, provided, however, this paragraph shall not 47 apply to payments to a partner treated as occurring between the unincor- 48 porated entity and one who is not a partner under section seven hundred 49 seven of the internal revenue code, and provided, further, this para- 50 graph shall not affect the determination of whether gross income, gains, 51 losses or deductions of an unincorporated entity are subject to the tax 52 imposed by this chapter as realized from an unincorporated business. 53 (b) Modifications increasing federal gross income. There shall be 54 added to federal gross income of the business the following items 55 attributable to the business:

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1 (1) Interest income on obligations of any state other than this state, 2 or of a political subdivision of any such other state unless created by 3 compact or agreement to which this state is a party. 4 (2) Interest or dividend income on obligations or securities of any 5 authority, commission, or instrumentality of the United States, which 6 the laws of the United States exempt from federal income tax but not 7 from state or local income taxes. 8 (3) In the case of a taxpayer who has exercised the election permitted 9 by subdivision (b) of section 11-509 of this chapter, if the property to 10 which such election relates was sold or otherwise disposed of during the 11 taxable year, the amount required by such subdivision to be added to 12 federal gross income. 13 (4) The entire amount allowable as an exclusion or deduction for stock 14 transfer taxes imposed by article twelve of the tax law in determining 15 federal gross income but only to the extent that such taxes are incurred 16 and paid in market making transactions. 17 (5) The amount allowed as an exclusion or deduction for sales and use 18 taxes imposed by section eleven hundred seven of the tax law in deter- 19 mining federal gross income but only such portion of such exclusion or 20 deduction which is not in excess of the amount of the credit allowed 21 pursuant to subdivision (d) of section 11-503 of this chapter. 22 (6) The amount allowed as an exclusion or deduction as rent in deter- 23 mining federal gross income but only such portion of such exclusion or 24 deduction which is not in excess of the amount of the credit allowed 25 pursuant to subdivision (e) of section 11-503 of this chapter. 26 (7) The amount allowed as an exclusion or deduction in determining 27 federal gross income but only such portion of such exclusion or 28 deduction which is not in excess of the amount of the credit allowed 29 pursuant to subdivision (f) of section 11-503 of this chapter. 30 (8) For taxable years beginning after December thirty-first, nineteen 31 hundred eighty-one, except with respect to property which is a qualified 32 mass commuting vehicle described in subparagraph (D) of paragraph eight 33 of subsection (f) of section one hundred sixty-eight of the internal 34 revenue code, relating to qualified mass commuting vehicles, any amount 35 which would properly be includible for federal income tax purposes had 36 the taxpayer not made the election permitted pursuant to such paragraph 37 eight as it was in effect for agreements entered into prior to January 38 first, nineteen hundred eighty-four. 39 (9) Upon the disposition of property to which subdivision (o) of 40 section 11-507 of this chapter applies, the amount, if any, by which the 41 aggregate of the amounts described in such subdivision fifteen attribut- 42 able to such property exceeds the aggregate of the amounts described in 43 subdivision (n) of section 11-507 of this chapter attributable to such 44 property. 45 (10) The amount allowed as an exclusion or deduction for sales and use 46 taxes imposed by section eleven hundred seven of the tax law in deter- 47 mining federal gross income, but only such portion of such exclusion or 48 deduction which is not in excess of the amount of the credit allowed 49 pursuant to subdivision (g) of section 11-503 of this chapter. 50 (12) The amount allowed as an exclusion or deduction for sales and use 51 taxes imposed by section eleven hundred seven of the tax law, or for any 52 interest imposed in connection therewith, in determining federal gross 53 income, but only such portion of such exclusion or deduction which is 54 not in excess of the amount of the credit allowed pursuant to subdivi- 55 sion (k) of section 11-503 of this chapter.

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1 (13) Notwithstanding any other provision of this chapter to the 2 contrary, the amount allowed as an exclusion or deduction in determining 3 federal gross income of any loss, including but not limited to, losses 4 from notional principal contracts, losses, other than as a dealer, from 5 the holding, sale, disposition, assumption, offset or termination of a 6 position in, property, as defined in paragraph one of subdivision (c) of 7 section 11-502 of this chapter, or other substantially similar losses 8 from ordinary and routine trading or investment activity to the extent 9 determined by the commissioner of finance, realized in connection with 10 activities described in paragraph two of subdivision (c) of section 11 11-502 of this chapter if, and to the extent that, such activities are 12 not deemed an unincorporated business carried on by the taxpayer pursu- 13 ant to the provisions of subdivision (c) of section 11-502 of this chap- 14 ter. 15 (14) Notwithstanding any other provision of this chapter to the 16 contrary, in the case of a taxpayer that is an unincorporated entity 17 described in subparagraph (B) of paragraph four of subdivision (c) of 18 section 11-502 of this chapter, the amount allowed as an exclusion or 19 deduction in determining federal gross income of any loss realized from 20 the sale or other disposition of an interest in another unincorporated 21 entity if, and to the extent that, such loss is attributable to activ- 22 ities of such other unincorporated entity not deemed an unincorporated 23 business carried on by the taxpayer pursuant to the provisions of subdi- 24 vision (c) of section 11-502 of this chapter. 25 (15) Notwithstanding any other provision of this chapter to the 26 contrary, the amount allowed as an exclusion or deduction in determining 27 federal gross income of any loss realized from the holding, leasing or 28 managing of real property if, and to the extent that, such holding, 29 leasing or managing of real property is not deemed an unincorporated 30 business carried on by the taxpayer pursuant to the provisions of subdi- 31 vision (d) of section 11-502 of this chapter. 32 (16) Notwithstanding any other provision of this chapter to the 33 contrary, the amount allowed as an exclusion or deduction in determining 34 federal gross income of any loss realized from the provision by an 35 owner, lessee or fiduciary holding, leasing or managing real property of 36 the service of parking, garaging or storing of motor vehicles on a 37 monthly or longer term basis to tenants at such real property if, and to 38 the extent that, the provision of such services to such tenants is not 39 deemed an unincorporated business carried on by the taxpayer pursuant to 40 the provisions of subdivision (d) of section 11-502 of this chapter. 41 (17) For taxable years beginning in two thousand nineteen and two 42 thousand twenty, the amount of the increase in the federal interest 43 deduction allowed pursuant to section 163(j)(10) of the internal revenue 44 code. 45 (18) Notwithstanding any other provision of this chapter to the 46 contrary, for taxable years beginning before January first, two thousand 47 twenty-one, the amount of increase in the federal deduction allowed 48 pursuant to any amendment to section 461(l) of the internal revenue code 49 made after March first, two thousand twenty. 50 (c) Modifications reducing federal gross income. There shall be 51 subtracted from federal gross income of the business the following items 52 attributable to the business: 53 (1) Interest income on obligations of the United States and its 54 possessions to the extent includible in gross income for federal income 55 tax purposes;

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1 (2) Interest or dividend income on obligations or securities of any 2 authority, commission or instrumentality of the United States to the 3 extent includible in gross income for federal income tax purposes but 4 exempt from state or local income taxes under the laws of the United 5 States; 6 (3) Interest or dividend income on obligations or securities to the 7 extent exempt from income tax under the laws of the city or this state 8 authorizing the issuance of such obligations or securities but includi- 9 ble in gross income for federal income tax purposes; 10 (3-a) Fifty percent of dividends to the extent includible in gross 11 income for federal income tax purposes and not subtracted under para- 12 graph two or three of this subdivision, provided, however, that there 13 shall be no subtraction pursuant to this paragraph for any portion of a 14 dividend from stock with respect to which a dividend deduction would be 15 disallowed by subsection (c) of section two hundred forty-six of the 16 internal revenue code if the unincorporated business were a corporation; 17 (4) The amount of any refund or credit for overpayment of income taxes 18 imposed by the city, this state or any other taxing jurisdiction, or the 19 tax imposed by article thirteen-A of the tax law, to the extent properly 20 included in gross income for federal tax purposes; 21 (5) With respect to gain derived from the sale or other disposition of 22 any property acquired prior to January first, nineteen hundred sixty- 23 six, except property described in subsections one and four of section 24 twelve hundred twenty-one of the internal revenue code, the difference 25 between: 26 (a) the amount of gain included in federal gross income with respect 27 to each such property, and 28 (b) the amount of gain, if smaller than the amount described in 29 subparagraph (a) of this paragraph, that would be included in federal 30 gross income with respect to each such property if the federal adjusted 31 basis of such property on the date of the sale or other disposition had 32 been equal to its fair market value on January first, nineteen hundred 33 sixty-six, or the date of its sale or other disposition prior to January 34 first, nineteen hundred sixty-six, plus or minus all adjustments to 35 basis made with respect to such property for federal income tax purposes 36 for periods on and after January first, nineteen hundred sixty-six; 37 provided, however, that the total modification provided by this subpara- 38 graph shall not exceed the taxpayer's net gain from the sale or other 39 disposition of all such property. 40 (6) For taxable years beginning after December thirty-first, nineteen 41 hundred eighty-one, except with respect to property which is a qualified 42 mass commuting vehicle described in subparagraph (D) of paragraph eight 43 of subsection (f) of section one hundred sixty-eight of the internal 44 revenue code, relating to qualified mass commuting vehicles, any amount 45 properly includible in federal gross income solely as a result of an 46 election made pursuant to the provisions of such paragraph eight as it 47 was in effect for agreements entered into prior to January first, nine- 48 teen hundred eighty-four. 49 (7) Upon the disposition of property to which subdivision (o) of 50 section 11-507 of this chapter applies, the amount, if any, by which the 51 aggregate of the amounts described in subdivision (n) of section 11-507 52 of this chapter attributable to such property exceeds the aggregate of 53 the amounts described in subdivision (o) of section 11-507 of this chap- 54 ter attributable to such property. 55 (8) Notwithstanding any other provision of this chapter to the contra- 56 ry, the amount of any income or gain, to the extent includible in gross

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1 income for federal income tax purposes, realized from the holding, leas- 2 ing or managing of real property if, and to the extent that, such hold- 3 ing, leasing or managing of real property is not deemed an unincorporat- 4 ed business carried on by the taxpayer pursuant to the provisions of 5 subdivision (d) of section 11-502 of this chapter. 6 (9) Notwithstanding any other provision of this chapter to the contra- 7 ry, the amount of any income or gain, to the extent includible in gross 8 income for federal income tax purposes, including but not limited to, 9 dividends, interest, payments with respect to securities loans, income 10 from notional principal contracts, or income and gains, other than as a 11 dealer, from the holding, sale, disposition, assumption, offset or 12 termination of a position in, property, as defined in paragraph one of 13 subdivision (c) of section 11-502 of this chapter, or other substantial- 14 ly similar income from ordinary and routine trading or investment activ- 15 ity to the extent determined by the commissioner of finance, realized in 16 connection with activities described in paragraph two of subdivision (c) 17 of section 11-502 of this chapter if, and to the extent that, such 18 activities are not deemed an unincorporated business carried on by the 19 taxpayer pursuant to the provisions of subdivision (c) of section 11-502 20 of this chapter. 21 (10) Notwithstanding any other provision of this chapter to the 22 contrary, in the case of a taxpayer that is an unincorporated entity 23 described in subparagraph (B) of paragraph four of subdivision (c) of 24 section 11-502 of this chapter, the amount of any income or gain, to the 25 extent includible in gross income for federal income tax purposes, real- 26 ized from the sale or other disposition of an interest in another unin- 27 corporated entity if, and to the extent that, such income or gain is 28 attributable to activities of such other unincorporated entity not 29 deemed an unincorporated business carried on by the taxpayer pursuant to 30 the provisions of subdivision (c) of section 11-502 of this chapter. 31 (11) Notwithstanding any other provision of this chapter to the 32 contrary, the amount of any income or gain, to the extent includible in 33 gross income for federal income tax purposes, realized from the 34 provision by an owner, lessee or fiduciary holding, leasing or managing 35 real property of the service of parking, garaging or storing of motor 36 vehicles on a monthly or longer term basis to tenants at such real prop- 37 erty if, and to the extent that, the provision of such services to such 38 tenants is not deemed an unincorporated business pursuant to the 39 provisions of subdivision (d) of section 11-502 of this chapter. 40 (12) The amount of any grant received through either the COVID-19 41 pandemic small business recovery grant program, pursuant to section 42 sixteen-ff of the New York state urban development corporation act, or 43 the small business resilience grant program administered by the depart- 44 ment of small business services, to the extent the amount of either such 45 grant is included in federal taxable income. 46 (d) Upon the disposition of property to which subdivisions (t) and (u) 47 of section 11-507 of this chapter apply, the amount of any gain or loss 48 includible in entire net income shall be adjusted to reflect the modifi- 49 cations provided in such subdivisions attributable to such property. 50 (e) Related members expense add back. (1) Definitions. (A) Related 51 member. "Related member" means a related person as defined in subpara- 52 graph (c) of paragraph three of subsection (b) of section four hundred 53 sixty-five of the internal revenue code, except that "fifty percent" 54 shall be substituted for "ten percent". 55 (B) Effective rate of tax. "Effective rate of tax" means, as to any 56 city, the maximum statutory rate of tax imposed by the city on or meas-

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1 ured by a related member's net income multiplied by the apportionment 2 percentage, if any, applicable to the related member under the laws of 3 said jurisdiction. For purposes of this definition, the effective rate 4 of tax as to any city is zero where the related member's net income tax 5 liability in said city is reported on a combined or consolidated return 6 including both the taxpayer and the related member where the reported 7 transactions between the taxpayer and the related member are eliminated 8 or offset. Also, for purposes of this definition, when computing the 9 effective rate of tax for a city in which a related member's net income 10 is eliminated or offset by a credit or similar adjustment that is 11 dependent upon the related member either maintaining or managing intan- 12 gible property or collecting interest income in such city, the maximum 13 statutory rate of tax imposed by such city shall be decreased to reflect 14 the statutory rate of tax that applies to the related member as effec- 15 tively reduced by such credit or similar adjustment. 16 (C) Royalty payments. Royalty payments are payments directly connected 17 to the acquisition, use, maintenance or management, ownership, sale, 18 exchange, or any other disposition of licenses, trademarks, copyrights, 19 trade names, trade dress, service marks, mask works, trade secrets, 20 patents and any other similar types of intangible assets as determined 21 by the commissioner of finance, and include amounts allowable as inter- 22 est deductions under section one hundred sixty-three of the internal 23 revenue code to the extent such amounts are directly or indirectly for, 24 related to or in connection with the acquisition, use, maintenance or 25 management, ownership, sale, exchange or disposition of such intangible 26 assets. 27 (D) Valid business purpose. A valid business purpose is one or more 28 business purposes, other than the avoidance or reduction of taxation, 29 which alone or in combination constitute the primary motivation for some 30 business activity or transaction, which activity or transaction changes 31 in a meaningful way, apart from tax effects, the economic position of 32 the taxpayer. The economic position of the taxpayer includes an increase 33 in the market share of the taxpayer, or the entry by the taxpayer into 34 new business markets. 35 (2) Royalty expense add backs. (A) For the purpose of computing unin- 36 corporated business entire net income, a taxpayer must add back royalty 37 payments directly or indirectly paid, accrued, or incurred in connection 38 with one or more direct or indirect transactions with one or more 39 related members during the taxable year to the extent deductible in 40 calculating federal taxable income. 41 (B) Exceptions. (i) The adjustment required in this subdivision shall 42 not apply to the portion of the royalty payment that the taxpayer estab- 43 lishes, by clear and convincing evidence of the type and in the form 44 specified by the commissioner of finance, meets all of the following 45 requirements: (I) the related member was subject to tax in this city or 46 another city within the United States or a foreign nation or some combi- 47 nation thereof on a tax base that included the royalty payment paid, 48 accrued or incurred by the taxpayer; (II) the related member during the 49 same taxable year directly or indirectly paid, accrued or incurred such 50 portion to a person that is not a related member; and (III) the trans- 51 action giving rise to the royalty payment between the taxpayer and the 52 related member was undertaken for a valid business purpose. 53 (ii) The adjustment required in this subdivision shall not apply if 54 the taxpayer establishes, by clear and convincing evidence of the type 55 and in the form specified by the commissioner of finance, that: (I) the 56 related member was subject to tax on or measured by its net income in

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1 this city or another city within the United States, or some combination 2 thereof; (II) the tax base for said tax included the royalty payment 3 paid, accrued or incurred by the taxpayer; and (III) the aggregate 4 effective rate of tax applied to the related member in those jurisdic- 5 tions is no less than eighty percent of the statutory rate of tax that 6 applied to the taxpayer under section 11-503 of this chapter for the 7 taxable year. 8 (iii) The adjustment required in this subdivision shall not apply if 9 the taxpayer establishes, by clear and convincing evidence of the type 10 and in the form specified by the commissioner of finance, that: (I) the 11 royalty payment was paid, accrued or incurred to a related member organ- 12 ized under the laws of a country other than the United States; (II) the 13 related member's income from the transaction was subject to a comprehen- 14 sive income tax treaty between such country and the United States; (III) 15 the related member was subject to tax in a foreign nation on a tax base 16 that included the royalty payment paid, accrued or incurred by the 17 taxpayer; (IV) the related member's income from the transaction was 18 taxed in such country at an effective rate of tax at least equal to that 19 imposed by this city; and (V) the royalty payment was paid, accrued or 20 incurred pursuant to a transaction that was undertaken for a valid busi- 21 ness purpose and using terms that reflect an arm's length relationship. 22 (iv) The adjustment required in this subdivision shall not apply if 23 the taxpayer and the commissioner of finance agree in writing to the 24 application or use of alternative adjustments or computations. The 25 commissioner of finance may, in his or her discretion, agree to the 26 application or use of alternative adjustments or computations when he or 27 she concludes that in the absence of such agreement the income of the 28 taxpayer would not be properly reflected. 29 (f) Upon the disposition of property to which subdivisions (w) and (x) 30 of section 11-507 of this chapter apply, the amount of any gain or loss 31 includible in unincorporated business gross income shall be adjusted to 32 reflect the modifications provided in such subdivisions attributable to 33 such property. 34 § 11-507 Unincorporated business deductions. The unincorporated busi- 35 ness deductions of an unincorporated business means the items of loss 36 and deduction directly connected with or incurred in the conduct of the 37 business, which are allowable for federal income tax purposes for the 38 taxable year, including losses and deductions connected with any proper- 39 ty employed in the business, with the following modifications: 40 (a) A deduction shall be allowed for charitable contributions of the 41 unincorporated business, to the extent that such contributions would be 42 deductible for federal income tax purposes if made by a corporation, but 43 not in excess of five per centum of the amount by which the unincorpo- 44 rated business gross income exceeds the sum of (A) the unincorporated 45 business deductions computed without the benefit of any deduction for 46 charitable contributions and (B) the deduction allowed under subdivision 47 (b) of section 11-509 of this chapter, where the election permitted by 48 such subdivision has been exercised. 49 (b) (1) A deduction shall be allowed for net operating losses incurred 50 by the unincorporated business, except as otherwise provided by para- 51 graph two of this subdivision, in an amount computed in the same manner 52 as the net operating loss deduction which would be allowed for the taxa- 53 ble year for federal income tax purposes if the unincorporated business 54 were an individual taxpayer, but determined solely by reference to the 55 unincorporated business gross income and unincorporated business 56 deductions, allocated to the city, of the unincorporated business;

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1 provided, however, that such net operating loss deduction which would be 2 allowed for the taxable year for federal income tax purposes shall for 3 purposes of this paragraph be determined as if the unincorporated busi- 4 ness had elected under section one hundred seventy-two of the internal 5 revenue code to relinquish the entire carryback period with respect to 6 net operating losses, except with respect to the first ten thousand 7 dollars of each of such losses, sustained during taxable years ending 8 after June thirtieth, nineteen hundred eighty-nine. Such deduction shall 9 not include any net operating loss sustained during any taxable year 10 beginning prior to January first, nineteen hundred sixty-six and for the 11 purposes of this paragraph a net operating loss shall be determined 12 without regard to any deductions allowed pursuant to subdivision (b) of 13 section 11-509 of this chapter and any net operating loss for a taxable 14 year beginning in nineteen hundred eighty-one shall be computed without 15 regard to the deduction allowed with respect to recovery property under 16 section one hundred sixty-eight of the internal revenue code; in lieu of 17 such deduction, a taxpayer shall be allowed for such taxable year with 18 respect to such property the depreciation deduction allowable under 19 section one hundred sixty-seven of such internal revenue code as such 20 section was in full force and effect on December thirty-first, nineteen 21 hundred eighty. 22 (2) In the case of a partnership, no net operating loss carryback or 23 carryover to any taxable year shall be allowed unless one or more of the 24 partners during such taxable year were persons having a proportionate 25 interest or interests, amounting to at least eighty percent of all such 26 interests, in the unincorporated business gross income and unincorporat- 27 ed business deductions of the partnership which sustained the loss for 28 which a carryback or carryover is claimed. In such event, the carryback 29 or carryover allowable on account of such loss shall not exceed the 30 percentage of the amount otherwise allowable, determined by dividing (A) 31 the sum of the proportionate interests in the unincorporated business 32 gross income and unincorporated business deductions of the partnership, 33 for the year to which the loss is carried back or carried over, attrib- 34 utable to such partners, by (B) the sum of such proportionate interests 35 owned by all partners for such taxable year. The amount by which the 36 carryback or carryover otherwise allowable exceeds the amount allowable 37 pursuant to the preceding sentence shall not be a carryback or carryover 38 to any other taxable year. 39 (3) Notwithstanding any other provision of this chapter to the contra- 40 ry, for taxable years beginning before January first, two thousand twen- 41 ty-one, any amendment to section one hundred seventy-two of the internal 42 revenue code made after March first, two thousand twenty shall not apply 43 to this chapter. 44 (c) No deduction shall be allowed, except as provided in section 45 11-509 of this chapter for amounts paid or incurred to a proprietor or 46 partner for services or for use of capital. 47 (d) No deduction shall be allowed for income taxes imposed by the 48 city, this state or any other taxing jurisdiction, or the tax imposed by 49 article thirteen-A of the tax law. 50 (e) No deduction shall be allowed for (A) interest on indebtedness 51 incurred or continued to purchase or carry obligations or securities the 52 interest on which is exempt from tax under this chapter; (B) expenses 53 paid or incurred for the production or collection of such income or the 54 management, conservation or maintenance of property held for the 55 production of such income; or (C) the amortizable bond premium on any 56 bond the interest income from which is so exempt.

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1 (f) No deduction shall be allowed in respect of the excess of net 2 long-term capital gain over net short-term capital loss, but capital 3 losses incurred in the unincorporated business shall be treated as ordi- 4 nary losses and shall be allowed in full. 5 (g) In the case of a taxpayer who has exercised the election permitted 6 by subdivision (b) of section 11-509 of this chapter, no deduction shall 7 be allowed for expenditures with reference to the property to which such 8 election relates, or for depreciation of such property, except as 9 permitted by said subdivision. 10 (h) A deduction shall be allowed, to the extent not allowable for 11 federal income tax purposes, for (A) interest on indebtedness incurred 12 or continued to purchase or carry obligations or securities the interest 13 on which is subject to tax under this chapter but exempt from federal 14 income tax; (B) ordinary and necessary expenses paid or incurred during 15 the taxable year for the production or collection of such income or the 16 management, conservation or maintenance of property held for the 17 production of such income; and (C) the amortizable bond premium for the 18 taxable year on any bond the interest on which is subject to tax under 19 this chapter but exempt from federal income tax. 20 (i) At the election of the taxpayer, a deduction shall be allowed for 21 expenditures paid or incurred during the taxable year for the 22 construction, reconstruction, erection or improvement of industrial 23 waste treatment facilities and air pollution control facilities. 24 (1) (A) The term "industrial waste treatment facilities" shall mean 25 facilities for the treatment, neutralization or stabilization of indus- 26 trial waste, as the term "industrial waste" is defined in section 27 17-0105 of the environmental conservation law, from a point immediately 28 preceding the point of such treatment, neutralization or stabilization 29 to the point of disposal, including the necessary pumping and transmit- 30 ting facilities, but excluding such facilities installed for the primary 31 purpose of salvaging materials which are usable in the manufacturing 32 process or are marketable. 33 (B) The term "air pollution control facilities" shall mean facilities 34 which remove, reduce, or render less noxious air contaminants emitted 35 from an air contamination source, as the terms "air contaminant" and 36 "air contamination source" are defined in section 19-0107 of the envi- 37 ronmental conservation law, from a point immediately preceding the point 38 of such removal, reduction or rendering to the point of discharge of 39 air, meeting emission standards as established by the air pollution 40 control board, but excluding such facilities installed for the primary 41 purpose of salvaging materials which are usable in the manufacturing 42 process or are marketable and excluding those facilities which rely for 43 their efficacy on dilution, dispersion or assimilation of air contam- 44 inants in the ambient air after emission. 45 (2) However, such deduction shall be allowed only (A) with respect to 46 tangible property which is depreciable, pursuant to section one hundred 47 sixty-seven of the internal revenue code, having a situs in the city and 48 used in the taxpayer's trade or business, the construction, recon- 49 struction, erection or improvement of which, in the case of industrial 50 waste treatment facilities, is initiated on or after January first, 51 nineteen hundred sixty-six, and only for expenditures paid or incurred 52 prior to January first, nineteen hundred seventy-two, or which, in the 53 case of air pollution control facilities, is initiated on or after Janu- 54 ary first, nineteen hundred sixty-six, and 55 (B) on condition that such facilities have been certified by the state 56 commissioner of environmental conservation or his or her designated

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1 representative, in the same manner as provided in either section 17-0707 2 or 19-0309 of the environmental conservation law, as applicable, as 3 complying with the provision of the environmental conservation law, the 4 sanitary code and regulations, permits or orders promulgated pursuant 5 thereto, and 6 (C) on condition that for the taxable year and all succeeding taxable 7 years, no deduction for such expenditures or for depreciation of the 8 same property allowed for federal income tax purposes shall be allowed 9 under this chapter, except to the extent that the basis of the property 10 may be attributable to factors other than such expenditures, or in case 11 a deduction is allowable pursuant to this subdivision, for only a part 12 of such expenditures, on condition that any deduction allowed for feder- 13 al income tax purposes for such expenditures or for depreciation of the 14 same property be proportionately reduced in computing unincorporated 15 business deductions for the taxable year and all succeeding taxable 16 years, and 17 (D) where the election provided for in subdivision (b) of section 18 11-509 of this chapter has not been exercised in respect to the same 19 property. 20 (3) (A) If expenditures in respect to an industrial waste treatment 21 facility or an air pollution control facility have been deducted as 22 provided herein and if within ten years from the end of the taxable year 23 in which such deduction was allowed such property or any part thereof is 24 used for the primary purpose of salvaging materials which are usable in 25 the manufacturing process or are marketable, the taxpayer shall report 26 such change of use in its return for the first taxable year during which 27 it occurs, and the commissioner of finance may recompute the tax for the 28 year or years for which such deduction was allowed and any carryback or 29 carryover year, and may assess any additional tax resulting from such 30 recomputation within the time fixed by paragraph eight of subdivision 31 (c) of section 11-523 of this chapter. 32 (B) If a deduction is allowed as herein provided for expenditures paid 33 or incurred during any taxable year on the basis of a temporary certif- 34 icate of compliance issued pursuant to the public health law, and if the 35 taxpayer fails to obtain a permanent certificate of compliance upon 36 completion of the facilities with respect to which such temporary 37 certificate was issued, the taxpayer shall report such failure in its 38 report for the taxable year during which such facilities are completed, 39 and the commissioner of finance may recompute the tax for the year or 40 years for which such deduction was allowed and any carryback or carry- 41 over year, and may assess any additional tax resulting from such recom- 42 putation within the time fixed by paragraph eight of subdivision (c) of 43 section 11-523 of this chapter. 44 (4) In any taxable year when property is sold or otherwise disposed 45 of, with respect to which a deduction has been allowed pursuant to this 46 subdivision, such deduction shall be disregarded in computing gain or 47 loss, and the gain or loss on the sale or other disposition of such 48 property shall be the gain or loss allowable for federal income tax 49 purposes for such taxable year. 50 (j) In the case of mines, oil and gas wells and other natural depos- 51 its, no deduction of any allowance for percentage depletion pursuant to 52 section six hundred thirteen or section six hundred thirteen A of the 53 internal revenue code of nineteen hundred fifty-four, as amended, shall 54 be allowed. However, an allowance for depletion with respect to such 55 property shall be deductible in the amount which would be allowable 56 under section six hundred eleven of such internal revenue code if such

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1 deduction were computed without reference to such section six hundred 2 thirteen or section six hundred thirteen A of such code. With respect to 3 the computation of depletion pursuant to this section, the basis for 4 such computation for taxable years beginning in nineteen hundred seven- 5 ty-two shall be the federal basis. For subsequent taxable years, the 6 basis of such computation shall be reduced only by the deduction for the 7 allowance for depletion deductible pursuant to this section. In any 8 taxable year when any such property is sold or otherwise disposed of, 9 with respect to which a deduction has been allowed pursuant to this 10 subdivision, the gain or loss thereon entering into the computation of 11 federal taxable income shall be disregarded in computing unincorporated 12 business taxable income and there shall be added to or subtracted from 13 federal gross income, so modified, the gain or loss upon such sale or 14 other disposition. In computing such gain or loss, the basis of the 15 property sold or disposed of shall be adjusted to reflect the deduction 16 allowed with respect to such property pursuant to this subdivision. 17 (k) A deduction shall be allowed for that portion of wages and sala- 18 ries paid or incurred for the taxable year for which a deduction is not 19 allowed pursuant to the provisions of section two hundred eighty-C of 20 the internal revenue code. 21 (l) For taxable years beginning after December thirty-first, nineteen 22 hundred eighty-one, except with respect to property which is a qualified 23 mass commuting vehicle described in subparagraph (D) of paragraph eight 24 of subsection (f) of section one hundred sixty-eight of the internal 25 revenue code, relating to qualified mass commuting vehicles, a deduction 26 shall be allowed for any amount which the taxpayer could have excluded 27 for purposes of this chapter had it not made the election provided for 28 in such paragraph eight as it was in effect for agreements entered into 29 prior to January first, nineteen hundred eighty-four. 30 (m) For taxable years beginning after December thirty-first, nineteen 31 hundred eighty-one, except with respect to property which is a qualified 32 mass commuting vehicle described in subparagraph (D) of paragraph eight 33 of subsection (f) of section one hundred sixty-eight of the internal 34 revenue code, relating to qualified mass commuting vehicles, no 35 deduction shall be allowed for any amount deductible for federal income 36 tax purposes solely as a result of an election made pursuant to the 37 provisions of such paragraph eight as it was in effect for agreements 38 entered into prior to January first, nineteen hundred eighty-four. 39 (n) In the case of property placed in service in taxable years begin- 40 ning before nineteen hundred ninety-four, for taxable years beginning 41 after December thirty-first, nineteen hundred eighty-one, except with 42 respect to property subject to the provisions of section two hundred 43 eighty-F of the internal revenue code and property subject to the 44 provisions of section one hundred sixty-eight of the internal revenue 45 code which is placed in service in this state in taxable years beginning 46 after December thirty-first, nineteen hundred eighty-four, no deduction 47 shall be allowed for the amount allowable as a deduction determined 48 under section one hundred sixty-eight of the internal revenue code. 49 (o) In the case of property placed in service in taxable years begin- 50 ning before nineteen hundred ninety-four, for taxable years beginning 51 after December thirty-first, nineteen hundred eighty-one, except with 52 respect to property subject to the provisions of section two hundred 53 eighty-F of the internal revenue code and property subject to the 54 provisions of section one hundred sixty-eight of the internal revenue 55 code which is placed in service in this state in taxable years beginning 56 after December thirty-first, nineteen hundred eighty-four, and provided

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1 a deduction has not been disallowed pursuant to subdivision (m) of this 2 section, a taxpayer shall be allowed with respect to property which is 3 subject to the provisions of section one hundred sixty-eight of the 4 internal revenue code the depreciation deduction allowable under section 5 one hundred sixty-seven of the internal revenue code as such section 6 would have applied to property placed in service on December thirty- 7 first, nineteen hundred eighty. 8 (p) Notwithstanding any other provision of this chapter to the contra- 9 ry, no deduction shall be allowed for interest, depreciation or any 10 other expense directly or indirectly attributable to the holding, leas- 11 ing or managing of real property or to income or gain therefrom if, and 12 to the extent that, such holding, leasing or managing of real property 13 is not deemed an unincorporated business carried on by the taxpayer 14 pursuant to the provisions of subdivision (d) of section 11-502 of this 15 chapter. 16 (q) Notwithstanding any other provision of this chapter to the contra- 17 ry, no deduction shall be allowed for any expenses directly or indirect- 18 ly attributable to activities described in paragraph two of subdivision 19 (c) of section 11-502 of this chapter if, and to the extent that, such 20 activities are not deemed an unincorporated business carried on by the 21 taxpayer pursuant to the provisions of subdivision (c) of section 11-502 22 of this chapter. 23 (r) Notwithstanding any other provision of this chapter to the contra- 24 ry, in the case of a taxpayer that is an unincorporated entity described 25 in subparagraph (B) of paragraph four of subdivision (c) of section 26 11-502 of this chapter, no deduction shall be allowed for any losses or 27 expenses directly or indirectly attributable to the sale or other dispo- 28 sition of an interest in another unincorporated entity if, and to the 29 extent that, such losses or expenses are attributable to activities of 30 such other unincorporated entity not deemed an unincorporated business 31 carried on by the taxpayer pursuant to the provisions of subdivision (c) 32 of section 11-502 of this chapter. 33 (s) Notwithstanding any other provision of this chapter to the contra- 34 ry, no deduction shall be allowed for interest, depreciation or any 35 other expense directly or indirectly attributable to the provision by an 36 owner, lessee or fiduciary holding, leasing or managing real property of 37 the service of parking, garaging or storing of motor vehicles on a 38 monthly or longer term basis to tenants at such real property if, and to 39 the extent that, the provision of such services to such tenants is not 40 deemed an unincorporated business pursuant to the provisions of subdivi- 41 sion (d) of section 11-502 of this chapter. 42 (t) For taxable years ending after September tenth, two thousand one, 43 in the case of qualified property described in paragraph two of 44 subsection k of section one hundred sixty-eight of the internal revenue 45 code, other than qualified New York Liberty Zone property described in 46 paragraph two of subsection b of section fourteen hundred L of the 47 internal revenue code, without regard to clause (i) of subparagraph (C) 48 of such paragraph, no deduction shall be allowed for the amount allow- 49 able as a deduction under section one hundred sixty-seven of the inter- 50 nal revenue code. 51 (u) For taxable years ending after September tenth, two thousand one, 52 in the case of qualified property described in paragraph two of 53 subsection k of section one hundred sixty-eight of the internal revenue 54 code other than qualified New York Liberty Zone property described in 55 paragraph two of subsection b of section fourteen hundred L of the 56 internal revenue code, without regard to clause (i) of subparagraph (C)

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1 of such paragraph, a deduction shall be allowed with respect to such 2 property equal to the depreciation deduction allowable under section one 3 hundred sixty-seven of the internal revenue code as such section would 4 have applied to such property had it been acquired by the taxpayer on 5 September tenth, two thousand one, provided, however, that for taxable 6 years beginning on or after January first, two thousand four, in the 7 case of a passenger motor vehicle or a sport utility vehicle subject to 8 the provisions of subdivision (w) of this section, the limitation under 9 clause (i) of subparagraph (A) of paragraph one of subdivision (a) of 10 section two hundred eighty-F of the internal revenue code applicable to 11 the amount allowed as a deduction under this paragraph shall be deter- 12 mined as of the date such vehicle was placed in service and not as of 13 September tenth, two thousand one. 14 (v) For taxable years beginning on or after January first, two thou- 15 sand four, in the case of a taxpayer that is not an eligible farmer as 16 defined in subsection (n) of section six hundred six of the tax law, no 17 deduction shall be allowed for the amounts allowable as a deduction 18 under sections one hundred seventy-nine, one hundred sixty-seven and one 19 hundred sixty-eight of the internal revenue code with respect to a sport 20 utility vehicle that is not a passenger automobile as defined in para- 21 graph five of subsection (d) of section two hundred eighty-F of the 22 internal revenue code. 23 (w) For taxable years beginning on or after January first, two thou- 24 sand four, in the case of a taxpayer that is not an eligible farmer as 25 defined in subsection (n) of section six hundred six of the tax law, a 26 deduction shall be allowed with respect to a sport utility vehicle that 27 is not a passenger automobile as defined in paragraph five of subsection 28 (d) of section two hundred eighty-F of the internal revenue code equal 29 to the amounts allowable as a deduction under sections one hundred 30 seventy-nine, one hundred sixty-seven and one hundred sixty-eight of the 31 internal revenue code, determined as if such sport utility vehicle were 32 a passenger automobile as defined in such paragraph five. 33 § 11-508 Allocation to the city. (a) General; allocation of business 34 income. If an unincorporated business is carried on both within and 35 without the city, as determined under regulations of the commissioner of 36 finance, there shall be allocated to the city, in the manner provided in 37 subdivision (b), (c) or (d) of this section, a fair and equitable 38 portion of its business income. For taxable years beginning before July 39 first, nineteen hundred ninety-six, if the unincorporated business has 40 no regular place of business outside the city, all of such business 41 income shall be allocated to the city. 42 (b) (1) Allocation by taxpayer's books. For taxable years beginning 43 before January first, two thousand five, the portion allocable to the 44 city may be determined from the books of the business if the methods 45 used in keeping such books are approved by the commissioner of finance 46 as fairly and equitably reflecting the income from the city. 47 (2)(i) If a taxpayer determines the portion of business income to be 48 allocated to the city using the method prescribed in paragraph one of 49 this subdivision on a timely filed original return with respect to each 50 of the two taxable years, each of which must consist of twelve months, 51 immediately preceding the taxpayer's first taxable year beginning on or 52 after January first, two thousand five, the taxpayer may make a one-time 53 election to continue to use that method for taxable years beginning on 54 or after January first, two thousand five and before January first, two 55 thousand twelve. Such election shall be made by using the method 56 prescribed in paragraph one of this subdivision on an original timely

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1 filed return with respect to the first taxable year beginning on or 2 after January first, two thousand five and before January first, two 3 thousand six. Such election may not be made, or if made, shall be deemed 4 revoked as of the beginning of the taxable year if, for either of the 5 two taxable years immediately preceding the year in which the election 6 is made, the commissioner of finance has determined the methods used in 7 keeping such books do not fairly and equitably reflect the income from 8 the city. 9 (ii) (A) A taxpayer that has made the election provided for in subpar- 10 agraph (i) of this paragraph may revoke it by filing an original or 11 amended return using an allocation method permitted by this section 12 other than the method prescribed in paragraph one of this subdivision 13 unless the commissioner of finance has determined that such method does 14 not fairly and equitably reflect the income from the city. 15 (B) The election provided for in subparagraph (i) of this paragraph 16 shall be deemed to have been revoked as of the beginning of the taxable 17 year if, for any taxable year during which the election is intended to 18 be in effect, the commissioner of finance has determined that the meth- 19 ods used in keeping the taxpayer's books do not fairly and equitably 20 reflect the income from the city. 21 (C) In the case of a taxpayer that is a partnership or other unincor- 22 porated entity, the election provided for in subparagraph (i) of this 23 paragraph shall be deemed to have been revoked as of the beginning of 24 the taxable year unless one or more of the persons having a propor- 25 tionate interest or interests, amounting to more than fifty percent of 26 all such interests, in the taxpayer's unincorporated business gross 27 income and unincorporated business deductions for such taxable year were 28 persons having a proportionate interest or interests, amounting to more 29 than fifty percent of all such interests, in the taxpayer's unincorpo- 30 rated business gross income and unincorporated business deductions at 31 the end of the taxpayer's last taxable year beginning before January 32 first, two thousand five. For purposes of this clause, a transfer of an 33 ownership interest in unincorporated business gross income or unincorpo- 34 rated business deductions upon the death of a partner or owner to such 35 deceased partner's or owner's estate shall be disregarded but transfers 36 by such decedent's estate shall not be disregarded. 37 (D) Once the election provided for in subparagraph (i) of this para- 38 graph has been revoked by the taxpayer pursuant to clause (A) or deemed 39 revoked pursuant to clauses (B) or (C) of this subparagraph, the taxpay- 40 er shall be barred from using the method prescribed in paragraph one of 41 this subdivision for the taxable year in which the election has been 42 revoked or deemed revoked and any subsequent taxable year. 43 (c) Allocation by formula. If subdivision (b) does not apply to the 44 taxpayer, the portion allocable to the city shall be determined by 45 multiplying (A) the business income by (B) a business allocation 46 percentage to be determined by adding together the percentages computed 47 under paragraphs one, two and three of this subdivision, and dividing 48 the result by the number of percentages; provided, however, that for 49 taxable years beginning on or after July first, nineteen hundred nine- 50 ty-six, a taxpayer that is a "manufacturing business," as defined in 51 subdivision (g) of this section, may determine its business allocation 52 percentage as provided in such subdivision (g): 53 (1) Property percentage. The percentage computed by dividing (A) the 54 average of the value, at the beginning and end of the taxable year, of 55 real and tangible personal property connected with the unincorporated 56 business and located within the city, by (B) the average of the value,

S. 8578 383

1 at the beginning and end of the taxable year, of all real and tangible 2 personal property connected with the unincorporated business and located 3 both within and without the city. For this purpose, for taxable years 4 beginning before January first, two thousand five, real property shall 5 include real property rented to the unincorporated business and, for 6 this purpose, for taxable years beginning on and after January first, 7 two thousand five, real and tangible personal property shall include 8 real and tangible personal property rented to the unincorporated busi- 9 ness and the value of such real and tangible personal property rented to 10 the unincorporated business shall mean the product of (i) eight and (ii) 11 the gross rents payable for the rental of such property during the taxa- 12 ble year. 13 (2) Payroll percentage. The percentage computed by dividing (A) the 14 total wages, salaries and other personal service compensation paid or 15 incurred during the taxable year to employees in connection with the 16 unincorporated business carried on within the city, by (B) the total of 17 all wages, salaries and other personal service compensation paid or 18 incurred during the taxable year to employees in connection with the 19 unincorporated business carried on both within and without the city. 20 (3) Gross income percentage. The percentage computed by dividing (A) 21 the gross sales or charges for services performed by or through an agen- 22 cy located within the city, by (B) the total of all gross sales or 23 charges for services performed within and without the city. The sales or 24 charges to be allocated to the city shall include all sales negotiated 25 or consummated, and charges for services performed, by an employee, 26 agent, agency or independent contractor chiefly situated at, connected 27 by contract or otherwise with, or sent out from, offices of the unincor- 28 porated business, or other agencies, situated within the city; provided, 29 however, that for taxable years beginning on or after July first, nine- 30 teen hundred ninety-six, sales of tangible personal property shall not 31 be allocated to the city as provided in this paragraph, but shall be 32 allocated to the city only where shipments are made to points within the 33 city, and provided, further, that: 34 (A) for taxable years beginning on or after July first, two thousand 35 five, for taxpayers having gross receipts for the taxable year, deter- 36 mined without regard to any deductions, of less than one hundred thou- 37 sand dollars, charges for services performed shall be allocated to the 38 city to the extent that the services are performed within the city; 39 (B) for taxable years beginning on or after July first, two thousand 40 six, for taxpayers having gross receipts for the taxable year, deter- 41 mined without regard to any deductions, of less than three hundred thou- 42 sand dollars, charges for services performed shall be allocated to the 43 city to the extent that the services are performed within the city; and 44 (C) for taxable years beginning on or after July first, two thousand 45 seven, for all other taxpayers, charges for services performed shall be 46 allocated to the city to the extent that the services are performed 47 within the city. 48 (d) Other allocation methods. The portion allocable to the city shall 49 be determined in accordance with rules and regulations of the commis- 50 sioner of finance if it shall appear to the commissioner of finance that 51 the income from the city is not fairly and equitably reflected under the 52 provisions of either subdivision (b) or subdivision (c) of this section. 53 (e) Special rules for real estate. Income and deductions from the 54 rental of real property, and gain and loss from the sale, exchange or 55 other disposition of real property, shall not be subject to allocation 56 under subdivision (b), (c), or (d) of this section, but shall be consid-

S. 8578 384

1 ered as entirely derived from or connected with the state, other than 2 this state, in which such property is located or, if such property is 3 located in this state, the political subdivision thereof. To the extent 4 that anything in this subdivision is inconsistent with any provision of 5 subdivision (d) of section 11-502, subdivision (c) of section 11-506 or 6 subdivision (p) of section 11-507 of this chapter, the provisions of 7 such subdivisions shall take precedence over the provisions of this 8 subdivision. 9 (e-1) Special rules for publishers and broadcasters. (1) Notwithstand- 10 ing anything in paragraph three of subdivision (c) of this section to 11 the contrary and except as provided in paragraph four of this subdivi- 12 sion, in the case of a taxpayer engaged in the business of publishing 13 newspapers or periodicals, there shall be allocated to the city, for 14 purposes of such paragraph three, the gross sales or charges for 15 services arising from sales of subscriptions to, and advertising 16 contained in, such newspapers or periodicals, to the extent that such 17 newspapers or periodicals are delivered to points within the city. 18 (2) Notwithstanding anything in paragraph three of subdivision (c) of 19 this section to the contrary and except as provided in paragraph four of 20 this subdivision, in the case of a taxpayer engaged in the business of 21 broadcasting radio or television programs, whether through the public 22 airwaves or by cable, direct or indirect satellite transmission, or any 23 other means of transmission, there shall be allocated to the city, for 24 purposes of such paragraph three, a portion of the gross sales or charg- 25 es for services arising from the sale of subscriptions to such programs 26 or from the broadcasting of such programs and of commercial messages in 27 connection therewith, such portion to be determined according to the 28 number of listeners or viewers within and without the city. 29 (3) Notwithstanding anything in this section, other than subdivision 30 (e) of this section, to the contrary, in the case of a taxpayer that is 31 substantially engaged, in the aggregate, in any combination of the busi- 32 nesses referred to in paragraphs one, two and four of this subdivision, 33 the portion of business income allocable to the city shall be determined 34 in accordance with the provisions of subdivision (c) of this section, as 35 modified by paragraphs one, two and four of this subdivision, unless the 36 commissioner of finance determines that the business income from the 37 city is not fairly and equitably reflected under the provisions of such 38 subdivision (c), in which event the provisions of subdivision (d) of 39 this section shall apply in determining the portion of business income 40 allocable to the city and the provisions of subdivision (b) of this 41 section shall not apply. For purposes of this subdivision, a taxpayer 42 shall be deemed to be substantially engaged in a business or businesses 43 referred to in such paragraphs one and two if more than ten percent of 44 the taxpayer's gross receipts for the taxable year are attributable to 45 such business or businesses. 46 (4) Notwithstanding anything in paragraph one or two of this subdivi- 47 sion to the contrary, for taxable years beginning on or after January 48 first, two thousand two, in the case of a taxpayer engaged in the busi- 49 ness of publishing newspapers or periodicals, or broadcasting radio or 50 television programs, whether through the public airwaves or by cable, 51 direct or indirect satellite transmission, or any other means of trans- 52 mission, there shall be allocated to the city, for purposes of paragraph 53 three of subdivision (c) of this section, the gross sales or charges to 54 subscribers located in the city for subscriptions to such newspapers, 55 periodicals, or program services. For purposes of this paragraph, a 56 subscriber shall be deemed located in the city if, in the case of news-

S. 8578 385

1 papers and periodicals, the mailing address for the subscription is 2 within the city and, in the case of program services, the billing 3 address for the subscription is within the city. For purposes of this 4 clause, "subscriber" shall mean a member of the general public who 5 receives such newspapers, periodicals or program services and does not 6 further distribute them. 7 (e-2) Rules for receipts from certain services to investment compa- 8 nies. (1) For taxable years beginning on or after January first, two 9 thousand one, for purposes of paragraph three of subdivision (c) of this 10 section, the portion of receipts received from an investment company 11 arising from the sale of management, administration or distribution 12 services to such investment company determined in accordance with para- 13 graph two of this subdivision shall be deemed to arise from services 14 performed within the city, such portion referred to herein as the Staten 15 Island city portion. 16 (2) The Staten Island city portion shall be the product of the total 17 of such receipts from the sale of such services and a fraction. The 18 numerator of that fraction is the sum of the monthly percentages, as 19 defined hereinafter, determined for each month of the investment compa- 20 ny's taxable year for federal income tax purposes which taxable year 21 ends within the taxable year of the taxpayer, but excluding any month 22 during which the investment company had no outstanding shares. The 23 monthly percentage for each such month is determined by dividing the 24 number of shares in the investment company which are owned on the last 25 day of the month by shareholders that are domiciled in the city by the 26 total number of shares in the investment company outstanding on that 27 date. The denominator of the fraction is the number of such monthly 28 percentages. 29 (3)(A) For purposes of this subdivision the term "domicile", in the 30 case of an individual shall have the meaning ascribed to it under chap- 31 ter seventeen of this title; an estate or trust is domiciled in the city 32 if it is a city resident estate or trust as defined in paragraph three 33 of subdivision (b) of section 11-1705 of the code of the proceeding 34 municipality; a business entity is domiciled in the city if the location 35 of the actual seat of management or control is in the city. It shall be 36 presumed that the domicile of a shareholder, with respect to any month, 37 is his, her or its mailing address on the records of the investment 38 company as of the last day of such month. 39 (B) For purposes of this subdivision, the term "investment company" 40 means a regulated investment company, as defined in section eight 41 hundred fifty-one of the internal revenue code, and a partnership to 42 which subdivision (a) of section seven thousand seven hundred four of 43 the internal revenue code applies, by virtue of paragraph three of 44 subdivision (c) of section seven thousand seven hundred four of such 45 code, and that meets the requirements of subdivision (b) of section 46 eight hundred fifty-one of such code. The provisions of this subpara- 47 graph shall be applied to the taxable year for federal income tax 48 purposes of the business entity that is asserted to constitute an 49 investment company that ends within the taxable year of the taxpayer. 50 (C) For purposes of this subdivision, the term "receipts from an 51 investment company" includes amounts received directly from an invest- 52 ment company as well as amounts received from the shareholders in such 53 investment company in their capacity as such. 54 (D) For purposes of this subdivision, the term "management services" 55 means the rendering of investment advice to an investment company, 56 making determinations as to when sales and purchases of securities are

S. 8578 386

1 to be made on behalf of an investment company, or the selling or 2 purchasing of securities constituting assets of an investment company, 3 and related activities, but only where such activity or activities are 4 performed pursuant to a contract with the investment company entered 5 into pursuant to subdivision (a) of section fifteen of the federal 6 investment company act of nineteen hundred forty, as amended. 7 (E) For purposes of this subdivision, the term "distribution services" 8 means the services of advertising, servicing investor accounts, includ- 9 ing redemptions, marketing shares or selling shares of an investment 10 company, but, in the case of advertising, servicing investor accounts, 11 including redemptions, or marketing shares, only where such service is 12 performed by a person who is, or was, in the case of a closed end compa- 13 ny, also engaged in the service of selling such shares. In the case of 14 an open end company, such service of selling shares must be performed 15 pursuant to a contract entered into pursuant to subdivision (b) of 16 section fifteen of the federal investment company act of nineteen 17 hundred forty, as amended. 18 (F) For purposes of this subdivision, the term "administration 19 services" includes clerical, accounting, bookkeeping, data processing, 20 internal auditing, legal and tax services performed for an investment 21 company but only if the provider of such service or services during the 22 taxable year in which such service or services are sold also sells 23 management or distribution services, as defined in this subdivision, to 24 such investment company. 25 (e-3) Rules for receipts for services performed by registered securi- 26 ties or commodities brokers or dealers. (1) For taxable years beginning 27 after two thousand eight, in the case of a taxpayer which is a regis- 28 tered securities or commodities broker or dealer, for purposes of para- 29 graph three of subdivision (c) of this section, the receipts specified 30 in subparagraphs (A) through (G) of this paragraph shall be deemed to 31 arise from services performed within the city to the extent set forth in 32 such subparagraphs. 33 (A) Receipts constituting brokerage commissions derived from the 34 execution of securities or commodities purchase or sales orders for the 35 accounts of customers shall be deemed to arise from services performed 36 at the mailing address in the records of the taxpayer of the customer 37 who is responsible for paying such commissions. 38 (B) Receipts constituting margin interest earned on behalf of broker- 39 age accounts shall be deemed to arise from services performed at the 40 mailing address in the records of the taxpayer of the customer who is 41 responsible for paying such margin interest. 42 (C) Gross income, including any accrued interest or dividends, from 43 principal transactions for the purchase or sale of stocks, bonds, 44 foreign exchange and other securities or commodities, including futures 45 and forward contracts, options and other types of securities or commod- 46 ities derivatives contracts, shall be deemed to arise from services 47 performed within the city either (i) to the extent that production cred- 48 its are awarded to branches, offices or employees of the taxpayer within 49 the city as a result of such principal transactions or (ii) if the 50 taxpayer so elects, to the extent that the gross proceeds from such 51 principal transactions, determined without deduction for any cost 52 incurred by the taxpayer to acquire the securities or commodities, are 53 generated from sales of securities or commodities to customers within 54 the city based upon the mailing addresses of such customers in the 55 records of the taxpayer. For purposes of clause (ii) of this subpara- 56 graph, the taxpayer shall separately calculate such gross income from

S. 8578 387

1 principal transactions by type of security or commodity. For purposes of 2 this subparagraph, gross income from principal transactions shall be 3 determined after the deduction of any cost incurred by the taxpayer to 4 acquire the securities or commodities. For purposes of this subdivision, 5 the term "production credits" means credits granted pursuant to the 6 internal accounting system used by the taxpayer to measure the amount of 7 revenue that should be awarded to a particular branch or office or 8 employee of the taxpayer which is based, at least in part, on the 9 branch's, the office's or the employee's particular activities. Upon 10 request, the taxpayer shall be required to furnish a detailed explana- 11 tion of such internal accounting system to the department. 12 (D) (i) Receipts constituting fees earned by the taxpayer for advisory 13 services to a customer in connection with the underwriting of securities 14 for such customer, such customer being the entity which is contemplating 15 issuing or is issuing securities, or fees earned by the taxpayer for 16 managing an underwriting shall be deemed to arise from services 17 performed at the mailing address in the records of the taxpayer of such 18 customer who is responsible for paying such fees. 19 (ii) Receipts constituting the primary spread or selling concession 20 from underwritten securities shall be deemed to arise from services 21 performed within the city to the extent that production credits are 22 awarded to branches, offices or employees of the taxpayer within the 23 city as a result of the sale of the underwritten securities. 24 (iii) The term "primary spread" means the difference between the price 25 paid by the taxpayer to the issuer of the securities being marketed and 26 the price received from the subsequent sale of the underwritten securi- 27 ties at the initial public offering price, less any selling concession 28 and any fees paid to the taxpayer for advisory services or any manager's 29 fees, if such fees are not paid by the customer to the taxpayer sepa- 30 rately. The term "public offering price" means the price agreed upon by 31 the taxpayer and the issuer at which the securities are to be offered to 32 the public. The term "selling concession" means the amount paid to the 33 taxpayer for participating in the underwriting of a security where the 34 taxpayer is not the lead underwriter. 35 (E) Receipts constituting interest earned by the taxpayer on loans and 36 advances made by the taxpayer to an entity affiliated with the taxpayer 37 shall be deemed to arise from services performed at the principal place 38 of business of such affiliated entity. For purposes of this subpara- 39 graph, an entity shall be considered affiliated with the taxpayer if 40 such entity and the taxpayer have eighty percent or more common direct 41 or indirect, actual or beneficial ownership. 42 (F) Receipts constituting account maintenance fees shall be deemed to 43 arise from services performed at the mailing address in the records of 44 the taxpayer of the customer who is responsible for paying such account 45 maintenance fees. 46 (G) Receipts constituting fees for management or advisory services, 47 including fees for advisory services in relation to merger or acquisi- 48 tion activities, but excluding fees paid for services described in para- 49 graph one of subdivision (e-2) of this section, shall be deemed to arise 50 from services performed at the mailing address in the records of the 51 taxpayer of the customer who is responsible for paying such fees. 52 (2) For purposes of this subdivision, the term "securities" shall have 53 the same meaning as in paragraph two of subdivision (c) of section four 54 hundred seventy-five of the internal revenue code and the term "commod- 55 ities" shall have the same meaning as in paragraph two of subdivision 56 (e) of section four hundred seventy-five of such code. The term "regis-

S. 8578 388

1 tered securities or commodities broker or dealer" means a broker or 2 dealer registered as such by the securities and exchange commission or 3 the commodities futures trading commission, and shall include an OTC 4 derivatives dealer as defined under regulations of the securities and 5 exchange commission at title seventeen, part two hundred forty, section 6 3b-12 of the code of federal regulations (17 CFR 240.3b-12). 7 (3) If the taxpayer receives any of the receipts enumerated in para- 8 graph one of this subdivision as a result of a securities correspondent 9 relationship such taxpayer has with another registered securities or 10 commodities broker or dealer with the taxpayer acting in this relation- 11 ship as the clearing firm, such receipts shall be deemed to arise from 12 services performed within the city to the extent set forth in each of 13 the subparagraphs in paragraph one of this subdivision. The amount of 14 such receipts shall exclude the amount the taxpayer is required to pay 15 to the correspondent firm for such correspondent relationship. If the 16 taxpayer receives any of the receipts enumerated in paragraph one of 17 this subdivision as a result of a securities correspondent relationship 18 such taxpayer has with another registered securities or commodities 19 broker or dealer with the taxpayer acting in this relationship as the 20 introducing firm, such receipts shall be deemed to arise from services 21 performed within the city to the extent set forth in each of the subpar- 22 agraphs in paragraph one of this subdivision. 23 (4) If, for purposes of subparagraph (A), (B), (F), or (G) of para- 24 graph one of this subdivision, and clause (i) of subparagraph (C) of 25 paragraph one of this subdivision, the taxpayer is unable from its 26 records to determine the mailing address of the customer, the receipts 27 described in any of such subparagraphs and such clause shall be deemed 28 to arise from services performed at the branch or office of the taxpayer 29 that generates the transaction for the customer that generated such 30 receipts. 31 (f) Allocation of investment income. (1) The investment income of an 32 unincorporated business shall be allocated to the city by multiplying 33 such investment income by an investment allocation percentage to be 34 determined as follows: 35 (A) multiply the amount of its investment capital invested in each 36 stock, bond or other security, other than governmental securities, 37 during the period covered by its return by the issuer's allocation 38 percentage, determined as provided in paragraph two of this subdivision, 39 of the issuer or obligor thereof: 40 (B) add together the products so obtained; and 41 (C) divide the sum so obtained by the total of its investment capital 42 invested during such period in stocks, bonds and other securities; 43 provided, however, that in case any investment capital is invested in 44 any stock, bond or other security during only a portion of the period 45 covered by the return, only such portion of such capital shall be taken 46 into account; and provided, further, that if a taxpayer's investment 47 allocation percentage is zero, interest received on bank accounts shall 48 be allocated in the manner provided in subdivision (b), (c) or (d) of 49 this section. 50 (2) (A) In the case of an issuer or obligor subject to tax under 51 subchapter two or three-A of chapter six of this title, or subject to 52 tax as a utility corporation under chapter eleven of this title, the 53 issuer's allocation percentage shall be the percentage of the appropri- 54 ate measure which is required to be allocated within the city on the 55 report or reports, if any, required of the issuer or obligor under chap- 56 ter six or eleven of this title for the preceding year. The appropriate

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1 measure referred to in this subparagraph shall be: in the case of an 2 issuer or obligor subject to subchapter two of chapter six of this 3 title, entire capital; and in the case of an issuer or obligor subject 4 to chapter eleven of this title as a utility corporation, gross income. 5 (B) In the case of an issuer or obligor subject to tax under part four 6 of subchapter three of chapter six of this title, the issuer's allo- 7 cation percentage shall be determined as follows: 8 (i) In the case of a banking corporation described in paragraphs one 9 through eight of subdivision (a) of section 11-640 of this title which 10 is organized under the laws of the United States, this state or any 11 other state of the United States, the issuer's allocation percentage 12 shall be its alternative entire net income allocation percentage, as 13 defined in subdivision (c) of section 11-642 of this title, for the 14 preceding year. In the case of such a banking corporation whose alterna- 15 tive entire net income for the preceding year is derived exclusively 16 from business carried on within the city, its issuer's allocation 17 percentage shall be one hundred percent. 18 (ii) In the case of a banking corporation described in paragraph two 19 of subdivision (a) of section 11-640 of this title which is organized 20 under the laws of a country other than the United States, the issuer's 21 allocation percentage shall be determined by dividing (I) the amount 22 described in clause (i) of subparagraph (A) of paragraph two of subdivi- 23 sion (a) of section 11-642 of this title with respect to such issuer or 24 obligor for the preceding year, by (II) the gross income of such issuer 25 or obligor from all sources within and without the United States, for 26 such preceding year, whether or not included in alternative entire net 27 income for such year. 28 (iii) In the case of an issuer or obligor described in paragraph nine 29 of subdivision (a) or in paragraph two of subdivision (d) of section 30 11-640 of this title, the issuer's allocation percentage shall be deter- 31 mined by dividing the portion of the entire capital of the issuer or 32 obligor allocable to the city for the preceding year by the entire capi- 33 tal, wherever located, of the issuer or obligor for the preceding year. 34 (C) Provided, however, that if a report or reports for the preceding 35 year are not filed, or if filed do not contain information which would 36 permit the determination of such issuer's allocation percentage, then 37 the issuer's allocation percentage to be used shall, at the discretion 38 of the commissioner of finance, be either (i) the issuer's allocation 39 percentage derived from the most recently filed report or reports of the 40 issuer or obligor or (ii) a percentage calculated, by the commissioner 41 of finance, reasonably to indicate the degree of economic presence in 42 the city of the issuer or obligor during the preceding year. 43 (3) For purposes of this subdivision, investment capital shall be 44 determined by taking the average value of the gross assets included 45 therein, less liabilities deductible therefrom pursuant to the 46 provisions of subdivision (h) of section 11-501 of this chapter. The 47 value of investment capital which consists of marketable securities 48 shall be the fair market value thereof and the value of investment capi- 49 tal other than marketable securities shall be the value thereof shown on 50 the books and records of the unincorporated business in accordance with 51 generally accepted accounting principles. 52 (g) Special rules for manufacturing businesses. (1) For taxable years 53 beginning on or after July first, nineteen hundred ninety-six and before 54 January first, two thousand eleven, a manufacturing business may elect 55 to determine its business allocation percentage by adding together the 56 percentages determined under paragraphs one, two and three of subdivi-

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1 sion (c) of this section and an additional percentage equal to the 2 percentage determined under paragraph three of subdivision (c) of this 3 section, and dividing the result by the number of percentages so added 4 together. 5 (2) An election under this subdivision must be made on a timely filed 6 (determined with regard to extensions granted) original return for the 7 taxable year. Once made for a taxable year, such election shall be irre- 8 vocable for that taxable year. A separate election must be made for each 9 taxable year. A manufacturing business that has failed to make an 10 election as provided in this paragraph shall be required to determine 11 its business allocation percentage without regard to the provisions of 12 this subdivision. Notwithstanding anything in this paragraph to the 13 contrary, the commissioner of finance may permit a manufacturing busi- 14 ness to make or revoke an election under this subdivision, upon such 15 terms and conditions as the commissioner may prescribe, where the 16 commissioner determines that such permission should be granted in the 17 interests of fairness and equity due to a change in circumstances 18 resulting from an audit adjustment. 19 (3) As used in this subdivision, the term "manufacturing business" 20 means an unincorporated business primarily engaged in the manufacturing 21 and sale thereof of tangible personal property; and the term "manufac- 22 turing" includes the process, including the assembly process (i) of 23 working raw materials into wares suitable for use or (ii) which gives 24 new shapes, new qualities or new combinations to matter which already 25 has gone through some artificial process, by the use of machinery, 26 tools, appliances and other similar equipment. An unincorporated busi- 27 ness shall be deemed to be primarily engaged in the activities described 28 in the preceding sentence if more than fifty percent of its gross 29 receipts for the taxable year are attributable to such activities. 30 (h) Notwithstanding subdivision (d) of this section, if it shall 31 appear to the commissioner of finance that any business or investment 32 allocation percentage determined pursuant to this section does not prop- 33 erly reflect the activity, business, or income of a taxpayer within the 34 city, the commissioner of finance shall be authorized in his or her 35 discretion, in the case of a business allocation percentage, to adjust 36 it by (1) excluding one or more of the factors therein; (2) including 37 one or more factors, such as expenses, purchases, contract values, minus 38 subcontract values; (3) excluding one or more assets in computing such 39 allocation percentage, provided the income therefrom is also excluded in 40 determining unincorporated business entire net income, or (4) any other 41 similar or different method calculated to effect a fair and proper allo- 42 cation of the income reasonably attributable to the city, and in the 43 case of an investment allocation percentage, to adjust it by excluding 44 one or more assets in computing such percentage; provided the income 45 therefrom is also excluded in determining unincorporated business entire 46 net income. The commissioner of finance from time to time shall publish 47 all rulings of general public interest with respect to any application 48 of the provisions of this subdivision. 49 (i) Notwithstanding subdivision (c) of this section, but subject to 50 subdivision (g) of this section, the business allocation percentage 51 shall be computed in the manner set forth in this subdivision. 52 (1) For taxable years beginning in two thousand nine, the business 53 allocation percentage shall be determined by adding together the follow- 54 ing percentages: 55 (A) the product of thirty percent and the percentage determined under 56 paragraph one of subdivision (c) of this section,

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1 (B) the product of thirty percent and the percentage determined under 2 paragraph two of subdivision (c) of this section, and 3 (C) the product of forty percent and the percentage determined under 4 paragraph three of subdivision (c) of this section. 5 (2) For taxable years beginning in two thousand ten, the business 6 allocation percentage shall be determined by adding together the follow- 7 ing percentages: 8 (A) the product of twenty-seven percent and the percentage determined 9 under paragraph one of subdivision (c) of this section, 10 (B) the product of twenty-seven percent and the percentage determined 11 under paragraph two of subdivision (c) of this section, and 12 (C) the product of forty-six percent and the percentage determined 13 under paragraph three of subdivision (c) of this section. 14 (3) For taxable years beginning in two thousand eleven, the business 15 allocation percentage shall be determined by adding together the follow- 16 ing percentages: 17 (A) the product of twenty-three and one-half percent and the percent- 18 age determined under paragraph one of subdivision (c) of this section, 19 (B) the product of twenty-three and one-half percent and the percent- 20 age determined under paragraph two of subdivision (c) of this section, 21 and 22 (C) the product of fifty-three percent and the percentage determined 23 under paragraph three of subdivision (c) of this section. 24 (4) For taxable years beginning in two thousand twelve, the business 25 allocation percentage shall be determined by adding together the follow- 26 ing percentages: 27 (A) the product of twenty percent and the percentage determined under 28 paragraph one of subdivision (c) of this section, 29 (B) the product of twenty percent and the percentage determined under 30 paragraph two of subdivision (c) of this section, and 31 (C) the product of sixty percent and the percentage determined under 32 paragraph three of subdivision (c) of this section. 33 (5) For taxable years beginning in two thousand thirteen, the business 34 allocation percentage shall be determined by adding together the follow- 35 ing percentages: 36 (A) the product of sixteen and one-half percent and the percentage 37 determined under paragraph one of subdivision (c) of this section, 38 (B) the product of sixteen and one-half percent and the percentage 39 determined under paragraph two of subdivision (c) of this section, and 40 (C) the product of sixty-seven percent and the percentage determined 41 under paragraph three of subdivision (c) of this section. 42 (6) For taxable years beginning in two thousand fourteen, the business 43 allocation percentage shall be determined by adding together the follow- 44 ing percentages: 45 (A) the product of thirteen and one-half percent and the percentage 46 determined under paragraph one of subdivision (c) of this section, 47 (B) the product of thirteen and one-half percent and the percentage 48 determined under paragraph two of subdivision (c) of this section, and 49 (C) the product of seventy-three percent and the percentage determined 50 under paragraph three of subdivision (c) of this section. 51 (7) For taxable years beginning in two thousand fifteen, the business 52 allocation percentage shall be determined by adding together the follow- 53 ing percentages: 54 (A) the product of ten percent and the percentage determined under 55 paragraph one of subdivision (c) of this section,

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1 (B) the product of ten percent and the percentage determined under 2 paragraph two of subdivision (c) of this section, and 3 (C) the product of eighty percent and the percentage determined under 4 paragraph three of subdivision (c) of this section. 5 (8) For taxable years beginning in two thousand sixteen, the business 6 allocation percentage shall be determined by adding together the follow- 7 ing percentages: 8 (A) the product of six and one-half percent and the percentage deter- 9 mined under paragraph one of subdivision (c) of this section, 10 (B) the product of six and one-half percent and the percentage deter- 11 mined under paragraph two of subdivision (c) of this section, and 12 (C) the product of eighty-seven percent and the percentage determined 13 under paragraph three of subdivision (c) of this section. 14 (9) For taxable years beginning in two thousand seventeen, the busi- 15 ness allocation percentage shall be determined by adding together the 16 following percentages: 17 (A) the product of three and one-half percent and the percentage 18 determined under paragraph one of subdivision (c) of this section, 19 (B) the product of three and one-half percent and the percentage 20 determined under paragraph two of subdivision (c) of this section, and 21 (C) the product of ninety-three percent and the percentage determined 22 under paragraph three of subdivision (c) of this section. 23 (10) For taxable years beginning after two thousand seventeen, the 24 business allocation percentage shall be the percentage determined under 25 paragraph three of subdivision (c) of this section. 26 (11) The commissioner shall promulgate rules necessary to implement 27 the provisions of this subdivision under such circumstances where any of 28 the percentages to be determined under paragraph one, two or three of 29 subdivision (c) of this section cannot be determined because the taxpay- 30 er has no property, payroll or gross receipts from sales or services 31 within or without the city. 32 § 11-509 Deductions not subject to allocation. (a) In computing 33 unincorporated business taxable income, there shall be allowed, without 34 allocation under section 11-508 of this chapter, deductions for reason- 35 able compensation for taxable years beginning before January first, two 36 thousand seven, not in excess of five thousand dollars, and for taxable 37 years beginning on or after January first, two thousand seven, not in 38 excess of ten thousand dollars, for personal services of the proprietor 39 and each partner actively engaged in the unincorporated business, but 40 the aggregate of such deductions shall not exceed twenty per centum of 41 the unincorporated business taxable income computed without the benefit 42 of any deductions under this subdivision or the unincorporated business 43 exemptions under section 11-510 of this chapter. 44 (b) Subject to the conditions provided in paragraphs three and four of 45 this subdivision at the election of the taxpayer there shall also be 46 allowed, without allocation under section 11-508 of this chapter, either 47 or both of the items set forth in paragraphs one and two of this subdi- 48 vision, except that only one of the items shall be allowed with respect 49 to any one item of property. 50 (1) Depreciation with respect to any property such as described in 51 paragraphs three or four of this subdivision, and subject to the condi- 52 tions provided therein, not exceeding twice the depreciation allowed 53 with respect to the same property for federal income tax purposes. Such 54 deduction shall be allowed only upon condition that no deduction shall 55 be allowed pursuant to section 11-507 of this chapter for depreciation 56 of the same property, and the total of all deductions allowed pursuant

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1 to this paragraph in any taxable year or years with respect to any prop- 2 erty shall not exceed its cost or other basis and, in the case of an 3 unincorporated business carried on both within and without this city, 4 with respect to property described in paragraph four of this subdivi- 5 sion, such total shall not exceed its cost or other basis multiplied by 6 (A) the percentage of the excess of the taxpayer's unincorporated busi- 7 ness gross income over its unincorporated business deductions allocated 8 to this city, or (B) the percentage of the taxpayer's business income 9 allocated to this city, whichever is applicable, which percentage shall 10 be determined under section 11-508 of this chapter for the first year 11 such depreciation is deducted. 12 (2) Expenditures paid or incurred during the taxable year for the 13 construction, reconstruction, erection or acquisition of any property 14 such as described in paragraph three or four of this subdivision, and 15 subject to the conditions provided therein, which is used or to be used 16 for purposes of research or development in the experimental or laborato- 17 ry sense. Such purposes shall not be deemed to include the ordinary 18 testing or inspection of materials or products for quality control, 19 efficiency surveys, management studies, consumer surveys, advertising, 20 promotions or research in connection with literary, historical or simi- 21 lar projects. Such deduction shall be allowed only on condition that, in 22 the case of an unincorporated business carried on both within and with- 23 out this city, with respect to property described in paragraph four of 24 this subdivision, such deduction does not exceed the expenditures multi- 25 plied by (A) the percentage of the excess of the taxpayer's unincorpo- 26 rated business gross income over its unincorporated business deductions 27 allocated to this city, or (B) the percentage of the taxpayer's business 28 income allocated to this city, whichever is applicable, which percentage 29 shall be determined under section 11-508 of this chapter for the first 30 year such depreciation is deducted, and that, for the taxable year and 31 all succeeding taxable years, no deduction shall be allowed pursuant to 32 section 11-507 of this chapter on account of such expenditures or on 33 account of depreciation of the same property, except to the extent that 34 its basis may be attributable to factors other than such expenditures, 35 or in case a deduction is allowable pursuant to this paragraph for only 36 a part of such expenditures, on condition that any deduction allowable 37 for federal income tax purposes on account of such expenditures or on 38 account of depreciation of the same property shall be proportionately 39 reduced in determining the deductions allowable pursuant to section 40 11-507 of this chapter for the taxable year and all succeeding taxable 41 years. With respect to property which is used or to be used for research 42 and development only in part, or during only part of its useful life, 43 the deduction allowable pursuant to this paragraph shall be limited to a 44 proportionate part of the expenditures relating thereto. If a deduction 45 shall have been allowed pursuant to this paragraph for all or part of 46 such expenditures with respect to any property, and such property is 47 used for purposes other than research and development to a greater 48 extent than originally reported, the taxpayer shall report such use in 49 the taxpayer's return for the first taxable year during which it occurs, 50 and the commissioner of finance may recompute the tax for the year or 51 years for which such deduction was allowed, and may assess any addi- 52 tional tax resulting from such recomputation within the time fixed by 53 subdivision (c) of section 11-523 of this chapter. 54 (3) For purposes of this paragraph, such deduction shall be allowed 55 only with respect to tangible property which is depreciable pursuant to 56 section one hundred sixty-seven of the internal revenue code, having a

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1 situs in the city and used in the taxpayer's trade or business, (A) 2 constructed, reconstructed or erected after December thirty-first, nine- 3 teen hundred sixty-five, pursuant to a contract which was, on or before 4 December thirty-first, nineteen hundred sixty-seven, and at all times 5 thereafter, binding on the taxpayer or, property, the physical 6 construction, reconstruction or erection of which began on or before 7 December thirty-first, nineteen hundred sixty-seven or which began after 8 such date pursuant to an order placed on or before December thirty- 9 first, nineteen hundred sixty-seven, and then only with respect to that 10 portion of the basis thereof or the expenditure relating thereto which 11 is properly attributable to such construction, reconstruction or 12 erection after December thirty-first, nineteen hundred sixty-five, or 13 (B) acquired after December thirty-first, nineteen hundred sixty-five, 14 pursuant to a contract which was, on or before December thirty-first, 15 nineteen hundred sixty-seven, and at all times thereafter, binding on 16 the taxpayer or pursuant to an order placed on or before December thir- 17 ty-first, nineteen hundred sixty-seven, by purchase as defined in 18 section one hundred seventy-nine (d) of the internal revenue code, if 19 the original use of such property commenced with the taxpayer, commenced 20 in the city and commenced after December thirty-first, nineteen hundred 21 sixty-five or (C) acquired, constructed, reconstructed, or erected 22 subsequent to December thirty-first, nineteen hundred sixty-seven, if 23 such acquisition, construction, reconstruction or erection is pursuant 24 to a plan of the taxpayer which was in existence December thirty-first, 25 nineteen hundred sixty-seven and not thereafter substantially modified, 26 and such acquisition, construction, reconstruction or erection would 27 qualify under the rules in paragraph four, five or six of subsection (h) 28 of section forty-eight of the internal revenue code provided all refer- 29 ences in such paragraphs four, five and six to the dates October nine, 30 nineteen hundred sixty-six, and October ten, nineteen hundred sixty-six, 31 shall be read as December thirty-first, nineteen hundred sixty-seven. A 32 taxpayer shall be allowed a deduction under subparagraph (A), (B) or (C) 33 of this paragraph only if the tangible property shall be delivered or 34 the construction, reconstruction or erection shall be completed on or 35 before December thirty-first, nineteen hundred sixty-nine, except in the 36 case of tangible property which is acquired, constructed, reconstructed 37 or erected pursuant to a contract which was, on or before December thir- 38 ty-first, nineteen hundred sixty-seven, and at all times thereafter, 39 binding on the taxpayer. However, for any taxable year beginning on or 40 after January first, nineteen hundred sixty-eight, a taxpayer shall not 41 be allowed a deduction under paragraph one of this subdivision with 42 respect to tangible personal property leased to any other person or 43 corporation, provided, any contract or agreement to lease or rent or for 44 a license to use such property shall be considered a lease. With 45 respect to property which a taxpayer uses for purposes other than leas- 46 ing for part of a taxable year and leases for a part of a taxable year, 47 a deduction under paragraph one of this subdivision may be taken in 48 proportion to the part of the year such property is used by the taxpay- 49 er. 50 (4) For purposes of this paragraph, such deductions shall be allowed 51 only with respect to tangible property which is depreciable pursuant to 52 section one hundred sixty-seven of the internal revenue code, having a 53 situs in this city and used in the taxpayer's trade or business, (A) the 54 construction, reconstruction, or erection of which is completed after 55 December thirty-first, nineteen hundred sixty-seven, and then only with 56 respect to that portion of the basis thereof or the expenditures relat-

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1 ing thereto which is properly attributable to such construction, recon- 2 struction or erection after December thirty-first, nineteen hundred 3 sixty-three, or (B) acquired after December thirty-first, nineteen 4 hundred sixty-seven, by purchase as defined in section one hundred 5 seventy-nine (d) of the internal revenue code, if the original use of 6 such property commenced with the taxpayer, commenced in this city and 7 commenced after December thirty-first, nineteen hundred sixty-five. 8 Provided, however, a deduction under paragraph one of this subdivision 9 shall be allowed with respect to property described in this paragraph 10 only on condition that such property shall be principally used by the 11 taxpayer in the production of goods by manufacturing; processing; assem- 12 bling; refining; mining; extracting; farming; agriculture; horticulture; 13 floriculture; viticulture or commercial fishing, provided, manufacturing 14 shall mean the process of working raw materials into wares suitable for 15 use or which gives new shapes, new qualities or new combinations to 16 matter which already has gone through some artificial process by the use 17 of machinery, tools, appliances, and other similar equipment. Property 18 used in the production of goods shall include machinery, equipment or 19 other tangible property which is principally used in the repair and 20 service of other machinery, equipment or other tangible property used 21 principally in the production of goods and shall include all facilities 22 used in the manufacturing operation, including storage of material to be 23 used in manufacturing and of the products that are manufactured. At the 24 option of the taxpayer, air and water pollution control facilities which 25 qualify for elective deductions under subdivision (i) of section 11-507 26 of this chapter may be treated, for purposes of this paragraph, as 27 tangible property principally used in the production of goods by manu- 28 facturing; processing; assembling; refining; mining; extracting; farm- 29 ing; agriculture; horticulture; floriculture; viticulture or commercial 30 fishing, in which event, a deduction shall not be allowed under subdivi- 31 sion (i) of section 11-507 of this chapter. However, for any taxable 32 year beginning on or after January first, nineteen hundred sixty-eight, 33 a taxpayer shall not be allowed a deduction under paragraph one of this 34 subdivision with respect to tangible personal property leased to any 35 other person or corporation, provided, any contract or agreement to 36 lease or rent or for a license to use such property shall be considered 37 a lease. With respect to property which a taxpayer uses for purposes 38 other than leasing for part of a taxable year and leases for a part of a 39 taxable year, a deduction under paragraph one shall be allowed in 40 proportion to the part of the year such property is used by the taxpay- 41 er. 42 (5) If the deductions allowable for any taxable year pursuant to this 43 subdivision exceed the taxpayer's unincorporated business taxable 44 income, determined without the allowance of such deductions, the excess 45 may be carried over to the following taxable year or years and may be 46 deducted, without allocation under section 11-508 of this chapter, in 47 computing unincorporated business taxable income for such year or years. 48 (6) In any taxable year when property is sold or otherwise disposed 49 of, with respect to which a deduction has been allowed pursuant to para- 50 graph one or two of this subdivision, the basis of such property shall 51 be adjusted to reflect the deductions so allowed, and if the basis as so 52 adjusted is lower than the adjusted basis of the same property for 53 federal income tax purposes, there shall be added to federal gross 54 income the amount of the difference between such adjusted bases.

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1 § 11-510 Unincorporated business exemptions. In computing unincorpo- 2 rated business taxable income, there shall be allowed, without allo- 3 cation under section 11-508 of this chapter: 4 (a) an unincorporated business exemption of five thousand dollars, 5 prorated for taxable years of less than twelve months under regulations 6 of the commissioner of finance; 7 (b) if a partner in an unincorporated business is taxable under this 8 chapter or under any local law imposed pursuant to section one of chap- 9 ter seven hundred seventy-two of the laws of nineteen hundred sixty-six, 10 an exemption for the amount of the partner's proportionate interest in 11 the excess of the unincorporated business gross income over the 12 deductions allowed under sections 11-507 and 11-509 of this chapter, but 13 this exemption shall be limited to the amount which is included in the 14 partner's unincorporated business taxable income allocable to the city, 15 or included in a corporate partner's net income allocable to the city, 16 provided, however, no such exemption shall be allowed to an unincorpo- 17 rated business for any taxable year of the unincorporated business 18 beginning after June thirtieth, nineteen hundred ninety-four. 19 § 11-511 Declarations of estimated tax. (a) Requirement of declara- 20 tion. Except as provided in subdivision (j) of this section, every 21 unincorporated business shall make a declaration of its estimated tax 22 for the taxable year, containing such information as the commissioner of 23 finance may prescribe by regulations or instruction, if: (1) for taxable 24 years beginning after nineteen hundred eighty-six but before nineteen 25 hundred ninety-six, its unincorporated business taxable income can 26 reasonably be expected to exceed fifteen thousand dollars; (2) for taxa- 27 ble years beginning in nineteen hundred ninety-six, its unincorporated 28 business taxable income can reasonably be expected to exceed twenty 29 thousand dollars; (3) for taxable years beginning after nineteen hundred 30 ninety-six but before two thousand nine, its estimated tax can reason- 31 ably be expected to exceed one thousand eight hundred dollars; and (4) 32 for taxable years beginning after two thousand eight, its estimated tax 33 can reasonably be expected to exceed three thousand four hundred 34 dollars. 35 (b) Definition of estimated tax. The term "estimated tax" means the 36 amount which an unincorporated business estimates to be its tax under 37 this chapter for the taxable year, less the amount which it estimates to 38 be the sum of any credits allowable against the tax other than the cred- 39 it allowable under subdivision (c) of section 11-503 of this chapter. 40 (c) Time for filing declaration. Except as hereinafter provided, a 41 declaration of estimated tax required under this section shall be filed 42 on or before April fifteenth of the taxable year provided, however, that 43 if the requirements of subdivision (a) of this section are first met: 44 (1) after April first and before June second of the taxable year, the 45 declaration shall be filed on or before June fifteenth, or 46 (2) after June first and before September second of the taxable year, 47 the declaration shall be filed on or before September fifteenth, or 48 (3) after September first of the taxable year, the declaration shall 49 be filed on or before January fifteenth of the succeeding year. 50 (d) Filing of declarations on or before January fifteenth. 51 (1) A declaration of estimated tax by an unincorporated business 52 having an estimated unincorporated business taxable income from farming, 53 including oyster farming, for the taxable year which is at least two- 54 thirds of its total estimated unincorporated business taxable income for 55 the taxable year may be filed at any time on or before January fifteenth 56 of the succeeding year.

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1 (2) For taxable years beginning before nineteen hundred ninety-seven, 2 a declaration of estimated tax under this section of forty dollars or 3 less for the taxable year may be filed at any time on or before January 4 fifteenth of the succeeding year under regulations of the commissioner 5 of finance. 6 (e) Amendments of declaration. An unincorporated business may amend a 7 declaration under regulations of the commissioner of finance. 8 (f) Return as declaration or amendment. If on or before February 9 fifteenth of the succeeding taxable year an unincorporated business 10 subject to the estimated tax requirements of this section files its 11 return for the taxable year for which the declaration is required, and 12 pays on or before such date the full amount of the tax shown to be due 13 on the return: 14 (1) such return shall be considered as its declaration if no declara- 15 tion was required to be filed during the taxable year, but is otherwise 16 required to be filed on or before January fifteenth of the succeeding 17 year, and 18 (2) such return shall be considered as the amendment permitted by 19 subdivision (e) of this section to be filed on or before January 20 fifteenth if the tax shown on the return is greater than the estimated 21 tax shown in a declaration previously made. 22 (g) Fiscal year. This section shall apply to a taxable year other 23 than a calendar year by the substitution of the months of such fiscal 24 year for the corresponding months specified in this section. 25 (h) Short taxable year. An unincorporated business subject to the 26 estimated tax requirements of this section and having a taxable year of 27 less than twelve months shall make a declaration in accordance with 28 regulations of the commissioner of finance. 29 (i) Declaration of unincorporated business under a disability. The 30 declaration of estimated tax for an unincorporated business which is 31 unable to make a declaration for any reason shall be made and filed by 32 the committee, fiduciary or other person charged with the care of the 33 property of such unincorporated business, other than a receiver in 34 possession of only a part of such property, or by his or her duly 35 authorized agent. 36 (j) Declaration of estimated tax for taxable years beginning prior to 37 July thirteenth, nineteen hundred sixty-six. Notwithstanding subdivision 38 (c) of this section, no declaration of estimated tax required by subdi- 39 vision (a) of this section need be filed until September twelfth, nine- 40 teen hundred sixty-six. 41 § 11-512 Payments of estimated tax. (a) General. The estimated tax 42 with respect to which a declaration is required shall be paid as 43 follows: 44 (1) If the declaration is filed on or before April fifteenth of the 45 taxable year, the estimated tax shall be paid in four equal install- 46 ments. The first installment shall be paid at the time of the filing of 47 the declaration, and the second, third and fourth installments shall be 48 paid on the following June fifteenth, September fifteenth, and January 49 fifteenth, respectively. 50 (2) If the declaration is filed after April fifteenth and not after 51 June fifteenth of the taxable year, and is not required to be filed on 52 or before April fifteenth of the taxable year, the estimated tax shall 53 be paid in three equal installments. The first installment shall be 54 paid at the time of the filing of the declaration, and the second and 55 third installments shall be paid on the following September fifteenth 56 and January fifteenth, respectively.

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1 (3) If the declaration is filed after June fifteenth and not after 2 September fifteenth of the taxable year, and is not required to be filed 3 on or before June fifteenth of the taxable year, the estimated tax shall 4 be paid in two equal installments. The first installment shall be paid 5 at the time of the filing of the declaration, and the second shall be 6 paid on the following January fifteenth. 7 (4) If the declaration is filed after September fifteenth of the taxa- 8 ble year, and is not required to be filed on or before September 9 fifteenth of the taxable year, the estimated tax shall be paid in full 10 at the time of the filing of the declaration. 11 (5) If the declaration is filed after the time prescribed therefor, or 12 after the expiration of any extension of time therefor, paragraphs two, 13 three and four of this subdivision shall not apply, and there shall be 14 paid at the time of such filing all installments of estimated tax paya- 15 ble at or before such time, and the remaining installments shall be paid 16 at the times at which, and in the amounts in which, they would have been 17 payable if the declaration had been filed when due. 18 (b) Amendments of declaration. If any amendment of a declaration is 19 filed, the remaining installments, if any, shall be ratably increased or 20 decreased, as the case may be, to reflect any increase or decrease in 21 the estimated tax by reason of such amendment, and if any amendment is 22 made after September fifteenth of the taxable year, any increase in the 23 estimated tax by reason thereof shall be paid at the time of making such 24 amendment. 25 (c) Application to short taxable year. This section shall apply to a 26 taxable year of less than twelve months in accordance with regulations 27 of the commissioner of finance. 28 (d) Fiscal year. This section shall apply to a taxable year other 29 than a calendar year by the substitution of the months of such fiscal 30 year for the corresponding months specified in this section. 31 (e) Installments paid in advance. An unincorporated business may elect 32 to pay any installment of its estimated tax prior to the date prescribed 33 for the payment thereof. 34 (f) Cross reference. For unincorporated businesses with taxable years 35 beginning prior to July thirteenth, nineteen hundred sixty-six, see 36 subdivision (j) of section 11-511 of this chapter. 37 (g) Taxpayers with credit relating to stock transfer tax. The portion 38 of an overpayment attributable to a credit allowable pursuant to subdi- 39 vision (c) of section 11-503 of this chapter may not be credited against 40 any payment due under this section. 41 § 11-513 Accounting periods and methods. (a) Accounting periods. A 42 taxpayer's taxable year under this chapter shall be the same as the 43 taxpayer's taxable year for federal income tax purposes. 44 (b) Accounting methods. A taxpayer's method of accounting under this 45 chapter shall be the same as the taxpayer's method of accounting for 46 federal income tax purposes. In the absence of any method of accounting 47 for federal income tax purposes, unincorporated business taxable income 48 shall be computed under such method as in the opinion of the commission- 49 er of finance clearly reflects income. 50 (c) Change of accounting period or method. (1) If a taxpayer's taxa- 51 ble year or method of accounting is changed for federal income tax 52 purposes, the taxable year or method of accounting for purposes of this 53 chapter shall be similarly changed. 54 (2) If a taxpayer's method of accounting is changed, other than from 55 an accrual to an installment method, any additional tax which results 56 from adjustments determined to be necessary solely by reason of the

S. 8578 399

1 change shall not be greater than if such adjustments were ratably allo- 2 cated and included for the taxable year of the change and the preceding 3 taxable years, not in excess of two, beginning after January first, 4 nineteen hundred sixty-six, during which the taxpayer used the method of 5 accounting from which the change is made. 6 (3) If a taxpayer's method of accounting is changed from an accrual 7 to an installment method, any additional tax for the year of such change 8 of method and for any subsequent year, which is attributable to the 9 receipt of installment payments properly accrued in a prior year, shall 10 be reduced by the portion of tax for any prior taxable year attributable 11 to the accrual of such installment payments, in accordance with regu- 12 lations of the commissioner of finance. 13 § 11-514 Returns, payment of tax. (a) General. An unincorporated 14 business income tax return shall be made and filed, and the balance of 15 any tax shown on the face of such return, not previously paid as 16 installments of estimated tax, shall be paid, on or before the fifteenth 17 day of the fourth month following the close of a taxable year, except 18 that in the case of an unincorporated business classified as a partner- 19 ship for federal income tax purposes, such return shall be made and 20 filed and such balance shall be paid on or before the fifteenth day of 21 the third month following the close of a taxable year for taxable years 22 beginning on or after January first, two thousand sixteen, by or for 23 every: 24 (1) unincorporated business, for taxable years beginning after nine- 25 teen hundred eighty-six but before nineteen hundred ninety-seven, having 26 unincorporated business gross income, determined for purposes of this 27 subdivision without any deduction for the cost of goods sold or services 28 performed, of more than ten thousand dollars, or having any amount of 29 unincorporated business taxable income; 30 (2) partnership, for taxable years beginning after nineteen hundred 31 ninety-six, having unincorporated business gross income, determined for 32 purposes of this subdivision without any deduction for the cost of goods 33 sold or services performed, of more than twenty-five thousand dollars, 34 or having unincorporated business taxable income of more than fifteen 35 thousand dollars; 36 (3) unincorporated business other than a partnership, for taxable 37 years beginning after nineteen hundred ninety-six, having unincorporated 38 business gross income, determined for purposes of this subdivision with- 39 out any deduction for the cost of goods sold or services performed, of 40 more than seventy-five thousand dollars, or having unincorporated busi- 41 ness taxable income of more than thirty-five thousand dollars; and 42 (4) unincorporated business, for taxable years beginning after two 43 thousand eight, having unincorporated business gross income, determined 44 for purposes of this subdivision without any deduction for the cost of 45 goods sold or services performed, of more than ninety-five thousand 46 dollars. 47 (b) Decedents. The return for any deceased individual shall be made 48 and filed by his or her executor, administrator, or other person charged 49 with his or her property. If a final return of a decedent is for a 50 fractional part of a year, the due date of such return shall be the 51 fifteenth day of the fourth month following the close of the twelve- 52 month period which began with the first day of such fractional part of 53 the year. 54 (c) Individuals under a disability. The return for an individual who 55 is unable to make a return by reason of minority or other disability 56 shall be made and filed by such individual's guardian, committee, fidu-

S. 8578 400

1 ciary or other person charged with the care of his or her person or 2 property, other than a receiver in possession of only a part of his or 3 her property, or by such individual's duly authorized agent. 4 (d) Estates and trusts. The return for an estate or trust shall be 5 made and filed by the fiduciary. 6 (e) Joint fiduciaries. If two or more fiduciaries are acting jointly, 7 the return may be made by any one of them. 8 (f) Returns for taxable years ending prior to December thirty-first, 9 nineteen hundred sixty-six. With respect to taxable years ending prior 10 to December thirty-first, nineteen hundred sixty-six, the returns 11 required to be made and filed pursuant to this section shall be made and 12 filed on or before the fifteenth day of the fourth month following the 13 close of such taxable year or September twelfth, nineteen hundred 14 sixty-six, whichever is later. 15 (g) Taxpayers with credit relating to stock transfer tax. Subdivision 16 (a) of this section shall apply to a taxpayer which has a right to a 17 credit pursuant to subdivision (c) of section 11-503 of this chapter, 18 except that the tax, or balance thereof, payable to the commissioner of 19 finance in full pursuant to subdivision (a) of this section, at the time 20 the report is required to be filed, shall be calculated and paid at such 21 time as if the credit provided for in subdivision (c) of section 11-503 22 of this chapter were not allowed. 23 § 11-515 Time and place for filing returns and paying tax. A person 24 required to make and file a return under this chapter shall, without 25 assessment, notice or demand, pay any tax due thereon to the commission- 26 er of finance on or before the date fixed for filing such return, deter- 27 mined without regard to any extension of time for filing the return. 28 The commissioner of finance shall prescribe by regulation the place for 29 filing any return, declaration, statement, or other document required 30 pursuant to this chapter and for payment of any tax. 31 § 11-516 Signing of returns and other documents. (a) General. Any 32 return, declaration, statement or other document required to be made 33 pursuant to this chapter shall be signed in accordance with regulations 34 or instructions prescribed by the commissioner of finance. The fact 35 that an individual's name is signed to a return, declaration, statement, 36 or other document, shall be prima facie evidence for all purposes that 37 the return, declaration, statement or other document was actually signed 38 by such individual. 39 (b) Partnerships. Any return, statement or other document required of 40 a partnership shall be signed by one or more partners. The fact that a 41 partner's name is signed to a return, statement, or other document, 42 shall be prima facie evidence for all purposes that such partner is 43 authorized to sign on behalf of the partnership. 44 (c) Certifications. The making or filing of any return, declaration, 45 statement or other document or copy thereof required to be made or filed 46 pursuant to this chapter, including a copy of a federal return, shall 47 constitute a certification by the person making or filing such return, 48 declaration, statement or other document or copy thereof that the state- 49 ments contained therein are true and that any copy filed is a true copy. 50 § 11-517 Extensions of time. (a) General. The commissioner of 51 finance may grant a reasonable extension of time for payment of tax or 52 estimated tax, or any installment, or for filing any return, declara- 53 tion, statement, or other document required pursuant to this chapter, on 54 such terms and conditions as it may require. Except for a taxpayer who 55 is outside the United States, no such extension for filing any return, 56 declaration, statement or other document, shall exceed six months.

S. 8578 401

1 (b) Furnishing of security. If any extension of time is granted for 2 payment of any amount of tax, the commissioner of finance may require 3 the taxpayer to furnish a bond or other security in an amount not 4 exceeding twice the amount for which the extension of time for payment 5 is granted, on such terms and conditions as the commissioner of finance 6 may require. 7 § 11-518 Requirements concerning returns, notices, records and state- 8 ments. (a) General. The commissioner of finance may prescribe regu- 9 lations as to the keeping of records, the content and forms of returns 10 and statements, and the filing of copies of federal income tax returns 11 and determinations. The commissioner of finance may require any person, 12 by regulation or notice served upon such person, to make such returns, 13 render such statements, or keep such records, as the commissioner of 14 finance may deem sufficient to show whether or not such person is liable 15 under this chapter for tax or for collection of tax. 16 (b) Notice of qualification as receiver, etc. Every receiver, trustee 17 in bankruptcy, assignee for benefit of creditors, or other like fiduci- 18 ary shall give notice of his or her qualification as such to the commis- 19 sioner of finance, as may be required by regulation. 20 § 11-519 Report of change in federal or New York state taxable 21 income. If the amount of a taxpayer's federal or New York state taxable 22 income reported on his or her federal or New York state income tax for 23 any taxable year is changed or corrected by the United States internal 24 revenue service or the New York state tax commission or other competent 25 authority, or as the result of a renegotiation of a contract or subcon- 26 tract with the United States or the state of New York, or if a taxpayer, 27 pursuant to subsection (d) of section sixty-two hundred thirteen of the 28 internal revenue code, executes a notice of waiver of the restrictions 29 provided in subsection (a) of said section, or if a taxpayer, pursuant 30 to subsection (f) of section six hundred eighty-one of the tax law, 31 executes a notice or waiver of the restrictions provided in subsection 32 (c) of such section of the tax law, the taxpayer shall report such 33 change or correction in federal or New York state taxable income or such 34 execution of such notice of waiver and the changes or corrections of the 35 taxpayer's federal or New York state taxable income on which it is 36 based, within ninety days after the final determination of such change, 37 correction, or renegotiation, or such execution of such notice of waiv- 38 er, or as otherwise required by the commissioner of finance, and shall 39 concede the accuracy of such determination or state wherein it is erro- 40 neous. Any taxpayer filing an amended federal or New York state income 41 tax return shall also file within ninety days thereafter an amended 42 return under this chapter, and shall give such information as the 43 commissioner of finance may require. The commissioner of finance may by 44 regulation prescribe such exceptions to the requirements of this section 45 as the commissioner deems appropriate. 46 § 11-519.1 Report of change of state sales and compensating use tax 47 liability. Where the state tax commission changes or corrects a taxpay- 48 er's sales and compensating use tax liability with respect to the 49 purchase or use of items for which a sales or compensating use tax cred- 50 it against the tax imposed by this chapter was claimed, the taxpayer 51 shall report such change or correction to the commissioner of finance 52 within ninety days of the final determination of such change or 53 correction, or as required by the commissioner of finance, and shall 54 concede the accuracy of such determination or state wherein it is erro- 55 neous. Any taxpayer filing an amended return or report relating to the 56 purchase or use of such items shall also file within ninety days there-

S. 8578 402

1 after a copy of such amended return or report with the commissioner of 2 finance. 3 § 11-520 Change of election. Any election expressly authorized by 4 this chapter, other than the election authorized by section 11-506 of 5 this chapter, may be changed on such terms and conditions as the commis- 6 sioner of finance may prescribe by regulation. 7 § 11-521 Notice of deficiency. (a) General. If upon examination of a 8 taxpayer's return under this chapter the commissioner of finance deter- 9 mines that there is a deficiency of income tax, the commissioner may 10 mail a notice of deficiency to the taxpayer. If a taxpayer fails to file 11 a return required under this chapter, the commissioner of finance is 12 authorized to estimate the taxpayer's city unincorporated business taxa- 13 ble income and tax thereon, from any information in the commissioner's 14 possession, and to mail a notice of deficiency to the taxpayer. A notice 15 of deficiency shall be mailed by certified or registered mail to the 16 taxpayer at his or her last known address in or out of the city. If the 17 taxpayer is deceased or under a legal disability, a notice of deficiency 18 may be mailed to his or her last known address in or out of the city, 19 unless the commissioner of finance has received notice of the existence 20 of a fiduciary relationship with respect to the taxpayer. 21 (b) Notice of deficiency as assessment. After ninety days from the 22 mailing of a notice of deficiency or, if the commissioner of finance has 23 established a conciliation procedure pursuant to section 11-124 of this 24 title and the taxpayer has requested a conciliation conference in 25 accordance therewith, after ninety days from the mailing of the concil- 26 iation decision or the date of the commissioner's confirmation of the 27 discontinuance of the conciliation proceeding, such notice shall be an 28 assessment of the amount of tax specified therein, together with the 29 interest, additions to tax and penalties stated in such notice, except 30 only for any such tax or other amounts as to which the taxpayer has 31 within such ninety day period filed with the tax appeals tribunal a 32 petition under section 11-529 of this chapter. If the notice of defi- 33 ciency or conciliation decision is addressed to a person outside of the 34 United States, such period shall be one hundred fifty days instead of 35 ninety days. 36 (c) Restrictions on assessment and levy. No assessment of a deficiency 37 in tax and no levy or proceeding in court for its collection shall be 38 made, begun or prosecuted, except as otherwise provided in section 39 11-534 of this chapter, until a notice of deficiency has been mailed to 40 the taxpayer, nor until the expiration of the time for filing a petition 41 with the tax appeals tribunal contesting such notice, nor, if a petition 42 with respect to the taxable year has been both served upon the commis- 43 sioner of finance and filed with the tax appeals tribunal, until the 44 decision of the tax appeals tribunal has become final. For exception in 45 the case of judicial review of the decision of the tax appeals tribunal, 46 see subdivision (c) of section 11-530 of this chapter. 47 (d) Exceptions for mathematical errors. If a mathematical error 48 appears on a return, including an overstatement of the amount paid as 49 estimated tax, the commissioner of finance shall notify the taxpayer 50 that an amount of tax in excess of that shown upon the return is due, 51 and that such excess has been assessed. 52 Such notice shall not be considered as a notice of deficiency for the 53 purposes of this section, subdivision (f) of section 11-527 of this 54 chapter, limiting credits or refunds after petition to the tax appeals 55 tribunal, or subdivision (b) of section 11-529 of this chapter, author- 56 izing the filing of a petition with the tax appeals tribunal based on a

S. 8578 403

1 notice of deficiency, nor shall such assessment or collection be prohib- 2 ited by the provisions of subdivision (c) of this section. 3 (e) Exception where change in federal or New York state taxable income 4 is not reported. 5 (1) If the taxpayer fails to comply with section 11-519 of this chap- 6 ter in not reporting a change or correction increasing or decreasing the 7 taxpayer's federal or New York state taxable income as reported on the 8 taxpayer's federal or New York state return or in not reporting a change 9 or correction which is treated in the same manner as if it were a defi- 10 ciency for federal or New York state income tax purposes or in not 11 filing an amended return or in not reporting the execution of a notice 12 of waiver described in such section, instead of the mode and time of 13 assessment provided for in subdivision (b) of this section, the commis- 14 sioner of finance may assess a deficiency based upon such changed or 15 corrected federal or New York state taxable income by mailing to the 16 taxpayer a notice of additional tax due specifying the amount of the 17 deficiency, and such deficiency, together with the interest, additions 18 to tax and penalties stated in such notice, shall be deemed assessed on 19 the date such notice is mailed unless within thirty days after the mail- 20 ing of such notice a report of the federal or New York state change or 21 correction or an amended return, where such return was required by 22 section 11-519 of this chapter, is filed accompanied by a statement 23 showing wherein such federal or New York state determination and such 24 notice of additional tax due are erroneous. 25 (2) Such notice shall not be considered as a notice of deficiency for 26 the purposes of this section, subdivision (f) of section 11-527 of this 27 chapter, limiting credits or refunds after petition to the tax appeals 28 tribunal, or subdivision (b) of section 11-529 of this chapter, author- 29 izing the filing of a petition with the tax appeals tribunal based on a 30 notice of deficiency, nor shall such assessment or collection thereof be 31 prohibited by the provisions of subdivision (c) of this section. 32 (3) If the taxpayer is deceased or under a legal disability, a notice 33 of additional tax due may be mailed to his or her last known address in 34 or out of the city, unless the commissioner of finance has received 35 notice of the existence of a fiduciary relationship with respect to the 36 taxpayer. 37 (f) Waiver of restrictions. The taxpayer shall at any time, whether or 38 not a notice of deficiency has been issued, have the right to waive the 39 restrictions on assessment and collection of the whole or any part of 40 the deficiency by a signed notice in writing filed with the commissioner 41 of finance. 42 (g) Deficiency defined. For purposes of this chapter, a deficiency 43 means the amount of the tax imposed by this chapter, less (i) the amount 44 shown as the tax upon the taxpayer's return, whether the return was made 45 or the tax computed by the taxpayer or by the commissioner of finance, 46 and less, (ii) the amounts previously assessed, or collected without 47 assessment, as a deficiency and plus (iii) the amount of any rebates. 48 For the purpose of this definition, the tax imposed by this chapter and 49 the tax shown on the return shall both be determined without regard to 50 payments on account of estimated tax; and a rebate means so much of an 51 abatement, credit, refund or other repayment, whether or not erroneous, 52 made on the ground that the amounts entering into the definition of a 53 deficiency showed a balance in favor of the taxpayer. 54 (h) Exception where change or correction of sales and compensating use 55 tax liability is not reported. (1) If a taxpayer fails to comply with 56 section 11-519.1 of this chapter in not reporting a change or correction

S. 8578 404

1 of his or her sales and compensating use tax liability or in not filing 2 a copy of an amended return or report relating to his or her sales and 3 compensating use tax liability, instead of the mode and time of assess- 4 ment provided for in subdivision (b) of this section, the commissioner 5 of finance may assess a deficiency based upon such changed or corrected 6 sales and compensating use tax liability, as same relates to credits 7 claimed under this chapter by mailing to the taxpayer a notice of addi- 8 tional tax due specifying the amount of the deficiency, and such defi- 9 ciency, together with the interest, additions to tax and penalties stat- 10 ed in such notice, shall be deemed assessed on the date such notice is 11 mailed unless within thirty days after the mailing of such notice a 12 report of the state change or correction or a copy of an amended return 13 or report, where such copy was required by section 11-519.1 of this 14 chapter, is filed accompanied by a statement showing where such state 15 determination and such notice of additional tax due are erroneous. 16 (2) Such notice shall not be considered as a notice of deficiency for 17 the purposes of this section, subdivision (f) of section 11-527 of this 18 chapter, limiting credits or refunds after petition to the tax appeals 19 tribunal, or subdivision (b) of section 11-529 of this chapter, author- 20 izing the filing of a petition with the tax appeals tribunal based on a 21 notice of deficiency, nor shall such assessment or the collection there- 22 of be prohibited by the provisions of subdivision (c) of this section. 23 (3) If the taxpayer is deceased or under a legal disability, a notice 24 of additional tax due may be mailed to his or her last known address in 25 or out of the city, and such notice shall be sufficient for purposes of 26 this chapter. If the commissioner of finance has received notice that a 27 person is acting for the taxpayer in a fiduciary capacity, a copy of 28 such notice shall also be mailed to the fiduciary named in such notice. 29 § 11-522 Assessment. (a) Assessment date. The amount of tax which a 30 return shows to be due, or the amount of tax which a return would have 31 shown to be due but for a mathematical error, shall be deemed to be 32 assessed on the date of filing of the return, including any amended 33 return showing an increase of tax. In the case of a return properly 34 filed without computation of tax, the tax computed by the commissioner 35 of finance shall be deemed to be assessed on the date on which payment 36 is due. If a notice of deficiency has been mailed, the amount of the 37 deficiency shall be deemed to be assessed on the date specified in 38 subdivision (b) of section 11-521 of this chapter if no petition is both 39 served on the commissioner of finance and filed with the tax appeals 40 tribunal, or if a petition is filed, then upon the date when a decision 41 of the tax appeals tribunal establishing the amount of the deficiency 42 becomes final. 43 If an amended return or report filed pursuant to section 11-519 of 44 this chapter concedes the accuracy of a federal or New York state 45 adjustment, change or correction, any deficiency in tax under this chap- 46 ter resulting therefrom shall be deemed to be assessed on the date of 47 filing such report or amended return, and such assessment shall be time- 48 ly notwithstanding section 11-523 of this chapter. 49 If a report or amended return or report filed pursuant to section 50 11-519.1 of this chapter concedes the accuracy of a state change or 51 correction of sales and compensating use tax liability, any deficiency 52 in tax under this chapter resulting therefrom shall be deemed assessed 53 on the date of filing such report, and such assessment shall be timely 54 notwithstanding section 11-523 of this chapter. 55 If a notice of additional tax due, as prescribed in subdivision (e) of 56 section 11-521 of this chapter has been mailed, the amount of the defi-

S. 8578 405

1 ciency shall be deemed to be assessed on the date specified in such 2 subdivision unless within thirty days after the mailing of such notice a 3 report of the federal or New York state change or correction or an 4 amended return, where such return was required by section 11-519 of this 5 chapter is filed accompanied by a statement showing wherein such federal 6 or New York state determination and such notice of additional tax due 7 are erroneous. 8 If a notice of additional tax due, as prescribed in subdivision (h) of 9 section 11-521 of this chapter, has been mailed, the amount of the defi- 10 ciency shall be deemed to be assessed on the date specified in such 11 subdivision unless within thirty days after the mailing of such notice a 12 report of the state change or correction, or a copy of an amended return 13 or report, where such copy was required by section 11-519.1 of this 14 chapter, is filed accompanied by a statement showing wherein such state 15 determination and such notice of additional tax due are erroneous. 16 Any amount paid as a tax or in respect of a tax, other than amounts 17 paid as estimated income tax, shall be deemed to be assessed upon the 18 date of receipt of payment, notwithstanding any other provisions. 19 (b) Other assessment powers. If the mode or time for the assessment of 20 any tax under this chapter, including interest, additions to tax and 21 assessable penalties, is not otherwise provided for, the commissioner of 22 finance may establish the same by regulations. 23 (c) Estimated income tax. No unpaid amount of estimated tax under 24 section one hundred sixteen shall be assessed. 25 (d) Supplemental assessment. The commissioner of finance may, at any 26 time within the period prescribed for assessment, make a supplemental 27 assessment, subject to the provisions of section 11-521 of this chapter 28 where applicable, whenever it is ascertained that any assessment is 29 imperfect or incomplete in any material respect. 30 (e) Cross-reference. For assessment in case of jeopardy, see section 31 11-534 of this chapter. 32 § 11-523 Limitations on assessment. (a) General. Except as otherwise 33 provided in this section, any tax under this chapter shall be assessed 34 within three years after the return was filed, whether or not such 35 return was filed on or after the date prescribed. 36 (b) Time return deemed filed. For purposes of this section a return 37 of tax filed before the last day prescribed by law or by regulations 38 promulgated pursuant to law for the filing thereof, shall be deemed to 39 be filed on such last day. 40 (c) Exceptions. (1) Assessment at any time. The tax may be assessed 41 at any time if: 42 (A) no return is filed, 43 (B) a false or fraudulent return is filed with intent to evade tax, 44 (C) the taxpayer fails to comply with section 11-519 of this chapter 45 in not reporting a change or correction increasing or decreasing the 46 taxpayer's federal or New York state taxable income as reported on the 47 taxpayer's federal or New York state income tax return, or the execution 48 of a notice of waiver and the changes or corrections on which it is 49 based or in not reporting a change or correction which is treated in the 50 same manner as if it were a deficiency for federal or New York state 51 income tax purposes, or in not filing an amended return, or 52 (D) the taxpayer fails to file a report or amended return or report 53 required under section 11-519.1 of this chapter, in respect of a change 54 or correction of sales and compensating use tax liability, relating to 55 the purchase or use of items for which a sales or compensating use tax 56 credit against the tax imposed by this chapter was claimed.

S. 8578 406

1 (2) Extension by agreement. Where, before the expiration of the time 2 prescribed in this section for the assessment of tax, both the commis- 3 sioner of finance and the taxpayer have consented in writing to its 4 assessment after such time, the tax may be assessed at any time prior to 5 the expiration of the period agreed upon. The period so agreed upon may 6 be extended by subsequent agreements in writing made before the expira- 7 tion of the period previously agreed upon. 8 (3) Report of changed or corrected federal or New York state income. 9 If the taxpayer shall, pursuant to section 11-519 of this chapter, 10 report a change or correction or file an amended return increasing or 11 decreasing federal or New York state taxable income or report the 12 execution of a notice of waiver and the changes and corrections on which 13 it is based, or a change or correction which is treated in the same 14 manner as if it were a deficiency for federal or New York state income 15 tax purposes, the assessment, if not deemed to have been made upon the 16 filing of the report or amended return, may be made at any time within 17 two years after such report or amended return was filed. The amount of 18 such assessment of tax shall not exceed the amount of the increase in 19 city tax attributable to such federal or New York state change or 20 correction. The provisions of this paragraph shall not affect the time 21 within which or the amount for which an assessment may otherwise be 22 made. 23 (4) Deficiency attributable to net operating loss carryback. If a 24 deficiency is attributable to the application to the taxpayer of a net 25 operating loss carryback, it may be assessed at any time that a defi- 26 ciency for the taxable year of the loss may be assessed. 27 (5) Recovery of erroneous refund. An erroneous refund shall be 28 considered an underpayment of tax on the date made, and an assessment of 29 a deficiency arising out of an erroneous refund may be made at any time 30 within two years from the making of the refund, except that the assess- 31 ment may be made within five years from the making of the refund if it 32 appears that any part of the refund was induced by fraud or misrepresen- 33 tation of a material fact. 34 (6) Request for prompt assessment. If a return is required for a 35 decedent or for his or her estate during the period of administration, 36 the tax shall be assessed within eighteen months after written request 37 therefor, made after the return is filed, by the executor, administrator 38 or other person representing the estate of such decedent, but not more 39 than three years after the return was filed, except as otherwise 40 provided in this subdivision and subdivision (d) of this section. 41 (7) Report on use of certain property. Under the circumstances 42 described in paragraph two of subdivision (b) of section 11-509 of this 43 chapter, the tax may be assessed within three years after the filing of 44 a return reporting that property has been used for purposes other than 45 research and development to a greater extent than originally reported. 46 (8) Report concerning waste treatment facility. Under the circum- 47 stances described in paragraph (i) of section 11-507 of this chapter, 48 the tax may be assessed within three years after the filing of the 49 return containing the information required by such paragraph. 50 (9) Report of changed or corrected sales and compensating use tax 51 liability. If the taxpayer files a report or amended return or report 52 required under section 11-519.1 of this chapter, in respect of a change 53 or correction of sales and compensating use tax liability, the assess- 54 ment, if not deemed to have been made upon the filing of the report, may 55 be made at any time within two years after such report or amended return 56 or report was filed. The amount of such assessment of tax shall not

S. 8578 407

1 exceed the amount of the increase in city tax attributable to such state 2 change or correction. The provisions of this paragraph shall not affect 3 the time within which or the amount for which an assessment may other- 4 wise be made. 5 (d) Omission of income on return. The tax may be assessed at any time 6 within six years after the return was filed if (1) a taxpayer omits from 7 his or her city unincorporated business gross income an amount properly 8 includible therein which is in excess of twenty-five per centum of the 9 amount of city unincorporated business gross income stated in the 10 return, or (2) an estate or trust omits income from its return in an 11 amount in excess of twenty-five percent of its income determined as if 12 it were an individual. 13 For purposes of this subdivision there shall not be taken into account 14 any amount which is omitted in the return if such amount is disclosed in 15 the return, or in a statement attached to the return, in a manner 16 adequate to apprise the commissioner of finance of the nature and amount 17 of such item. 18 (e) Suspension of running of period of limitation. The running of the 19 period of limitations on assessment or collection of tax or other 20 amount, or of a transferee's liability, shall, after the mailing of a 21 notice of deficiency, be suspended for the period during which the 22 commissioner of finance is prohibited under subdivision (c) of section 23 11-521 of this chapter from making the assessment or from collecting by 24 levy. 25 § 11-524 Interest on underpayment. (a) General. If any amount of tax 26 is not paid on or before the last date prescribed in this chapter for 27 payment, interest on such amount at the underpayment rate set by the 28 commissioner of finance pursuant to section 11-537 of this chapter, or, 29 if no rate is set, at the rate of seven and one-half percent per annum 30 shall be paid for the period from such last date to the date paid, 31 whether or not any extension of time for payment was granted. Interest 32 under this subdivision shall not be paid if the amount thereof is less 33 than one dollar. 34 (b) Exception as to estimated tax. This section shall not apply to 35 any failure to pay estimated tax under section 11-512 of this chapter. 36 (c) Exception for mathematical error. No interest shall be imposed on 37 any underpayment of tax due solely to mathematical error if the taxpayer 38 files a return within the time prescribed in this chapter, including any 39 extension of time, and pays the amount of underpayment within three 40 months after the due date of such return, as it may be extended. 41 (d) Suspension of interest on deficiencies. If a waiver of 42 restrictions on assessment of a deficiency has been filed by the taxpay- 43 er, and if notice and demand by the commissioner of finance for payment 44 of such deficiency is not made within thirty days after the filing of 45 such waiver, interest shall not be imposed on such deficiency for the 46 period beginning immediately after such thirtieth day and ending with 47 the date of notice and demand. 48 (e) Tax reduced by carryback. If the amount of tax for any taxable 49 year is reduced by reason of a carryback of a net operating loss, such 50 reduction in tax shall not affect the computation of interest under this 51 section for the period ending with the filing date for the taxable year 52 in which the net operating loss arises. Such filing date shall be deter- 53 mined without regard to extensions of time to file. 54 (f) Interest treated as tax. Interest under this section shall be 55 paid upon notice and demand and shall be assessed, collected and paid in 56 the same manner as tax. Any reference in this chapter to the tax

S. 8578 408

1 imposed by this chapter shall be deemed also to refer to interest 2 imposed by this section on such tax. 3 (g) Interest on penalties or additions to tax. Interest shall be 4 imposed under subdivision (a) of this section in respect of any assessa- 5 ble penalty or addition to tax only if such assessable penalty or addi- 6 tion to tax is not paid within ten days from the date of the notice and 7 demand therefor under subdivision (b) of section 11-532 of this chapter, 8 and in such case interest shall be imposed only for the period from such 9 date of the notice and demand to the date of payment. 10 (h) Payment within ten days after notice and demand. If notice and 11 demand is made for payment of any amount under subdivision (b) of 12 section 11-532 of this chapter, and if such amount is paid within ten 13 days after the date of such notice and demand, interest under this 14 section on the amount so paid shall not be imposed for the period after 15 the date of such notice and demand. 16 (i) Limitation on assessment and collection. Interest prescribed 17 under this section may be assessed and collected at any time during the 18 period within which the tax or other amount to which such interest 19 relates may be assessed and collected, respectively. 20 (j) Interest on erroneous refund. Any portion of tax or other amount 21 which has been erroneously refunded, and which is recoverable by the 22 commissioner of finance, shall bear interest at the underpayment rate 23 set by the commissioner of finance pursuant to section 11-537 of this 24 chapter, or, if no rate is set, at the rate of seven and one-half 25 percent per annum from the date of the payment of the refund, but only 26 if it appears that any part of the refund was induced by fraud or a 27 misrepresentation of a material fact. 28 (k) Satisfaction by credits. If any portion of a tax is satisfied by 29 credit of an overpayment, then no interest shall be imposed under this 30 section on the portion of the tax so satisfied for any period during 31 which, if the credit had not been made, interest would have been allow- 32 able with respect to such overpayment. 33 § 11-525 Additions to tax and civil penalties. (a) (1) Failure to 34 file tax return. (A) In case of failure to file a tax return under this 35 chapter on or before the prescribed date, determined with regard to any 36 extension of time for filing, unless it is shown that such failure is 37 due to reasonable cause and not due to willful neglect, there shall be 38 added to the amount required to be shown as tax on such return five 39 percent of the amount of such tax if the failure is for not more than 40 one month, with an additional five percent for each additional month or 41 fraction thereof during which such failure continues, not exceeding 42 twenty-five percent in the aggregate. 43 (B) In the case of a failure to file a tax return within sixty days of 44 the date prescribed for filing of such return, determined with regard to 45 any extension of time for filing, unless it is shown that such failure 46 is due to reasonable cause and not due to willful neglect, the addition 47 to tax under subparagraph (A) of this paragraph shall not be less than 48 the lesser of one hundred dollars or one hundred percent of the amount 49 required to be shown as tax on such return. 50 (C) For purposes of this paragraph, the amount of tax required to be 51 shown on the return shall be reduced by the amount of any part of the 52 tax which is paid on or before the date prescribed for payment of the 53 tax and by the amount of any credit against the tax which may be claimed 54 upon the return. 55 (2) Failure to pay tax shown on return. In case of failure to pay the 56 amounts shown as tax on any return required to be filed under this chap-

S. 8578 409

1 ter on or before the prescribed date, determined with regard to any 2 extension of time for payment, unless it is shown that such failure is 3 due to reasonable cause and not due to willful neglect, there shall be 4 added to the amount shown as tax on such return one-half of one percent 5 of the amount of such tax if the failure is not for more than one month, 6 with an additional one-half of one percent for each additional month or 7 fraction thereof during which such failure continues, not exceeding 8 twenty-five percent in the aggregate. For the purpose of computing the 9 addition for any month, the amount of tax shown on the return shall be 10 reduced by the amount of any part of the tax which is paid on or before 11 the beginning of such month and by the amount of any credit against the 12 tax which may be claimed upon the return. If the amount of tax required 13 to be shown on a return is less than the amount shown as tax on such 14 return, this paragraph shall be applied by substituting such lower 15 amount. 16 (3) Failure to pay tax required to be shown on return. In case of 17 failure to pay any amount in respect of any tax required to be shown on 18 a return required to be filed under this chapter which is not so shown, 19 including an assessment made pursuant to subdivision (a) of section 20 11-522 of this chapter, within ten days of the date of a notice and 21 demand therefor, unless it is shown that such failure is due to reason- 22 able cause and not due to willful neglect, there shall be added to the 23 amount of tax stated in such notice and demand one-half of one percent 24 of such tax if the failure is not for more than one month, with an addi- 25 tional one-half of one percent for each additional month or fraction 26 thereof during which such failure continues, not exceeding twenty-five 27 percent in the aggregate. For the purpose of computing the addition for 28 any month, the amount of tax stated in the notice and demand shall be 29 reduced by the amount of any part of the tax which is paid before the 30 beginning of such month. 31 (4) Limitations on additions. (A) With respect to any return the 32 amount of the addition under paragraph one of this subdivision shall be 33 reduced by the amount of the addition under paragraph two of this subdi- 34 vision for any month to which an addition applies under both paragraphs 35 one and two of this subdivision. In any case described in subparagraph 36 (B) of paragraph one of this subdivision, the amount of the addition 37 under such paragraph one shall not be reduced below the amount provided 38 in such subparagraph. 39 (B) With respect to any return, the maximum amount of the addition 40 permitted under paragraph three of this subdivision shall be reduced by 41 the amount of the addition under paragraph one of this subdivision, 42 determined without regard to subparagraph (B) of such paragraph one, 43 which is attributable to the tax for which the notice and demand is made 44 and which is not paid within ten days of such notice and demand. 45 (b) Deficiency due to negligence. (1) If any part of a deficiency is 46 due to negligence or intentional disregard of this chapter or rules or 47 regulations hereunder, but without intent to defraud, there shall be 48 added to the tax an amount equal to five percent of the deficiency. 49 (2) There shall be added to the tax, in addition to the amount deter- 50 mined under paragraph one of this subdivision, an amount equal to fifty 51 percent of the interest payable under subdivision (a) of section 11-524 52 with respect to the portion of the deficiency described in such para- 53 graph one which is attributable to the negligence or intentional disre- 54 gard referred to in such paragraph one, for the period beginning on the 55 last date prescribed by law for payment of such deficiency, determined

S. 8578 410

1 without regard to any extension, and ending on the date of the assess- 2 ment of the tax, or, if earlier, the date of the payment of the tax. 3 (3) If any payment is shown on a return made by a payor with respect 4 to dividends, patronage dividends and interest under subsection (a) of 5 section six thousand forty-two, subsection (a) of section six thousand 6 forty-four or subsection (a) of section six thousand forty-nine of the 7 internal revenue code of nineteen hundred fifty-four, respectively, and 8 the payee fails to include any portion of such payment in unincorporated 9 business gross income, as that term is defined in section 11-506, any 10 portion of a deficiency attributable to such failure shall be treated, 11 for purposes of this subdivision, as due to negligence in the absence of 12 clear and convincing evidence to the contrary. If any addition to tax is 13 imposed under this subdivision by reason of this paragraph, the amount 14 of the addition to tax imposed by paragraph one of this subdivision 15 shall be five percent of the portion of the deficiency which is attrib- 16 utable to the failure described in this paragraph. 17 (c) Failure to file declaration or underpayment of estimated tax. If 18 any taxpayer fails to file a declaration of estimated tax or fails to 19 pay all or any part of an installment of estimated tax, the taxpayer 20 shall be deemed to have made an underpayment of estimated tax. There 21 shall be added to the tax for the taxable year an amount at the under- 22 payment rate set by the commissioner of finance pursuant to section 23 11-537 of this chapter, or, if no rate is set, at the rate of seven and 24 one-half percent per annum upon the amount of the underpayment for the 25 period of the underpayment but not beyond the fifteenth day of the 26 fourth month following the close of the taxable year. The amount of the 27 underpayment shall be the excess of the amount of the installment which 28 would be required to be paid if the estimated tax were equal to ninety 29 percent of the tax shown on the return for the taxable year, or if no 30 return was filed, ninety percent of the tax for such year, over the 31 amount, if any, of the installment paid on or before the last day 32 prescribed for such payment. No underpayment shall be deemed to exist 33 with respect to a declaration or installment otherwise due on or after 34 the taxpayer's death. In any case in which there would be no underpay- 35 ment if this subdivision were applied by substituting "eighty percent" 36 for "ninety percent" where it appears in this subdivision, the addition 37 to tax under this subdivision shall be equal to seventy-five percent of 38 the amount otherwise determined under this subdivision. 39 (d) Exception to addition for underpayment of estimated tax. The addi- 40 tion to tax under subdivision (c) of this section with respect to any 41 underpayment of any installment shall not be imposed if the total amount 42 of all payments of estimated tax made on or before the last date 43 prescribed for the payment of such installment equals or exceeds which- 44 ever of the following is the lesser: 45 (1) The amount which would have been required to be paid on or before 46 such date if the estimated tax were whichever of the following is the 47 least: 48 (A) The tax shown on the return of the taxpayer for the preceding 49 taxable year, if a return showing a liability for tax was filed by the 50 taxpayer for the preceding taxable year and such preceding year was a 51 taxable year of twelve months, or 52 (B) An amount equal to the tax computed, at the rates applicable to 53 the taxable year, but otherwise on the basis of the facts shown on the 54 taxpayer's return for, and the law applicable to, the preceding taxable 55 year, or

S. 8578 411

1 (C) An amount equal to ninety percent of the tax for the taxable year 2 computed by placing on an annualized basis the unincorporated business 3 taxable income for the months in the taxable year ending before the 4 month in which the installment is required to be paid. For purposes of 5 this subparagraph, the unincorporated business taxable income shall be 6 placed on an annualized basis by: 7 (i) multiplying by twelve, or, in the case of a taxable year of less 8 than twelve months, the number of months in the taxable year, the unin- 9 corporated business taxable income for the months in the taxable year 10 ending before the month in which the installment is required to be paid, 11 and 12 (ii) dividing the resulting amount by the number of months in the 13 taxable year ending before the month in which such installment date 14 falls, or 15 (D)(i) If the base period percentage for any six consecutive months of 16 the taxable year equals or exceeds seventy percent, an amount equal to 17 ninety percent of the tax determined in the following manner: 18 (I) take the unincorporated business taxable income for all months 19 during the taxable year preceding the filing month, 20 (II) divide such amount by the base period percentage for all months 21 during the taxable year preceding the filing month, 22 (III) determine the tax on the amounts determined under subclause (II) 23 of this clause, and 24 (IV) multiply the tax determined under subclause (III) of this clause 25 by the base period percentage for the filing month and all months during 26 the taxable year preceding the filing month. 27 (ii) For purposes of clause (i) of this subparagraph: 28 (I) the base period percentage for any period of months shall be the 29 average percent which the unincorporated business taxable income for the 30 corresponding months in each of the three preceding years bears to the 31 unincorporated business taxable income for the three preceding taxable 32 years. The commissioner of finance may by regulations provide for the 33 determination of the base period percentage in the case of new unincor- 34 porated businesses and other similar circumstances, and 35 (II) the term "filing month" means the month in which the installment 36 is required to be paid; 37 (2) An amount equal to ninety percent of the tax computed, at the 38 rates applicable to the taxable year, on the basis of the actual unin- 39 corporated business taxable income for the months in the taxable year 40 ending before the month in which the installment is required to be paid. 41 (e)(1) Except as provided in paragraph two of this subdivision, 42 subparagraphs (A) and (B) of paragraph one of subdivision (d) of this 43 section shall not apply in the case of any taxpayer which had unincorpo- 44 rated business taxable income, or the portion thereof allocated within 45 the city, of one million dollars or more for any taxable year during the 46 three taxable years immediately preceding the taxable year involved. 47 (2) The amount treated as the estimated tax under subparagraphs (A) 48 and (B) of paragraph one of subdivision (d) of this section shall in no 49 event be less than seventy-five percent of the tax shown on the return 50 for the taxable year beginning in nineteen hundred eighty-three or, if 51 no return was filed, seventy-five percent of the tax for such year. 52 (f) Deficiency due to fraud. (1) If any part of a deficiency is due to 53 fraud, there shall be added to the tax an amount equal to two times of 54 the deficiency. 55 (2) The addition to tax under this subdivision shall be in lieu of any 56 other addition to tax imposed by subdivision (a) or (b) of this section.

S. 8578 412

1 (g) Additional penalty. Any taxpayer who with fraudulent intent shall 2 fail to pay any tax, or to make, render, sign or certify any return or 3 declaration of estimated tax, or to supply any information within the 4 time required by or under this chapter shall be liable to a penalty of 5 not more than one thousand dollars, in addition to any other amounts 6 required under this chapter, to be imposed, assessed and collected by 7 the commissioner of finance. The commissioner of finance shall have the 8 power, in his or her discretion, to waive, reduce or compromise any 9 penalty under this subdivision. 10 (h) Additions treated as tax. The additions to tax and penalties 11 provided by this section shall be paid upon notice and demand and shall 12 be assessed, collected and paid in the same manner as taxes, and any 13 reference in this chapter to tax or tax imposed by this chapter, shall 14 be deemed also to refer to the additions to tax and penalties provided 15 by this section. For purposes of section 11-521, this subdivision shall 16 not apply to: 17 (1) any addition to tax under subdivision (a) of this section except 18 as to that portion attributable to a deficiency; 19 (2) any addition to tax under subdivision (c) of this section; and 20 (3) any additional penalties under subdivisions (g) and (k) of this 21 section. 22 (i) Determination of deficiency. For purposes of subdivisions (b) and 23 (c) of this section, the amounts shown as the tax by the taxpayer upon 24 his or her return shall be taken into account in determining the amount 25 of the deficiency only if such return was filed on or before the last 26 day prescribed for the filing of such return, determined with regard to 27 any extension of time for such filing. 28 (j) Substantial understatement of liability. If there is a substantial 29 understatement of tax for any taxable year, there shall be added to the 30 tax an amount equal to ten percent of the amount of any underpayment 31 attributable to such understatement. For purposes of this subdivision, 32 there is a substantial understatement of tax for any taxable year if the 33 amount of the understatement for the taxable year exceeds the greater of 34 ten percent of the tax required to be shown on the return for the taxa- 35 ble year, or five thousand dollars. For purposes of the this subdivi- 36 sion, the term "understatement" means the excess of the amount of the 37 tax required to be shown on the return for the taxable year, over the 38 amount of the tax imposed which is shown on the return, reduced by any 39 rebate, within the meaning of subdivision (g) of section 11-521 of this 40 chapter. The amount of such understatement shall be reduced by that 41 portion of the understatement which is attributable to the tax treatment 42 of any item by the taxpayer if there is or was substantial authority for 43 such treatment, or any item with respect to which the relevant facts 44 affecting the item's tax treatment are adequately disclosed in the 45 return or in a statement attached to the return. The commissioner of 46 finance may waive all or any part of the addition to tax provided by 47 this subdivision on a showing by the taxpayer that there was reasonable 48 cause for the understatement, or part thereof, and that the taxpayer 49 acted in good faith. 50 (k) Aiding or assisting in the giving of fraudulent returns, reports, 51 statements or other documents. (1) Any person who, with the intent that 52 tax be evaded, shall, for a fee or other compensation or as an incident 53 to the performance of other services for which such person receives 54 compensation, aid or assist in, or procure, counsel, or advise the prep- 55 aration or presentation under, or in connection with any matter arising 56 under this chapter of any return, report, declaration, statement or

S. 8578 413

1 other document which is fraudulent or false as to any material matter, 2 or supply any false or fraudulent information, whether or not such 3 falsity or fraud is with the knowledge or consent of the person author- 4 ized or required to present such return, report, declaration, statement 5 or other document shall pay a penalty not exceeding ten thousand 6 dollars. 7 (2) For purposes of paragraph one of this subdivision, the term 8 "procures" includes ordering, or otherwise causing, a subordinate to do 9 an act, and knowing of, and not attempting to prevent, participation by 10 a subordinate in an act. The term "subordinate" means any other person, 11 whether or not a member, employee, or agent of the taxpayer involved, 12 over whose activities the person has direction, supervision, or control. 13 (3) For purposes of paragraph one of this subdivision, a person 14 furnishing typing, reproducing, or other mechanical assistance with 15 respect to a document shall not be treated as having aided or assisted 16 in the preparation of such document by reason of such assistance. 17 (4) The penalty imposed by this subdivision shall be in addition to 18 any other penalty provided by law. 19 (l) False or fraudulent document penalty. Any taxpayer that submits a 20 false or fraudulent document to the department shall be subject to a 21 penalty of one hundred dollars per document submitted, or five hundred 22 dollars per tax return submitted. Such penalty shall be in addition to 23 any other penalty or addition provided by law. 24 § 11-526 Overpayment. (a) General. The commissioner of finance, 25 within the applicable period of limitations, may credit an overpayment 26 of tax and interest on such overpayment against any liability in respect 27 of any tax imposed by this title, on the person who made overpayment, 28 and the balance shall be refunded. Such credit of an overpayment shall 29 be applied before such overpayment, or any portion thereof, is paid to 30 the state commissioner of taxation and finance pursuant to section one 31 hundred seventy-one-m of the tax law. 32 (b) Credits against estimated tax. The commissioner of finance may 33 prescribe regulations providing for the crediting against the estimated 34 tax for any taxable year of the amount determined to be an overpayment 35 of the tax for a preceding taxable year. If any overpayment of tax is 36 so claimed as a credit against estimated tax for the succeeding taxable 37 year, such amount shall be considered as a payment of the tax for the 38 succeeding taxable year, whether or not claimed as a credit in the 39 declaration of estimated tax for such succeeding taxable year, and no 40 claim for credit or refund of such overpayment shall be allowed for the 41 taxable year for which the overpayment arises. 42 (c) Rule where no tax liability. If there is no tax liability for a 43 period in respect of which an amount is paid as tax, such amount shall 44 be considered an overpayment. 45 (d) Assessment and collection after limitation period. If any amount 46 of income tax is assessed or collected after the expiration of the peri- 47 od of limitations properly applicable thereto, such amount shall be 48 considered an overpayment. 49 (e) Notwithstanding any provision of law in article fifty-two of the 50 civil practice law and rules to the contrary, the procedures for the 51 enforcement of money judgments shall not apply to the department of 52 finance, or to any officer or employee of the department of finance, as 53 a garnishee, with respect to any amount of money to be refunded or cred- 54 ited to a taxpayer under this chapter. 55 § 11-527 Limitation on credit or refund. (a) General. Claim for credit 56 or refund of an overpayment of tax shall be filed by the taxpayer within

S. 8578 414

1 three years from the time the return was filed or two years from the 2 time the tax was paid, whichever of such periods expires the later, or 3 if no return was filed, within two years from the time the tax was paid. 4 If the claim is filed within the three year period, the amount of the 5 credit or refund shall not exceed the portion of the tax paid within the 6 three years immediately preceding the filing of the claim plus the peri- 7 od of any extension of time for filing the return. If the claim is not 8 filed within the three year period, but is filed within the two year 9 period, the amount of the credit or refund shall not exceed the portion 10 of the tax paid during the two years immediately preceding the filing of 11 the claim. Except as otherwise provided in this section, if no claim is 12 filed, the amount of a credit or refund shall not exceed the amount 13 which would be allowable if a claim had been filed on the date the cred- 14 it or refund is allowed. 15 (b) Extension of time by agreement. If an agreement under the 16 provisions of paragraph two of subdivision (c) of section 11-523 of this 17 chapter, extending the period for assessment of income tax, is made 18 within the period prescribed in subdivision (a) of this section for the 19 filing of a claim for credit or refund the period for filing a claim for 20 credit or refund, or for making credit or refund if no claims filed, 21 shall not expire prior to six months after the expiration of the period 22 within which an assessment may be made pursuant to the agreement or any 23 extension thereof. The amount of such credit or refund shall not exceed 24 the portion of the tax paid after the execution of the agreement and 25 before the filing of the claim or the making of the credit or refund, as 26 the case may be, plus the portion of the tax paid within the period 27 which would be applicable under subdivision (a) of this section if a 28 claim had been filed on the date the agreement was executed. 29 (c) Notice of change or correction of federal or New York state taxa- 30 ble income. If a taxpayer is required by section 11-519 of this chapter 31 to report a change or correction in federal or New York state taxable 32 income reported on the taxpayer's federal or New York state income tax 33 return, or to report a change or correction which is treated in the same 34 manner as if it were an overpayment for federal or New York state income 35 tax purposes, or to file an amended return with the commissioner of 36 finance, claim for credit or refund of any resulting overpayment of tax 37 shall be filed by the taxpayer within two years from the time the notice 38 of such change or correction or such amended return was required to be 39 filed with the commissioner of finance. If the report or amended return 40 required by section 11-519 of this chapter is not filed within the nine- 41 ty day period therein specified, no interest shall be payable on any 42 claim for credit or refund of the overpayment attributable to the feder- 43 al or New York state change or correction. The amount of such credit or 44 refund shall not exceed the amount of the reduction in tax attributable 45 to such federal or New York state change, correction or items amended on 46 the taxpayer's amended federal or New York state income tax return. This 47 subdivision shall not affect the time within which or the amount for 48 which a claim for credit or refund may be filed apart from this subdivi- 49 sion. 50 (d) Overpayment attributable to net operating loss carryback. A claim 51 for credit or refund of so much of an overpayment as is attributable to 52 the application to the taxpayer of a net operating loss carryback shall 53 be filed within three years from the time the return was due for the 54 taxable year of the loss, or within the period prescribed in subdivision 55 (b) of this section in respect of such taxable year, or within the peri- 56 od prescribed in subdivision (c) of this section, where applicable in

S. 8578 415

1 respect of the taxable year to which the net operating loss is carried 2 back, whichever expires the latest. 3 (e) Failure to file claim within prescribed period. No credit or 4 refund shall be allowed or made, except as provided in subdivision (f) 5 of this section or subdivision (d) of section 11-530 of this chapter 6 after the expiration of the applicable period of limitation specified in 7 this chapter unless a claim for credit or refund is filed by the taxpay- 8 er within such period. Any later credit shall be void and any later 9 refund erroneous. No period of limitations specified in any other law 10 shall apply to the recovery by a taxpayer of moneys paid in respect of 11 taxes under this chapter. 12 (f) Effect of petition to tax appeals tribunal. If a notice of defi- 13 ciency for a taxable year has been mailed to the taxpayer under section 14 11-521 of this chapter and if the taxpayer files a timely petition with 15 the tax appeals tribunal under section 11-529 of this chapter, the tax 16 appeals tribunal may determine that the taxpayer has made an overpayment 17 for such year, whether or not it also determines a deficiency for such 18 year. No separate claim for credit or refund for such year shall be 19 filed, and no credit or refund for such year shall be allowed or made, 20 except: 21 (1) as to overpayments determined by a decision of the tax appeals 22 tribunal which has become final; 23 (2) as to any amount collected in excess of an amount computed in 24 accordance with the decision of the tax appeals tribunal which has 25 become final; 26 (3) as to any amount collected after the period of limitation upon the 27 making of levy for collection has expired; and 28 (4) as to any amount claimed as a result of a change or correction 29 described in subdivision (c) of this section. 30 (g) Limit on amount of credit or refund. The amount of overpayment 31 determined under subdivision (f) of this section shall, when the deci- 32 sion of the tax appeals tribunal has become final, be credited or 33 refunded in accordance with subdivision (a) of section 11-526 of this 34 chapter and shall not exceed the amount of tax which the tax appeals 35 tribunal determines as part of its decision was paid: 36 (1) after the mailing of the notice of deficiency, or 37 (2) within the period which would be applicable under subdivision (a), 38 (b) or (c) of this section, if on the date of the mailing of the notice 39 of deficiency a claim has been filed, whether or not filed, stating the 40 grounds upon which the tax appeals tribunal finds that there is an over- 41 payment. 42 (h) Early return. For purposes of this section, any return filed 43 before the last day prescribed for the filing thereof shall be consid- 44 ered as filed on such last day, determined without regard to any exten- 45 sion of time granted the taxpayer. 46 (i) Prepaid tax. For purposes of this section, any tax paid by the 47 taxpayer before the last day prescribed for its payment and any amount 48 paid by the taxpayer as estimated tax for a taxable year shall be deemed 49 to have been paid by the taxpayer on the fifteenth day of the fourth 50 month following the close of his or her taxable year with respect to 51 which such amount constitutes a credit or payment, except that for taxa- 52 ble years beginning on or after January first, two thousand sixteen, in 53 the case of a taxpayer classified as a partnership for federal income 54 tax purposes, such amount shall be deemed to have been paid on the 55 fifteenth day of the third month following the close of his or her taxa-

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1 ble year with respect to which such amount constitutes a credit or 2 payment. 3 (j) Cross reference. For provision barring refund of overpayment cred- 4 ited against tax of a succeeding year, see subdivision (d) of section 5 11-526 of this chapter. 6 (k) Notice of change or correction of sales and compensating use tax 7 liability. If a taxpayer is required by section 11-519.1 of this chapter 8 to file a report or amended return or report in respect of a change or 9 correction of his or her sales and compensating use tax liability, claim 10 for credit or refund of any resulting overpayment of tax shall be filed 11 by the taxpayer within two years from the time such report or amended 12 return or report was required to be filed with the commissioner of 13 finance. The amount of such credit or refund shall be computed without 14 change of the allocation of income upon which the taxpayer's return, or 15 any additional assessment, was based, and shall not exceed the amount of 16 the reduction in tax attributable to such change or correction of sales 17 and compensating use tax liability. 18 This subdivision shall not affect the time within which or the amount 19 for which a claim for credit or refund may be filed apart from this 20 subdivision. 21 § 11-528 Interest on overpayment. (a) General. Notwithstanding the 22 provisions of section three-a of the general municipal law, interest 23 shall be allowed and paid as follows at the overpayment rate set by the 24 commissioner of finance pursuant to section 11-537 of this chapter, or, 25 if no rate is set, at the rate of six percent per annum upon any over- 26 payment in respect of the tax imposed by this chapter: 27 (1) from the date of the overpayment to the due date of an amount 28 against which a credit is taken; or 29 (2) from the date of the overpayment to a date, to be determined by 30 the commissioner of finance, preceding the date of a refund check by not 31 more than thirty days, whether or not such refund check is accepted by 32 the taxpayer after tender of such check to the taxpayer. The acceptance 33 of such check shall be without prejudice to any right of the taxpayer to 34 claim any additional overpayment and interest thereon. 35 (3) Late and amended returns and claims for credit or refund. 36 Notwithstanding paragraph one or two of this subdivision, in the case of 37 an overpayment claimed on a return of tax which is filed after the last 38 date prescribed for filing such return, determined with regard to exten- 39 sions, or claimed on an amended return of tax or claimed on a claim, for 40 credit or refund, no interest shall be allowed or paid for any day 41 before the date on which such return or claim is filed. 42 (4) Interest on certain refunds. To the extent provided for in regu- 43 lations promulgated by the commissioner of finance, if an item of 44 income, gain, loss, deduction or credit is changed from the taxable year 45 or period in which it is reported to the taxable year or period in which 46 it belongs and the change results in an underpayment in a taxable year 47 or period and an overpayment in some other taxable year or period, the 48 provisions of paragraph three of this subdivision with respect to an 49 overpayment shall not be applicable to the extent that the limitation in 50 such paragraph on the right to interest would result in a taxpayer not 51 being allowed interest for a length of time with respect to an overpay- 52 ment while being required to pay interest on an equivalent amount of the 53 related underpayment. However, this paragraph shall not be construed as 54 limiting or mitigating the effect of any statute of limitations or any 55 other provisions of law relating to the authority of such commissioner

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1 to issue a notice of deficiency or to allow a credit or refund of an 2 overpayment. 3 (5) Amounts of less than one dollar. No interest shall be allowed or 4 paid if the amount thereof is less than one dollar. 5 (b) Advance payment of tax and payment of estimated tax. The 6 provisions of subdivisions (h) and (i) of section 11-527 of this chapter 7 applicable in determining the date of payment of tax for purposes of 8 determining the period of limitations on credit or refund, shall be 9 applicable in determining the date of payment for purposes of this 10 section. 11 (c) Refund within three months of claim for overpayment. If any over- 12 payment of tax imposed by this chapter is credited or refunded within 13 three months after the last date prescribed, or permitted by extension 14 of time, for filing the return of such tax on which such overpayment was 15 claimed or within three months after such return was filed, whichever is 16 later, or within three months after an amended return was filed claiming 17 such overpayment or within three months after a claim for credit or 18 refund was filed on which such overpayment was claimed, no interest 19 shall be allowed under this section on any such overpayment. For 20 purposes of this subdivision, any amended return or claim for credit or 21 refund filed before the last day prescribed, or permitted by extension 22 of time, for the filing of the return of tax for such year shall be 23 considered as filed on such last day. 24 (d) Refund of tax caused by carryback. For purposes of this section, 25 if any overpayment of tax imposed by this chapter results from a carry- 26 back of a net operating loss, such overpayment shall be deemed not to 27 have been made prior to the filing date for the taxable year in which 28 such net operating loss arises. Such filing date shall be determined 29 without regard to extensions of time to file. For purposes of subdivi- 30 sion (c) of this section any overpayment described herein shall be 31 treated as an overpayment for the loss year and such subdivision shall 32 be applied with respect to such overpayment by treating the return for 33 the loss year as not filed before claim for such overpayment is filed. 34 The term "loss year" means the taxable year in which such loss arises. 35 (e) No interest until return in processible form. (1) For purposes of 36 subdivisions (a) and (c) of this section, a return shall not be treated 37 as filed until it is filed in processible form. 38 (2) For purposes of paragraph one of this subdivision, a return is in 39 a processible form if: 40 (A) such return is filed on a permitted form, and 41 (B) such return contains: 42 (i) the taxpayer's name, address, and identifying number and the 43 required signatures, and 44 (ii) sufficient required information, whether on the return or on 45 required attachments, to permit the mathematical verification of tax 46 liability shown on the return. 47 (f) Cross-reference. For provision with respect to interest after 48 failure to file notice of federal or New York state change under section 49 11-519 of this chapter, see subdivision (c) of section 11-527 of this 50 chapter. 51 § 11-529 Petition to tax appeals tribunal. (a) General. The form of a 52 petition to the tax appeals tribunal, and further proceedings before the 53 tax appeals tribunal in any case initiated by the filing of a petition, 54 shall be governed by such rules as the tax appeals tribunal shall 55 prescribe. No petition shall be denied in whole or in part without 56 opportunity for a hearing on reasonable prior notice. Such hearing and

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1 any appeal to the tribunal sitting en banc from the decision rendered in 2 such hearing shall be conducted in the manner and subject to the 3 requirements prescribed by the tax appeals tribunal pursuant to sections 4 one hundred sixty-eight through one hundred seventy-two of the charter 5 of the preceding municipality as it existed January first, nineteen 6 hundred ninety-four. A decision of the tax appeals tribunal shall be 7 rendered, and notice thereof shall be given, in the manner provided by 8 section one hundred seventy-one of the charter of the preceding munici- 9 pality. 10 (b) Petition for redetermination of a deficiency. Within ninety days, 11 or one hundred fifty days if the notice is addressed to a person outside 12 of the United States, after the mailing of the notice of deficiency 13 authorized by section 11-521 of this chapter, or if the commissioner of 14 finance has established a conciliation procedure pursuant to section 15 11-124 of this title and the taxpayer has requested a conciliation 16 conference in accordance therewith, within ninety days from the mailing 17 of the conciliation decision or the date of the commissioner's confirma- 18 tion of the discontinuance of the conciliation proceeding, the taxpayer 19 may file a petition with the tax appeals tribunal for a redetermination 20 of the deficiency. Such petition may also assert a claim for refund for 21 the same taxable year or years, subject to the limitations of subdivi- 22 sion (g) of section 11-527 of this chapter. 23 (c) Petition for refund. A taxpayer may file a petition with the tax 24 appeals tribunal for the amounts asserted in a claim for refund if: 25 (1) the taxpayer has filed a timely claim for refund with the commis- 26 sioner of finance, 27 (2) the taxpayer has not previously filed with the tax appeals tribu- 28 nal a timely petition under subdivision (b) of this section for the same 29 taxable year unless the petition under this subdivision relates to a 30 separate claim for credit or refund properly filed under subdivision (f) 31 of section 11-527 of this chapter, and 32 (3) either: (A) six months have expired since the claim was filed, or 33 (B) the commissioner of finance has mailed to the taxpayer, by regis- 34 tered or certified mail, a notice of disallowance of such claim in whole 35 or in part. No petition under this subdivision shall be filed more than 36 two years after the date of mailing of a notice of disallowance, unless 37 prior to the expiration of such two year period it has been extended by 38 written agreement between the taxpayer and the commissioner of finance. 39 If a taxpayer files a written waiver of the requirement that he or she 40 be mailed a notice of disallowance, the two year period prescribed by 41 this subdivision for filing a petition for refund shall begin on the 42 date such waiver is filed. 43 (4) If the commissioner of finance has established a conciliation 44 procedure pursuant to section 11-124 of this title, a taxpayer who is 45 eligible to file a petition for refund with the tax appeals tribunal 46 pursuant to this subdivision may request a conciliation conference prior 47 to filing such petition, provided the request is made within the time 48 prescribed for filing the petition. Notwithstanding anything in this 49 subdivision to the contrary, if the taxpayer has requested a concil- 50 iation conference in accordance with the procedure established pursuant 51 to section 11-124 of this title, a petition for refund may be filed no 52 later than ninety days from the mailing of the conciliation decision or 53 the date of the commissioner's confirmation of the discontinuance of the 54 conciliation proceeding. 55 (d) Assertion of deficiency after filing petition. (1) Petition for 56 redetermination of deficiency. If a taxpayer files with the tax appeals

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1 tribunal a petition for redetermination of a deficiency, the tax appeals 2 tribunal shall have power to determine a greater deficiency than 3 asserted in the notice of deficiency and to determine if there should be 4 assessed any addition to tax or penalty provided in section 11-525 of 5 this chapter, if claim therefor is asserted at or before the hearing 6 under the rules of the tax appeals tribunal. 7 (2) Petition for refund. If the taxpayer files with the tax appeals 8 tribunal a petition for credit or refund for a taxable year, the tax 9 appeals tribunal may: 10 (A) determine a deficiency for such year as to any amount of deficien- 11 cy asserted at or before the hearing under rules of the tax appeals 12 tribunal, and within the period in which an assessment would be timely 13 under section 11-523 of this chapter, or 14 (B) deny so much of the amount for which credit or refund is sought in 15 the petition, as is offset by other issues pertaining to the same taxa- 16 ble year which are asserted at or before the hearing under rules of the 17 tax appeals tribunal. 18 (3) Opportunity to respond. A taxpayer shall be given a reasonable 19 opportunity to respond to any matters asserted by the commissioner of 20 finance under this subdivision. 21 (4) Restriction on further notices of deficiency. If the taxpayer 22 files a petition with the tax appeals tribunal under this section, no 23 notice of deficiency under section 11-521 of this chapter may thereafter 24 be issued by the commissioner of finance for the same taxable year, 25 except in case of fraud or with respect to a change or correction in 26 federal or New York state taxable income required to be reported under 27 section 11-519 of this chapter or with respect to a state change or 28 correction of sales and compensating use tax liability to be reported 29 under section 11-519.1 of this chapter. 30 (e) Burden of proof. In any case before the tax appeals tribunal under 31 this chapter, the burden of proof shall be upon the petitioner except 32 for the following issues, as to which the burden of proof shall be upon 33 the commissioner of finance: 34 (1) whether the petitioner has been guilty of fraud with intent to 35 evade tax; 36 (2) whether the petitioner is liable as the transferee of property of 37 a taxpayer, but not to show that the taxpayer was liable for the tax; 38 (3) whether the petitioner is liable for any increase in a deficiency 39 where such increase is asserted initially after a notice of deficiency 40 was mailed and a petition under this section filed, unless such increase 41 in deficiency is the result of a change or correction of federal or New 42 York state taxable income required to be reported under section 11-519 43 of this chapter, and of which change or correction the commissioner of 44 finance had no notice at the time he or she mailed the notice of defi- 45 ciency or unless such increase in deficiency is the result of a change 46 or correction of sales and compensating use tax liability required to be 47 reported under section 11-519.1 of this title, and of which change or 48 correction the commissioner of finance had no notice at the time he or 49 she mailed the notice of deficiency; and 50 (4) whether any person is liable for a penalty under subdivision (k) 51 of section 11-525 of this chapter. 52 (f) Evidence of related federal or state determination. Evidence of a 53 federal or state determination relating to issues raised in a case 54 before the tax appeals tribunal under this section shall be admissible, 55 under rules established by the tax appeals tribunal.

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1 (g) Jurisdiction over other years. The tax appeals tribunal shall 2 consider such facts with relation to the taxes for other years as may be 3 necessary correctly to determine the tax for the taxable year, but in so 4 doing shall have no jurisdiction to determine whether or not the tax for 5 any other year has been overpaid or underpaid. 6 § 11-530 Review of tax appeals tribunal's decision. (a) General. A 7 decision of the tax appeals tribunal sitting en banc shall be subject to 8 judicial review at the instance of any taxpayer affected thereby in the 9 manner provided by law for the review of a final decision or action of 10 administrative agencies of the city. An application by a taxpayer for 11 such review must be made within four months after notice of the decision 12 is sent by certified mail, return receipt requested, to the taxpayer and 13 the commissioner of finance. 14 (b) Judicial review exclusive remedy. The review of a decision of the 15 tax appeals tribunal provided by this section shall be the exclusive 16 remedy available to any taxpayer for the judicial determination of the 17 liability of the taxpayer for the taxes imposed by this chapter. 18 (c) Assessment pending review; review bond. Irrespective of any 19 restrictions on the assessment and collection of deficiencies, the 20 commissioner of finance may assess a deficiency determined by the tax 21 appeals tribunal in a decision rendered pursuant to section one hundred 22 seventy-one of the charter of the preceding municipality as it existed 23 January first, nineteen hundred ninety-four after the expiration of the 24 period specified in subdivision (a) of this section, notwithstanding 25 that an application for judicial review in respect of such deficiency 26 has been duly made by the taxpayer, unless the taxpayer, at or before 27 the time his or her application for review is made, has paid the defi- 28 ciency, has deposited with the commissioner of finance the amount of the 29 deficiency, or has filed with the commissioner of finance a bond, which 30 may be a jeopardy bond under subdivision (h) of section 11-534 of this 31 chapter, in the amount of the portion of the deficiency, including 32 interest and other amounts, in respect of which the application for 33 review is made and all costs and charges which may accrue against such 34 taxpayer in the prosecution of the proceeding, including costs of all 35 appeals, and with surety approved by a justice of the supreme court of 36 the state of New York, conditioned upon the payment of the deficiency, 37 including interests and other amounts, as finally determined and such 38 costs and charges. If, as a result of a waiver of the restrictions on 39 the assessment and collection of a deficiency, any part of the amount 40 determined by the tax appeals tribunal is paid after the filing of the 41 review bond, such bond shall, at the request of the taxpayer, be propor- 42 tionately reduced. 43 (d) Credit, refund or abatement after review. If the amount of a defi- 44 ciency determined by the tax appeals tribunal is disallowed in whole or 45 in part by the court of review, the amount so disallowed shall be cred- 46 ited, or refunded to the taxpayer, without the making of claim therefor, 47 or, if payment has not been made, shall be abated. 48 (e) Date of finality of tax appeals tribunal's decision. A decision of 49 the tax appeals tribunal shall become final upon the expiration of the 50 period specified in subdivision (a) of this section for making an appli- 51 cation for review, if no such application has been duly made within such 52 time, or if such application has been duly made, upon expiration of the 53 time for all further judicial review, or upon the rendering by the tax 54 appeals tribunal of a decision in accordance with the mandate of the 55 court on review. Notwithstanding the provisions of this subdivision, 56 for the purpose of making an application for review, the decision of the

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1 tax appeals tribunal shall be deemed final on the date the notice of 2 decision is sent by certified mail to the taxpayer and the commissioner 3 of finance. 4 § 11-531 Mailing rules; holidays; miscellaneous. (a) Timely mailing. 5 (1) If any return, declaration of estimated tax, claim, statement, 6 notice, petition, or other document required to be filed, or any payment 7 required to be made, within a prescribed period or on or before a 8 prescribed date under authority of any provision of this chapter is, 9 after such period or such date, delivered by the United States mail to 10 the commissioner of finance, tax appeals tribunal, bureau, office, offi- 11 cer or person with which or with whom such document is required to be 12 filed, or to which or to whom such payment is required to be made, the 13 date of the United States postmark stamped on the envelope shall be 14 deemed to be the date of delivery. This subdivision shall apply only if 15 the postmark date falls within the prescribed period or on or before the 16 prescribed date for the filing of such document, or for making the 17 payment, including any extension granted for such filing or payment, and 18 only if such document or payment was deposited in the mail, postage 19 prepaid, properly addressed to the commissioner of finance, tax appeals 20 tribunal, bureau, office, officer or person with which or with whom the 21 document is required to be filed or to which or to whom such payment is 22 required to be made. If any document is sent by United States registered 23 mail, such registration shall be prima facie evidence that such document 24 was delivered to the commissioner of finance, tax appeals tribunal, 25 bureau, office, officer or person to which or to whom addressed. To the 26 extent that the commissioner of finance or, where relevant, the tax 27 appeals tribunal shall prescribe by regulation, certified mail may be 28 used in lieu of registered mail under this section. Except as provided 29 in paragraph two of this subdivision, this subdivision shall apply in 30 the case of postmarks not made by the United States postal service only 31 if and to the extent provided by regulations of the commissioner of 32 finance or, where relevant, the tax appeals tribunal. 33 (2) (A) Any reference in paragraph one of this subdivision to the 34 United States mail shall be treated as including a reference to any 35 delivery service designated by the secretary of the treasury of the 36 United States pursuant to section seventy-five hundred two of the inter- 37 nal revenue code and any reference in paragraph one of this subdivision 38 to a United States postmark shall be treated as including a reference to 39 any date recorded or marked in the manner described in section seventy- 40 five hundred two of the internal revenue code by a designated delivery 41 service. If the commissioner of finance finds that any delivery service 42 designated by such secretary is inadequate for the needs of the city, 43 the commissioner may withdraw such designation for purposes of this 44 title. The commissioner may also designate additional delivery services 45 meeting the criteria of section seventy-five hundred two of the internal 46 revenue code for purposes of this title, or may withdraw any such desig- 47 nation if the commissioner of finance finds that a delivery service so 48 designated is inadequate for the needs of the city. Any reference in 49 paragraph one of this subdivision to the United States mail shall be 50 treated as including a reference to any delivery service designated by 51 the commissioner of finance and any reference in paragraph one of this 52 subdivision to a United States postmark shall be treated as including a 53 reference to any date recorded or marked in the manner described in 54 section seventy-five hundred two of the internal revenue code by a 55 delivery service designated by the commissioner of finance. Notwith- 56 standing the provisions of this paragraph, any withdrawal of designation

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1 or additional designation by the commissioner of finance shall not be 2 effective for purposes of service upon the tax appeals tribunal, unless 3 and until such withdrawal of designation or additional designation is 4 ratified by the president of the tax appeals tribunal. 5 (B) Any equivalent of registered or certified mail designated by the 6 United States secretary of the treasury, or as may be designated by the 7 commissioner of finance pursuant to the same criteria used by such 8 secretary for such designations pursuant to section seventy-five hundred 9 two of the internal revenue code, shall be included within the meaning 10 of registered or certified mail as used in paragraph one of this subdi- 11 vision. If the commissioner of finance finds that any equivalent of 12 registered or certified mail designated by such secretary or the commis- 13 sioner of finance is inadequate for the needs of the city, the commis- 14 sioner of finance may withdraw such designation for purposes of this 15 title. Notwithstanding the provisions of this paragraph, any withdrawal 16 of designation or additional designation by the commissioner of finance 17 shall not be effective for purposes of service upon the tax appeals 18 tribunal, unless and until such withdrawal of designation or additional 19 designation is ratified by the president of the tax appeals tribunal. 20 (b) Last known address. For purposes of this chapter, a taxpayer's 21 last known address shall be given in the last return filed by the 22 taxpayer, unless subsequently to the filing of such return the taxpayer 23 shall have notified the commissioner of finance of a change of address. 24 (c) Last day a Saturday, Sunday or legal holiday. When the last day 25 prescribed under authority of this chapter, including any extension of 26 time, for performing any act falls on Saturday, Sunday, or a legal holi- 27 day in the state of New York, the performance of such act shall be 28 considered timely if it is performed on the next succeeding day which is 29 not a Saturday, Sunday or legal holiday. 30 (d) Certificate: unfiled return. For purposes of this chapter and 31 sections one hundred sixty-eight through one hundred seventy-two of the 32 charter of the preceding municipality, the certificate of the commis- 33 sioner of finance to the effect that a tax has not been paid, that a 34 return or declaration of estimated tax has not been filed, or that 35 information has not been supplied, as required by or under the 36 provisions of this title, shall be prima facie evidence that such tax 37 has not been paid, that such return or declaration has not been filed, 38 or that such information has not been supplied. 39 § 11-532 Collection, levy and liens. (a) Collection procedures. The 40 taxes imposed by this chapter shall be collected by the commissioner of 41 finance, and the commissioner may establish the mode or time for the 42 collection of any amount due it under this chapter if not otherwise 43 specified. The commissioner of finance shall, upon request, give a 44 receipt for any sum collected under this chapter. The commissioner of 45 finance may authorize banks or trust companies which are depositories or 46 financial agents of the city to receive and give a receipt for any tax 47 imposed under this chapter in such manner, at such times, and under such 48 conditions as the commissioner of finance may prescribe; and the commis- 49 sioner of finance shall prescribe the manner, times and conditions under 50 which the receipt of such tax by such banks and trust companies is to be 51 treated as payment of such tax to the commissioner of finance. 52 (b) Notice and demand for tax. The commissioner of finance shall as 53 soon as practicable give notice to each person liable for any amount of 54 tax, addition to tax, penalty or interest, which has been assessed but 55 remains unpaid, stating the amount and demanding payment thereof. Such 56 notice shall be left at the dwelling or usual place of business of such

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1 person or shall be sent by mail to such person's last known address. 2 Except where the commissioner of finance determines that collection 3 would be jeopardized by delay, if any tax is assessed prior to the last 4 date, including any date fixed by extension, prescribed for payment of 5 such tax, payment of such tax shall not be demanded until after such 6 date. 7 (c) Issuance of warrant after notice and demand. If any person liable 8 under this chapter for the payment of any tax, addition to tax, penalty 9 or interest neglects or refuses to pay the same within the ten days 10 after notice and demand herefor is given to such person under subdivi- 11 sion (b) of this section, the commissioner of finance may within six 12 years after the date of such assessment issue a warrant directed to the 13 sheriff of any county of the state, or to any officer or employee of the 14 department of finance, commanding such person to levy upon and sell such 15 person's real and personal property for the payment of the amount 16 assessed, with the cost of executing the warrant, and to return such 17 warrant to the commissioner of finance and pay to the commissioner the 18 money collected by virtue thereof within sixty days after the receipt of 19 the warrant. If the commissioner of finance finds that the collection 20 of the tax or other amount is in jeopardy, notice and demand for immedi- 21 ate payment of such tax may be made by the commissioner of finance and 22 upon failure or refusal to pay such tax or other amount the commissioner 23 of finance may issue a warrant without regard to the ten-day period 24 provided in this subdivision. 25 (d) Copy of warrant to be filed and lien to be created. Any sheriff 26 or officer or employee who receives a warrant under subdivision (c) of 27 this section shall within five days thereafter file a copy with the 28 clerk of the appropriate county. The clerk shall thereupon enter in the 29 judgment docket, in the column for judgment debtors, the name of the 30 taxpayer mentioned in the warrant, and in appropriate columns the tax or 31 other amounts for which the warrant is issued and the date when such 32 copy is filed; and such amount shall thereupon be a binding lien upon 33 the real, personal and other property of the taxpayer. 34 (e) Judgment. When a warrant has been filed with the county clerk the 35 commissioner of finance shall, on behalf of the city, be deemed to have 36 obtained judgment against the taxpayer for the tax or other amounts. 37 (f) Execution. The sheriff or officer or employee shall thereupon 38 proceed upon the judgment in all respects, with like effect, and in the 39 same manner prescribed by law in respect to executions issued against 40 property upon judgments of a court of record, and a sheriff shall be 41 entitled to the same fees for the sheriff's services in executing the 42 warrant, to be collected in the same manner. An officer or employee of 43 the department of finance may proceed in any county or counties of this 44 state and shall have all the powers of execution conferred by law upon 45 sheriffs, but shall be entitled to no fee or compensation in excess of 46 actual expenses paid in connection with the execution of the warrant. 47 (g) Taxpayer not a resident of this state. Where a notice and demand 48 under subdivision (b) of this section shall have been given to a taxpay- 49 er who is not then a resident of this state, and it appears to the 50 commissioner of finance that it is not practicable to find in this state 51 property of the taxpayer sufficient to pay the entire balance of tax or 52 other amount owing by such taxpayer who is not then a resident of this 53 state, the commissioner of finance may, in accordance with subdivision 54 (c) of this section, issue a warrant directed to an officer or employee 55 of the department of finance, a copy of which warrant shall be mailed by 56 certified or registered mail to the taxpayer at the taxpayer's last

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1 known address, subject to the rules for mailing provided in subdivision 2 (a) of section 11-521 of this chapter. Such warrant shall command the 3 officer or employee to proceed in Richmond county, and such officer or 4 employee shall, within five days after receipt of the warrant, file the 5 warrant and obtain a judgment in accordance with this section. Thereup- 6 on the commissioner of finance may authorize the institution of any 7 action or proceeding to collect or enforce the judgment in any place and 8 by any procedure that a civil judgment of the supreme court of the state 9 of New York could be collected or enforced. The commissioner of finance 10 may also, in the commissioner's discretion, designate agents or retain 11 counsel for the purpose of collecting, outside the state of New York, 12 any unpaid taxes, additions to tax, penalties or interest which have 13 been assessed under this chapter against taxpayers who are not residents 14 of this state, may fix the compensation of such agents and counsel to be 15 paid out of money appropriated or otherwise lawfully available for 16 payment thereof, and may require of them bonds or other security for the 17 faithful performance of their duties, in such form and in such amount as 18 the commissioner of finance shall deem proper and sufficient. 19 (h) Action by city for recovery of taxes. Action may be brought by 20 the corporation counsel of the city at the instance of the commissioner 21 of finance as agent and trustee for the city to recover the amount of 22 any unpaid taxes, additions to tax, penalties or interest which have 23 been assessed under this chapter within six years prior to the date the 24 action is commenced. 25 (i) Release of lien or vacating warrant. The commissioner of finance, 26 if he or she finds that the interests of the city will not thereby be 27 jeopardized, and upon such conditions as the commissioner may require, 28 may release any property from the lien of any warrant or vacate such 29 warrant for unpaid taxes, additions to tax, penalties and interest filed 30 pursuant to subdivision (d) or (g) of this section, and such release or 31 vacating of the warrant may be recorded in the office of any recording 32 officer in which such warrant has been filed. The clerk shall thereupon 33 cancel and discharge as of the original date of docketing the vacated 34 warrant. 35 § 11-533 Transferees. (a) General. The liability, at law or in equity, 36 of a transferee of property of a taxpayer for any tax, additions to tax, 37 penalty or interest due the commissioner of finance under this chapter, 38 shall be assessed, paid, and collected in the same manner and subject to 39 the same provisions and limitations as in the case of the tax to which 40 the liability relates, except that the period of limitations for assess- 41 ment against the transferee shall be extended by one year for each 42 successive transfer, in order, from the original taxpayer to the trans- 43 feree involved, but not by more than three years in the aggregate. The 44 term "transferee" includes donee, heir, legatee, devisee and distribu- 45 tee. 46 (b) Exceptions. (1) If before the expiration of the period of limi- 47 tations for assessment of liability of the transferee, a claim has been 48 filed by the commissioner of finance in any court against the original 49 taxpayer or the last preceding transferee based upon the liability of 50 the original taxpayer, then the period of limitation for assessment of 51 liability of the transferee shall in no event expire prior to one year 52 after such claim has been finally allowed, disallowed or otherwise 53 disposed of. 54 (2) If, before the expiration of the time prescribed in subdivision 55 (a) of this section or the immediately preceding paragraph of this 56 subdivision for the assessment of the liability, the commissioner of

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1 finance and the transferee have both consented in writing to its assess- 2 ment after such time, the liability may be assessed at any time prior to 3 the expiration of the period agreed upon. The period so agreed upon may 4 be extended by subsequent agreements in writing made before the expira- 5 tion of the period previously agreed upon. For the purpose of determin- 6 ing the period of limitation on credit or refund to the transferee of 7 overpayments of tax made by such transferee or overpayments of tax made 8 by the transferor as to which the transferee is legally entitled to 9 credit or refund, such agreement and any extension thereof shall be 10 deemed an agreement and extension thereof referred to in subdivision (b) 11 of section 11-527 of this chapter. If the agreement is executed after 12 the expiration of the period of limitation for assessment against the 13 original taxpayer, then in applying the limitations under subdivision 14 (b) of section 11-527 of this chapter on the amount of the credit or 15 refund, the periods specified in subdivision (a) of section 11-527 of 16 this chapter shall be increased by the period from the date of such 17 expiration to the date of agreement. 18 (c) Deceased transferor. If any person is deceased, the period of 19 limitation for assessment against such person shall be the period that 20 would be in effect if such person had lived. 21 (d) Evidence. Notwithstanding the provisions of subdivision (e) of 22 section 11-537 of this chapter the commissioner of finance shall use his 23 or her powers to make available to the transferee evidence necessary to 24 enable the transferee to determine the liability of the original taxpay- 25 er and of any preceding transferees, but without undue hardship to the 26 original taxpayer or preceding transferee. See subdivision (e) of 27 section 11-529 of this chapter for rules as to burden of proof. 28 § 11-534 Jeopardy assessment. (a) Authority for making. If the commis- 29 sioner of finance believes that the assessment or collection of a defi- 30 ciency will be jeopardized by delay, the commissioner shall, notwith- 31 standing the provision of sections 11-521 and 11-536 of this chapter, 32 and immediately assess such deficiency, together with all interest, 33 penalties and additions to tax provided for by law, and notice and 34 demand shall be made by the commissioner of finance for the payment 35 thereof. 36 (b) Notice of deficiency. If the jeopardy assessment is made before 37 any notice in respect to the tax to which the jeopardy assessment 38 relates has been mailed under section 11-521 of this chapter, then the 39 commissioner of finance shall mail a notice under such section within 40 sixty days after the making of the assessment. 41 (c) Amount assessable before decision of tax appeals tribunal. The 42 jeopardy assessment may be made in respect of a deficiency greater or 43 less than that of which notice is mailed to the taxpayer and whether or 44 not the taxpayer has heretofore filed a petition with the tax appeals 45 tribunal. The commissioner of finance may, at any time before the tax 46 appeals tribunal renders its decision, abate such assessment, or any 47 unpaid portion thereof, to the extent that the commissioner believes the 48 assessment to be excessive in amount. The tax appeals tribunal may in 49 its decision redetermine the entire amount of the deficiency and of all 50 amounts assessed at the same time in connection therewith. 51 (d) Amount assessable after decision of tax appeals tribunal. If the 52 jeopardy assessment is made after the decision of the tax appeals tribu- 53 nal is rendered, such assessment may be made only in respect of the 54 deficiency determined by the tax appeals tribunal in its decision. 55 (e) Expiration of right to assess. A jeopardy assessment may not be 56 made after the decision of the tax appeals tribunal has become final or

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1 after the taxpayer has made an application for review of the decision of 2 the tax appeals tribunal. 3 (f) Collection of unpaid amounts. When a petition has been filed with 4 the tax appeals tribunal and when the amount which should have been 5 assessed has been determined by a decision of the tax appeals tribunal 6 which has become final, then any unpaid portion, the collection of which 7 has been stayed by bond, shall be collected as part of the tax upon 8 notice and demand from the commissioner of finance, and any remaining 9 portion of the assessment shall be abated. If the amount already 10 collected exceeds the amount determined as the amount which should have 11 been assessed, such excess shall be credited or refunded to the taxpayer 12 as provided in section 11-526 of this chapter without the filing of 13 claim therefor. If the amount determined as the amount which should have 14 been assessed is greater than the amount actually assessed, then the 15 difference shall be assessed and shall be collected as part of the tax 16 upon notice and demand from the commissioner of finance. 17 (g) Abatement if jeopardy does not exist. The commissioner of finance 18 may abate the jeopardy assessment if the commissioner finds that jeopar- 19 dy does not exist. Such abatement may not be made after a decision of 20 the tax appeals tribunal in respect of the deficiency has been rendered 21 or, if no petition is filed with the tax appeals tribunal, after the 22 expiration of the period for filing such petition. The period of limita- 23 tion on the making of assessments and levy or a proceeding for 24 collection, in respect of any deficiency, shall be determined as if the 25 jeopardy assessment so abated had not been made, except that the running 26 of such period shall in any event be suspended for the period from the 27 date of such jeopardy assessment until the expiration of the tenth day 28 after the day on which such jeopardy assessment is abated. 29 (h) Bond to stay collection. The collection of the whole or any amount 30 of any jeopardy assessment may be stayed by filing with the commissioner 31 of finance, within such time as may be fixed by regulation, a bond in an 32 amount equal to the amount as to which the stay is desired, conditioned 33 upon the payment of the amount, together with interest thereon, the 34 collection of which is stayed at the time at which, but for the making 35 of the jeopardy assessment, such amount would be due. Upon the filing of 36 the bond the collection of so much of the amount assessed as is covered 37 by the bond shall be stayed. The taxpayer shall have the right to waive 38 such stay at any time in respect of the whole or any part of the amount 39 covered by the bond, and if as a result of such waiver any part of the 40 amount covered by the bond is paid, then the bond shall at the request 41 of the taxpayer, be proportionately reduced. If any portion of the 42 jeopardy assessment is abated, or if a notice or deficiency under 43 section 11-521 of this chapter is mailed to the taxpayer in a lesser 44 amount, the bond shall, at the request of the taxpayer, be proportion- 45 ately reduced. 46 (i) Petition to tax appeals tribunal. If the bond is given before the 47 taxpayer has filed his or her petition under section 11-529 of this 48 chapter, the bond shall contain a further condition that if a petition 49 is not filed within the period provided in such section, then the amount 50 the collection of which is stayed by the bond, will be paid on notice 51 and demand at any time after the expiration of such period, together 52 with interest thereon from the date of the jeopardy notice and demand to 53 the date of notice and demand under this subdivision. The bond shall be 54 conditioned upon the payment of so much of such assessment, collection 55 of which is stayed by the bond, as is not abated by a decision of the 56 tax appeals tribunal which has become final. If the tax appeals tribunal

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1 determines that the amount assessed is greater than the amount which 2 should have been assessed, then the bond shall, at the request of the 3 taxpayer, be proportionately reduced when the decision of the tax 4 appeals tribunal is rendered. 5 (j) Stay of sale of seized property pending tax appeals tribunal deci- 6 sion. Where a jeopardy assessment is made, the property seized for the 7 collection of the tax shall not be sold: 8 (1) if subdivision (b) of this section is applicable, prior to the 9 issuance of the notice of deficiency and the expiration of the time 10 provided in section 11-529 of this chapter for filing a petition with 11 the tax appeals tribunal, and 12 (2) if a petition is filed with the tax appeals tribunal, whether 13 before or after the making of such jeopardy assessment, prior to the 14 expiration of the period during which the assessment of the deficiency 15 would be prohibited if subdivision (a) of this section were not applica- 16 ble. 17 Such property may be sold if the taxpayer consents to the sale, or if 18 the commissioner of finance determines that the expenses of conservation 19 and maintenance will greatly reduce the net proceeds, or if the property 20 is perishable. 21 (k) Interest. For the purpose of subdivision (a) of section 11-524 of 22 this chapter, the last date prescribed for payment shall be determined 23 without regard to any notice and demand for payment issued under this 24 section prior to the last date otherwise prescribed for such payment. 25 (l) Early termination of taxable year. If the commissioner of finance 26 finds that a taxpayer designs quickly to depart from this state or to 27 remove his or her property therefrom, or to conceal himself or herself 28 or his or her property therein, or to do any other act tending to preju- 29 dice or to render wholly or partly ineffectual proceedings to collect 30 the income tax for the current or the preceding taxable year unless such 31 proceedings be brought without delay, the commissioner of finance shall 32 declare the taxable period for such taxpayer immediately terminated, and 33 shall cause notice of such finding and declaration to be given to the 34 taxpayer, together with a demand for immediate payment of the tax for 35 the taxable period so declared terminated and of the tax for the preced- 36 ing taxable year or so much of such tax as is unpaid, whether or not the 37 time otherwise allowed by law for filing return and paying the tax has 38 expired; and such taxes shall thereupon become immediately due and paya- 39 ble. In any proceeding brought to enforce payment of taxes made due and 40 payable by virtue of the provisions of this subdivision, the finding of 41 the commissioner of finance, whether made after notice to the taxpayer 42 or not, shall be for all purposes presumptive evidence of jeopardy. 43 (m) Reopening of taxable period. Notwithstanding the termination of 44 the taxable period of the taxpayer by the commissioner of finance as 45 provided in subdivision (l) of this section, the commissioner of finance 46 may reopen such taxable period each time the taxpayer is found by the 47 commissioner of finance to have received income, within the current 48 taxable year, since the termination of such period. A taxable period so 49 terminated by the commissioner of finance may be reopened by the taxpay- 50 er if the taxpayer files with the commissioner of finance a true and 51 accurate return of taxable income and credits allowed under this chapter 52 for taxable period, together with such other information as the commis- 53 sioner of finance may by regulations prescribe. 54 (n) Furnishing of bond where taxable year is closed by the commission- 55 er of finance. Payment of taxes shall not be enforced by any proceedings 56 under the provisions of subdivision (l) of this section prior to the

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1 expiration of the time otherwise allowed for paying such taxes if the 2 taxpayer furnishes, under regulations prescribed by the commissioner of 3 finance, a bond to insure the timely making of returns with respect to, 4 and payment of, such taxes or any taxes under this chapter for prior 5 years. 6 § 11-535 Criminal penalties; cross-reference. For criminal penalties, 7 see chapter forty of this title. 8 § 11-536 Armed forces relief provisions. (a) Time to be disregarded. 9 In the case of an individual serving in the armed forces of the United 10 States or serving in support of such armed forces, in an area designated 11 by the president of the United States by executive order as a "combat 12 zone" at any time during the period designated by the president by exec- 13 utive order as the period of combatant activities in such zone, or 14 hospitalized outside the state as a result of injury received while 15 serving in such an area during such time, the period of service in such 16 area, plus the period of continuous hospitalization outside the state 17 attributable to such injury, and the next one hundred eighty days there- 18 after, shall be disregarded in determining, under this chapter, in 19 respect of the tax liability, including any interest, penalty, or addi- 20 tion to the tax, of such individual: 21 (1) Whether any of the following acts was performed within the time 22 prescribed therefor: 23 (A) filing any return of tax; 24 (B) payment of any tax or any installment thereof or of any other 25 liability to the commissioner of finance, in respect thereof; 26 (C) filing a petition with the tax appeals tribunal for credit or 27 refund or for redetermination of a deficiency, or application for review 28 of a decision rendered by the tax appeals tribunal; 29 (D) allowance of a credit or refund of tax; 30 (E) filing a claim for credit or refund of tax; 31 (F) assessment of tax; 32 (G) giving or making any notice or demand for the payment of any tax, 33 or with respect to any liability to the commissioner of finance in 34 respect of tax; 35 (H) collection, by the commissioner of finance, by levy or otherwise 36 of the amount of any liability in respect of tax; 37 (I) bringing suit by the city, or any officer, on its behalf, in 38 respect of any liability in respect of tax; and 39 (J) any other act required or permitted under this chapter or speci- 40 fied in regulations prescribed under this section by the commissioner of 41 finance. 42 (2) The amount of any credit or refund (including interest). 43 (b) Action taken before ascertainment of right to benefits. The 44 assessment or collection of the tax imposed by this chapter or of any 45 liability to the commissioner of finance in respect of such tax, or any 46 action or proceeding by or on behalf of the commissioner of finance in 47 connection therewith, may be made, taken, begun, or prosecuted in 48 accordance with law, without regard to the provisions of subdivision (a) 49 of this section, unless prior to such assessment, collection, action, or 50 proceeding it is ascertained that the person concerned is entitled to 51 the benefit of subdivision (a) of this section. 52 (c) Members of armed forces dying in action. In the case of any person 53 who dies during an induction period while in active service as a member 54 of the armed forces of the United States, if such death occurred while 55 serving in a combat zone during a period of combatant activities in such 56 zone, as described in subdivision (a) of this section, or as a result of

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1 wounds, disease or injury incurred while so serving, the tax imposed by 2 this chapter shall not apply with respect to the taxable year in which 3 falls the date of such person's death, or with respect to any prior 4 taxable year ending on or after the first day he or she so served in a 5 combat zone, and no returns shall be required in behalf of such person 6 or such person's estate for such year; and the tax for any such taxable 7 year which is unpaid at the date of his or her death, including inter- 8 est, additions to tax and penalties, if any, shall not be assessed and 9 if assessed, the assessment shall be abated and, if collected, shall be 10 refunded to the legal representative of such person's estate if one has 11 been appointed and has qualified, or, if no legal representative has 12 been appointed or has qualified, to such person's surviving spouse. 13 § 11-537 General powers of commissioner of finance. (a) General. The 14 commissioner of finance shall administer and enforce the tax imposed by 15 this chapter and the commissioner is authorized to make such rules and 16 regulations, and to require such facts and information to be reported, 17 as the commissioner may deem necessary to enforce the provision of this 18 chapter; and the commissioner may delegate his or her powers and func- 19 tions under all parts of this chapter to one of the commissioner's depu- 20 ties or to any employee or employees of the commissioner's department. 21 (b) Examination of books and witnesses. The commissioner of finance 22 for the purpose of ascertaining the correctness of any return, or for 23 the purpose of making an estimate of tax of any person, shall have power 24 to examine or to cause to have examined, by any agent or representative 25 designated by the commissioner for that purpose, any books, papers, 26 records or memoranda bearing upon the matters required to be included in 27 the return, and may require the attendance of the person rendering the 28 return or any officer or employee of such person, or the attendance of 29 any other person having knowledge in the premises, and may take testimo- 30 ny and require proof material for the commissioner's information, with 31 power to administer oaths to such person or persons. 32 (c) Abatement authority. The commissioner of finance, of his or her 33 own motion, may abate any small unpaid balance of an assessment of tax 34 under this part, or any liability in respect thereof, if the commis- 35 sioner of finance determines under uniform rules prescribed by the 36 commissioner that the administration and collection costs involved would 37 not warrant collection of the amount due. The commissioner may also 38 abate, of his or her own motion, the unpaid portion of the assessment of 39 any tax or any liability in respect thereof, which is excessive in 40 amount, or is assessed after the expiration of the period of limitation 41 properly applicable thereto, or is erroneously or illegally assessed. 42 No claim for abatement under this subdivision shall be filed by a 43 taxpayer. 44 (d) Special refund authority. Where no questions of fact or law are 45 involved and it appears from the records of the commissioner of finance 46 that any moneys have been erroneously or illegally collected from any 47 taxpayer or other person, or paid by such taxpayer or other person under 48 a mistake of facts, pursuant to the provisions of this chapter, the 49 commissioner of finance at any time, without regard to any period of 50 limitations, shall have the power, upon making a record of his or her 51 reasons therefor in writing, to cause such moneys so paid and being 52 erroneously and illegally held to be refunded. 53 (e) Cooperation with the United States, this state and other states. 54 Notwithstanding the provisions of section 11-538 of this chapter, the 55 commissioner of finance may permit the secretary of the treasury of the 56 United States or the secretary's delegates, or the proper officer of

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1 this or any other state imposing an income tax upon the incomes of indi- 2 viduals, or the authorized representative of any such officer, to 3 inspect any return filed under this chapter or may furnish to such offi- 4 cer or his or her authorized representative an abstract of any such 5 return or supply such officer with information concerning an item 6 contained in any such return, or disclosed by any investigation of tax 7 liability under this chapter, but such permission shall be granted or 8 such information furnished to such officer or such officer's represen- 9 tative only if the laws of the United States or of such state, as the 10 case may be, grant substantially similar privileges to the commissioner 11 of finance and such information is to be used for tax purposes only; and 12 provided further the commissioner of finance may furnish to the secre- 13 tary of the treasury of the United States or the secretary's delegates 14 or to the tax commission of the state of New York or its delegates such 15 returns filed under this chapter and other tax information, as he or she 16 may consider proper for use in court actions or proceedings under the 17 internal revenue code or the tax law of the state of New York, whether 18 civil or criminal, where a written request therefor has been made to the 19 commissioner of finance by the secretary of the treasury or by such tax 20 commission or by their delegates, provided the laws of the United States 21 or the laws of the state of New York grant substantially similar powers 22 to the secretary of the treasury of the United States or the secretary's 23 delegates or to such tax commission or its delegates. Where the commis- 24 sioner of finance has so authorized use of returns or other information 25 in such actions or proceedings, officers and employees of the department 26 of finance may testify in such actions or proceedings in respect to such 27 returns or other information. 28 (f) (1) Authority to set interest rates. The commissioner of finance 29 shall set the overpayment and underpayment rates of interest to be paid 30 pursuant to sections 11-524, 11-525 and 11-528 of this chapter, but if 31 no such rate or rates of interest are set, such overpayment rate shall 32 be deemed to be set at six percent per annum and such underpayment rate 33 shall be deemed to be set at seven and one-half percent per annum. Such 34 overpayment and underpayment rates shall be the rates prescribed in 35 paragraph two of this subdivision, but the underpayment rate shall not 36 be less than seven and one-half percent per annum. Any such rates set by 37 the commissioner of finance shall apply to taxes, or any portion there- 38 of, which remain or become due or overpaid on or after the date on which 39 such rates become effective and shall apply only with respect to inter- 40 est computed or computable for periods or portions of periods occurring 41 in the period during which such rates are in effect. 42 (2) General rule. (A) Overpayment rate. The overpayment rate set under 43 this subdivision shall be the sum of (i) the federal short-term rate as 44 provided under paragraph three of this subdivision, plus (ii) two 45 percentage points. 46 (B) Underpayment rate. The underpayment rate set under this subdivi- 47 sion shall be the sum of (i) the federal short-term rate as provided 48 under paragraph three of this subdivision, plus (ii) seven percentage 49 points. 50 (3) Federal short-term rate. For purposes of this subdivision: 51 (A) The federal short-term rate for any month shall be the federal 52 short-term rate determined by the United States secretary of the treas- 53 ury during such month in accordance with subsection (d) of section 54 twelve hundred seventy-four of the internal revenue code for use in 55 connection with section six thousand six hundred twenty-one of the 56 internal revenue code. Any such rate shall be rounded to the nearest

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1 full percent, or, if a multiple of one-half of one percent, such rate 2 shall be increased to the next highest full percent. 3 (B) Period during which rate applies. 4 (i) In general. Except as provided in clause (ii) of this subpara- 5 graph, the federal short-term rate for the first month in each calendar 6 quarter shall apply during the first calendar quarter beginning after 7 such month. 8 (ii) Special rule for the month of September, nineteen hundred eight- 9 y-nine. The federal short-term rate for the month of April, nineteen 10 hundred eighty-nine shall apply with respect to setting the overpayment 11 and underpayment rates for the month of September, nineteen hundred 12 eighty-nine. 13 (4) Publication of interest rates. The commissioner of finance shall 14 cause to be published in the City Record, and give other appropriate 15 general notice of, the interest rates to be set under this subdivision 16 no later than twenty days preceding the first day of the calendar quar- 17 ter during which such interest rates apply. The setting and publication 18 of such interest rates shall not be included within paragraph (a) of 19 subdivision five of section one thousand forty-one of the city charter 20 of the preceding municipality as it existed January first, nineteen 21 hundred ninety-four relating to the definition of a rule. 22 (5) Cross-reference. For provisions relating to the power of the 23 commissioner of finance to abate small amounts of interest, see subdivi- 24 sion (c) of this section. 25 (g) In computing the amount of any interest required to be paid under 26 this chapter by the commissioner of finance or by the taxpayer, or any 27 other amount determined by reference to such amount of interest, such 28 interest and such amount shall be compounded daily. The provisions of 29 this subdivision shall not apply for purposes of computing the amount of 30 any addition to tax for failure to pay estimated tax under subdivision 31 (c) of section 11-525 of this chapter. 32 § 11-538 Secrecy requirement and the penalties for violation. 1. 33 Except in accordance with proper judicial order or as otherwise provided 34 by law, it shall be unlawful for the commissioner of finance, the 35 department of finance of the city, any officer or employee of the 36 department of finance of the city, any person engaged or retained by 37 such department on an independent contract basis, any depository to 38 which any return may be delivered as provided in subdivision four of 39 this section, any officer or employee of such depository, the tax 40 appeals tribunal, any commissioner or employee of such tribunal, or any 41 person who, pursuant to this section, is permitted to inspect any report 42 or return or to whom a copy, an abstract or a portion of any report or 43 return is furnished, or to whom any information contained in any report 44 or return is furnished, to divulge or make known in any manner the 45 amount of income or any particulars set forth or disclosed in any report 46 or return required under this chapter. The officers charged with the 47 custody of such reports and returns shall not be required to produce any 48 of them or evidence of anything contained in them in any action or 49 proceeding in any court, except on behalf of the city in an action or 50 proceeding under the provisions of this chapter or in any other action 51 or proceeding involving the collection of a tax due under this chapter 52 to which the city is a party or a claimant, or on behalf of any party to 53 any action or proceeding under the provisions of this chapter when the 54 reports, returns or facts shown thereby are directly involved in such 55 action or proceeding, in any of which events the court may require the 56 production of, and may admit in evidence, so much of said reports,

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1 returns or of the facts shown thereby, as are pertinent to the action or 2 proceeding and no more. Nothing herein shall be construed to prohibit 3 the delivery to a taxpayer or to the taxpayer's duly authorized repre- 4 sentative of a certified copy of any return or report filed in 5 connection with his or her tax or to prohibit the publication of statis- 6 tics so classified as to prevent the identification of particular 7 reports or returns and the items thereof, or the inspection by the 8 corporation counsel or other legal representatives of the city of the 9 report or return of any taxpayer who shall bring action to set aside or 10 review the tax based thereon, or against whom an action or proceeding 11 under this chapter has been recommended by the commissioner of finance 12 or the corporation counsel or has been instituted, or the inspection of 13 the reports or returns required under this chapter by the duly desig- 14 nated officers or employees of the city for purposes of an audit under 15 this chapter or an audit authorized by the enacting of this chapter. 16 Reports and returns shall be preserved for three years and thereafter 17 until the commissioner of finance orders them to be destroyed. 18 2. Any officer or employee of the city or the state who willfully 19 violates the provisions of subdivision one of this section shall be 20 dismissed from office and be incapable of holding any public office in 21 the city or the state for a period of five years thereafter. 22 3. Cross-reference: For criminal penalties, see chapter forty of this 23 title. 24 4. Notwithstanding the provisions of subdivision one of this section, 25 the commissioner of finance, in his or her discretion, may require or 26 permit any or all persons liable for any tax imposed by this chapter, to 27 make payments on account of estimated tax and payment of any tax, penal- 28 ty or interest imposed by this chapter to banks, banking houses or trust 29 companies designated by the commissioner of finance and to file declara- 30 tions of estimated tax and reports and returns with such banks, banking 31 houses or trust companies as agents of the commissioner of finance, in 32 lieu of making any such payment directly to the commissioner of finance. 33 However, the commissioner of finance shall designate only such banks, 34 banking houses or trust companies as are depositories or financial 35 agents of the city. 36 5. This section shall be deemed a state statute for purposes of para- 37 graph (a) of subdivision two of section eighty-seven of the public offi- 38 cers law. 39 6. Notwithstanding anything in subdivision one of this section to the 40 contrary, if a taxpayer has petitioned the tax appeals tribunal for 41 administrative review as provided in section one hundred seventy of the 42 charter of the preceding municipality as it existed January first, nine- 43 teen hundred ninety-four, the commissioner of finance shall be author- 44 ized to present to the tribunal any report or return of such taxpayer, 45 or any information contained therein or relating thereto, which may be 46 material or relevant to the proceeding before the tribunal. The tax 47 appeals tribunal shall be authorized to publish a copy or a summary of 48 any decision rendered pursuant to section one hundred seventy-one of the 49 charter of the preceding municipality as it existed January first, nine- 50 teen hundred ninety-four. 51 7. Notwithstanding anything in subdivision one of this section, the 52 commissioner of finance may disclose to a taxpayer or a taxpayer's 53 related member, as defined in subdivision (e) of section 11-506 of this 54 chapter, information relating to any royalty paid, incurred or received 55 by such taxpayer or related member to or from the other, including the 56 treatment of such payments by the taxpayer or the related member in any

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1 report or return transmitted to the commissioner of finance under this 2 title. 3 § 11-539 Inconsistencies with other laws. If any provision of this 4 chapter is inconsistent with, in conflict with, or contrary to any other 5 provision of law, such provision of this chapter shall prevail over such 6 other provision and such other provision shall be deemed to have been 7 amended, superseded or repealed to the extent of such inconsistency, 8 conflict or contrariety. 9 § 11-540 Disposition of revenues. All revenues resulting from the 10 imposition of the taxes under this chapter shall be paid into the treas- 11 ury of the city and shall be credited to and deposited in the general 12 fund of the city, but no part of such revenues may be expended unless 13 appropriated in the annual budget of the city.

14 CHAPTER 6 15 CITY BUSINESS 16 TAXES 17 SUBCHAPTER 1 18 GENERAL PROVISIONS 19 § 11-601 Definitions. When used in subchapters one through five: 20 1. "Taxpayer" means any corporation, association or other entity or 21 individual subject to tax under this chapter; 22 2. "State", "the state" or "this state" means the state of New York; 23 3. "Tax law", "insurance law", "private housing finance law", "envi- 24 ronmental conservation law", "public housing law", "state finance law", 25 "general municipal law", "public service law", "workers' compensation 26 law", "business corporation law", "civil practice law and rules", "crim- 27 inal procedure law", and "banking law" refer to laws of the state; 28 4. "Superintendent of insurance", and "commissioner of health" refer 29 to officials of the state; 30 5. "Commissioner of finance" means the commissioner of finance of the 31 city; 32 6. "Department of finance" means the department of finance of the 33 city; 34 7. "Domestic corporation" means a corporation organized under the laws 35 of the state; and 36 8. "Tax appeals tribunal" means the tax appeals tribunal established 37 by section one hundred sixty-eight of the charter of the preceding muni- 38 cipality as it existed January first, nineteen hundred ninety-four. 39 9. "REIT" means a real estate investment trust as defined in section 40 eight hundred fifty-six of the internal revenue code. 41 10. "RIC" means a regulated investment company as defined in section 42 eight hundred fifty-one of the internal revenue code. 43 11. "Captive REIT" means a REIT (a) that is not regularly traded on an 44 established securities market, and (b) more than fifty percent of the 45 voting stock of which is owned or controlled, directly or indirectly, by 46 a single corporation that is not exempt from federal income tax and is 47 not a REIT. Any voting stock in a REIT that is held in a segregated 48 asset account of a life insurance corporation, as described in section 49 eight hundred seventeen of the internal revenue code, shall not be taken 50 into account for purposes of determining whether a REIT is a captive 51 REIT. 52 12. "Captive RIC" means a RIC (a) that is not regularly traded on an 53 established securities market, and (b) more than fifty percent of the 54 voting stock of which is owned or controlled, directly or indirectly, by

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1 a single corporation that is not exempt from federal income tax and is 2 not a RIC. Any voting stock in a RIC that is held in a segregated asset 3 account of a life insurance corporation, as described in section eight 4 hundred seventeen of the internal revenue code, shall not be taken into 5 account for purposes of determining whether a RIC is a captive RIC. 6 13. Unless a different meaning is clearly required, any term used in 7 this chapter shall have the same meaning as when used in a comparable 8 context in the laws of the United States relating to federal income 9 taxes, and any reference to the laws of the United States shall mean the 10 provisions of the internal revenue code of nineteen hundred fifty-four, 11 and amendments thereto, and other provisions of the laws of the United 12 States relating to federal income taxes, as the same are included in the 13 appendix to this chapter. The quotation of the aforesaid laws of the 14 United States is intended to make them a part of any appropriate chapter 15 and to avoid constitutional uncertainties which might result if such 16 laws were merely incorporated by reference. The quotation of a 17 provision of the federal internal revenue code or of any other law of 18 the United States shall not necessarily mean that it is applicable to or 19 has relevance to any of the chapters.

20 SUBCHAPTER 2 21 GENERAL CORPORATION TAX

22 § 11-602 Definitions. When used in this subchapter: 23 1. (a) "Corporation" includes (1) an association within the meaning of 24 paragraph three of subsection (a) of section seventy-seven hundred one 25 of the internal revenue code, including a limited liability company, (2) 26 a joint-stock company or association, (3) a publicly traded partnership 27 treated as a corporation for purposes of the internal revenue code 28 pursuant to section seventy-seven hundred four thereof and (4) any busi- 29 ness conducted by a trustee or trustees wherein interest or ownership is 30 evidenced by certificate or other written instrument; 31 (b) (1) Notwithstanding paragraph (a) of this subdivision, an unincor- 32 porated organization that (i) is described in subparagraph one or three 33 of such paragraph (a) and (ii) was subject to the provisions of chapter 34 five of this title for its taxable year beginning in nineteen hundred 35 ninety-five, may make a one-time election not to be treated as a corpo- 36 ration and, instead, to continue to be subject to the provisions of 37 chapter five of this title for its taxable years beginning in nineteen 38 hundred ninety-six and thereafter. Such election shall be made on the 39 return prescribed pursuant to such chapter five for such electing organ- 40 ization's taxable year beginning in nineteen hundred ninety-six, which 41 shall be filed on or before the due date, determined with regard to 42 extensions, for filing such return. 43 (2) An election under this paragraph shall continue to be in effect 44 until revoked by the unincorporated organization. An election under this 45 paragraph shall be revoked by the filing of a return under this subchap- 46 ter for the first taxable year with respect to which such revocation is 47 to be effective, which return shall be filed on or before the due date, 48 determined with regard to extensions, for filing such return. In no 49 event shall such election or revocation be for a part of a taxable year. 50 (c) Notwithstanding paragraph (a) of this subdivision, a corporation 51 shall not include an entity classified as a partnership for federal 52 income tax purposes.

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1 2. "Subsidiary" means a corporation of which over fifty per centum of 2 the number of shares of stock entitling the holders thereof to vote for 3 the election of directors or trustees is owned by the taxpayer; 4 3. "Subsidiary capital" means investments in the stock of subsidiaries 5 and any indebtedness from subsidiaries, exclusive of accounts receivable 6 acquired in the ordinary course of trade or business for services 7 rendered or for sales of property held primarily for sale to customers, 8 whether or not evidenced by written instrument, on which interest is not 9 claimed and deducted by the subsidiary for purposes of taxation under 10 this subchapter or subchapter three of this chapter, provided, however, 11 that, in the discretion of the commissioner of finance, there shall be 12 deducted from subsidiary capital any liabilities which are directly or 13 indirectly attributable to subsidiary capital; 14 4. "Investment capital" means investments in stocks, bonds and other 15 securities, corporate and governmental, not held for sale to customers 16 in the regular course of business, exclusive of subsidiary capital and 17 stock issued by the taxpayer, provided, however, that, in the discretion 18 of the commissioner of finance, there shall be deducted from investment 19 capital any liabilities which are directly or indirectly attributable to 20 investment capital; and provided, further, that investment capital shall 21 not include any such investments the income from which is excluded from 22 entire net income pursuant to the provisions of paragraph (c-1) of 23 subdivision eight of this section, and that investment capital shall be 24 computed without regard to any liabilities directly or indirectly 25 attributable to such investments, but only if air carriers organized in 26 the United States and operating in the foreign country or countries in 27 which the taxpayer has its major base of operations and in which it is 28 organized, resident or headquartered, if not in the same country as its 29 major base of operations, are not subject to any tax based on or meas- 30 ured by capital imposed by such foreign country or countries or any 31 political subdivision thereof, or if taxed are provided an exemption, 32 equivalent to that provided for herein, from any tax based on or meas- 33 ured by capital imposed by such foreign country or countries and from 34 any such tax imposed by any political subdivision thereof; 35 5. "Investment income" means income, including capital gains in excess 36 of capital losses, from investment capital to the extent included in 37 computing entire net income, less, (a) in the discretion of the commis- 38 sioner of finance, any deductions allowable in computing entire net 39 income which are directly or indirectly attributable to investment capi- 40 tal or investment income, and (b) such portion of any net operating loss 41 deduction allowable in computing entire net income, as the investment 42 income, before such deduction, bears to entire net income, before such 43 deduction, provided, however, that in no case shall investment income 44 exceed entire net income; 45 6. (a) "Business capital" means all assets, other than subsidiary 46 capital, investment capital and stock issued by the taxpayer, less 47 liabilities not deducted from subsidiary or investment capital except 48 that cash on hand and on deposit shall be treated as investment capital 49 or as business capital as the taxpayer may elect; 50 (b) Provided, however, "business capital" shall not include assets to 51 the extent employed for the purpose of generating income which is 52 excluded from entire net income pursuant to the provisions of paragraph 53 (c-1) of subdivision eight of this section and shall be computed without 54 regard to liabilities directly or indirectly attributable to such 55 assets, but only if air carriers organized in the United States and 56 operating in the foreign country or countries in which the taxpayer has

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1 its major base of operations and in which it is organized, resident or 2 headquartered, if not in the same country as its major base of oper- 3 ations, are not subject to any tax based on or measured by capital 4 imposed by such foreign country or countries or any political subdivi- 5 sion thereof, or if taxed, are provided an exemption, equivalent to that 6 provided for herein, from any tax based on or measured by capital 7 imposed by such foreign country or countries and from any such tax 8 imposed by any political subdivision thereof. 9 7. "Business income" means entire net income minus investment income; 10 8. "Entire net income" means total net income from all sources, which 11 shall be presumably the same as the entire taxable income, but not 12 alternative minimum taxable income, 13 (i) which the taxpayer is required to report to the United States 14 treasury department, or 15 (ii) which the taxpayer would have been required to report to the 16 United States treasury department if it had not made an election under 17 subchapter s of chapter one of the internal revenue code, or 18 (iii) which the taxpayer, in the case of a corporation which is exempt 19 from federal income tax, other than the tax on unrelated business taxa- 20 ble income imposed under section five hundred eleven of the internal 21 revenue code, but which is subject to tax under this subchapter, would 22 have been required to report to the United States treasury department 23 but for such exemption, or 24 (iv) which the taxpayer would have been required to report to the 25 United States treasury department if no election had been made to treat 26 the taxpayer as a qualified subchapter s subsidiary under paragraph 27 three of subsection (b) of section thirteen hundred sixty-one of the 28 internal revenue code, except as provided in this paragraph, and subject 29 to any modification required by paragraphs (d) and (e) of subdivision 30 three of section 11-604 of this subchapter. 31 (a) Entire net income shall not include: 32 (1) income, gains and losses from subsidiary capital which do not 33 include the amount of a recovery in respect of any war loss; 34 (2) fifty percent of dividends other than from subsidiaries, except 35 that entire net income shall include one hundred percent of dividends on 36 shares of stock with respect to which a dividend deduction is disallowed 37 by subsection (c) of section two hundred forty-six of the internal 38 revenue code; 39 (2-a) any amounts treated as dividends pursuant to section seventy- 40 eight of the internal revenue code and not otherwise deductible under 41 subparagraphs one and two of this paragraph; 42 (3) bona fide gifts; 43 (4) income and deductions with respect to amounts received from school 44 districts and from corporations and associations, organized and operated 45 exclusively for religious, charitable or educational purposes, no part 46 of the net earnings of which inures to the benefit of any private share- 47 holder or individual, for the operation of school buses; 48 (5) any refund or credit of a tax imposed under this chapter, or 49 imposed by article nine or nine-A or thirty-two of the tax law as such 50 article was in effect on December thirty-first, two thousand fourteen, 51 for which tax no exclusion or deduction was allowed in determining the 52 taxpayer's entire net income under this subchapter or subchapter three 53 of this chapter for any prior year; 54 (6) in the case of a taxpayer who is separately or as a partner of a 55 partnership doing an insurance business as a member of the New York 56 insurance exchange described in section six thousand two hundred one of

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1 the insurance law, any item of income, gain, loss or deduction of such 2 business which is the taxpayer's distributive or pro rata share for 3 federal income tax purposes or which the taxpayer is required to take 4 into account separately for federal income tax purposes; 5 (7) that portion of wages and salaries paid or incurred for the taxa- 6 ble year for which a deduction is not allowed pursuant to the provisions 7 of section two hundred eighty C of the internal revenue code; 8 (8) for taxable years beginning after December thirty-first, nineteen 9 hundred eighty-one, except with respect to property which is a qualified 10 mass commuting vehicle described in subparagraph (D) of paragraph eight 11 of subsection (f) of section one hundred sixty-eight of the internal 12 revenue code, relating to qualified mass commuting vehicles, and proper- 13 ty of a taxpayer principally engaged in the conduct of an aviation, 14 steamboat, ferry or navigation business, or two or more of such busi- 15 nesses, which is placed in service before taxable years beginning in 16 nineteen hundred eighty-nine, any amount which is included in the 17 taxpayer's federal taxable income solely as a result of an election made 18 pursuant to the provisions of such paragraph eight as it was in effect 19 for agreements entered into prior to January first, nineteen hundred 20 eighty-four; 21 (9) for taxable years beginning after December thirty-first, nineteen 22 hundred eighty-one, except with respect to property which is a qualified 23 mass commuting vehicle described in subparagraph (D) of paragraph eight 24 of subsection (f) of section one hundred sixty-eight of the internal 25 revenue code, relating to qualified mass commuting vehicles, and proper- 26 ty of a taxpayer principally engaged in the conduct of an aviation, 27 steamboat, ferry or navigation business, or two or more of such busi- 28 nesses, which is placed in service before taxable years beginning in 29 nineteen hundred eighty-nine, any amount which the taxpayer could have 30 excluded from federal taxable income had it not made the election 31 provided for in such paragraph eight as it was in effect for agreements 32 entered into prior to January first, nineteen hundred eighty-four; 33 (10) the amount deductible pursuant to paragraph (j) of this subdivi- 34 sion; 35 (11) upon the disposition of property to which paragraph (j) of this 36 subdivision applies, the amount, if any, by which the aggregate of the 37 amounts described in subparagraph eleven of paragraph (b) of this subdi- 38 vision attributable to such property exceeds the aggregate of the 39 amounts described in paragraph (j) of this subdivision attributable to 40 such property; 41 (12) for taxable years ending after September tenth, two thousand one, 42 the amount deductible pursuant to paragraph (k) of this subdivision; 43 (13) the amount deductible pursuant to paragraph (o) of this subdivi- 44 sion; 45 (14) any amount excepted, for purposes of subsection (a) of section 46 one hundred eighteen of the internal revenue code, from the term 47 "contribution to the capital of the taxpayer" by paragraph two of 48 subsection (b) of section one hundred eighteen of the internal revenue 49 code; 50 (15) the amount of any gain added back to determine entire net income 51 in a previous taxable year pursuant to subparagraph nineteen of para- 52 graph (b) of this subdivision that is included in federal gross income 53 for the taxable year; and 54 (16) the amount of any grant received through either the COVID-19 55 pandemic small business recovery grant program, pursuant to section 56 sixteen-ff of the New York state urban development corporation act, or

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1 the small business resilience grant program administered by the depart- 2 ment of small business services, to the extent the amount of either such 3 grant is included in federal taxable income. 4 (a-1) Notwithstanding any other provision of this subchapter, for 5 taxable years beginning on or after August first, two thousand two, in 6 the case of a taxpayer that is a partner in a partnership subject to the 7 tax imposed by chapter eleven of this title as a utility, as defined in 8 subdivision six of section 11-1101 of such chapter, entire net income 9 shall not include the taxpayer's distributive or pro rata share for 10 federal income tax purposes of any item of income, gain, loss or 11 deduction of such partnership, or any item of income, gain, loss or 12 deduction of such partnership that the taxpayer is required to take into 13 account separately for federal income tax purposes. 14 (b) Entire net income shall be determined without the exclusion, 15 deduction or credit of: 16 (1) the amount of any specific exemption or credit allowed in any law 17 of the United States imposing any tax on or measured by the income of 18 any corporation, 19 (2) any part of any income from dividends or interest on any kind of 20 stock, securities, or indebtedness, except as provided in clauses one 21 and two of paragraph (a) of this subdivision, 22 (3) taxes on or measured by profits or income paid or accrued to the 23 United States, any of its possessions or to any foreign country, includ- 24 ing taxes in lieu of any of the foregoing taxes otherwise generally 25 imposed by any foreign country or by any possession of the United 26 States, or taxes on or measured by profited or income paid or accrued to 27 the state or any subdivision thereof, including taxes paid or accrued 28 under article nine, nine-A, thirteen-A, twenty-four-A, or twenty-four-B 29 of the tax law or under article thirty-two of the tax law as such arti- 30 cle was in effect on December thirty-first, two thousand fourteen, 31 (3-a) taxes on or measured by profits or income, or which include 32 profits or income as a measure, paid or accrued to any other state of 33 the United States, or any political subdivision thereof, or to the 34 District of Columbia, including taxes expressly in lieu of any of the 35 foregoing taxes otherwise generally imposed by any other state of the 36 United States, or any political subdivision thereof, or the District of 37 Columbia; 38 (4) taxes imposed under this chapter, 39 (4-a) (A) the entire amount allowable as an exclusion or deduction for 40 stock transfer taxes imposed by article twelve of the tax law in deter- 41 mining the entire taxable income which the taxpayer is required to 42 report to the United States treasury department but only to the extent 43 that such taxes are incurred and paid in market making transactions, and 44 (B) the amount allowed as an exclusion or deduction for sales and use 45 taxes imposed by section eleven hundred seven of the tax law in deter- 46 mining the entire taxable income which the taxpayer is required to 47 report to the United States treasury department but only such portion of 48 such exclusion or deduction which is not in excess of the amount of the 49 credit allowed pursuant to subdivision twelve of section 11-604 of this 50 subchapter, 51 (4-b) the amount allowed as an exclusion or a deduction imposed by the 52 tax law in determining the entire taxable income which the taxpayer is 53 required to report to the United States treasury department but only 54 such portion of such exclusion or deduction which is not in excess of 55 the amount of the credit allowed pursuant to subdivision thirteen of 56 section 11-604 of this subchapter,

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1 (4-c) the amount allowed as an exclusion or a deduction imposed by the 2 tax law in determining the entire taxable income which the taxpayer is 3 required to report to the United States treasury department but only 4 such portion of such exclusion or deduction which is not in excess of 5 the amount of the credit allowed pursuant to subdivision fourteen of 6 section 11-604 of this subchapter, 7 (4-d) the amount allowed as an exclusion or deduction for sales and 8 use taxes imposed by section eleven hundred seven of the tax law in 9 determining the entire taxable income which the taxpayer is required to 10 report to the United States Treasury Department, but only such portion 11 of such exclusion or deduction which is not in excess of the amount of 12 the credit allowed pursuant to subdivision fifteen of section 11-604 of 13 this chapter, 14 (4-g) The amount allowed as an exclusion or deduction for sales and 15 use taxes imposed by section eleven hundred seven of the tax law, or for 16 any interest imposed in connection therewith, in determining the entire 17 taxable income which the taxpayer is required to report to the United 18 States treasury department but only such portion of such exclusion or 19 deduction which is not in excess of the amount of the credit allowed 20 pursuant to subdivision seventeen-a of section 11-604 of this subchap- 21 ter. 22 (6) in the discretion of the commissioner of finance, any amount of 23 interest directly or indirectly and any other amount directly or indi- 24 rectly attributable as a carrying charge or otherwise to subsidiary 25 capital or to income, gains or losses from subsidiary capital, 26 (7) any amount by reason of the granting, issuing or assuming of a 27 restricted stock option, as defined in the internal revenue code of 28 nineteen hundred fifty-four, or by reason of the transfer of the share 29 of stock upon the exercise of the option, unless such share is disposed 30 of by the grantee of the option within two years from the date of the 31 granting of the option or within six months after the transfer of such 32 share to the grantee, 33 (8) in the case of a taxpayer who is separately or as a partner of a 34 partnership doing an insurance business as a member of the New York 35 insurance exchange described in section six thousand two hundred one of 36 the insurance law, such taxpayer's distributive or pro rata share of the 37 allocated entire net income of such business as determined under 38 sections fifteen hundred three and fifteen hundred four of the tax law, 39 provided however, in the event such allocated entire net income is a 40 loss, such taxpayer's distributive or pro rata share of such loss shall 41 not be subtracted from federal taxable income in computing entire net 42 income under this subdivision, 43 (9) for taxable years beginning after December thirty-first, nineteen 44 hundred eighty-one, except with respect to property which is a qualified 45 mass commuting vehicle described in subparagraph (D) of paragraph eight 46 of subsection (f) of section one hundred sixty-eight of the internal 47 revenue code, relating to qualified mass commuting vehicles, and proper- 48 ty of a taxpayer principally engaged in the conduct of an aviation, 49 steamboat, ferry or navigation business, or two or more of such busi- 50 nesses, which is placed in service before taxable years beginning in 51 nineteen hundred eighty-nine, any amount which the taxpayer claimed as a 52 deduction in computing its federal taxable income solely as a result of 53 an election made pursuant to the provisions of such paragraph eight as 54 it was in effect for agreements entered into prior to January first, 55 nineteen hundred eighty-four,

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1 (10) for taxable years beginning after December thirty-first, nineteen 2 hundred eighty-one, except with respect to property which is a qualified 3 mass commuting vehicle described in subparagraph (D) of paragraph eight 4 of subsection (f) of section one hundred sixty-eight of the internal 5 revenue code, relating to qualified mass commuting vehicles, and proper- 6 ty of a taxpayer principally engaged in the conduct of an aviation, 7 steamboat, ferry or navigation business, or two or more of such busi- 8 nesses, which is placed in service before taxable years beginning in 9 nineteen hundred eighty-nine, any amount which the taxpayer would have 10 been required to include in the computation of its federal taxable 11 income had it not made the election permitted pursuant to such paragraph 12 eight as it was in effect for agreements entered into prior to January 13 first, nineteen hundred eighty-four, 14 (11) in the case of property placed in service in taxable years begin- 15 ning before nineteen hundred ninety-four, for taxable years beginning 16 after December thirty-first, nineteen hundred eighty-one, except with 17 respect to property subject to the provisions of section two hundred 18 eighty-F of the internal revenue code, property subject to the 19 provisions of section one hundred sixty-eight of the internal revenue 20 code which is placed in service in this state in taxable years beginning 21 after December thirty-first, nineteen hundred eighty-four and property 22 of a taxpayer principally engaged in the conduct of an aviation, steam- 23 boat, ferry or navigation business, or two or more of such businesses, 24 which is placed in service before taxable years beginning in nineteen 25 hundred eighty-nine, the amount allowable as a deduction determined 26 under section one hundred sixty-eight of the internal revenue code, 27 (12) upon the disposition of property to which paragraph (j) of this 28 subdivision applies, the amount, if any, by which the aggregate of the 29 amounts described in such paragraph (j) attributable to such property 30 exceeds the aggregate of the amounts described in subparagraph eleven of 31 this paragraph attributable to such property, 32 (13) for taxable years ending after September tenth, two thousand one, 33 in the case of qualified property described in paragraph two of 34 subsection k of section one hundred sixty-eight of the internal revenue 35 code, other than qualified resurgence zone property described in para- 36 graph (m) of this subdivision, and other than qualified New York Liberty 37 Zone property described in paragraph two of subsection b of section 38 fourteen hundred L of the internal revenue code, without regard to 39 clause (i) of subparagraph (C) of such paragraph, the amount allowable 40 as a deduction under section one hundred sixty-seven of the internal 41 revenue code, 42 (14) for taxable years beginning on or after January first, two thou- 43 sand four, in the case of a taxpayer that is not an eligible farmer as 44 defined in subsection (n) of section six hundred six of the tax law, the 45 amount allowable as a deduction under sections one hundred seventy-nine, 46 one hundred sixty-seven and one hundred sixty-eight of the internal 47 revenue code with respect to a sport utility vehicle that is not a 48 passenger automobile as defined in paragraph five of subsection (d) of 49 section two hundred eighty F of the internal revenue code, 50 (15) the amount of any deduction allowed pursuant to section one 51 hundred ninety-nine of the internal revenue code, 52 (16) the amount of any federal deduction for taxes imposed under arti- 53 cle twenty-three of the tax law, 54 (17) the amount of any federal deduction that would have been allowed 55 pursuant to subparagraph (A) of paragraph one of subdivision (a) of 56 section two hundred fifty of the internal revenue code if the taxpayer

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1 had not made an election under subchapter s of chapter one of the inter- 2 nal revenue code, 3 (18) for taxable years beginning in two thousand nineteen and two 4 thousand twenty, the amount of the increase in the federal interest 5 deduction allowed pursuant to paragraph ten of subdivision (j) of 6 section one hundred sixty-three of the internal revenue code, and 7 (19) the amount of any gain excluded from federal gross income for the 8 taxable year by subparagraph (A) of paragraph (1) of subsection (a) of 9 section one thousand four hundred Z-two of the internal revenue code. 10 (c) Entire net income shall include income within and without the 11 United States; 12 (c-1)(1) Notwithstanding any other provision of this subchapter, in 13 the case of a taxpayer which is a foreign air carrier holding a foreign 14 air carrier permit issued by the United States department of transporta- 15 tion pursuant to section four hundred two of the federal aviation act of 16 nineteen hundred fifty-eight, as amended, and which is qualified under 17 subparagraph two of this paragraph, entire net income shall not include, 18 and shall be computed without the deduction of, amounts directly or 19 indirectly attributable to, (i) any income derived from the interna- 20 tional operation of aircraft as described in and subject to the 21 provisions of section eight hundred eighty-three of the internal revenue 22 code, (ii) income without the United States which is derived from the 23 operation of aircraft, and (iii) income without the United States which 24 is of a type described in subdivision (a) of section eight hundred 25 eighty-one of the internal revenue code except that it is derived from 26 sources without the United States. Entire net income shall include 27 income described in clauses (i), (ii) and (iii) of this subparagraph in 28 the case of taxpayers not described in this subparagraph. 29 (2) A taxpayer is qualified under this subparagraph if air carriers 30 organized in the United States and operating in the foreign country or 31 countries in which the taxpayer has its major base of operations and in 32 which it is organized, resident or headquartered, if not in the same 33 country as its major base of operations, are not subject to any income 34 tax or other tax based on or measured by income or receipts imposed by 35 such foreign country or countries or any political subdivision thereof, 36 or if so subject to such tax, are provided an exemption from such tax 37 equivalent to that provided for in this paragraph. 38 (d) The commissioner of finance may, whenever necessary in order prop- 39 erly to reflect the entire net income of any taxpayer, determine the 40 year or period in which any item of income or deduction shall be 41 included, without regard to the method of accounting employed by the 42 taxpayer; 43 (e) The entire net income of any bridge commission created by act of 44 congress to construct a bridge across an international boundary means 45 its gross income less the expense of maintaining and operating its prop- 46 erties, the annual interest upon its bonds and other obligations, and 47 the annual charge for the retirement of such bonds or obligations at 48 maturity; 49 (f) A net operating loss deduction shall be allowed which shall be the 50 same as the net operating loss deduction allowed under section one 51 hundred seventy-two of the internal revenue code or which would have 52 been allowed if the taxpayer had not made an election under subchapter s 53 of chapter one of the internal revenue code, except that in every 54 instance where such deduction is allowed under this subchapter: 55 (1) any net operating loss included in determining such deduction 56 shall be adjusted to reflect the inclusions and exclusions from entire

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1 net income pursuant to paragraphs (a), (b), (g) and (h) of this subdivi- 2 sion, 3 (2) such deductions shall not include any net operating loss sustained 4 during any taxable year in which the taxpayer was not subject to the tax 5 imposed by this subchapter, 6 (3) such deduction shall not exceed the deduction for the taxable year 7 allowed under section one hundred seventy-two of the internal revenue 8 code, or the deduction for the taxable year which would have been 9 allowed if the taxpayer had not made an election under subchapter s of 10 chapter one of the internal revenue code, 11 (4) any net operating loss for a taxable year beginning in nineteen 12 hundred eighty-one shall be computed without regard to the deduction 13 allowed with respect to recovery property under section one hundred 14 sixty-eight of the internal revenue code; in lieu of such deduction, a 15 taxpayer shall be allowed for such taxable year with respect to such 16 property the depreciation deduction allowable under section one hundred 17 sixty-seven of such code as such section was in full force and effect on 18 December thirty-first, nineteen hundred eighty, and 19 (5) the net operating loss deduction allowed under section one hundred 20 seventy-two of the internal revenue code shall for purposes of this 21 paragraph be determined as if the taxpayer had elected under such 22 section to relinquish the entire carryback period with respect to net 23 operating losses, except with respect to the first ten thousand dollars 24 of each of such losses, sustained during taxable years ending after June 25 thirtieth, nineteen hundred eighty-nine. 26 (6) Notwithstanding any other provision of this subchapter to the 27 contrary, for taxable years beginning before January first, two thousand 28 twenty-one, any amendment to section one hundred seventy-two of the 29 internal revenue code made after March first, two thousand twenty shall 30 not apply to this subchapter. 31 (g) At the election of the taxpayer, a deduction shall be allowed for 32 expenditures paid or incurred during the taxable year for the 33 construction, reconstruction, erection or improvement of industrial 34 waste treatment facilities and air pollution control facilities. 35 (1)(A) The term "industrial waste treatment facilities" shall mean 36 facilities for the treatment, neutralization or stabilization of indus- 37 trial waste, as the term "industrial waste" is defined in section 38 17-0105 of the environmental conservation law, from a point immediately 39 preceding the point of such treatment, neutralization or stabilization 40 to the point of disposal, including the necessary pumping and transmit- 41 ting facilities, but excluding such facilities installed for the primary 42 purpose of salvaging materials which are usable in the manufacturing 43 process or are marketable. 44 (B) The term "air pollution control facilities" shall mean facilities 45 which remove, reduce, or render less noxious air contaminants emitted 46 from an air contamination source, as the terms "air contaminant" and 47 "air contamination source" are defined in section 19-0107 of the envi- 48 ronmental conservation law, from a point immediately preceding the point 49 of such removal, reduction or rendering to the point of discharge of 50 air, meeting emission standards as established by the air pollution 51 control board, but excluding such facilities installed for the primary 52 purpose of salvaging materials which are usable in the manufacturing 53 process or are marketable and excluding those facilities which rely for 54 their efficacy on dilution, dispersion or assimilation of air contam- 55 inants in the ambient air after emission.

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1 (2) However, such deduction shall be allowed only (A) with respect to 2 tangible property which is depreciable, pursuant to section one hundred 3 sixty-seven of the internal revenue code, having a situs in the city and 4 used in the taxpayer's trade or business, the construction, recon- 5 struction, erection or improvement of which, in the case of industrial 6 waste treatment facilities, is initiated on or after January first, 7 nineteen hundred sixty-six, and only for expenditures paid or incurred 8 prior to January first, nineteen hundred seventy-two, or which, in the 9 case of air pollution control facilities, is initiated on or after Janu- 10 ary first, nineteen hundred sixty-six, and 11 (B) on condition that such facilities have been certified by the state 12 commissioner of environmental conservation or the state commissioner's 13 designated representative, in the same manner as provided for in section 14 17-0707 or 19-0309 of the environmental conservation law, as applicable, 15 as complying with applicable provisions of the environmental conserva- 16 tion law, the state sanitary code and regulations, permits or orders 17 issued pursuant thereto, and 18 (C) on condition that entire net income for the taxable year and all 19 succeeding taxable years be computed without any deductions for such 20 expenditures or for depreciation of the same property other than the 21 deductions allowed by this paragraph except to the extent that the basis 22 of the property may be attributable to factors other than such expendi- 23 tures, or in case a deduction is allowable pursuant to this paragraph 24 for only a part of such expenditures, on condition that any deduction 25 allowed for federal income tax purposes for such expenditures or for 26 depreciation of the same property be proportionately reduced in comput- 27 ing entire net income for the taxable year and all succeeding taxable 28 years, and 29 (D) where the election provided for in paragraph (d) of subdivision 30 three of section 11-604 of this subchapter has not been exercised in 31 respect to the same property. 32 (3)(A) If expenditures in respect to an industrial waste treatment 33 facility or an air pollution control facility have been deducted as 34 provided herein and if within ten years from the end of the taxable year 35 in which such deduction was allowed such property or any part thereof is 36 used for the primary purpose of salvaging materials which are usable in 37 the manufacturing process or are marketable, the taxpayer shall report 38 such change of use in its report for the first taxable year during which 39 it occurs, and the commissioner of finance may recompute the tax for the 40 year or years for which such deduction was allowed and any carryback or 41 carryover year, and may assess any additional tax resulting from such 42 recomputation within the time fixed by paragraph (h) of subdivision 43 three of section 11-674 of this chapter. 44 (B) If a deduction is allowed as herein provided for expenditures paid 45 or incurred during any taxable year on the basis of a temporary certif- 46 icate of compliance issued pursuant to the environmental conservation 47 law and if the taxpayer fails to obtain a permanent certificate of 48 compliance upon completion of the facilities with respect to which such 49 temporary certificate was issued, the taxpayer shall report such failure 50 in its report for the taxable year during which such facilities are 51 completed, and the commissioner of finance may recompute the tax for the 52 year or years for which such deduction was allowed and any carryback or 53 carryover year, and may assess any additional tax resulting from such 54 recomputation within the time fixed by paragraph (h) of subdivision 55 three of section 11-674 of this chapter.

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1 (4) In any taxable year when property is sold or otherwise disposed 2 of, with respect to which a deduction has been allowed pursuant to this 3 paragraph, such deduction shall be disregarded in computing gain or 4 loss, and the gain or loss on the sale or other disposition of such 5 property shall be the gain or loss entering into the computation of 6 entire taxable income which the taxpayer is required to report to the 7 United States treasury for such taxable year; 8 (h) With respect to gain derived from the sale or other disposition of 9 any property acquired prior to January first, nineteen hundred sixty- 10 six; which had a federal adjusted basis on such date, or on the date of 11 its sale or other disposition prior to January first, nineteen hundred 12 sixty-six, lower than its fair market value on January first, nineteen 13 hundred sixty-six or the date of its sale or other disposition prior 14 thereto, except property described in subsections one and four of 15 section twelve hundred twenty-one of the internal revenue code, there 16 shall be deducted from entire net income, the difference between (1) the 17 amount of the taxpayer's federal taxable income, and (2) the amount of 18 the taxpayer's federal taxable income, if smaller than the amount 19 described in subparagraph one of this paragraph computed as if the 20 federal adjusted basis of each such property on the sale or other dispo- 21 sition of which gain was derived, on the date of the sale or other 22 disposition had been equal to either (A) its fair market value on Janu- 23 ary first, nineteen hundred sixty-six or the date of its sale or other 24 disposition prior to January first, nineteen hundred sixty-six, plus or 25 minus all adjustments to basis made with respect to such property for 26 federal income tax purposes for periods on and after January first, 27 nineteen hundred sixty-six or (B) the amount realized from its sale or 28 disposition, whichever is lower; provided, however, that the total 29 modification provided by this paragraph shall not exceed the amount of 30 the taxpayer's net gain from the sale or other disposition of all such 31 property. 32 (i) If the period covered by a report under this subchapter is other 33 than the period covered by the report of the United States treasury 34 department, entire net income shall be determined by multiplying the 35 federal taxable income, as adjusted pursuant to the provisions of this 36 subchapter, by the number of calendar months or major parts thereof 37 covered by the report under this subchapter and dividing by the number 38 of calendar months or major parts thereof covered by the report to such 39 department. 40 If it shall appear that such method of determining entire net income 41 does not properly reflect the taxpayer's income during the period 42 covered by the report under this subchapter, the commissioner of finance 43 shall be authorized in his or her discretion to determine such entire 44 net income solely on the basis of the taxpayer's income during the peri- 45 od covered by its report under this subchapter. 46 (j) In the case of property placed in service in taxable years begin- 47 ning before nineteen hundred ninety-four, for taxable years beginning 48 after December thirty-first, nineteen hundred eighty-one, except with 49 respect to property subject to the provisions of section two hundred 50 eighty-F of the internal revenue code and property subject to the 51 provisions of section one hundred sixty-eight of the internal revenue 52 code which is placed in service in this state in taxable years beginning 53 after December thirty-first, nineteen hundred eighty-four, and provided 54 a deduction has not been excluded from entire net income pursuant to 55 subparagraph nine of paragraph (b) of this subdivision, a taxpayer shall 56 be allowed with respect to property which is subject to the provisions

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1 of section one hundred sixty-eight of the internal revenue code the 2 depreciation deduction allowable under section one hundred sixty-seven 3 of the internal revenue code as such section would have applied to prop- 4 erty placed in service on December thirty-first, nineteen hundred 5 eighty. This paragraph shall not apply to property of a taxpayer princi- 6 pally engaged in the conduct of an aviation, steamboat, ferry or naviga- 7 tion business, or two or more of such businesses, which is placed in 8 service before taxable years beginning in nineteen hundred eighty-nine. 9 (k) for taxable years ending after September tenth, two thousand one, 10 in the case of qualified property described in paragraph two of 11 subsection k of section one hundred sixty-eight of the internal revenue 12 code, other than qualified resurgence zone property described in para- 13 graph (m) of this subdivision, and other than qualified New York Liberty 14 Zone property described in paragraph two of subsection b of section 15 fourteen hundred L of the internal revenue code, without regard to 16 clause (i) of subparagraph (C) of such paragraph, the depreciation 17 deduction allowable under section one hundred sixty-seven as such 18 section would have applied to such property had it been acquired by the 19 taxpayer on September tenth, two thousand one, provided, however, that 20 for taxable years beginning on or after January first, two thousand 21 four, in the case of a passenger motor vehicle or a sport utility vehi- 22 cle subject to the provisions of paragraph (o) of this subdivision, the 23 limitation under clause (i) of subparagraph (A) of paragraph one of 24 subdivision (a) of section two hundred eighty-F of the internal revenue 25 code applicable to the amount allowed as a deduction under this para- 26 graph shall be determined as of the date such vehicle was placed in 27 service and not as of September tenth, two thousand one. 28 (l) for taxable years ending after September tenth, two thousand one, 29 upon the disposition of property to which paragraph (k) of this subdivi- 30 sion applies, the amount of any gain or loss includible in entire net 31 income shall be adjusted to reflect the inclusions and exclusions from 32 entire net income pursuant to subparagraph twelve of paragraph (a) and 33 subparagraph thirteen of paragraph (b) of this subdivision attributable 34 to such property. 35 (m) for purposes of this paragraph and paragraph (l) of this subdivi- 36 sion, qualified resurgence zone property shall mean qualified property 37 described in paragraph two of subsection k of section one hundred 38 sixty-eight of the internal revenue code substantially all of the use of 39 which is in the resurgence zone, as defined in this paragraph, and is in 40 the active conduct of a trade or business by the taxpayer in such zone, 41 and the original use of which in the resurgence zone commences with the 42 taxpayer after September tenth, two thousand one. The resurgence zone 43 shall mean the area of New York county bounded on the south by a line 44 running from the intersection of the Hudson River with the Holland 45 Tunnel, and running thence east to Canal Street, then running along the 46 centerline of Canal Street to the intersection of the Bowery and Canal 47 Street, running thence in a southeasterly direction diagonally across 48 Manhattan Bridge Plaza, to the Manhattan Bridge, and thence along the 49 centerline of the Manhattan Bridge to the point where the centerline of 50 the Manhattan Bridge would intersect with the easterly bank of the East 51 River, and bounded on the north by a line running from the intersection 52 of the Hudson River with the Holland Tunnel and running thence north 53 along West Avenue to the intersection of Clarkson Street then running 54 east along the centerline of Clarkson Street to the intersection of 55 Washington Avenue, then running south along the centerline of Washington 56 Avenue to the intersection of West Houston Street, then east along the

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1 centerline of West Houston Street, then at the intersection of the 2 Avenue of the Americas continuing east along the centerline of East 3 Houston Street to the easterly bank of the East River. 4 (n) Related members expense add back. 5 (1) Definitions. (A) Related member. "Related member" means a related 6 person as defined in subparagraph (c) of paragraph three of subsection 7 (b) of section four hundred sixty-five of the internal revenue code, 8 except that "fifty percent" shall be substituted for "ten percent". 9 (B) Effective rate of tax. "Effective rate of tax" means, as to any 10 city, the maximum statutory rate of tax imposed by the city on or meas- 11 ured by a related member's net income multiplied by the apportionment 12 percentage, if any, applicable to the related member under the laws of 13 said jurisdiction. For purposes of this definition, the effective rate 14 of tax as to any city is zero where the related member's net income tax 15 liability in said city is reported on a combined or consolidated return 16 including both the taxpayer and the related member where the reported 17 transactions between the taxpayer and the related member are eliminated 18 or offset. Also, for purposes of this definition, when computing the 19 effective rate of tax for a city in which a related member's net income 20 is eliminated or offset by a credit or similar adjustment that is 21 dependent upon the related member either maintaining or managing intan- 22 gible property or collecting interest income in that city, the maximum 23 statutory rate of tax imposed by said city shall be decreased to reflect 24 the statutory rate of tax that applies to the related member as effec- 25 tively reduced by such credit or similar adjustment. 26 (C) Royalty payments. Royalty payments are payments directly connected 27 to the acquisition, use, maintenance or management, ownership, sale, 28 exchange, or any other disposition of licenses, trademarks, copyrights, 29 trade names, trade dress, service marks, mask works, trade secrets, 30 patents and any other similar types of intangible assets as determined 31 by the commissioner of finance, and include amounts allowable as inter- 32 est deductions under section one hundred sixty-three of the internal 33 revenue code to the extent such amounts are directly or indirectly for, 34 related to or in connection with the acquisition, use, maintenance or 35 management, ownership, sale, exchange or disposition of such intangible 36 assets. 37 (D) Valid business purpose. A valid business purpose is one or more 38 business purposes, other than the avoidance or reduction of taxation, 39 which alone or in combination constitute the primary motivation for some 40 business activity or transaction, which activity or transaction changes 41 in a meaningful way, apart from tax effects, the economic position of 42 the taxpayer. The economic position of the taxpayer includes an increase 43 in the market share of the taxpayer, or the entry by the taxpayer into 44 new business markets. 45 (2) Royalty expense add backs. (A) For the purpose of computing entire 46 net income or other applicable taxable basis, a taxpayer must add back 47 royalty payments directly or indirectly paid, accrued, or incurred in 48 connection with one or more direct or indirect transactions with one or 49 more related members during the taxable year to the extent deductible in 50 calculating federal taxable income. 51 (B) (i) The adjustment required in this paragraph shall not apply to 52 the portion of the royalty payment that the taxpayer establishes, by 53 clear and convincing evidence of the type and in the form specified by 54 the commissioner of finance, meets all of the following requirements: 55 (I) the related member was subject to tax in this city or another city 56 within the United States or a foreign nation or some combination thereof

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1 on a tax base that included the royalty payment paid, accrued or 2 incurred by the taxpayer; (II) the related member during the same taxa- 3 ble year directly or indirectly paid, accrued or incurred such portion 4 to a person that is not a related member; and (III) the transaction 5 giving rise to the royalty payment between the taxpayer and the related 6 member was undertaken for a valid business purpose. 7 (ii) The adjustment required in this paragraph shall not apply if the 8 taxpayer establishes, by clear and convincing evidence of the type and 9 in the form specified by the commissioner of finance, that: (I) the 10 related member was subject to tax on or measured by its net income in 11 this city or another city within the United States, or some combination 12 thereof; (II) the tax base for said tax included the royalty payment 13 paid, accrued or incurred by the taxpayer; and (III) the aggregate 14 effective rate of tax applied to the related member in those jurisdic- 15 tions is no less than eighty percent of the statutory rate of tax that 16 applied to the taxpayer under section 11-604 of this subchapter for the 17 taxable year. 18 (iii) The adjustment required in this paragraph shall not apply if the 19 taxpayer establishes, by clear and convincing evidence of the type and 20 in the form specified by the commissioner of finance, that: (I) the 21 royalty payment was paid, accrued or incurred to a related member organ- 22 ized under the laws of a country other than the United States; (II) the 23 related member's income from the transaction was subject to a comprehen- 24 sive income tax treaty between such country and the United States; (III) 25 the related member was subject to tax in a foreign nation on a tax base 26 that included the royalty payment paid, accrued or incurred by the 27 taxpayer; (IV) the related member's income from the transaction was 28 taxed in such country at an effective rate of tax at least equal to that 29 imposed by this city; and (V) the royalty payment was paid, accrued or 30 incurred pursuant to a transaction that was undertaken for a valid busi- 31 ness purpose and using terms that reflect an arm's length relationship. 32 (iv) The adjustment required in this paragraph shall not apply if the 33 taxpayer and the commissioner of finance agree in writing to the appli- 34 cation or use of alternative adjustments or computations. The commis- 35 sioner of finance may, in his or her discretion, agree to the applica- 36 tion or use of alternative adjustments or computations when he or she 37 concludes that in the absence of such agreement the income of the 38 taxpayer would not be properly reflected. 39 (o) For taxable years beginning on or after January first, two thou- 40 sand four, in the case of a taxpayer that is not an eligible farmer as 41 defined in subsection (n) of section six hundred six of the tax law, the 42 deductions allowable under sections one hundred seventy-nine, one 43 hundred sixty-seven and one hundred sixty-eight of the internal revenue 44 code with respect to a sport utility vehicle that is not a passenger 45 automobile as defined in paragraph five of subsection (d) of section two 46 hundred eighty-F of the internal revenue code, determined as if such 47 sport utility vehicle were a passenger automobile as defined in such 48 paragraph five. For purposes of paragraph (k) and subparagraph thirteen 49 of paragraph (b) of this subdivision, the terms qualified resurgence 50 zone property and qualified New York Liberty Zone property described in 51 paragraph two of subsection b of section fourteen hundred-L of the 52 internal revenue code shall not include any sport utility vehicle that 53 is not a passenger automobile as defined in paragraph five of subsection 54 (d) of section two hundred eighty-F of the internal revenue code. 55 (p) Upon the disposition of property to which paragraph (o) of this 56 subdivision applies, the amount of any gain or loss includible in entire

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1 net income shall be adjusted to reflect the inclusions and exclusions 2 from entire net income pursuant to subparagraph thirteen of paragraph 3 (a) and subparagraph fourteen of paragraph (b) of this subdivision 4 attributable to such property. 5 9. (a) The term "calendar year" means a period of twelve calendar 6 months, or any shorter period beginning on the date the taxpayer becomes 7 subject to the tax imposed by this subchapter, ending on the thirty- 8 first day of December, provided the taxpayer keeps its books on the 9 basis of such period or on the basis of any period ending on any day 10 other than the last day of a calendar month, or provided the taxpayer 11 does not keep books, and includes, in case the taxpayer changes the 12 period on the basis of which it keeps its books from a fiscal year to a 13 calendar year, the period from the close of its last old fiscal year up 14 to and including the following December thirty-first. 15 (b) The term "fiscal year" means a period of twelve calendar months, 16 or any shorter period beginning on the date the taxpayer becomes subject 17 to the tax imposed by this subchapter, ending on the last day of any 18 month other than December, provided the taxpayer keeps its books on the 19 basis of such period, and includes, in case the taxpayer changes the 20 period on the basis of which it keeps its books from a calendar year to 21 a fiscal year or from one fiscal year to another fiscal year, the period 22 from the close of its last old calendar or fiscal year up to the date 23 designated as the close of its new fiscal year. 24 10. The term "tangible personal property" means corporeal personal 25 property, such as machinery, tools, implements, goods, wares and 26 merchandise, and does not mean money, deposits in banks, shares of 27 stock, bonds, notes, credits or evidence of an interest property and 28 evidences of debt. 29 § 11-603 Imposition of tax; exemptions. 1. For the privilege of doing 30 business, or of employing capital, or of owning or leasing property in 31 the city in a corporate or organized capacity, or of maintaining an 32 office in the city, for all or any part of each of its fiscal or calen- 33 dar years, every domestic or foreign corporation, except corporations 34 specified in subdivision four of this section, shall annually pay a tax, 35 upon the basis of its entire net income, or upon such other basis as may 36 be applicable as provided by this section, for such fiscal or calendar 37 year or part thereof, on a report which shall be filed, except as 38 provided by this section, on or before the fifteenth day of March next 39 succeeding the close of each such year, or, in the case of a taxpayer 40 which reports on the basis of a fiscal year, within two and one-half 41 months after the close of such fiscal year, and shall be paid as 42 provided by this section. 43 2. A corporation shall not be deemed to be doing business, employing 44 capital, owning or leasing property, or maintaining an office in the 45 city, for the purposes of this subchapter, by reason of (a) the mainte- 46 nance of cash balances with banks or trust companies in the city, or (b) 47 the ownership of shares of stock or securities kept in the city, if kept 48 in a safe deposit box, safe, vault or other receptacle rented for the 49 purpose, or if pledged as collateral security, or if deposited with one 50 or more banks or trust companies, or brokers who are members of a recog- 51 nized security exchange, in safekeeping or custody accounts, or (c) the 52 taking of any action by any such bank or trust company or broker, which 53 is incidental to the rendering of safekeeping or custodian service to 54 such corporation, or (d) the maintenance of an office in the city by one 55 or more officers or directors of the corporation who are not employees 56 of the corporation if the corporation otherwise is not doing business in

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1 the city, and does not employ capital or own or lease property in the 2 city, or (e) the keeping of books or records of a corporation in the 3 city if such books or records are not kept by employees of such corpo- 4 ration and such corporation does not otherwise do business, employ capi- 5 tal, own or lease property or maintain an office in the city, or (f) any 6 combination of the activities described in this subdivision. 7 2-a. An alien corporation shall not be deemed to be doing business, 8 employing capital, owning or leasing property, or maintaining an office 9 in the city, for the purposes of this subchapter, if its activities in 10 the city are limited solely to (a) investing or trading in stocks and 11 securities for its own account within the meaning of clause (ii) of 12 subparagraph (A) of paragraph (2) of subsection (b) of section eight 13 hundred sixty-four of the internal revenue code or (b) investing or 14 trading in commodities for its own account within the meaning of clause 15 (ii) of subparagraph (B) of paragraph (2) of subsection (b) of section 16 eight hundred sixty-four of the internal revenue code or (c) any combi- 17 nation of activities described in paragraphs (a) and (b) of this subdi- 18 vision. For purposes of this subdivision, an alien corporation is a 19 corporation organized under the laws of a country, or any political 20 subdivision thereof, other than the United States. 21 3. Any receiver, referee, trustee, assignee or other fiduciary, or 22 any officer or agent appointed by any court, who conducts the business 23 of any corporation, shall be subject to the tax imposed by this subchap- 24 ter in the same manner and to the same extent as if the business were 25 conducted by the agents or officers of such corporation. A dissolved 26 corporation which continues to conduct business shall also be subject to 27 the tax imposed by this subchapter. 28 4. (a) Corporations subject to tax under subchapter three of this 29 chapter or under chapter eleven of this title, any trust company organ- 30 ized under a law of this state all of the stock of which is owned by not 31 less than twenty savings banks organized under a law of this state, bank 32 holding companies filing a combined return in accordance with subdivi- 33 sion (f) of section 11-646 of this chapter, a captive REIT or a captive 34 RIC filing a combined return under subdivision (f) of section 11-646 of 35 this chapter, housing companies organized and operating pursuant to the 36 provisions of article two of the private housing finance law, housing 37 development fund companies organized pursuant to the provisions of arti- 38 cle eleven of the private housing finance law, corporations described in 39 section three of the tax law, a corporation principally engaged in the 40 operation of marine vessels whose activities in the city are limited 41 exclusively to the use of property in interstate or foreign commerce, 42 provided, however, such a corporation will not be subject to tax under 43 this subchapter solely because it maintains an office in the city, or 44 employs capital in the city, in connection with such use of property, a 45 corporation principally engaged in the conduct of a ferry business and 46 operating between any of the boroughs of the city under a lease granted 47 by the city and a corporation principally engaged in the conduct of an 48 aviation, steamboat, ferry or navigation business, or two or more of 49 such businesses, all of the capital stock of which is owned by a munici- 50 pal corporation of this state, shall not be subject to tax under this 51 subchapter; provided, however, that any corporation, other than (1) a 52 utility corporation subject to the supervision of the state department 53 of public service, and (2) for taxable years beginning on or after 54 August first, two thousand two, a utility as defined in subdivision six 55 of section 11-1101 of this title, which is subject to tax under chapter 56 eleven of this title as a vendor of utility services shall be subject to

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1 tax under this subchapter, but in computing the tax imposed by this 2 section pursuant to the provisions of clause one of subparagraph (a) of 3 paragraph A of subdivision one of section 11-604 of this subchapter, 4 business income allocated to the city pursuant to paragraph (a) of 5 subdivision three of such section shall be reduced by the percentage 6 which such corporation's gross operating income subject to tax under 7 chapter eleven of this title is of its gross operating income. 8 (b) The term "gross operating income", when used in paragraph (a) of 9 this subdivision, means receipts received in or by reason of any trans- 10 action had and consummated in the city, including cash, credits and 11 property of any kind or nature, whether or not such transaction is made 12 for profit, without any deduction therefrom on account of the cost of 13 the property sold, the cost of materials used, labor or other services, 14 delivery costs or any other costs whatsoever, interest or discount paid 15 or any other expenses whatsoever. 16 (c) If it shall appear to the commissioner of finance that the appli- 17 cation of the proviso of paragraph (a) of this subdivision, does not 18 fairly and equitably reflect the portion of the taxpayer's business 19 income allocable to the city which is attributable to its city activ- 20 ities which are not taxable under chapter eleven of this title, the 21 commissioner may prescribe other means or methods of determining such 22 portion, including the use of the books and records of the taxpayer, if 23 the commissioner finds that such means or methods used in keeping them 24 fairly and equitably reflect such portion. 25 5. The tax imposed by subdivision one of this section, with the 26 modifications provided by subdivision six of this section, is imposed 27 for each calendar or fiscal year beginning with calendar or fiscal years 28 ending in or with the calendar year nineteen hundred sixty-six. 29 6. (a) The tax for any taxable year ending prior to December thirty- 30 first, nineteen hundred sixty-six shall be an amount equal to the tax 31 imposed by subdivision one of this section for such taxable year, multi- 32 plied by the number of months, or major portions thereof, in such taxa- 33 ble year which occur after December thirty-first, nineteen hundred 34 sixty-five and divided by the number of months, or major portions there- 35 of, in such taxable year. 36 (b) In lieu of the method of computation of tax prescribed in para- 37 graph (a) of this subdivision, if the taxpayer maintained adequate 38 records for the portion of any taxable year ending prior to December 39 thirty-first, nineteen hundred sixty-six, which portion falls within the 40 calendar year nineteen hundred sixty-six, it may elect to compute the 41 tax for such taxable year by determining entire net income on the basis 42 of the entire taxable income which it would have reported for federal 43 income tax purposes had it filed a federal income tax return for a taxa- 44 ble year beginning January first, nineteen hundred sixty-six and ending 45 with the close of its actual taxable year and such taxable year begin- 46 ning January first, nineteen hundred sixty-six, shall be deemed to be 47 the period covered by its report, except that in computing such tax any 48 portion of a capital loss which results from a capital loss carryover 49 and any net operating loss deduction, as modified pursuant to paragraph 50 (f) of subdivision eight of section 11-602 of this subchapter, shall be 51 reduced by the same part of such portion of such capital loss or of such 52 net operating loss deduction, as the case may be, as the number of 53 months, or major portions thereof, in the taxable year occurring before 54 January first, nineteen hundred sixty-six is of the number of months, or 55 major portions thereof, in such taxable year.

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1 7. For any taxable year of a real estate investment trust as defined 2 in section eight hundred fifty-six of the internal revenue code in which 3 such trust is subject to federal income taxation under section eight 4 hundred fifty-seven of such code, such trust shall be subject to a tax 5 computed under either clause one of subparagraph (a) of paragraph A of 6 subdivision one of section 11-604 of this subchapter with respect to its 7 entire net income, or clause four of such subparagraph, whichever is 8 greater, and shall not be subject to any tax under subchapter three of 9 this chapter, except for a captive REIT required to file a combined 10 return under subdivision (f) of section 11-646 of this chapter. In the 11 case of such a real estate investment trust, including a captive REIT as 12 defined in section 11-601 of this chapter, the term "entire net income" 13 means "real estate investment trust taxable income" as defined in para- 14 graph two of subdivision (b) of section eight hundred fifty-seven, as 15 modified by section eight hundred fifty-eight, of the internal revenue 16 code plus the amount taxable under paragraph three of subdivision (b) of 17 section eight hundred fifty-seven of such code, subject to the modifica- 18 tion required by subdivision eight of section 11-602 of this subchapter, 19 other than the modification required by clause two of paragraph (a) and 20 by paragraph (f) thereof, including the modifications required by para- 21 graphs (d) and (e) of subdivision three of section 11-604 of this 22 subchapter. 23 8. For any taxable year beginning on or after January first, nineteen 24 hundred eighty-one of a regulated investment company, as defined in 25 section eight hundred fifty-one of the internal revenue code, in which 26 such company is subject to federal income taxation under section eight 27 hundred fifty-two of such code, such company shall be subject to a tax 28 computed under clause one or four of subparagraph (a) of paragraph E of 29 subdivision one of section 11-604 of this subchapter, whichever is 30 greater, and such company shall not be subject to any tax under subchap- 31 ter three of this chapter. The term "entire net income" used in subdivi- 32 sion one of this section means "investment company taxable income" as 33 defined in paragraph two of subdivision (b) of section eight hundred 34 fifty-two, as modified by section eight hundred fifty-five, of the 35 internal revenue code plus the amount taxable under paragraph three of 36 subdivision (b) of section eight hundred fifty-two of such code subject 37 to the modifications required by subdivision eight of section 11-602 of 38 this subchapter, other than the modification required by clause two of 39 paragraph (a) and by paragraph (f) of such subdivision, including the 40 modification required by paragraphs (d) and (e) of subdivision three of 41 section 11-604 of this subchapter. 42 9. For any taxable year beginning on or after January first, nineteen 43 hundred eighty-seven, an organization described in paragraph two or 44 twenty-five of subdivision (c) of section five hundred one of the inter- 45 nal revenue code of nineteen hundred eighty-six shall be exempt from all 46 taxes imposed by this chapter. 47 § 11-604 Computation of tax. 1. A. For taxable years beginning on or 48 after January first, nineteen hundred seventy-one and ending on or 49 before December thirty-first, nineteen hundred seventy-four, and for 50 taxable years beginning on or after January first, nineteen hundred 51 seventy-six, the tax imposed by subdivision one of section 11-603 of 52 this subchapter shall be, in the case of each taxpayer: (a) a tax (1) 53 computed at the rate of six and seven-tenths per centum of its entire 54 net income, or the portion of such entire net income allocated within 55 the city as provided in this section, subject to any modification 56 required by paragraphs (d) and (e) of subdivision three of this section,

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1 or (2) computed at one mill for each dollar of its total business and 2 investment capital, or the portion thereof allocated within the city, as 3 provided in this section, except that in the case of a cooperative hous- 4 ing corporation as defined in the internal revenue code, or in the case 5 of a housing company organized and operating pursuant to the provisions 6 of article four of the private housing finance law, the applicable rates 7 shall be one-quarter of one mill, or (3) computed at the rate of six and 8 seven-tenths per centum on thirty per centum of the taxpayer's entire 9 net income plus salaries and other compensation paid to the taxpayer's 10 elected or appointed officers and to every stockholder owning in excess 11 of five per centum of its issued capital stock minus fifteen thousand 12 dollars, except as provided in this section, and any net loss for the 13 reported year, or on the portion of any such sum allocated within the 14 city as provided in this section for the allocation of entire net 15 income, subject to any modification required by paragraphs (d) and (e) 16 of subdivision three of this section, or (4) twenty-five dollars, which- 17 ever is greatest, plus (b) a tax computed at the rate of one-half mill 18 for each dollar of the portion of its subsidiary capital allocated with- 19 in the city as provided in this section. In the case of a taxpayer 20 which is not subject to tax for an entire year, the exemption allowed in 21 clause three of subparagraph (a) of this paragraph shall be prorated 22 according to the period such taxpayer was subject to tax. 23 B. For taxable years beginning on or after January first, nineteen 24 hundred seventy-five and before January first nineteen hundred seventy- 25 seven, the tax imposed by subdivision one of section 11-603 of this 26 subchapter shall be, in the case of each taxpayer: (a) a tax (1) 27 computed at the rate of ten and five one-hundredths per centum of its 28 entire net income, or the portion of such entire net income allocated 29 within the city as provided in this paragraph, subject to any modifica- 30 tion required by paragraphs (d) and (e) of subdivision three of this 31 section, or (2) computed at one and one-half mills for each dollar of 32 its total business and investment capital, or the portion thereof allo- 33 cated within the city, as provided in this paragraph, except that in the 34 case of a cooperative housing corporation as defined in the internal 35 revenue code, or in the case of a housing company organized and operat- 36 ing pursuant to the provisions of article four of the private housing 37 finance law, the applicable rate shall be four-tenths of one mill, or 38 (3) computed at the rate of ten and five one-hundredths per centum on 39 thirty per centum of the taxpayer's entire net income plus salaries and 40 other compensation paid to the taxpayer's elected or appointed officers 41 and to every stockholder owning in excess of five per centum of its 42 issued capital stock minus fifteen thousand dollars, except as provided 43 in this paragraph, and any net loss for the reported year, or on the 44 portion of any such sum allocated within the city as provided in this 45 paragraph for the allocation of entire net income, subject to any 46 modification required by paragraphs (d) and (e) of subdivision three of 47 this section, or (4) one hundred twenty-five dollars, whichever is 48 greatest, plus (b) a tax computed at the rate of three-quarters of a 49 mill for each dollar of the portion of its subsidiary capital allocated 50 within the city as provided in this paragraph. In the case of a taxpay- 51 er which is not subject to tax for an entire year, the exemption allowed 52 in clause three of subparagraph (a) of this paragraph shall be prorated 53 according to the period such taxpayer was subject to tax. 54 C. For each taxable year beginning in nineteen hundred seventy-four 55 and ending in nineteen hundred seventy-five, two tentative taxes shall 56 be computed, the first as provided in paragraph A and the second as

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1 provided in paragraph B of this subdivision, and the tax for each such 2 year shall be the sum of that proportion of each tentative tax which the 3 number of days in nineteen hundred seventy-four and the number of days 4 in nineteen hundred seventy-five, respectively, bears to the number of 5 days in the entire taxable year. 6 D. For taxable years beginning on or after January first, nineteen 7 hundred seventy-seven and before January first, nineteen hundred seven- 8 ty-eight, the tax imposed by subdivision one of section 11-603 of this 9 subchapter shall be, in the case of each taxpayer: (a) a tax (1) 10 computed at the rate of nine and one-half per centum of its entire net 11 income, or the portion of such entire net income allocated within the 12 city as provided in this paragraph, subject to any modification required 13 by paragraphs (d) and (e) of subdivision three of this section, or (2) 14 computed at one and one-half mills for each dollar of its total business 15 and investment capital, or the portion thereof allocated within the 16 city, as provided in this paragraph, except that in the case of a coop- 17 erative housing corporation as defined in the internal revenue code, the 18 applicable rate shall be four-tenths of one mill, or (3) computed at the 19 rate of nine and one-half per centum on thirty per centum of the taxpay- 20 er's entire net income plus salaries and other compensation paid to the 21 taxpayer's elected or appointed officers and to every stockholder owning 22 in excess of five per centum of its issued capital stock minus fifteen 23 thousand dollars, except as provided in this paragraph, and any net loss 24 for the reported year, or on the portion of any such sum allocated with- 25 in the city as provided in this paragraph for the allocation of entire 26 net income, subject to any modification required by paragraphs (d) and 27 (e) of subdivision three of this section, or (4) one hundred twenty-five 28 dollars, whichever is greatest, plus (b) a tax computed at the rate of 29 three-quarters of a mill for each dollar of the portion of its subsid- 30 iary capital allocated within the city as provided in this paragraph. In 31 the case of a taxpayer which is not subject to tax for an entire year, 32 the exemption allowed in clause three of subparagraph (a) of this para- 33 graph shall be prorated according to the period such taxpayer was 34 subject to tax. 35 E. For taxable years beginning on or after January first, nineteen 36 hundred seventy-eight but before January first, two thousand twenty-sev- 37 en, the tax imposed by subdivision one of section 11-603 of this 38 subchapter shall be, in the case of each taxpayer: 39 (a) whichever of the following amounts is the greatest: 40 (1) an amount computed, for taxable years beginning before nineteen 41 hundred eighty-seven, at the rate of nine per centum, and for taxable 42 years beginning after nineteen hundred eighty-six, at the rate of eight 43 and eighty-five one-hundredths per centum, of its entire net income or 44 the portion of such entire net income allocated within the city as 45 provided in this paragraph, subject to any modification required by 46 paragraphs (d) and (e) of subdivision three of this section, 47 (2) an amount computed at one and one-half mills for each dollar of 48 its total business and investment capital, or the portion thereof allo- 49 cated within the city, as provided in this paragraph, except that in the 50 case of a cooperative housing corporation as defined in the internal 51 revenue code, the applicable rate shall be four-tenths of one mill, 52 (3) an amount computed, for taxable years beginning before nineteen 53 hundred eighty-seven, at the rate of nine per centum, and for taxable 54 years beginning after nineteen hundred eighty-six, at the rate of eight 55 and eighty-five one-hundredths per centum, on thirty per centum of the 56 taxpayer's entire net income plus salaries and other compensation paid

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1 to the taxpayer's elected or appointed officers and to every stockholder 2 owning in excess of five per centum of its issued capital stock minus 3 fifteen thousand dollars, subject to proration as provided in this para- 4 graph, and any net loss for the reported year, or on the portion of any 5 such sum allocated within the city as provided in this paragraph for the 6 allocation of entire net income, subject to any modification required by 7 paragraphs (d) and (e) of subdivision three of this section, provided, 8 however, that for taxable years beginning on or after July first, nine- 9 teen hundred ninety-six, the provisions of paragraph H of this subdivi- 10 sion shall apply for purposes of the computation under this clause, or 11 (4) for taxable years ending on or before June thirtieth, nineteen 12 hundred eighty-nine, one hundred twenty-five dollars, for taxable years 13 ending after June thirtieth, nineteen hundred eighty-nine and beginning 14 before two thousand nine, three hundred dollars, and for taxable years 15 beginning after two thousand eight:

16 If city Fixed dollar 17 receipts are: minimum tax is:

18 Not more than $100,000 $25 19 More than $100,000 but not over $250,000 $75 20 More than $250,000 but not over $500,000 $175 21 More than $500,000 but not over $1,000,000 $500 22 More than $1,000,000 but not over $5,000,000 $1,500 23 More than $5,000,000 but not over $25,000,000 $3,500 24 Over $25,000,000 $5,000

25 For purposes of this clause, city receipts are the receipts computed in 26 accordance with subparagraph two of paragraph (a) of subdivision three 27 of this section for the taxable year. For taxable years beginning after 28 two thousand eight, if the taxable year is less than twelve months, 29 the amount prescribed by this clause shall be reduced by twenty-five 30 percent if the period for which the taxpayer is subject to tax is more 31 than six months but not more than nine months and by fifty percent if 32 the period for which the taxpayer is subject to tax is not more than six 33 months. If the taxable year is less than twelve months, the amount of 34 city receipts for purposes of this clause is determined by divid- 35 ing the amount of the receipts for the taxable year by the number of 36 months in the taxable year and multiplying the result by twelve plus; 37 (b) an amount computed at the rate of three-quarters of a mill for 38 each dollar of the portion of its subsidiary capital allocated within 39 the city as provided in this paragraph. 40 In the case of a taxpayer which is not subject to tax for an entire 41 year, the exemption allowed in clause three of subparagraph (a) of this 42 paragraph shall be prorated according to the period such taxpayer was 43 subject to tax. Provided, however, that this paragraph shall not apply 44 to taxable years beginning after December thirty-first, two thousand 45 twenty-six. For the taxable years specified in this subparagraph, the 46 tax imposed by subdivision one of section 11-603 of this subchapter 47 shall be, in the case of each taxpayer, determined as specified in para- 48 graph A of this subdivision, provided, however, that the provisions of 49 paragraphs G and H of this subdivision shall apply for purposes of the 50 computation under clause three of subparagraph (a) of such paragraph. 51 F. Notwithstanding any other provision of this subdivision to the 52 contrary, for taxable years beginning after nineteen hundred eighty-sev- 53 en and before two thousand nine the amount of tax computed on the basis

S. 8578 455

1 of the taxpayer's total business and investment capital, or the portion 2 thereof allocated within the city, shall in no event exceed three 3 hundred fifty thousand dollars and for taxable years beginning after two 4 thousand eight the amount of tax computed on the basis of the taxpayer's 5 total business and investment capital, or the portion thereof allocated 6 within the city, shall in no event exceed one million dollars. 7 G. In the case of a foreign air carrier described in subparagraph one 8 of paragraph (c-1) of subdivision eight of section 11-602 of this 9 subchapter, there shall be excluded from the computation of the tax 10 under clause three of subparagraph (a) of paragraph E of this subdivi- 11 sion salaries and other compensation described therein which are direct- 12 ly attributable to the generation of income excluded from entire net 13 income for the taxable year pursuant to the provisions of paragraph 14 (c-1) of subdivision eight of section 11-602 of this subchapter. 15 H. For taxable years beginning on or after July first, nineteen 16 hundred ninety-six, the computation under clause three of subparagraph 17 (a) of paragraph E of this subdivision shall be subject to the following 18 modifications: 19 (a) (1) For taxable years beginning on or after July first, nineteen 20 hundred ninety-six but before July first, nineteen hundred ninety-eight, 21 only seventy-five percent of the total salaries and other compensation 22 paid to the taxpayer's elected or appointed officers shall be added to 23 the entire net income entering into such computation; for taxable years 24 beginning on or after July first, nineteen hundred ninety-eight but 25 before July first, nineteen hundred ninety-nine, only fifty percent of 26 such salaries and other compensation shall be added to such entire net 27 income; and for taxable years beginning on or after July first, nineteen 28 hundred ninety-nine, no part of such salaries and other compensation 29 shall be added to such entire net income. 30 (2) Notwithstanding anything in clause one of this subparagraph to the 31 contrary, the full amount of the salary or other compensation paid to 32 any such elected or appointed officer shall be added to entire net 33 income as provided in clause three of subparagraph (a) of paragraph E of 34 this subdivision if such officer was, at any time during the taxable 35 year, a stockholder owning more than five percent of taxpayer's issued 36 capital stock. 37 (b) For taxable years beginning on or after July first, nineteen 38 hundred ninety-seven but before July first, nineteen hundred ninety- 39 eight, the fixed dollar amount entering into the computation under 40 clause three of subparagraph (a) of paragraph E of this subdivision 41 shall be thirty thousand dollars instead of fifteen thousand dollars; 42 and for taxable years beginning on or after July first, nineteen hundred 43 ninety-eight, such fixed dollar amount shall be forty thousand dollars. 44 (c) For taxable years beginning on or after January first, two thou- 45 sand seven and before January first, two thousand eight the per centum 46 entering into the computation under clause three of subparagraph (a) of 47 paragraph E of this subdivision shall be twenty-six and one-fourth per 48 centum instead of thirty per centum, for taxable years beginning on or 49 after January first, two thousand eight and before January first, two 50 thousand nine such per centum shall be twenty-two and one-half per 51 centum, for taxable years beginning on or after January first, two thou- 52 sand nine and before January first, two thousand ten such per centum 53 shall be eighteen and three-fourths per centum and for taxable years 54 beginning on or after January first, two thousand ten such per centum 55 shall be fifteen per centum.

S. 8578 456

1 I. Notwithstanding any provision of this subdivision to the contrary, 2 for taxable years beginning on or after January first, two thousand 3 seven for any corporation that: 4 (a) has a business allocation percentage for the taxable year, as 5 determined under paragraph (a) of subdivision three of this section, of 6 one hundred percent; 7 (b) has no investment capital or income at any time during the taxable 8 year; 9 (c) has no subsidiary capital or income at any time during the taxable 10 year; and 11 (d) has gross income, as defined in section sixty-one of the internal 12 revenue code, less than two hundred fifty thousand dollars for the taxa- 13 ble year: 14 the tax imposed by subdivision one of section 11-603 of this subchap- 15 ter shall be the greater of the tax on entire net income computed under 16 clause one of subparagraph (a) of paragraph E of this subdivision and 17 the fixed dollar minimum tax specified in clause four of subparagraph 18 (a) of paragraph E of this subdivision. 19 For purposes of this paragraph, for taxable years beginning before 20 January first, two thousand fifteen, any corporation for which an 21 election under subsection (a) of section six hundred sixty of the tax 22 law is not in effect for the taxable year may elect to treat as entire 23 net income the sum of: 24 (i) entire net income as determined under section two hundred eight of 25 the tax law; and 26 (ii) any deductions taken for the taxable year in computing federal 27 taxable income for Staten Island city taxes paid or accrued under this 28 chapter. 29 2. The amount of subsidiary capital, investment capital and business 30 capital shall each be determined by taking the average value of the 31 gross assets included therein, less liabilities deductible therefrom 32 pursuant to the provisions of subdivisions three, four and six of 33 section 11-602 of this subchapter, and, if the period covered by the 34 report is other than a period of twelve calendar months, by multiplying 35 such value by the number of calendar months or major parts thereof 36 included in such period, and dividing the product thus obtained by 37 twelve. For purposes of this subdivision, real property and marketable 38 securities shall be valued at fair market value and the value of 39 personal property other than marketable securities shall be the value 40 thereof shown on the books and records of the taxpayer in accordance 41 with generally accepted accounting principles. 42 3. The portion of the entire net income of a taxpayer to be allocated 43 within the city shall be determined as follows: 44 (a) multiply its business income by a business allocation percentage 45 to be determined by: 46 (1) ascertaining the percentage which the average value of the taxpay- 47 er's real and tangible personal property, whether owned or rented to it, 48 within the city during the period covered by its report bears to the 49 average value of all the taxpayer's real and tangible personal property, 50 whether owned or rented to it, wherever situated during such period. For 51 the purpose of this subparagraph, the term "value of the taxpayer's real 52 and tangible personal property" shall mean the adjusted bases of such 53 properties for federal income tax purposes, except that in the case of 54 rented property such value shall mean the product of (A) eight and (B) 55 the gross rents payable for the rental of such property during the taxa- 56 ble year; provided, however, that the taxpayer may make a one-time,

S. 8578 457

1 revocable election, pursuant to regulations promulgated by the commis- 2 sioner of finance to use fair market value as the value of all of its 3 real and tangible personal property, provided that such election is made 4 on or before the due date for filing a report under section 11-605 of 5 this subchapter for the taxpayer's first taxable year commencing on or 6 after January first, nineteen hundred eighty-eight and provided that 7 such election shall not apply to any taxable year with respect to which 8 the taxpayer is included on a combined report unless each of the taxpay- 9 ers included on such report has made such an election which remains in 10 effect for such year; 11 (2) ascertaining the percentage which the receipts of the taxpayer, 12 computed on the cash or accrual basis according to the method of 13 accounting used in the computation of its entire net income, arising 14 during such period from: 15 (A) except as otherwise provided in subparagraph nine of this para- 16 graph, sales of its tangible personal property where shipments are made 17 to points within the city; 18 (B) services performed within the city, provided, however, that (i) in 19 the case of a taxpayer engaged in the business of publishing newspapers 20 or periodicals, receipts arising from sales of advertising contained in 21 such newspapers and periodicals shall be deemed to arise from services 22 performed within the city to the extent that such newspapers and period- 23 icals are delivered to points within the city, (ii) receipts received 24 from an investment company arising from the sale of management, adminis- 25 tration or distribution services to such investment company shall be 26 deemed to arise from services performed within the city to the extent 27 set forth in subparagraph five of this paragraph, (iii) in the case of 28 taxpayers principally engaged in the activity of air freight forwarding 29 acting as principal and like indirect air carriage, receipts arising 30 from such activity shall be deemed to arise from services performed 31 within the city as follows: one hundred percent of such receipts if both 32 the pickup and delivery associated with such receipts are made in the 33 city and fifty percent of such receipts if either the pickup or delivery 34 associated with such receipts is made in the city, (iv) for taxable 35 years beginning on or after January first, two thousand two, in the case 36 of a taxpayer engaged in the business of publishing newspapers or peri- 37 odicals, or broadcasting radio or television programs, whether through 38 the public airwaves or by cable, direct or indirect satellite trans- 39 mission, or any other means of transmission, receipts arising from sales 40 of subscriptions, advertising or broadcasting shall be deemed to arise 41 from services performed within the city to the extent provided in 42 subparagraph nine of this paragraph, and (v) for taxable years beginning 43 after two thousand eight, in the case of a taxpayer which is a regis- 44 tered securities or commodities broker or dealer, the receipts specified 45 in subparagraph ten of this paragraph shall be deemed to arise from 46 services performed within the city to the extent set forth in such 47 subparagraph ten; 48 (C) rentals from property situated and royalties from the use of 49 patents or copyrights, within the city; 50 (D) all other business receipts earned within the city, bear to the 51 total amount of the taxpayer's receipts, similarly computed, arising 52 during such period from all sales of its tangible personal property, 53 services, rentals, royalties and all other business transactions, wheth- 54 er within or without the city; and 55 (E) notwithstanding any other provision of this paragraph, net global 56 intangible low-taxed income shall be included in the receipts fraction

S. 8578 458

1 as provided in this clause. Receipts constituting net global intangible 2 low-taxed income shall not be included in the numerator of the receipts 3 fraction. Receipts constituting net global intangible low-taxed income 4 shall be included in the denominator of the receipts fraction. For 5 purposes of this clause, the term "net global intangible low-taxed 6 income" means the amount that would have been required to be included in 7 the taxpayer's federal gross income pursuant to subsection (a) of 8 section nine hundred fifty-one-A of the internal revenue code less the 9 amount of the deduction that would have been allowed under clause (i) of 10 subparagraph (B) of paragraph one of subdivision (a) of section two 11 hundred fifty of such code if the taxpayer had not made an election 12 under subchapter s of chapter one of the internal revenue code; 13 (3) ascertaining the percentage of the total wages, salaries and other 14 personal service compensation, similarly computed, during such period of 15 employees within the city, except general executive officers, to the 16 total wages, salaries and other personal service compensation, similarly 17 computed, during such period of all the taxpayer's employees within and 18 without the city, except general executive officers; and 19 (4) adding together the percentages so determined and dividing the 20 result by the number of percentages; provided, however, that for taxable 21 years beginning on or after July first, nineteen hundred ninety-six, a 22 taxpayer that is a "manufacturing corporation," as defined in subpara- 23 graph eight of this paragraph, may determine its business allocation 24 percentage as provided in such subparagraph eight; and provided, 25 further, however, that for taxable years beginning before July first, 26 nineteen hundred ninety-six, if the taxpayer does not have a regular 27 place of business outside the city other than a statutory office, the 28 business allocation percentage shall be one hundred per centum. 29 (5) Rules for receipts from certain services to investment companies. 30 (A) For purposes of subclause (ii) of clause (B) of subparagraph two of 31 this paragraph, the portion of receipts received from an investment 32 company arising from the sale of management, administration or distrib- 33 ution services to such investment company determined in accordance with 34 clause (B) of this subparagraph shall be deemed to arise from services 35 performed within the city, such portion referred to as the Staten Island 36 city portion. 37 (B) The Staten Island city portion shall be the product of (a) the 38 total of such receipts from the sale of such services and (b) a frac- 39 tion. The numerator of that fraction is the sum of the monthly percent- 40 ages, as defined, determined for each month of the investment company's 41 taxable year for federal income tax purposes which taxable year ends 42 within the taxable year of the taxpayer, but excluding any month during 43 which the investment company had no outstanding shares. The monthly 44 percentage for each such month is determined by dividing (a) the number 45 of shares in the investment company which are owned on the last day of 46 the month by shareholders which are domiciled in the city by (b) the 47 total number of shares in the investment company outstanding on that 48 date. The denominator of the fraction is the number of such monthly 49 percentages. 50 (C) (i) For purposes of this subparagraph, the term "domicile", in the 51 case of an individual, shall have the meaning ascribed to it under chap- 52 ter seventeen of this title; an estate or trust is domiciled in the city 53 if it is a city resident estate or trust as defined in paragraph three 54 of subdivision (b) of section 11-1705 of the code of the preceding muni- 55 cipality; a business entity is domiciled in the city if the location of 56 the actual seat of management or control is in the city. It shall be

S. 8578 459

1 presumed that the domicile of a shareholder, with respect to any month, 2 is his, her or its mailing address on the records of the investment 3 company as of the last day of such month. 4 (ii) For purposes of this subparagraph, the term "investment company" 5 means a regulated investment company, as defined in section eight 6 hundred fifty-one of the internal revenue code, and a partnership to 7 which subdivision (a) of section seven thousand seven hundred four of 8 the internal revenue code applies, by virtue of paragraph three of 9 subdivision (c) of section seven thousand seven hundred four of such 10 code, and that meets the requirements of subdivision (b) of section 11 eight hundred fifty-one of such code. The provisions of this subpara- 12 graph shall be applied to the taxable year for federal income tax 13 purposes of the business entity that is asserted to constitute an 14 investment company that ends within the taxable year of the taxpayer. 15 (iii) For purposes of this subparagraph, the term "receipts from an 16 investment company" includes amounts received directly from an invest- 17 ment company as well as amounts received from the shareholders in such 18 investment company in their capacity as such. 19 (iv) For purposes of this subparagraph, the term "management services" 20 means the rendering of investment advice to an investment company, 21 making determinations as to when sales and purchases of securities are 22 to be made on behalf of an investment company, or the selling or 23 purchasing of securities constituting assets of an investment company, 24 and related activities, but only where such activity or activities are 25 performed pursuant to a contract with the investment company entered 26 into pursuant to subdivision (a) of section fifteen of the federal 27 investment company act of nineteen hundred forty, as amended. 28 (v) For purposes of this subparagraph, the term "distribution 29 services" means the services of advertising, servicing investor 30 accounts, including redemptions, marketing shares or selling shares of 31 an investment company, but, in the case of advertising, servicing inves- 32 tor accounts, including redemptions, or marketing shares, only where 33 such service is performed by a person who is, or was, in the case of a 34 closed end company, also engaged in the service of selling such shares. 35 In the case of an open end company, such service of selling shares must 36 be performed pursuant to a contract entered into pursuant to subdivision 37 (b) of section fifteen of the federal investment company act of nineteen 38 hundred forty, as amended. 39 (vi) For purposes of this subparagraph, the term "administration 40 services" includes (1) clerical, accounting, bookkeeping, data process- 41 ing, internal auditing, legal and tax services performed for an invest- 42 ment company but only (2) if the provider of such service or services 43 during the taxable year in which such service or services are sold also 44 sells management or distribution services, as defined in this paragraph, 45 to such investment company. 46 (6) (A) Provided, further, however, that a taxpayer principally 47 engaged in the conduct of aviation, other than as provided in clause (C) 48 of this subparagraph, shall, notwithstanding subparagraphs one through 49 five of this paragraph, determine the portion of entire net income to be 50 allocated within the city by multiplying its business income by a busi- 51 ness allocation percentage which is equal to the arithmetic average of 52 the following three percentages: 53 (i) the percentage determined by dividing aircraft arrivals and depar- 54 tures within the city by the taxpayer during the period covered by its 55 report by the total aircraft arrivals and departures within and without 56 the city during such period; provided, however, arrivals and departures

S. 8578 460

1 solely for maintenance or repair, refueling, where no debarkation or 2 embarkation of traffic occurs, arrivals and departures of ferry and 3 personnel training flights or arrivals and departures in the event of 4 emergency situations shall not be included in computing such arrival and 5 departure percentage; provided, further, the commissioner of finance may 6 also exempt from such percentage aircraft arrivals and departures of all 7 non-revenue flights including flights involving the transportation of 8 officers or employees receiving air transportation to perform mainte- 9 nance or repair services or where such officers or employees are trans- 10 ported in conjunction with an emergency situation or the investigation 11 of an air disaster, other than on a scheduled flight; provided, however, 12 that arrivals and departures of flights transporting officers and 13 employees receiving air transportation for purposes other than specified 14 above, without regard to remuneration, shall be included in computing 15 such arrival and departure percentage; 16 (ii) the percentage determined by dividing the revenue tons handled by 17 the taxpayer at airports within the city during such period by the total 18 revenue tons handled by it at airports within and without the city 19 during such period; and 20 (iii) the percentage determined by dividing the taxpayer's originating 21 revenue within the city for such period by its total originating revenue 22 within and without the city for such period. 23 (B) As used herein, the term "aircraft arrivals and departures" means 24 the number of landings and takeoffs of the aircraft of the taxpayer and 25 the number of air pickups and deliveries by the aircraft of such taxpay- 26 er; the term "originating revenue" means revenue to the taxpayer from 27 the transportation of revenue passengers and revenue property first 28 received by the taxpayer either as originating or connecting traffic at 29 airports; and the term "revenue tons handled" by the taxpayer at 30 airports means the weight in tons of revenue passengers, at two hundred 31 pounds per passenger, and revenue cargo first received either as origi- 32 nating or connecting traffic or finally discharged by the taxpayer at 33 airports; 34 (C) A foreign air carrier described in subparagraph one of paragraph 35 (c-1) of subdivision eight of section 11-602 of this subchapter shall 36 determine its business allocation percentage pursuant to the provisions 37 of subparagraphs one through four of this paragraph, except that the 38 numerators and denominators involved in such computation shall exclude 39 property to the extent employed in generating income excluded from 40 entire net income pursuant to the provisions of paragraph (c-1) of 41 subdivision eight of section 11-602 of this subchapter, exclude such 42 receipts as are excluded from entire net income for the taxable year 43 pursuant to the provisions of paragraph (c-1) of subdivision eight of 44 section 11-602 of this subchapter, and exclude wages, salaries or other 45 personal service compensation which are directly attributable to the 46 generation of income excluded from entire net income for the taxable 47 year pursuant to the provisions of paragraph (c-1) of subdivision eight 48 of section 11-602 of this subchapter. 49 (7) Provided, further, however, that a taxpayer principally engaged in 50 the operation of vessels shall, notwithstanding subparagraphs one 51 through six of this paragraph, determine the portion of entire net 52 income to be allocated within the city by multiplying its business 53 income by a business allocation percentage determined by dividing the 54 aggregate number of working days of the vessels it owns or leases in 55 territorial waters of the city during the period covered by its report

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1 by the aggregate number of working days of all the vessels it owns or 2 leases during such period. 3 (8) (A) For taxable years beginning on or after July first, nineteen 4 hundred ninety-six and before January first, two thousand eleven, a 5 manufacturing corporation may elect to determine its business allocation 6 percentage by adding together the percentages determined under subpara- 7 graphs one, two and three of this paragraph and an additional percentage 8 equal to the percentage determined under subparagraph two of this para- 9 graph, and dividing the result by the number of percentages so added 10 together. 11 (B) An election under this subparagraph must be made on a timely 12 filed, determined with regard to extensions granted, original report for 13 the taxable year. Once made for a taxable year, such election shall be 14 irrevocable for that taxable year. A separate election must be made for 15 each taxable year. A manufacturing corporation that has failed to make 16 an election as provided in this clause shall be required to determine 17 its business allocation percentage without regard to the provisions of 18 this subparagraph. Notwithstanding anything in this clause to the 19 contrary, the commissioner of finance may permit a manufacturing corpo- 20 ration to make or revoke an election under this subparagraph, upon such 21 terms and conditions as the commissioner may prescribe, where the 22 commissioner determines that such permission should be granted in the 23 interests of fairness and equity due to a change in circumstances 24 resulting from an audit adjustment. 25 (C) As used in this subparagraph, the term "manufacturing corporation" 26 means a corporation primarily engaged in the manufacturing and sale 27 thereof of tangible personal property; and the term "manufacturing" 28 includes the process, including the assembly process, (i) of working raw 29 materials into wares suitable for use or (ii) which gives new shapes, 30 new qualities or new combinations to matter which already has gone 31 through some artificial process, by the use of machinery, tools, appli- 32 ances and other similar equipment. A corporation shall be deemed to be 33 primarily engaged in the activities described in the provisions of this 34 subparagraph if more than fifty percent of its gross receipts for the 35 taxable year are attributable to such activities. 36 (D) Notwithstanding anything to the contrary, if a taxpayer that is 37 otherwise eligible to make the election authorized by this subparagraph 38 is required or permitted to make a report on a combined basis with one 39 or more other corporations pursuant to subdivision four of section 40 11-605 of this chapter, the taxpayer shall be permitted to make an 41 election under this subparagraph only if such taxpayer and such other 42 corporation or corporations would be a manufacturing corporation if they 43 were treated as a single corporation. In making such determination, 44 intercorporate transactions shall be eliminated. Where such election has 45 been made by the taxpayer for a taxable year, each of the other corpo- 46 rations included in the combined report shall also be deemed to have 47 made a proper election under this subparagraph for such taxable year. 48 (9) Special rules for publishers and broadcasters. (A) Notwithstanding 49 anything in subparagraph two of this paragraph to the contrary and 50 except as provided in clause (C) of this subparagraph, in the case of a 51 taxpayer engaged in the business of publishing newspapers or period- 52 icals, there shall be allocated to the city, for purposes of subpara- 53 graph two of this paragraph, the gross sales or charges for services 54 arising from sales of advertising contained in such newspapers or peri- 55 odicals, to the extent that such newspapers or periodicals are delivered 56 to points within the city.

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1 (B) Notwithstanding anything in subparagraph two of this paragraph to 2 the contrary and except as provided in clause (C) of this subparagraph, 3 in the case of a taxpayer engaged in the business of broadcasting radio 4 or television programs, whether through the public airwaves or by cable, 5 direct or indirect satellite transmission, or any other means of trans- 6 mission, there shall be allocated to the city, for purposes of subpara- 7 graph two of this paragraph, a portion of the gross sales or charges for 8 services arising from the broadcasting of such programs and of commer- 9 cial messages in connection therewith, such portion to be determined 10 according to the number of listeners or viewers within and without the 11 city. 12 (C) Notwithstanding anything in clause (A) or (B) of this subparagraph 13 to the contrary, in the case of a taxpayer engaged in the business of 14 publishing newspapers or periodicals, or broadcasting radio or tele- 15 vision programs, whether through the public airwaves or by cable, direct 16 or indirect satellite transmission, or any other means of transmission, 17 there shall be allocated to the city, for purposes of subparagraph two 18 of this paragraph, the gross sales or charges to subscribers located in 19 the city for subscriptions to such newspapers, periodicals, or program 20 services. For purposes of this clause, a subscriber shall be deemed 21 located in the city if, in the case of newspapers and periodicals, the 22 mailing address for the subscription is within the city and, in the case 23 of program services, the billing address for the subscription is within 24 the city. For purposes of this clause, "subscriber" shall mean a member 25 of the general public who receives such newspapers, periodicals or 26 program services and does not further distribute them. 27 (10) Notwithstanding subparagraphs one through five of this paragraph, 28 but subject to subparagraph eight of this paragraph, the business allo- 29 cation percentage, to the extent that it is computed by reference to the 30 percentages determined under subparagraphs one, two and three of this 31 paragraph, shall be computed in the manner set forth in this subpara- 32 graph. 33 (A) For taxable years beginning in two thousand nine, the business 34 allocation percentage shall be determined by adding together the follow- 35 ing percentages: 36 (i) the product of thirty percent and the percentage determined under 37 subparagraph one of this paragraph, 38 (ii) the product of forty percent and the percentage determined under 39 subparagraph two of this paragraph, and 40 (iii) the product of thirty percent and the percentage determined 41 under subparagraph three of this paragraph. 42 (B) For taxable years beginning in two thousand ten, the business 43 allocation percentage shall be determined by adding together the follow- 44 ing percentages: 45 (i) the product of twenty-seven percent and the percentage determined 46 under subparagraph one of this paragraph, 47 (ii) the product of forty-six percent and the percentage determined 48 under subparagraph two of this paragraph, and 49 (iii) the product of twenty-seven percent and the percentage deter- 50 mined under subparagraph three of this paragraph. 51 (C) For taxable years beginning in two thousand eleven, the business 52 allocation percentage shall be determined by adding together the follow- 53 ing percentages: 54 (i) the product of twenty-three and one-half percent and the percent- 55 age determined under subparagraph one of this paragraph,

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1 (ii) the product of fifty-three percent and the percentage determined 2 under subparagraph two of this paragraph, and 3 (iii) the product of twenty-three and one-half percent and the 4 percentage determined under subparagraph three of this paragraph. 5 (D) For taxable years beginning in two thousand twelve, the business 6 allocation percentage shall be determined by adding together the follow- 7 ing percentages: 8 (i) the product of twenty percent and the percentage determined under 9 subparagraph one of this paragraph, 10 (ii) the product of sixty percent and the percentage determined under 11 subparagraph two of this paragraph, and 12 (iii) the product of twenty percent and the percentage determined 13 under subparagraph three of this paragraph. 14 (E) For taxable years beginning in two thousand thirteen, the business 15 allocation percentage shall be determined by adding together the follow- 16 ing percentages: 17 (i) the product of sixteen and one-half percent and the percentage 18 determined under subparagraph one of this paragraph, 19 (ii) the product of sixty-seven percent and the percentage determined 20 under subparagraph two of this paragraph, and 21 (iii) the product of sixteen and one-half percent and the percentage 22 determined under subparagraph three of this paragraph. 23 (F) For taxable years beginning in two thousand fourteen, the business 24 allocation percentage shall be determined by adding together the follow- 25 ing percentages: 26 (i) the product of thirteen and one-half percent and the percentage 27 determined under subparagraph one of this paragraph, 28 (ii) the product of seventy-three percent and the percentage deter- 29 mined under subparagraph two of this paragraph, and 30 (iii) the product of thirteen and one-half percent and the percentage 31 determined under subparagraph three of this paragraph. 32 (G) For taxable years beginning in two thousand fifteen, the business 33 allocation percentage shall be determined by adding together the follow- 34 ing percentages: 35 (i) the product of ten percent and the percentage determined under 36 subparagraph one of this paragraph, 37 (ii) the product of eighty percent and the percentage determined under 38 subparagraph two of this paragraph, and 39 (iii) the product of ten percent and the percentage determined under 40 subparagraph three of this paragraph. 41 (H) For taxable years beginning in two thousand sixteen, the business 42 allocation percentage shall be determined by adding together the follow- 43 ing percentages: 44 (i) the product of six and one-half percent and the percentage deter- 45 mined under subparagraph one of this paragraph, 46 (ii) the product of eighty-seven percent and the percentage determined 47 under subparagraph two of this paragraph, and 48 (iii) the product of six and one-half percent and the percentage 49 determined under subparagraph three of this paragraph. 50 (I) For taxable years beginning in two thousand seventeen, the busi- 51 ness allocation percentage shall be determined by adding together the 52 following percentages: 53 (i) the product of three and one-half percent and the percentage 54 determined under subparagraph one of this paragraph, 55 (ii) the product of ninety-three percent and the percentage determined 56 under subparagraph two of this paragraph, and

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1 (iii) the product of three and one-half percent and the percentage 2 determined under subparagraph three of this paragraph. 3 (J) For taxable years beginning after two thousand seventeen, the 4 business allocation percentage shall be the percentage determined under 5 subparagraph two of this paragraph. 6 (K) The commissioner shall promulgate rules necessary to implement the 7 provisions of this subparagraph under such circumstances where any of 8 the percentages to be determined under subparagraph one, two or three of 9 this paragraph cannot be determined because the taxpayer has no proper- 10 ty, receipts or wages within or without the city. 11 (11) (A) In the case of a taxpayer which is a registered securities or 12 commodities broker or dealer, the receipts specified in items (i) 13 through (vii) of this clause shall be deemed to arise from services 14 performed within the city to the extent set forth in each of such items. 15 (i) Receipts constituting brokerage commissions derived from the 16 execution of securities or commodities purchase or sales orders for the 17 accounts of customers shall be deemed to arise from services performed 18 at the mailing address in the records of the taxpayer of the customer 19 who is responsible for paying such commissions. 20 (ii) Receipts constituting margin interest earned on behalf of broker- 21 age accounts shall be deemed to arise from services performed at the 22 mailing address in the records of the taxpayer of the customer who is 23 responsible for paying such margin interest. 24 (iii) Gross income, including any accrued interest or dividends, from 25 principal transactions for the purchase or sale of stocks, bonds, 26 foreign exchange and other securities or commodities, including futures 27 and forward contracts, options and other types of securities or commod- 28 ities derivatives contracts, shall be deemed to arise from services 29 performed within the city either (I) to the extent that production cred- 30 its are awarded to branches, offices or employees of the taxpayer within 31 the city as a result of such principal transactions or (II) if the 32 taxpayer so elects, to the extent that the gross proceeds from such 33 principal transactions, determined without deduction for any cost 34 incurred by the taxpayer to acquire the securities or commodities, are 35 generated from sales of securities or commodities to customers within 36 the city based upon the mailing addresses of such customers in the 37 records of the taxpayer. For purposes of subitem (II) of this item, the 38 taxpayer shall separately calculate such gross income from principal 39 transactions by type of security or commodity. For purposes of this 40 item, gross income from principal transactions shall be determined after 41 the deduction of any cost incurred by the taxpayer to acquire the secu- 42 rities or commodities. For purposes of this subparagraph, the term 43 "production credits" means credits granted pursuant to the internal 44 accounting system used by the taxpayer to measure the amount of revenue 45 that should be awarded to a particular branch or office or employee of 46 the taxpayer which is based, at least in part, on the branch's, the 47 office's or the employee's particular activities. Upon request, the 48 taxpayer shall be required to furnish a detailed explanation of such 49 internal accounting system to the department. 50 (iv) (I) Receipts constituting fees earned by the taxpayer for advi- 51 sory services to a customer in connection with the underwriting of secu- 52 rities for such customer, such customer being the entity which is 53 contemplating issuing or is issuing securities, or fees earned by the 54 taxpayer for managing an underwriting shall be deemed to arise from 55 services performed at the mailing address in the records of the taxpayer 56 of such customer who is responsible for paying such fees.

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1 (II) Receipts constituting the primary spread or selling concession 2 from underwritten securities shall be deemed to arise from services 3 performed within the city to the extent that production credits are 4 awarded to branches, offices or employees of the taxpayer within the 5 city as a result of the sale of the underwritten securities. 6 (III) The term "primary spread" means the difference between the price 7 paid by the taxpayer to the issuer of the securities being marketed and 8 the price received from the subsequent sale of the underwritten securi- 9 ties at the initial public offering price, less any selling concession 10 and any fees paid to the taxpayer for advisory services or any manager's 11 fees, if such fees are not paid by the customer to the taxpayer sepa- 12 rately. The term "public offering price" means the price agreed upon by 13 the taxpayer and the issuer at which the securities are to be offered to 14 the public. The term "selling concession" means the amount paid to the 15 taxpayer for participating in the underwriting of a security where the 16 taxpayer is not the lead underwriter. 17 (v) Receipts constituting interest earned by the taxpayer on loans and 18 advances made by the taxpayer to a corporation affiliated with the 19 taxpayer but with which the taxpayer is not permitted or required to 20 file a combined report pursuant to subdivision four of section 11-605 of 21 this subchapter shall be deemed to arise from services performed at the 22 principal place of business of such affiliated corporation. 23 (vi) Receipts constituting account maintenance fees shall be deemed to 24 arise from services performed at the mailing address in the records of 25 the taxpayer of the customer who is responsible for paying such account 26 maintenance fees. 27 (vii) Receipts constituting fees for management or advisory services, 28 including fees for advisory services in relation to merger or acquisi- 29 tion activities but excluding fees paid for services described in item 30 (ii) of clause (B) of subparagraph two of this paragraph, shall be 31 deemed to arise from services performed at the mailing address in the 32 records of the taxpayer of the customer who is responsible for paying 33 such fees. 34 (B) For purposes of this subparagraph, the term "securities" shall 35 have the same meaning as in paragraph two of subdivision (c) of section 36 four hundred seventy-five of the internal revenue code and the term 37 "commodities" shall have the same meaning as in paragraph two of subdi- 38 vision (e) of section four hundred seventy-five of the internal revenue 39 code. The term "registered securities or commodities broker or dealer" 40 means a broker or dealer registered as such by the securities and 41 exchange commission or the commodities futures trading commission, and 42 shall include an over-the-counter derivatives dealer as defined under 43 regulations of the securities and exchange commission at title 17, part 44 240, section 3b-12 of the code of federal regulations (17 CFR 45 240.3b-12). 46 (C) If the taxpayer receives any of the receipts enumerated in clause 47 (A) of this subparagraph as a result of a securities correspondent 48 relationship such taxpayer has with another registered securities or 49 commodities broker or dealer with the taxpayer acting in this relation- 50 ship as the clearing firm, such receipts shall be deemed to arise from 51 services performed within the city to the extent set forth in each of 52 the items of clause (A) of this subparagraph. The amount of such 53 receipts shall exclude the amount the taxpayer is required to pay to the 54 correspondent firm for such correspondent relationship. If the taxpayer 55 receives any of the receipts enumerated in clause (A) of this subpara- 56 graph as a result of a securities correspondent relationship such

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1 taxpayer has with another registered securities or commodities broker or 2 dealer with the taxpayer acting in this relationship as the introducing 3 firm, such receipts shall be deemed to arise from services performed 4 within the city to the extent set forth in each of the items of clause 5 (A) of this subparagraph. 6 (D) If, for purposes of item (i) or (ii), subitem (I) of item (iv), or 7 item (vi), or (vii) of clause (A) of this subparagraph, the taxpayer is 8 unable from its records to determine the mailing address of the custom- 9 er, the receipts enumerated in any of such items shall be deemed to 10 arise from services performed at the branch or office of the taxpayer 11 that generates the transaction for the customer that generated such 12 receipts. 13 (b) multiply its investment income by an investment allocation 14 percentage to be determined by: 15 (1) multiplying the amount of its investment capital invested in each 16 stock, bond or other security, other than governmental securities, 17 during the period covered by its report by the issuer's allocation 18 percentage of the issuer or obligor thereof. 19 (i) In the case of an issuer or obligor subject to tax under this 20 subchapter, subchapter three-A or subchapter four of this chapter, or 21 subject to tax as a utility corporation under chapter eleven of this 22 title, the issuer's allocation percentage shall be the percentage of the 23 appropriate measure, which is required to be allocated within the city 24 on the report or reports, if any, required of the issuer or obligor 25 under this title for the preceding year. The "appropriate measure" shall 26 be defined as: in the case of an issuer or obligor subject to this 27 subchapter or subchapter three-A, entire capital; in the case of an 28 issuer or obligor subject to subchapter four of this chapter, issued 29 capital stock; in the case of an issuer or obligor subject to chapter 30 eleven of this title as a utility corporation, gross income. 31 (ii) In the case of an issuer or obligor subject to tax under part 32 four of subchapter three of this chapter, the issuer's allocation 33 percentage shall be determined as follows: 34 (A) In the case of a banking corporation described in paragraphs one 35 through eight of subdivision (a) of section 11-640 of this chapter which 36 is organized under the laws of the United States, this state or any 37 other state of the United States, the issuer's allocation percentage 38 shall be its alternative entire net income allocation percentage, as 39 defined in subdivision (c) of section 11-642 of this chapter, for the 40 preceding year. In the case of such a banking corporation whose alterna- 41 tive entire net income for the preceding year is derived exclusively 42 from business carried on within the city, its issuer's allocation 43 percentage shall be one hundred percent. 44 (B) In the case of a banking corporation described in paragraph two of 45 subdivision (a) of section 11-640 of this chapter which is organized 46 under the laws of a country other than the United States, the issuer's 47 allocation percentage shall be determined by dividing (I) the amount 48 described in clause (i) of subparagraph (A) of paragraph two of subdivi- 49 sion (a) of section 11-642 of this chapter with respect to such issuer 50 or obligor for the preceding year, by (II) the gross income of such 51 issuer or obligor from all sources within and without the United States, 52 for such preceding year, whether or not included in alternative entire 53 net income for such year. 54 (C) In the case of an issuer or obligor described in paragraph nine of 55 subdivision (a) or in paragraph two of subdivision (d) of section 11-640 56 of this chapter, the issuer's allocation percentage shall be determined

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1 by dividing the portion of the entire capital of the issuer or obligor 2 allocable to the city for the preceding year by the entire capital, 3 wherever located, of the issuer or obligor for the preceding year. 4 (iii) Provided, however, that if a report or reports for the preceding 5 year are not filed, or if filed do not contain information which would 6 permit the determination of such issuer's allocation percentage, then 7 the issuer's allocation percentage to be used shall, at the discretion 8 of the commissioner of finance, be either (A) the issuer's allocation 9 percentage derived from the most recently filed report or reports of the 10 issuer or obligor or (B) a percentage calculated, by the commissioner of 11 finance, reasonably to indicate the degree of economic presence in the 12 city of the issuer or obligor during the preceding year. 13 (2) adding together the sum so obtained, and 14 (3) dividing the result so obtained by the total of its investment 15 capital invested during such period in stocks, bonds and other securi- 16 ties; provided, however, that in case any investment capital is invested 17 in any stock, bond or other security during only a portion of the period 18 covered by the report, only such portion of such capital shall be taken 19 into account; and provided further, that if a taxpayer's investment 20 allocation percentage is zero, interest received on bank accounts shall 21 be multiplied by its business allocation percentage; and 22 (c) add the products so obtained. 23 (d) Except as provided in subparagraph three of this paragraph or in 24 paragraph (e) of this subdivision, at the election of the taxpayer there 25 shall be deducted from the portion of its entire net income allocated 26 within the city either or both of the items set forth in subparagraphs 27 one and two of this paragraph, except that only one of such deductions 28 shall be allowed with respect to any one item of property. 29 (1) Depreciation with respect to any property such as described in 30 subparagraph three of this paragraph, not exceeding twice the depreci- 31 ation allowed with respect to the same property for federal income tax 32 purposes. Such deduction shall be allowed only upon condition that 33 entire net income be computed without any deduction for the depreciation 34 of the same property, and the total of all deductions allowed in any 35 taxable year or years with respect to the depreciation of any such prop- 36 erty shall not exceed its cost or other basis. 37 (2) Expenditures paid or incurred during the taxable year for the 38 construction, reconstruction, erection or acquisition of any property 39 such as described in subparagraph three of this paragraph which is used 40 or to be used for purposes of research and development in the exper- 41 imental or laboratory sense. Such purposes shall not be deemed to 42 include the ordinary testing or inspection of materials or products for 43 quality control, efficiency surveys, management studies, consumer 44 surveys, advertising, promotions or research in connection with liter- 45 ary, historical or similar projects. Such deduction shall be allowed 46 only on condition that entire net income for the taxable year and all 47 succeeding taxable years be computed without the deduction of any such 48 expenditures and without any deduction for depreciation of the same 49 property, except to the extent that its basis may be attributable to 50 factors other than such expenditures, or in case a deduction is allow- 51 able pursuant to this subparagraph for only a part of such expenditures, 52 on condition that any deduction allowed for federal income tax purposes 53 on account of such expenditures or on account of depreciation of the 54 same property be proportionately reduced in computing entire net income 55 for the taxable year and all succeeding taxable years. With respect to 56 property which is used or to be used for research and development only

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1 in part, or during only part of its useful life, a proportionate part of 2 such expenditures shall be deductible. If all or part of such expendi- 3 tures with respect to any property shall have been deducted as provided 4 in this subparagraph, and such property is used for purposes other than 5 research and development to a greater extent than originally reported, 6 the taxpayer shall report such use in its report for the first taxable 7 year during which it occurs, and the commissioner of finance may recom- 8 pute the tax for the year or years for which such deduction was allowed, 9 and may assess any additional tax resulting from such recomputation 10 regardless of the time limitations set forth in section 11-674 of this 11 chapter. 12 (3) Such deductions shall be allowed only with respect to tangible 13 property which is depreciable pursuant to section one hundred sixty-sev- 14 en of the internal revenue code, having a situs in the city and used in 15 the taxpayer's trade or business, (A) constructed, reconstructed or 16 erected after December thirty-first, nineteen hundred sixty-five, pursu- 17 ant to a contract which was, on or before December thirty-first, nine- 18 teen hundred sixty-seven, and at all times thereafter, binding on the 19 taxpayer or, property, the physical construction, reconstruction or 20 erection of which began on or before December thirty-first, nineteen 21 hundred sixty-seven or which began after such date pursuant to an order 22 placed on or before December thirty-first, nineteen hundred sixty-seven, 23 and then only with respect to that portion of the basis thereof or the 24 expenditures relating thereto which is properly attributable to such 25 construction, reconstruction or erection after December thirty-first, 26 nineteen hundred sixty-five, or (B) acquired after December thirty- 27 first, nineteen hundred sixty-five, pursuant to a contract which was, on 28 or before December thirty-first, nineteen hundred sixty-seven, and at 29 all times thereafter, binding on the taxpayer or pursuant to an order 30 placed on or before December thirty-first, nineteen hundred sixty-seven, 31 by purchase as defined in section one hundred seventy-nine (d) of the 32 internal revenue code, if the original use of such property commenced 33 with the taxpayer, commenced in the city and commenced after December 34 thirty-first, nineteen hundred sixty-five, or (C) acquired, constructed, 35 reconstructed, or erected subsequent to December thirty-first nineteen 36 hundred sixty-seven, if such acquisition, construction, reconstruction 37 or erection is pursuant to a plan of the taxpayer which was in existence 38 December thirty-first, nineteen hundred sixty-seven and not thereafter 39 substantially modified, and such acquisition, construction, recon- 40 struction or erection would qualify under the rules in paragraphs four, 41 five or six of subsection (h) of section forty-eight of the internal 42 revenue code provided all references in such paragraphs four, five and 43 six to the dates October nine, nineteen hundred sixty-six, and October 44 ten, nineteen hundred sixty-six, shall be read as December thirty-first, 45 nineteen hundred sixty-seven. A taxpayer shall be allowed a deduction 46 under clauses (A), (B) or (C) of this subparagraph only if the tangible 47 property shall be delivered or the construction, reconstruction or 48 erection shall be completed on or before December thirty-first, nineteen 49 hundred sixty-nine, except in the case of tangible property which is 50 acquired, constructed, reconstructed or erected pursuant to a contract 51 which was, on or before December thirty-first, nineteen hundred sixty- 52 seven, and at all times thereafter, binding on the taxpayer. Provided, 53 however, for any taxable year beginning on or after January first, nine- 54 teen hundred sixty-eight, a taxpayer shall not be allowed a deduction 55 under this paragraph with respect to tangible personal property leased 56 by it to any other person or corporation. Accordingly, any contract or

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1 agreement to lease or rent or for a license to use such property shall 2 be considered a lease. With respect to property which the taxpayer uses 3 itself for purposes other than leasing for part of a taxable year and 4 leases for a part of a taxable year, the taxpayer shall be allowed a 5 deduction under this paragraph in proportion to the part of the year it 6 uses such property. 7 (4) If the deductions allowable for any taxable year, pursuant to this 8 subdivision, exceed the portion of the taxpayer's entire net income 9 allocated to the city for such year, the excess may be carried over to 10 the following taxable year or years and may be deducted from the portion 11 of the taxpayer's entire net income allocated to the city for such year 12 or years. 13 (5) In any taxable year when property is sold or otherwise disposed 14 of, with respect to which a deduction has been allowed pursuant to 15 subparagraph one or two of this paragraph, the gain or loss thereon 16 entering into the computation of federal taxable income shall be disre- 17 garded in computing entire net income, and there shall be added to or 18 subtracted from the portion of entire net income allocated within the 19 city the gain or loss upon such sale or other disposition. In computing 20 such gain or loss the basis of the property sold or disposed of shall be 21 adjusted to reflect the deduction allowed with respect to such property 22 pursuant to subparagraph one or two of this paragraph. Provided, howev- 23 er, that no loss shall be recognized for the purposes of this subpara- 24 graph with respect to a sale or other disposition of property to a 25 person whose acquisition thereof is not a purchase as defined in section 26 one hundred seventy-nine (d) of the internal revenue code. 27 (e) At the election of the taxpayer there shall be deducted from the 28 portion of its entire net income allocated within the city either or 29 both of the items set forth in subparagraphs one and two of this para- 30 graph, except that only one of such deductions shall be allowed with 31 respect to any one item of property. 32 (1) Depreciation with respect to any property such as described in 33 subparagraphs three and four of this paragraph, not exceeding twice the 34 depreciation allowed with respect to the same property for federal 35 income tax purposes. Such deduction shall be allowed only upon condition 36 that entire net income be computed without any deduction for the depre- 37 ciation of the same property, and the total of all deductions allowed in 38 any taxable year or years with respect to the depreciation of any such 39 property shall not exceed its cost or other basis multiplied by the 40 taxpayer's business allocation percentage determined under this subdivi- 41 sion for the first year it deducts such depreciation under this para- 42 graph. 43 (2) Expenditures paid or incurred during the taxable year for the 44 construction, reconstruction, erection or acquisition of any property 45 such as described in subparagraph three of this paragraph which is used 46 or to be used for purposes of research and development in the exper- 47 imental or laboratory sense. Such purposes shall not be deemed to 48 include the ordinary testing or inspection of materials or products for 49 quality control, efficiency surveys, management studies, consumer 50 surveys, advertising, promotions or research in connection with liter- 51 ary, historical or similar projects. Such deductions shall be allowed 52 only on condition that it does not exceed the amount of the expenditures 53 multiplied by the taxpayer's business allocation percentage determined 54 under this subdivision for the year the expenditures are paid or 55 incurred and that entire net income for the taxable year and all 56 succeeding taxable years be computed without the deduction of any such

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1 expenditures and without any deduction for depreciation of the same 2 property, except to the extent that its basis may be attributable to 3 factors other than such expenditures, or in case a deduction is allow- 4 able pursuant to this subparagraph for only a part of such expenditures, 5 on condition that any deduction allowed for federal income tax purposes 6 on account of such expenditures or on account of depreciation of the 7 same property be proportionately reduced in computing entire net income 8 for the taxable year and all succeeding taxable years. With respect to 9 property which is used or to be used for research and development only 10 in part, or during only part of its useful life, a proportionate part of 11 such expenditures shall be deductible. If all or part of such expendi- 12 tures with respect to any property shall have been deducted as provided 13 in this subparagraph, and such property is used for purposes other than 14 research and development to a greater extent than originally reported, 15 the taxpayer shall report such use in its report for the first taxable 16 year during which it occurs, and the commissioner of finance may recom- 17 pute the tax for the year or years for which such deduction was allowed, 18 and may assess any additional tax resulting from such recomputation 19 regardless of the time limitations set forth in section 11-674 of this 20 chapter. 21 (3) Such deduction shall be allowed only with respect to tangible 22 property which is depreciable pursuant to section one hundred sixty-sev- 23 en of the internal revenue code, having a situs in the city and used in 24 the taxpayer's trade or business (A) the construction, reconstruction or 25 erection of which is completed after December thirty-first, nineteen 26 hundred sixty-seven, and then only with respect to that portion of the 27 basis thereof or the expenditures relating thereto which is properly 28 attributable to such construction, reconstruction or erection after 29 December thirty-first, nineteen hundred sixty-five, or (B) acquired 30 after December thirty-first, nineteen hundred sixty-seven by purchase or 31 defined in section one hundred seventy-nine (d) of the internal revenue 32 code, if the original use of such property commenced with the taxpayer, 33 commenced in this state and commenced after December thirty-first nine- 34 teen hundred sixty-five. Provided, however, for any taxable year begin- 35 ning on or after January first, nineteen hundred sixty-eight, a taxpayer 36 shall not be allowed a deduction under this paragraph with respect to 37 tangible personal property leased by it to any other person or corpo- 38 ration. Accordingly, any contract or agreement to lease or rent or for a 39 license to use such property shall be considered a lease. With respect 40 to property which the taxpayer uses itself for purposes other than leas- 41 ing for part of a taxable year and leases for a part of a taxable year, 42 the taxpayer shall be allowed a deduction under this paragraph in 43 proportion to the part of the year it uses such property. 44 (4) A deduction under subparagraph one of this paragraph shall be 45 allowed with respect to tangible property described in subparagraph 46 three only if such property is principally used by the taxpayer in the 47 production of goods by manufacturing; processing; assembling; refining; 48 mining; extracting; farming; agriculture; horticulture; floriculture; 49 viticulture or commercial fishing. For purposes of this subparagraph, 50 manufacturing shall mean the process of working raw materials into wares 51 suitable for use or which gives new shapes, new qualities or new combi- 52 nations to matter which already has gone through some artificial process 53 by the use of machinery, tools, appliances and other similar equipment. 54 Property used in the production of goods shall include machinery, equip- 55 ment or other tangible property which is principally used in the repair 56 and service of other machinery, equipment or other tangible property

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1 used principally in the production of goods and shall include all facil- 2 ities used in the manufacturing operation, including storage of material 3 to be used in manufacturing and of the products that are manufactured. 4 At the option of the taxpayer, air and water pollution control facili- 5 ties which qualify for elective deductions under paragraph (g) of subdi- 6 vision eight of section 11-602 of this subchapter may be treated, for 7 purposes of this paragraph, as tangible property principally used in the 8 production of goods by manufacturing; processing; assembling; refining; 9 mining; extracting; farming; agriculture; horticulture; floriculture; 10 viticulture; or commercial fishing, in which event, a deduction shall 11 not be allowed under such paragraph (g). 12 (5) Subject to the limitation imposed by subparagraphs one and two of 13 this paragraph, if the deductions allowable for any taxable year, pursu- 14 ant to this subdivision, exceed the portion of the taxpayer's entire net 15 income allocated to the city for such year, the excess may be carried 16 over to the following taxable year or years and may be deducted from the 17 portion of the taxpayer's entire net income allocated to the city for 18 such year or years. 19 (6) In any taxable year when property is sold or otherwise disposed 20 of, with respect to which a deduction has been allowed pursuant to 21 subparagraph one or two of this paragraph, the gain or loss thereon 22 entering into the computation of federal taxable income shall be disre- 23 garded in computing entire net income, and there shall be added to or 24 subtracted from the portion of entire net income allocated within the 25 city the gain or loss upon such sale or other disposition. In computing 26 such gain or loss the basis of the property sold or disposed of shall be 27 adjusted to reflect the deduction allowed with respect to such property 28 pursuant to subparagraph one or two of this paragraph. Provided, howev- 29 er, that no loss shall be recognized for the purposes of this subpara- 30 graph with respect to a sale or other disposition of property to a 31 person whose acquisition thereof is not a purchase as defined in section 32 one hundred seventy-nine (d) of the internal revenue code. 33 4. The portion of the business capital of a taxpayer to be allocated 34 within the city shall be determined by multiplying the amount thereof by 35 the business allocation percentage determined as provided for in this 36 subdivision. Provided, however, such business allocation percentage, for 37 purposes of allocating business capital, shall (a) for taxable years 38 beginning before nineteen hundred ninety-four, be determined without 39 regard to clause (C) of subparagraph six of paragraph (a) of subdivision 40 three of this section and (b) for taxable years beginning after nineteen 41 hundred ninety-three, be determined with regard to such clause (C) but 42 only in the case of a taxpayer subject to the provisions of paragraph 43 (b) of subdivision six of section 11-602 of this subchapter. 44 5. The portion of the investment capital of a taxpayer to be allocated 45 within the city shall be determined by multiplying the amount thereof by 46 the investment allocation percentage determined as provided in this 47 subdivision. 48 7. The portion of the subsidiary capital of a taxpayer to be allocated 49 within the city shall be determined by (a) multiplying the amount of its 50 subsidiary capital invested in each subsidiary during the period covered 51 by its report, or, in the case of any such capital so invested during 52 only a portion of such period, such portion of such capital, by the 53 issuer's allocation percentage, as defined in subparagraph one of para- 54 graph (b) of subdivision three of this section, of each such subsidiary 55 and (b) adding together the sums so obtained.

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1 8. If it shall appear to the commissioner of finance that any business 2 or investment allocation percentage determined as provided in this 3 subdivision does not properly reflect the activity, business, income or 4 capital of a taxpayer within the city, the commissioner of finance shall 5 be authorized in his or her discretion, in the case of a business allo- 6 cation percentage, to adjust it by (a) excluding one or more of the 7 factors therein, (b) including one or more other factors, such as 8 expenses, purchases, contract values, minus subcontract values, (c) 9 excluding one or more assets in computing such allocation percentage, 10 provided the income therefrom is also excluded in determining entire net 11 income, or (d) any other similar or different method calculated to 12 effect a fair and proper allocation of the income and capital reasonably 13 attributable to the city, and in the case of an investment allocation 14 percentage to adjust it by excluding one or more assets in computing 15 such percentage provided the income therefrom is also excluded in deter- 16 mining entire net income. The commissioner of finance from time to time 17 shall publish all rulings of general public interest with respect to any 18 application of the provisions of this subdivision. 19 9. If it shall appear to the commissioner of finance that any business 20 allocation percentage determined as provided in subdivisions one through 21 eight of this section does not properly reflect the activity, business, 22 income or capital of a taxpayer within the city, the commissioner of 23 finance shall be authorized in his or her discretion to adjust it by (a) 24 excluding one or more of the factors therein, (b) including one or more 25 other factors, such as expenses, purchases, contract values, minus 26 subcontract values, (c) excluding one or more assets in computing such 27 allocation percentage, provided the income therefrom, is also excluded 28 in determining entire net income, or (d) any other similar or different 29 method calculated to effect a fair and proper allocation of the income 30 and capital reasonably attributable to the city, and in the case of an 31 investment allocation percentage, to adjust it by excluding one or more 32 assets in computing such percentage provided the income therefrom is 33 also excluded in determining entire net income. The commissioner of 34 finance from time to time shall publish all rulings of general public 35 interest with respect to any application of the provisions of this 36 subdivision. 37 11. (a) A taxpayer shall be allowed a credit, to be refunded in the 38 manner as provided in this subdivision, against the tax imposed by this 39 chapter. The amount of such credit shall be fifty percent of the tax 40 incurred in market making transactions under the provisions of article 41 twelve of the tax law on such transactions subject to such tax occurring 42 on and after August first, nineteen hundred seventy-six and paid by such 43 taxpayer, except when such tax shall have been paid pursuant to section 44 two hundred seventy-nine-a of such tax law. 45 (b) For purposes of this subdivision: 46 (1) the term "taxpayer" shall mean any corporation subject to tax 47 under this chapter registered with the United States securities and 48 exchange commission in accordance with subsection (b) of section fifteen 49 of the securities exchange act of nineteen hundred thirty-four, as 50 amended, and acting as a dealer in a transaction described in subpara- 51 graph two of this paragraph, and 52 (2) the term "market making transaction" shall mean any transaction 53 involving a sale, including a short sale, by a dealer of shares or 54 certificates subject to the tax imposed by article twelve of the tax 55 law, provided such shares or certificates are sold:

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1 (i) as stock in trade or inventory or as property held for sale in the 2 ordinary course of such dealer's trade or business, including transfers 3 which are part of an underwriting, 4 (ii) in (a) a bona fide arbitrage transaction; (b) a bona fide hedge 5 transaction involving a long or short position in any equity security 6 and a long or short position in a security entitling the holder to 7 acquire or sell such equity security; or (c) a risk arbitrage trans- 8 action in connection with a merger, acquisition, tender offer, recap- 9 italization, reorganization, or similar transaction, or 10 (iii) to offset a transaction made in error. 11 Provided, however, that, except as to subclause (c) of clause (ii) of 12 this paragraph, the term "market making transaction" shall not include 13 any sale of shares or certificates identified in such dealer's records 14 as a security held for investment within the meaning of section twelve 15 hundred thirty-six of the internal revenue code. 16 (c) The credit allowed under this subdivision for any taxable year 17 shall be deemed to be an overpayment of tax by the taxpayer to be cred- 18 ited or refunded in accordance with the provisions of section 11-677 of 19 this chapter, except as otherwise provided in subdivision three of 20 section 11-606 and subdivision eleven of section 11-608; provided, 21 however, that the provisions of this title notwithstanding, the amount 22 to be refunded pursuant to this subdivision shall not be paid prior to 23 the first day of the eighth month following the close of the taxable 24 year, and the provisions of subdivision three of section 11-679 of this 25 chapter notwithstanding interest shall be allowed and paid on the over- 26 payment of the credit under this subdivision from the first day of the 27 eleventh month following the close of the taxable year, or three months 28 after a claim for the credit or refund provided for in this subdivision 29 has been filed, whichever is later. 30 (d) Provided, however, that the credit provided under this subdivision 31 shall be allowed only to the extent that the amount of credit allowable 32 with respect to market making transactions under the provisions of this 33 subdivision, determined without regard to the provisions of this para- 34 graph, exceeds fifty percent of all rebates, provided for under the 35 provisions of section two hundred eighty-a of the tax law, allowed for 36 such taxes incurred in the same market making transactions with respect 37 to which the credit is determined. No credit shall be allowed under this 38 subdivision with respect to any tax incurred in market making trans- 39 actions occurring on or after October first, nineteen hundred eighty- 40 one. 41 12. (a) In addition to the credit allowed by subdivision eleven of 42 this section, a taxpayer shall be allowed a credit against the tax 43 imposed by this subchapter to be credited or refunded in the manner 44 provided in this section. The amount of such credit shall be the excess 45 of (A) the amount of sales and compensating use taxes imposed by section 46 eleven hundred seven of the tax law during the taxpayer's taxable year 47 which became legally due on or after and was paid on or after July 48 first, nineteen hundred seventy-seven, less any credits or refunds of 49 such taxes, with respect to the purchase or use by the taxpayer of 50 machinery or equipment for use or consumption directly and predominantly 51 in the production of tangible personal property, gas, electricity, 52 refrigeration or steam for sale, by manufacturing, processing, generat- 53 ing, assembling, refining, mining or extracting, or telephone central 54 office equipment or station apparatus or comparable telegraph equipment 55 for use directly and predominantly in receiving at destination or initi- 56 ating and switching telephone or telegraph communication, but not

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1 including parts with a useful life of one year or less or tools or 2 supplies used in connection with such machinery, equipment or apparatus 3 over (B) the amount of any credit for such sales and compensating use 4 taxes allowed or allowable against the taxes imposed by subchapter two 5 of chapter eleven of this title for any periods embraced within the 6 taxable year of the taxpayer under this subchapter. 7 (b) The credit allowed under this subdivision for any taxable year 8 shall be deemed to be an overpayment of tax by the taxpayer to be cred- 9 ited or refunded, without interest, in accordance with the provisions of 10 section 11-677 of this chapter. 11 (c) Where the taxpayer receives a refund or credit of any tax imposed 12 under section eleven hundred seven of the tax law for which the taxpayer 13 had claimed a credit under the provisions of this subdivision in a prior 14 taxable year, the amount of such tax refund shall be added to the tax 15 imposed by subdivision one of section 11-603 of this subchapter, and 16 such amount shall be subtracted in computing entire net income for the 17 taxable year. 18 13. (a) In addition to any other credit allowed by this section, a 19 taxpayer shall be allowed a credit against the tax imposed by this 20 subchapter to be credited or refunded without interest, in the manner 21 provided in this section. 22 (1) Where a taxpayer shall have relocated to the city from a location 23 outside the state, and by such relocation shall have created a minimum 24 of one hundred industrial or commercial employment opportunities; and 25 where such taxpayer shall have entered into a written lease for the 26 relocation premises, the terms of which lease provide for increased 27 additional payments to the landlord which are based solely and directly 28 upon any increase or addition in real estate taxes imposed on the leased 29 premises, the taxpayer upon approval and certification by the industrial 30 and commercial incentive board shall be entitled to a credit against the 31 tax imposed by this subchapter. The amount of such credit shall be: An 32 amount equal to the annual increased payments actually made by the 33 taxpayer to the landlord which are solely and directly attributable to 34 an increase or addition to the real estate tax imposed upon the leased 35 premises. Such credit shall be allowed only to the extent that the 36 taxpayer has not otherwise claimed said amount as a deduction against 37 the tax imposed by this subchapter. 38 The industrial and commercial incentive board in approving and certi- 39 fying to the qualifications of the taxpayer to receive the tax credit 40 provided for in this subdivision shall first determine that the appli- 41 cant has met the requirements of this section, and further, that the 42 granting of the tax credit to the applicant is in the "public interest". 43 In determining that the granting of the tax credit is in the public 44 interest, the board shall make affirmative findings that: the granting 45 of the tax credit to the applicant will not effect an undue hardship on 46 similar taxpayers already located within the city; the existence of this 47 tax incentive has been instrumental in bringing about the relocation of 48 the applicant to the city; and the granting of the tax credit will 49 foster the economic recovery and economic development of the city. 50 The tax credit, if approved and certified by the industrial and 51 commercial incentive board, must be utilized annually by the taxpayer 52 for the length of the term of the lease or for a period not to exceed 53 ten years from the date of relocation whichever period is shorter. 54 (2) When used in this section, the following terms shall have the 55 following meanings:

S. 8578 475

1 (i) "Employment opportunity" means the creation of a full time posi- 2 tion of gainful employment for an industrial or commercial employee and 3 the actual hiring of such employee for the said position. 4 (ii) "Industrial employee" means one engaged in the manufacture or 5 assembling of tangible goods or the processing of raw materials. 6 (iii) "Commercial employee" means one engaged in the buying, selling 7 or otherwise providing of goods or services other than on a retail 8 basis. 9 (iv) "Retail" means the selling or otherwise disposing or furnishing 10 of tangible goods or services directly to the ultimate user or consumer. 11 (v) "Full time position" means the hiring of an industrial or commer- 12 cial employee in a position of gainful employment where the number of 13 hours worked by such employees is not less than thirty hours during any 14 given work week. 15 (vi) "Industrial and commercial incentive board" means the board 16 created pursuant to part three of subchapter two of chapter two of this 17 title. 18 (b) The credit allowed under this subdivision for any taxable year 19 shall be deemed to be an overpayment of tax by the taxpayer to be cred- 20 ited or refunded, without interest, in accordance with the provisions of 21 section 11-677 of this chapter. 22 14. (a) In addition to any other credit allowed by this section, a 23 taxpayer shall be allowed a credit against the tax imposed by this 24 subchapter to be credited or refunded without interest, in the manner 25 provided in this section. The amount of such credit shall be: 26 (1) A maximum of three hundred dollars for each commercial employment 27 opportunity and a maximum of five hundred dollars for each industrial 28 employment opportunity relocated to the city from an area outside the 29 state. Such credit shall be allowed to a taxpayer who relocates a mini- 30 mum of ten employment opportunities. The credit shall be allowed against 31 employment opportunity relocation costs incurred by the taxpayer. Such 32 credit shall be allowed only to the extent that the taxpayer has not 33 claimed a deduction for allowable employment opportunity relocation 34 costs. Such credit may be taken by the taxpayer in whole or in part in 35 the year in which the employment opportunity is relocated by such 36 taxpayer or either of the two years succeeding such event, provided, 37 however, no credit shall be allowed under this subdivision to a taxpayer 38 for industrial employment opportunities relocated to premises (A) that 39 are within an industrial business zone established pursuant to section 40 22-626 of this code and (B) for which a binding contract to purchase or 41 lease was first entered into by the taxpayer on or after July first, two 42 thousand five. 43 The commissioner of finance is empowered to promulgate rules and regu- 44 lations and to prescribe the form of application to be used by a taxpay- 45 er seeking such credit. 46 (2) When used in this section: (i) "Employment opportunity" means the 47 creation of a full time position of gainful employment for an industrial 48 or commercial employee and the actual hiring of such employee for the 49 said position. 50 (ii) "Industrial employee" means one engaged in the manufacture or 51 assembling of tangible goods or the processing of raw materials. 52 (iii) "Commercial employee" means one engaged in the buying, selling 53 or otherwise providing of goods or services other than on a retail 54 basis. 55 (iv) "Retail" means the selling or otherwise disposing of tangible 56 goods directly to the ultimate user or consumer.

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1 (v) "Full time position" means the hiring of an industrial or commer- 2 cial employee in a position of gainful employment where the number of 3 hours worked by such employee is not less than thirty hours during any 4 given work week. 5 (vi) "Employment opportunity relocation costs" means the costs 6 incurred by the taxpayer in moving furniture, files, papers and office 7 equipment into the city from a location outside the state; the costs 8 incurred by the taxpayer in the moving and installation of machinery and 9 equipment into the city from a location outside the state; the costs of 10 installation of telephones and other communications equipment required 11 as a result of the relocation to the city from a location outside the 12 state; the cost incurred in the purchase of office furniture and 13 fixtures required as a result of the relocation to the city from a 14 location outside the state; and the cost of renovation of the premises 15 to be occupied as a result of the relocation provided, however, that 16 such renovation costs shall be allowable only to the extent that they do 17 not exceed seventy-five cents per square foot of the total area utilized 18 by the taxpayer in the occupied premises. 19 (b) The credit allowed under this section for any taxable year shall 20 be deemed to be an overpayment of tax by the taxpayer to be credited or 21 refunded without interest in accordance with the provisions of section 22 11-677 of this chapter. 23 17. (a) In addition to any other credit allowed by this section, a 24 taxpayer that has obtained the certifications required by chapter six-B 25 of title twenty-two of the preceding municipality code shall be allowed 26 a credit against the tax imposed by this subchapter. The amount of the 27 credit shall be the amount determined by multiplying five hundred 28 dollars or, in the case of a taxpayer that has obtained pursuant to 29 chapter six-B of such title twenty-two a certification of eligibility 30 dated on or after July first, nineteen hundred ninety-five, one thousand 31 dollars or, in the case of an eligible business that has obtained pursu- 32 ant to chapter six-B of such title twenty-two a certification of eligi- 33 bility dated on or after July first, two thousand, for a relocation to 34 eligible premises located within a revitalization area defined in subdi- 35 vision (n) of section 22-621 of the code of the preceding municipality, 36 three thousand dollars, by the number of eligible aggregate employment 37 shares maintained by the taxpayer during the taxable year with respect 38 to particular premises to which the taxpayer has relocated; provided, 39 however, with respect to a relocation for which no application for a 40 certificate of eligibility is submitted prior to July first, two thou- 41 sand three, to eligible premises that are not within a revitalization 42 area, if the date of such relocation as determined pursuant to subdivi- 43 sion (j) of section 22-621 of the code of the preceding municipality is 44 before July first, nineteen hundred ninety-five, the amount to be multi- 45 plied by the number of eligible aggregate employment shares shall be 46 five hundred dollars, and with respect to a relocation for which no 47 application for a certificate of eligibility is submitted prior to July 48 first, two thousand three, to eligible premises that are within a revi- 49 talization area, if the date of such relocation as determined pursuant 50 to subdivision (j) of such section is before July first, nineteen 51 hundred ninety-five, the amount to be multiplied by the number of eligi- 52 ble aggregate employment shares shall be five hundred dollars, and if 53 the date of such relocation as determined pursuant to subdivision (j) of 54 such section is on or after July first, nineteen hundred ninety-five, 55 and before July first, two thousand, one thousand dollars; provided, 56 however, that no credit shall be allowed for the relocation of any

S. 8578 477

1 retail activity or hotel services; provided, further, that no credit 2 shall be allowed under this subdivision to any taxpayer that has elected 3 pursuant to subdivision (d) of section 22-622 of the code of the preced- 4 ing municipality to take such credit against a gross receipts tax 5 imposed by chapter eleven of this title; and provided that in the case 6 of an eligible business that has obtained pursuant to chapter six-B of 7 such title twenty-two certifications of eligibility for more than one 8 relocation, the portion of the total amount of eligible aggregate 9 employment shares to be multiplied by the dollar amount specified in 10 this subdivision for each such certification of a relocation shall be 11 the number of total attributed eligible aggregate employment shares 12 determined with respect to such relocation pursuant to subdivision (o) 13 of section 22-621 of the code of the preceding municipality. For 14 purposes of this subdivision, the terms "eligible aggregate employment 15 shares," "relocate," "retail activity" and "hotel services" shall have 16 the meanings ascribed by section 22-621 of the code of the preceding 17 municipality. 18 (b) The credit allowed under this subdivision with respect to eligible 19 aggregate employment shares maintained with respect to particular prem- 20 ises to which the taxpayer has relocated shall be allowed for the first 21 taxable year during which such eligible aggregate employment shares are 22 maintained with respect to such premises and for any of the twelve 23 succeeding taxable years during which eligible aggregate employment 24 shares are maintained with respect to such premises; provided that the 25 credit allowed for the twelfth succeeding taxable year shall be calcu- 26 lated by multiplying the number of eligible aggregate employment shares 27 maintained with respect to such premises in the twelfth succeeding taxa- 28 ble year by the lesser of one and a fraction the numerator of which is 29 such number of days in the taxable year of relocation less the number of 30 days the eligible business maintained employment shares in the eligible 31 premises in the taxable year of relocation and the denominator of which 32 is the number of days in such twelfth succeeding taxable year during 33 which such eligible aggregate employment shares are maintained with 34 respect to such premises. Except as provided in paragraph (d) of this 35 subdivision, if the amount of the credit allowable under this subdivi- 36 sion for any taxable year exceeds the tax imposed for such year, the 37 excess may be carried over, in order, to the five immediately succeeding 38 taxable years and, to the extent not previously deductible, may be 39 deducted from the taxpayer's tax for such years. 40 (c) The credit allowable under this subdivision shall be deducted 41 after the credit allowed by subdivision eighteen of this section, but 42 prior to the deduction of any other credit allowed by this section. 43 (d) In the case of a taxpayer that has obtained a certification of 44 eligibility pursuant to chapter six-B of title twenty-two of the code of 45 the preceding municipality dated on or after July first, two thousand 46 for a relocation to eligible premises located within the revitalization 47 area defined in subdivision (n) of section 22-621 of the code of the 48 preceding municipality, the credits allowed under this subdivision, or 49 in the case of a taxpayer that has relocated more than once, the portion 50 of such credits attributed to such certification of eligibility pursuant 51 to paragraph (a) of this subdivision, against the tax imposed by this 52 chapter for the taxable year of such relocation and for the four taxable 53 years immediately succeeding the taxable year of such relocation, shall 54 be deemed to be overpayments of tax by the taxpayer to be credited or 55 refunded, without interest, in accordance with the provisions of section 56 11-677 of this chapter. For such taxable years, such credits or portions

S. 8578 478

1 thereof may not be carried over to any succeeding taxable year; 2 provided, however, that this paragraph shall not apply to any relocation 3 for which an application for a certification of eligibility was not 4 submitted prior to July first, two thousand three, unless the date of 5 such relocation is on or after July first, two thousand. 6 17-a. (a) In addition to any other credit allowed by this section, a 7 taxpayer shall be allowed a credit against the tax imposed by this 8 subchapter to be credited or refunded in the manner provided in this 9 subdivision. The amount of such credit shall be equal to the amount of 10 sales and compensating use taxes imposed by section eleven hundred seven 11 of the tax law during the taxpayer's taxable year, and the amount of any 12 interest imposed in connection therewith, which was paid after January 13 first, nineteen hundred ninety-five, less any credit or refund of such 14 taxes, or such interest, with respect to the purchase or use by the 15 taxpayer of the services described in subdivision (b) of section eleven 16 hundred five-b of the tax law. 17 (b) The credit allowed under this subdivision for any taxable year 18 shall be deemed to be an overpayment of tax by the taxpayer to be cred- 19 ited or refunded, without interest, in accordance with the provisions of 20 section 11-677 of this chapter. 21 (c) Where the taxpayer receives a refund or credit of any tax imposed 22 under section eleven hundred seven of the tax law, or of any interest 23 imposed in connection therewith, for which the taxpayer had claimed a 24 credit under the provisions of this subdivision in a prior taxable year, 25 the amount of such tax, or such interest, refund or credit shall be 26 added to the tax imposed by subdivision one of section 11-603 of this 27 subchapter, and such amount shall be subtracted in computing entire net 28 income for the taxable year. 29 17-b. (a) For taxable years beginning on or after January first, two 30 thousand six, in addition to any other credit allowed by this section, 31 an eligible business that first enters into a binding contract on or 32 after July first, two thousand five to purchase or lease eligible prem- 33 ises to which it relocates shall be allowed a one-time credit against 34 the tax imposed by this subchapter to be credited or refunded in the 35 manner hereinafter provided in this subdivision. The amount of such 36 credit shall be one thousand dollars per full-time employee; provided, 37 however, that the amount of such credit shall not exceed the lesser of 38 actual relocation costs or one hundred thousand dollars. 39 (b) When used in this subdivision, the following terms shall have the 40 following meanings: 41 (i) "Eligible business" means any business subject to tax under this 42 subchapter that (1) has been conducting substantial business operations 43 and engaging primarily in industrial and manufacturing activities at one 44 or more locations within the city of Staten Island or outside the state 45 of New York continuously during the twenty-four consecutive full months 46 immediately preceding relocation, (2) has leased the premises from which 47 it relocates continuously during the twenty-four consecutive full months 48 immediately preceding relocation, (3) first enters into a binding 49 contract on or after July first, two thousand five to purchase or lease 50 eligible premises to which such business will relocate, and (4) will be 51 engaged primarily in industrial and manufacturing activities at such 52 eligible premises. 53 (ii) "Eligible premises" means premises located entirely within an 54 industrial business zone. For any eligible business, an industrial busi- 55 ness zone tax credit shall not be granted with respect to more than one 56 eligible premises.

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1 (iii) "Full-time employee" means (1) one person gainfully employed in 2 an eligible premises by an eligible business where the number of hours 3 required to be worked by such person is not less than thirty-five hours 4 per week; or (2) two persons gainfully employed in an eligible premises 5 by an eligible business where the number of hours required to be worked 6 by each such person is more than fifteen hours per week but less than 7 thirty-five hours per week. 8 (iv) "Industrial business zone" means an area within the city of 9 Staten Island established pursuant to section 22-626 of the code of the 10 preceding municipality. 11 (v) "Industrial business zone tax credit" means a credit, as provided 12 for in this subdivision, against a tax imposed under this subchapter. 13 (vi) "Industrial and manufacturing activities" means activities 14 involving the assembly of goods to create a different article, or the 15 processing, fabrication, or packaging of goods. Industrial and manufac- 16 turing activities shall not include waste management or utility 17 services. 18 (vii) "Relocation" means the physical relocation of furniture, 19 fixtures, equipment, machinery and supplies directly to an eligible 20 premises, from one or more locations of an eligible business, including 21 at least one location at which such business conducts substantial busi- 22 ness operations and engages primarily in industrial and manufacturing 23 activities. For purposes of this subdivision, the date of relocation 24 shall be (1) the date of the completion of the relocation to the eligi- 25 ble premises or (2) ninety days from the commencement of the relocation 26 to the eligible premises, whichever is earlier. 27 (viii) "Relocation costs" means costs incurred in the relocation of 28 such furniture, fixtures, equipment, machinery and supplies, including, 29 but not limited to, the cost of dismantling and reassembling equipment 30 and the cost of floor preparation necessary for the reassembly of the 31 equipment. Relocation costs shall include only such costs that are 32 incurred during the ninety-day period immediately following the 33 commencement of the relocation to an eligible premises. Relocation costs 34 shall not include costs for structural or capital improvements or items 35 purchased in connection with the relocation. 36 (c) The credit allowed under this subdivision for any taxable year 37 shall be deemed to be an overpayment of tax by the taxpayer to be cred- 38 ited or refunded without interest, in accordance with the provisions of 39 section 11-677 of this chapter. 40 (d) The number of full-time employees for the purposes of calculating 41 an industrial business tax credit shall be the average number of full- 42 time employees, calculated on a weekly basis, employed in the eligible 43 premises by the eligible business in the fifty-two week period imme- 44 diately following the earlier of (1) the date of the completion of the 45 relocation to eligible premises or (2) ninety days from the commencement 46 of the relocation to the eligible premises. 47 (e) The credit allowed under this subdivision must be taken by the 48 taxpayer in the taxable year in which such twelve-month period selected 49 by the taxpayer ends. 50 (f) For the purposes of calculating entire net income in the taxable 51 year that an industrial business tax credit is allowed, a taxpayer must 52 add back the amount of the credit allowed under this subdivision, to the 53 extent of any relocation costs deducted in the current taxable year or a 54 prior taxable year in calculating federal taxable income. 55 (g) The credit allowed under this subdivision shall not be granted for 56 an eligible business for more than one relocation, provided, however, an

S. 8578 480

1 industrial business tax credit shall not be granted if the eligible 2 business receives benefits pursuant to chapter six-B or six-C of title 3 twenty-two of the code of the preceding municipality, through a grant 4 program administered by the business relocation assistance corporation, 5 or through the New York city printers relocation fund grant. 6 (h) The commissioner of finance is authorized to promulgate rules and 7 regulations and to prescribe forms necessary to effectuate the purposes 8 of this subdivision. 9 18. (a) If a corporation is a partner in an unincorporated business 10 taxable under chapter five of this title, and is required to include in 11 entire net income its distributive share of income, gain, loss and 12 deductions of, or guaranteed payments from, such unincorporated busi- 13 ness, such corporation shall be allowed a credit against the tax imposed 14 by this subchapter equal to the lesser of the amounts determined in 15 subparagraphs one and two of this paragraph: 16 (1) The amount determined in this subparagraph is the product of (A) 17 the sum of (i) the tax imposed by chapter five of this title on the 18 unincorporated business for its taxable year ending within or with the 19 taxable year of the corporation and paid by the unincorporated business 20 and (ii) the amount of any credit or credits taken by the unincorporated 21 business under section 11-503 of this title, except the credit allowed 22 by subdivision (b) of such section, for its taxable year ending within 23 or with the taxable year of the corporation, to the extent that such 24 credits do not reduce such unincorporated business's tax below zero, and 25 (B) a fraction, the numerator of which is the net total of the corpo- 26 ration's distributive share of income, gain, loss and deductions of, and 27 guaranteed payments from, the unincorporated business for such taxable 28 year, and the denominator of which is the sum, for such taxable year, of 29 the net total distributive shares of income, gain, loss and deductions 30 of, and guaranteed payments to, all partners in the unincorporated busi- 31 ness for whom or which such net total, as separately determined for each 32 partner, is greater than zero. 33 (2) The amount determined in this subparagraph is the product of (A) 34 the excess of (i) the tax computed under clause one of subparagraph (a) 35 of paragraph E of subdivision one of this section, without allowance of 36 any credits allowed by this section, over (ii) the tax so computed, 37 determined as if the corporation had no such distributive share or guar- 38 anteed payments with respect to the unincorporated business, and (B) a 39 fraction, the numerator of which is four and the denominator of which is 40 eight and eighty-five one-hundredths, provided, however, that the 41 amounts computed in clauses (i) and (ii) of this subparagraph shall be 42 computed with the following modifications: 43 (I) such amounts shall be computed without taking into account any 44 carryforward or carryback by the partner of a net operating loss; 45 (II) if, prior to taking into account any distributive share or guar- 46 anteed payments from any unincorporated business or any net operating 47 loss carryforward or carryback, the entire net income of the partner is 48 less than zero, such entire net income shall be treated as zero; and 49 (III) if such partner's net total distributive share of income, gain, 50 loss and deductions of, and guaranteed payments from, any unincorporated 51 business is less than zero, such net total shall be treated as zero. The 52 amount determined in this subparagraph shall not be less than zero. 53 (b)(1) Notwithstanding anything to the contrary in paragraph (a) of 54 this subdivision, in the case of a corporation that, before the applica- 55 tion of this subdivision or any other credit allowed by this section, is 56 liable for the tax on entire net income under clause one of subparagraph

S. 8578 481

1 (a) of paragraph E of subdivision one of this section, the credit or the 2 sum of the credits that may be taken by such corporation for a taxable 3 year under this subdivision with respect to an unincorporated business 4 or unincorporated businesses in which it is a partner shall not exceed 5 the tax so computed, without allowance of any credits allowed by this 6 section, multiplied by a fraction the numerator of which is four and the 7 denominator of which is eight and eighty-five one-hundredths. If the 8 credit allowed under this subdivision or the sum of such credits exceeds 9 the product of such tax and such fraction, the amount of the excess may 10 be carried forward, in order, to each of the seven immediately succeed- 11 ing taxable years and, to the extent not previously taken, shall be 12 allowed as a credit in each of such years. Accordingly, the credit 13 determined for the taxable year under paragraph (a) of this subdivision 14 shall be taken before taking any credit carryforward pursuant to this 15 paragraph and the credit carryforward attributable to the earliest taxa- 16 ble year shall be taken before taking a credit carryforward attributable 17 to a subsequent taxable year. 18 (2) Notwithstanding anything to the contrary in paragraph (a) of this 19 subdivision, in the case of a corporation that, before the application 20 of this subdivision or any other credit allowed by this section, is 21 liable for the tax on entire net income plus certain salaries and other 22 compensation under clause three of subparagraph (a) of paragraph E of 23 subdivision one of this section, the maximum credit that may be taken in 24 any taxable year is the amount that will reduce the tax so computed, 25 without allowance of any credits allowed by this section, to zero. For 26 purposes of this paragraph each dollar of credit shall be applied so as 27 to reduce such tax for taxable years beginning before January first, two 28 thousand seven by sixty-six and thirty-eight one-hundredths cents; for 29 taxable years beginning on or after January first, two thousand seven 30 and before January first, two thousand eight by fifty-eight and eight 31 one-hundredths cents; for taxable years beginning on or after January 32 first, two thousand eight and before January first, two thousand nine by 33 forty-nine and seventy-eight one-hundredths cents; for taxable years 34 beginning on or after January first, two thousand nine and before Janu- 35 ary first, two thousand ten by forty-one and forty-eight one-hundredths 36 cents; and for taxable years beginning on or after January first, two 37 thousand ten by thirty-three and nineteen one-hundredths cents. If the 38 amount of credit allowed under this subdivision or the sum of such cred- 39 its exceeds the amount that may be taken against such tax, the amount of 40 the excess may be carried forward, in order, to each of the seven imme- 41 diately succeeding taxable years and, to the extent not previously 42 taken, shall be allowed as a credit in each of such years. Accordingly, 43 the credit determined for the taxable year under paragraph (a) of this 44 subdivision shall be taken before taking any credit carryforward pursu- 45 ant to this paragraph and the credit carryforward attributable to the 46 earliest taxable year shall be taken before taking a credit carryforward 47 attributable to a subsequent taxable year. 48 (3) No credit allowed under this subdivision may be taken in a taxable 49 year by a taxpayer that, in the absence of such credit, would be liable 50 for the tax computed on the basis of business and investment capital 51 under clause two of subparagraph (a) of paragraph E of subdivision one 52 of this section or the fixed-dollar minimum tax under clause four of 53 subparagraph (a) of paragraph E of subdivision one of this section. No 54 credit allowed under this subdivision may be taken against the tax 55 computed on the basis of subsidiary capital under subparagraph (b) of 56 paragraph E of subdivision one of this section.

S. 8578 482

1 (c) For corporations that file a report on a combined basis pursuant 2 to subdivision four of section 11-605 of this chapter, the credit 3 allowed by this subdivision shall be computed as if the combined group 4 were the partner in each unincorporated business from which any of the 5 members of such group had a distributive share or guaranteed payments, 6 provided, however, if more than one member of the combined group is a 7 partner in the same unincorporated business, for purposes of the calcu- 8 lation required in subparagraph one of paragraph (a) of this subdivi- 9 sion, the numerator of the fraction described in clause (B) of such 10 subparagraph one shall be the sum of the net total distributive shares 11 of income, gain, loss and deductions of, and guaranteed payments from, 12 the unincorporated business of all of the partners of the unincorporated 13 business within the combined group for which such net total, as sepa- 14 rately determined for each partner, is greater than zero, and the denom- 15 inator of such fraction shall be the sum of the net total distributive 16 shares of income, gain, loss and deductions of, and guaranteed payments 17 from, the unincorporated business of all partners in the unincorporated 18 business for whom or which such net total, as separately determined for 19 each partner, is greater than zero. 20 (d) The credit allowed by this subdivision shall not be allowed to a 21 partner in an unincorporated business with respect to any tax paid by 22 the unincorporated business under chapter five of this title for any 23 taxable year beginning before July first, nineteen hundred ninety-four. 24 (e) Notwithstanding any other provision of this subchapter, the credit 25 allowable under this subdivision shall be taken prior to the taking of 26 any other credit allowed by this section. Notwithstanding any other 27 provision of this subchapter, the application of this subdivision shall 28 not change the basis on which the taxpayer's tax is computed under para- 29 graph E of subdivision one of this section. 30 19. Lower Manhattan relocation and employment assistance credit. (a) 31 In addition to any other credit allowed by this section, a taxpayer that 32 has obtained the certifications required by chapter six-C of title twen- 33 ty-two of the code of the preceding municipality shall be allowed a 34 credit against the tax imposed by this chapter. The amount of the credit 35 shall be the amount determined by multiplying three thousand dollars by 36 the number of eligible aggregate employment shares maintained by the 37 taxpayer during the taxable year with respect to eligible premises to 38 which the taxpayer has relocated; provided, however, that no credit 39 shall be allowed for the relocation of any retail activity or hotel 40 services; provided, further, that no credit shall be allowed under this 41 subdivision to any taxpayer that has elected pursuant to subdivision (d) 42 of section 22-624 of the code of the preceding municipality to take such 43 credit against a gross receipts tax imposed under chapter eleven of this 44 title. For purposes of this subdivision, the terms "eligible aggregate 45 employment shares," "eligible premises," "relocate," "retail activity" 46 and "hotel services" shall have the meanings ascribed by section 22-623 47 of the code of the preceding municipality. 48 (b) The credit allowed under this subdivision with respect to eligible 49 aggregate employment shares maintained with respect to eligible premises 50 to which the taxpayer has relocated shall be allowed for the taxable 51 year of the relocation and for any of the twelve succeeding taxable 52 years during which eligible aggregate employment shares are maintained 53 with respect to eligible premises; provided that the credit allowed for 54 the twelfth succeeding taxable year shall be calculated by multiplying 55 the number of eligible aggregate employment shares maintained with 56 respect to eligible premises in the twelfth succeeding taxable year by

S. 8578 483

1 the lesser of one and a fraction the numerator of which is such number 2 of days in the taxable year of relocation less the number of days the 3 taxpayer maintained employment shares in eligible premises in the taxa- 4 ble year of relocation and the denominator of which is the number of 5 days in such twelfth taxable year during which such eligible aggregate 6 employment shares are maintained with respect to such premises. 7 (c) Except as provided in paragraph (d) of this subdivision, if the 8 amount of the credit allowable under this subdivision for any taxable 9 year exceeds the tax imposed for such year, the excess may be carried 10 over, in order, to the five immediately succeeding taxable years and, to 11 the extent not previously deductible, may be deducted from the taxpay- 12 er's tax for such years. 13 (d) The credits allowed under this subdivision, against the tax 14 imposed by this chapter for the taxable year of the relocation and for 15 the four taxable years immediately succeeding the taxable year of such 16 relocation, shall be deemed to be overpayments of tax by the taxpayer to 17 be credited or refunded, without interest, in accordance with the 18 provisions of section 11-677 of this chapter. For such taxable years, 19 such credits or portions thereof may not be carried over to any succeed- 20 ing taxable year. 21 (e) The credit allowable under this subdivision shall be deducted 22 after the credits allowed by subdivisions seventeen and eighteen of this 23 section, but prior to the deduction of any other credit allowed by this 24 section. 25 20. Film production credit. (a)(1) allowance of credit. A taxpayer 26 which is a qualified film production company, and which is subject to 27 tax under this subchapter, shall be allowed a credit against such tax, 28 pursuant to the provisions in paragraph (c) of this subdivision, to be 29 computed as provided in this subdivision. 30 (2) The amount of the credit shall be the product of five percent and 31 the qualified production costs paid or incurred in the production of a 32 qualified film, provided that the qualified production costs, excluding 33 post production costs, paid or incurred which are attributable to the 34 use of tangible property or the performance of services at a qualified 35 film production facility in the production of such qualified film equal 36 or exceed seventy-five percent of the production costs, excluding post 37 production costs, paid or incurred which are attributable to the use of 38 tangible property or the performance of services at any film production 39 facility within and without the city of Staten Island in the production 40 of such qualified film. However, if the qualified production costs, 41 excluding post production costs, which are attributable to the use of 42 tangible property or the performance of services at a qualified film 43 production facility in the production of such qualified film are less 44 than three million dollars, then the portion of the qualified production 45 costs attributable to the use of tangible property or the performance of 46 services in the production of such qualified film outside of a qualified 47 film production facility shall be allowed only if the shooting days 48 spent in the city of Staten Island outside of a film production facility 49 in the production of such qualified film equal or exceed seventy-five 50 percent of the total shooting days spent within and without the city of 51 Staten Island outside of a film production facility in the production of 52 such qualified film. The credit shall be allowed for the taxable year in 53 which the production of such qualified film is completed. 54 (3) No qualified production costs used by a taxpayer either as the 55 basis for the allowance of the credit provided for under this subdivi- 56 sion or used in the calculation of the credit provided for under this

S. 8578 484

1 subdivision shall be used by such taxpayer to claim any other credit 2 allowed pursuant to this title. 3 (b) Definitions. As used in this subdivision, the following terms 4 shall have the following meanings: 5 (1) "Qualified production costs" means production costs only to the 6 extent such costs are attributable to the use of tangible property or 7 the performance of services within the city of New York directly and 8 predominantly in the production, including pre-production and post 9 production, of a qualified film. 10 (2) "Production costs" means any costs for tangible property used and 11 services performed directly and predominantly in the production, includ- 12 ing pre-production and post production, of a qualified film. 13 "Production costs" shall not include (i) costs for a story, script or 14 scenario to be used for a qualified film and (ii) wages or salaries or 15 other compensation for writers, directors, including music directors, 16 producers and performers, other than background actors with no scripted 17 lines. "Production costs" generally include technical and crew 18 production costs, such as expenditures for film production facilities, 19 or any part thereof, props, makeup, wardrobe, film processing, camera, 20 sound recording, set construction, lighting, shooting, editing and 21 meals. 22 (3) "Qualified film" means a feature-length film, television film, 23 television pilot and/or each episode of a television series, regardless 24 of the medium by means of which the film, pilot or episode is created or 25 conveyed. "Qualified film" shall not include (i) a documentary film, 26 news or current affairs program, interview or talk program, "how-to" 27 (i.e., instructional) film or program, film or program consisting prima- 28 rily of stock footage, sporting event or sporting program, game show, 29 award ceremony, film or program intended primarily for industrial, 30 corporate or institutional end-users, fundraising film or program, 31 daytime drama (i.e., daytime "soap opera"), commercials, music videos or 32 "reality" program, or (ii) a production for which records are required 33 under section 2257 of title 18, United States code, to be maintained 34 with respect to any performer in such production, reporting of books, 35 films, etc. with respect to sexually explicit conduct. 36 (4) "Film production facility" shall mean a building and/or complex of 37 buildings and their improvements and associated back-lot facilities in 38 which films are or are intended to be regularly produced and which 39 contain at least one sound stage. 40 (5) "Qualified film production facility" shall mean a film production 41 facility in the city of Staten Island, which contains at least one sound 42 stage having a minimum of seven thousand square feet of contiguous 43 production space. 44 (6) "Qualified film production company" shall mean a corporation which 45 is principally engaged in the production of a qualified film and 46 controls the qualified film during production. 47 (c) Application of credit. (1) The credit allowed under this subdivi- 48 sion for any taxable year shall not reduce the tax due for such year to 49 less than the amount prescribed in clause four of subparagraph (a) of 50 paragraph E of subdivision one of this section. Provided, however, that 51 if the amount of the credit allowable under this subdivision for any 52 taxable year reduces the tax to such amount, fifty percent of the excess 53 shall be treated as an overpayment of tax to be credited or refunded in 54 accordance with the provisions of section 11-677 of this chapter; 55 provided, however, the provisions of section 11-679 of this chapter 56 notwithstanding, no interest shall be paid thereon. The balance of such

S. 8578 485

1 credit not credited or refunded in such taxable year may be carried over 2 to the immediately succeeding taxable year and may be credited against 3 the taxpayer's tax for such year. The excess, if any, of the amount of 4 the credit over the tax for such succeeding year shall be treated as an 5 overpayment of tax to be credited or refunded in accordance with the 6 provisions of section 11-677 of this chapter. Provided, however, the 7 provisions of section 11-679 of this chapter notwithstanding, no inter- 8 est shall be paid thereon. 9 (2) Notwithstanding anything contained in this section to the contra- 10 ry, the credit provided by this subdivision shall be allowed against the 11 taxes authorized by this chapter for the taxable year after reduction by 12 all other credits permitted by this chapter. 13 21. Biotechnology credit. (a) (1) A taxpayer that is a qualified 14 emerging technology company, engages in biotechnologies, and meets the 15 eligibility requirements of this subdivision, shall be allowed a credit 16 against the tax imposed by this subchapter. The amount of credit shall 17 be equal to the sum of the amounts specified in subparagraphs three, 18 four, and five of this paragraph, subject to the limitations in subpara- 19 graph seven of this paragraph and paragraph (b) of this subdivision. For 20 the purposes of this subdivision, "qualified emerging technology compa- 21 ny" shall mean a company located in a city: (A) whose primary products 22 or services are classified as emerging technologies and whose total 23 annual product sales are ten million dollars or less; or (B) a company 24 that has research and development activities in city and whose ratio of 25 research and development funds to net sales equals or exceeds the aver- 26 age ratio for all surveyed companies classified as determined by the 27 National Science Foundation in the most recent published results from 28 its Survey of Industry Research and Development, or any comparable 29 successor survey as determined by the department, and whose total annual 30 product sales are ten million dollars or less. For the purposes of this 31 subdivision, the definition of research and development funds shall be 32 the same as that used by the National Science Foundation in the afore- 33 mentioned survey. For the purposes of this subdivision, "biotechnolo- 34 gies" shall mean the technologies involving the scientific manipulation 35 of living organisms, especially at the molecular and/or the sub-molecu- 36 lar genetic level, to produce products conducive to improving the lives 37 and health of plants, animals, and humans; and the associated scientific 38 research, pharmacological, mechanical, and computational applications 39 and services connected with these improvements. Activities included with 40 such applications and services shall include, but not be limited to, 41 alternative mRNA splicing, DNA sequence amplification, antigenetic 42 switching bioaugmentation, bioenrichment, bioremediation, chromosome 43 walking, cytogenetic engineering, DNA diagnosis, fingerprinting, and 44 sequencing, electroporation, gene translocation, genetic mapping, site- 45 directed mutagenesis, bio-transduction, bio-mechanical and bio-electri- 46 cal engineering, and bio-informatics. 47 (2) An eligible taxpayer shall (A) have no more than one hundred full- 48 time employees, of which at least seventy-five percent are employed in 49 the city, (B) have a ratio of research and development funds to net 50 sales, as referred to in section thirty-one hundred two-e of the public 51 authorities law, which equals or exceeds six percent during the calendar 52 year ending with or within the taxable year for which the credit is 53 claimed, and (C) have gross revenues, along with the gross revenues of 54 its "affiliates" and "related members" not exceeding twenty million 55 dollars for the calendar year immediately preceding the calendar year 56 ending with or within the taxable year for which the credit is claimed.

S. 8578 486

1 For the purposes of this subdivision, "affiliates" shall mean those 2 corporations that are members of the same affiliated group, as defined 3 in section fifteen hundred four of the internal revenue code, as the 4 taxpayer. For the purposes of this subdivision, the term "related 5 members" shall mean a person, corporation, or other entity, including an 6 entity that is treated as a partnership or other pass-through vehicle 7 for purposes of federal taxation, whether such person, corporation or 8 entity is a taxpayer or not, where one such person, corporation or enti- 9 ty, or set of related persons, corporations or entities, directly or 10 indirectly owns or controls a controlling interest in another entity. 11 Such entity or entities may include all taxpayers under chapters five, 12 eleven and seventeen of this title, and subchapters two and three of 13 this chapter. A controlling interest shall mean, in the case of a corpo- 14 ration, either thirty percent or more of the total combined voting power 15 of all classes of stock of such corporation, or thirty percent or more 16 of the capital, profits or beneficial interest in such voting stock of 17 such corporation; and in the case of a partnership, association, trust 18 or other entity, thirty percent or more of the capital, profits or bene- 19 ficial interest in such partnership, association, trust or other entity. 20 (3) An eligible taxpayer shall be allowed a credit for eighteen per 21 centum of the cost or other basis for federal income tax purposes of 22 research and development property that is acquired by the taxpayer by 23 purchase as defined in subdivision (d) of section one hundred seventy- 24 nine of the internal revenue code and placed in service during the 25 calendar year that ends with or within the taxable year for which the 26 credit is claimed. Provided, however, for the purposes of this paragraph 27 only, an eligible taxpayer shall be allowed a credit for such percentage 28 of the (A) cost or other basis for federal income tax purposes for prop- 29 erty used in the testing or inspection of materials and products, (B) 30 the costs or expenses associated with quality control of the research 31 and development, (C) fees for use of sophisticated technology facilities 32 and processes, and (D) fees for the production or eventual commercial 33 distribution of materials and products resulting from the activities of 34 an eligible taxpayer as long as such activities fall under activities 35 relating to biotechnologies. The costs, expenses and other amounts for 36 which a credit is allowed and claimed under this paragraph shall not be 37 used in the calculation of any other credit allowed under this subchap- 38 ter. For the purposes of this subdivision, "research and development 39 property" shall mean property that is used for purposes of research and 40 development in the experimental or laboratory sense. Such purposes shall 41 not be deemed to include the ordinary testing or inspection of materials 42 or products for quality control, efficiency surveys, management studies, 43 consumer surveys, advertising, promotions, or research in connection 44 with literary, historical or similar projects. 45 (4) An eligible taxpayer shall be allowed a credit for nine per centum 46 of qualified research expenses paid or incurred by the taxpayer in the 47 calendar year that ends with or within the taxable year for which the 48 credit is claimed. For the purposes of this subdivision, "qualified 49 research expenses" shall mean expenses associated with in-house research 50 and processes, and costs associated with the dissemination of the 51 results of the products that directly result from such research and 52 development activities; provided, however, that such costs shall not 53 include advertising or promotion through media. In addition, costs asso- 54 ciated with the preparation of patent applications, patent application 55 filing fees, patent research fees, patent examinations fees, patent post 56 allowance fees, patent maintenance fees, and grant application expenses

S. 8578 487

1 and fees shall qualify as qualified research expenses. In no case shall 2 the credit allowed under this subparagraph apply to expenses for liti- 3 gation or the challenge of another entity's intellectual property 4 rights, or for contract expenses involving outside paid consultants. 5 (5) An eligible taxpayer shall be allowed a credit for qualified high- 6 technology training expenditures as described in this subparagraph paid 7 or incurred by the taxpayer during the calendar year that ends with or 8 within the taxable year for which the credit is claimed. 9 (A) The amount of credit shall be one hundred percent of the training 10 expenses described in clause (C) of this subparagraph, subject to a 11 limitation of no more than four thousand dollars per employee per calen- 12 dar year for such training expenses. 13 (B) Qualified high-technology training shall include a course or 14 courses taken and satisfactorily completed by an employee of the taxpay- 15 er at an accredited, degree granting post-secondary college or universi- 16 ty in a city that (i) directly relates to biotechnology activities, and 17 (ii) is intended to upgrade, retrain or improve the productivity or 18 theoretical awareness of the employee. Such course or courses may 19 include, but are not limited to, instruction or research relating to 20 techniques, meta, macro, or micro-theoretical or practical knowledge 21 bases or frontiers, or ethical concerns related to such activities. Such 22 course or courses shall not include classes in the disciplines of 23 management, accounting or the law or any class designed to fulfill the 24 discipline specific requirements of a degree program at the associate, 25 baccalaureate, graduate or professional level of these disciplines. 26 Satisfactory completion of a course or courses shall mean the earning 27 and granting of credit or equivalent unit, with the attainment of a 28 grade of "B" or higher in a graduate level course or courses, a grade of 29 "C" or higher in an undergraduate level course or courses, or a similar 30 measure of competency for a course that is not measured according to a 31 standard grade formula. 32 (C) Qualified high-technology training expenditures shall include 33 expenses for tuition and mandatory fees, software required by the insti- 34 tution, fees for textbooks or other literature required by the institu- 35 tion offering the course or courses, minus applicable scholarships and 36 tuition or fee waivers not granted by the taxpayer or any affiliates of 37 the taxpayer, that are paid or reimbursed by the taxpayer. Qualified 38 high-technology expenditures do not include room and board, computer 39 hardware or software not specifically assigned for such course or cours- 40 es, late-charges, fines or membership dues and similar expenses. Such 41 qualified expenditures shall not be eligible for the credit provided by 42 this section unless the employee for whom the expenditures are disbursed 43 is continuously employed by the taxpayer in a full-time, full-year posi- 44 tion primarily located at a qualified site during the period of such 45 coursework and lasting through at least one hundred eighty days after 46 the satisfactory completion of the qualifying course-work. Qualified 47 high-technology training expenditures shall not include expenses for 48 in-house or shared training outside of a city higher education institu- 49 tion or the use of consultants outside of credit granting courses, 50 whether such consultants function inside of such higher education insti- 51 tution or not. 52 (D) If a taxpayer relocates from an academic business incubator facil- 53 ity partnered with an accredited post-secondary education institution 54 located within city, which provides space and business support services 55 to taxpayers, to another site, the credit provided in this subdivision 56 shall be allowed for all expenditures referenced in clause (C) of this

S. 8578 488

1 subparagraph paid or incurred in the two preceding calendar years that 2 the taxpayer was located in such an incubator facility for employees of 3 the taxpayer who also relocate from said incubator facility to such city 4 site and are employed and primarily located by the taxpayer in city. 5 Such expenditures in the two preceding years shall be added to the 6 amounts otherwise qualifying for the credit provided by this subdivision 7 that were paid or incurred in the calendar year that the taxpayer relo- 8 cates from such a facility. Such expenditures shall include expenses 9 paid for an eligible employee who is a full-time, full-year employee of 10 said taxpayer during the calendar year that the taxpayer relocated from 11 an incubator facility notwithstanding (i) that such employee was 12 employed full or part-time as an officer, staff-person or paid intern of 13 the taxpayer when such taxpayer was located at such incubator facility 14 or (ii) that such employee was not continuously employed when such 15 taxpayer was located at the incubator facility during the one hundred 16 eighty day period referred to in clause (C) of this subparagraph, 17 provided such employee received wages or equivalent income for at least 18 seven hundred fifty hours during any twenty-four month period when the 19 taxpayer was located at the incubator facility. Such expenditures shall 20 include payments made to such employee after the taxpayer has relocated 21 from the incubator facility for qualified expenditures if such payments 22 are made to reimburse an employee for expenditures paid by the employee 23 during such two preceding years. The credit provided under this para- 24 graph shall be allowed in any taxable year that the taxpayer qualifies 25 as an eligible taxpayer. 26 (E) For purposes of this subdivision the term "academic year" shall 27 mean the annual period of sessions of a post-secondary college or 28 university. 29 (F) For the purposes of this subdivision the term "academic incubator 30 facility" shall mean a facility providing low-cost space, technical 31 assistance, support services and educational opportunities, including 32 but not limited to central services provided by the manager of the 33 facility to the tenants of the facility, to an entity located in city. 34 Such entity's primary activity must be in biotechnologies, and such 35 entity must be in the formative stage of development. The academic incu- 36 bator facility and the entity must act in partnership with an accredited 37 post-secondary college or university located in city. An academic incu- 38 bator facility's mission shall be to promote job creation, entrepreneur- 39 ship, technology transfer, and provide support services to incubator 40 tenants, including, but not limited to, business planning, management 41 assistance, financial-packaging, linkages to financing services, and 42 coordinating with other sources of assistance. 43 (6) An eligible taxpayer may claim credits under this subdivision for 44 three consecutive years. In no case shall the credit allowed by this 45 subdivision to a taxpayer exceed two hundred fifty thousand dollars per 46 calendar year for eligible expenditures made during such calendar year. 47 (7) The credit allowed under this subdivision for any taxable year 48 shall not reduce the tax due for such year to less than the amount 49 prescribed in clause four of subparagraph (a) of paragraph E of subdivi- 50 sion one of this section. Provided, however, if the amount of credit 51 allowed under this subdivision for any taxable year reduces the tax to 52 such amount, any amount of credit not deductible in such taxable year 53 shall be treated as an overpayment of tax to be credited or refunded in 54 accordance with the provisions of section 11-677 of this chapter; 55 provided, however, that notwithstanding the provisions of section 11-679 56 of this chapter, no interest shall be paid thereon.

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1 (8) The credit allowed under this subdivision shall only be allowed 2 for taxable years beginning on or after January first, two thousand ten 3 and before January first, two thousand nineteen. 4 (b) (1) The percentage of the credit allowed to a taxpayer under this 5 subdivision in any calendar year shall be: 6 (A) If the average number of individuals employed full time by a 7 taxpayer in the city during the calendar year that ends with or within 8 the taxable year for which the credit is claimed is at least one hundred 9 five percent of the taxpayer's base year employment, one hundred 10 percent, except that in no case shall the credit allowed under this 11 clause exceed two hundred fifty thousand dollars per calendar year. 12 Provided, however, the increase in base year employment shall not apply 13 to a taxpayer allowed a credit under this subdivision that was, (i) 14 located outside of the city, (ii) not doing business, or (iii) did not 15 have any employees, in the year preceding the first year that the credit 16 is claimed. Any such taxpayer shall be eligible for one hundred percent 17 of the credit for the first calendar year that ends with or within the 18 taxable year for which the credit is claimed, provided that such taxpay- 19 er locates in the city, begins doing business in the city or hires 20 employees in the city during such calendar year and is otherwise eligi- 21 ble for the credit pursuant to the provisions of this subdivision. 22 (B) If the average number of individuals employed full time by a 23 taxpayer in the city during the calendar year that ends with or within 24 the taxable year for which the credit is claimed is less than one 25 hundred five percent of the taxpayer's base year employment, fifty 26 percent, except that in no case shall the credit allowed under this 27 clause exceed one hundred twenty-five thousand dollars per calendar 28 year. In the case of an entity located in city receiving space and busi- 29 ness support services by an academic incubator facility, if the average 30 number of individuals employed full time by such entity in the city 31 during the calendar year in which the credit allowed under this subdivi- 32 sion is claimed is less than one hundred five percent of the taxpayer's 33 base year employment, the credit shall be zero. 34 (2) For the purposes of this subdivision, "base year employment" means 35 the average number of individuals employed full-time by the taxpayer in 36 the city in the year preceding the first calendar year that ends with or 37 within the taxable year for which the credit is claimed. 38 (3) For the purposes of this subdivision, average number of individ- 39 uals employed full-time shall be computed by adding the number of such 40 individuals employed by the taxpayer at the end of each quarter during 41 each calendar year or other applicable period and dividing the sum so 42 obtained by the number of such quarters occurring within such calendar 43 year or other applicable period. 44 (4) Notwithstanding anything contained in this section to the contra- 45 ry, the credit provided by this subdivision shall be allowed against the 46 taxes authorized by this chapter for the taxable year after reduction by 47 all other credits permitted by this chapter. 48 22. Beer production credit. (a) A taxpayer subject to tax under this 49 subchapter, that is registered as a distributor under article eighteen 50 of the tax law, and that produces sixty million or fewer gallons of beer 51 in this state in the taxable year, shall be allowed a credit against the 52 tax imposed by this subchapter in the amount specified in paragraph (b) 53 of this subdivision. Provided, however, that no credit shall be allowed 54 for any beer produced in excess of fifteen million five hundred thousand 55 gallons in the taxable year. Notwithstanding anything in this title to 56 the contrary, if a partnership is allowed a credit under subdivision (p)

S. 8578 490

1 of section 11-503 of this title, a taxpayer that is a partner in such 2 partnership shall not be allowed a credit under this subdivision for any 3 taxable year that includes the last day of the taxable year for which 4 the partnership is allowed such credit. 5 (b) The amount of the credit per taxpayer per taxable year for each 6 gallon of beer produced in the city of New York on or after January 7 first, two thousand seventeen shall be determined as follows: 8 (1) for the first five hundred thousand gallons of beer produced in 9 the city of New York in the taxable year, the credit shall equal twelve 10 cents per gallon; and 11 (2) for each gallon of beer produced in the city of New York in the 12 taxable year in excess of five hundred thousand gallons, the credit 13 shall equal three and eighty-six one-hundredths cents per gallon. In no 14 event shall the credit allowed under this subdivision for any taxable 15 year reduce the tax due for such year to less than the amount prescribed 16 in clause four of subparagraph (a) of paragraph E of subdivision one of 17 this section. However, if the amount of credit allowed under this subdi- 18 vision for any taxable year reduces the tax to such amount, any amount 19 of credit thus not deductible in such taxable year shall be treated as 20 an overpayment of tax to be credited or refunded in accordance with the 21 provisions of section 11-677 of this chapter; provided, however, that 22 notwithstanding the provisions of section 11-679 of this chapter, no 23 interest shall be paid thereon. 24 23. Credit for the provision of child care. In addition to any other 25 credit allowed under this section, a taxpayer whose application for a 26 credit authorized by section 11-144 of this title has been approved by 27 the department of finance shall be allowed a credit against the tax 28 imposed by this chapter. The amount of the credit shall be determined as 29 provided in such section. To the extent the amount of the credit allowed 30 by this subdivision exceeds the amount of tax due pursuant to this 31 subchapter, as calculated without such credit, such excess amount shall 32 be treated as an overpayment of tax to be credited or refunded in 33 accordance with the provisions of section 11-677 of this chapter, 34 provided, however, that notwithstanding the requirements of section 35 11-679 of this chapter to the contrary, no interest shall be paid there- 36 on. 37 § 11-605 Reports. 1. Every corporation having an officer, agent or 38 representative within the city, shall annually on or before March 39 fifteenth, transmit to the commissioner of finance a report in a form 40 prescribed by the commissioner, except that a corporation which reports 41 on the basis of a fiscal year shall transmit its report within two and 42 one-half months after the close of its fiscal year, setting forth such 43 information as the commissioner of finance may prescribe and every 44 taxpayer which ceases to do business in the city or to be subject to the 45 tax imposed by this subchapter shall transmit to the commissioner of 46 finance a report on the date of such cessation or at such other time as 47 the commissioner may require covering each year or period for which no 48 report was theretofore filed. Every taxpayer shall also transmit such 49 other reports and such facts and information as the commissioner of 50 finance may require in the administration of this subchapter. The 51 commissioner of finance may grant a reasonable extension of time for 52 filing reports whenever good cause exists. 53 With respect to taxable years ending prior to December thirty-first, 54 nineteen hundred sixty-six, the returns required to be made and filed 55 pursuant to this section shall be made and filed on or before the 56 fifteenth day of the third month following the close of such taxable

S. 8578 491

1 year or September eleventh, nineteen hundred sixty-six, whichever is 2 later. 3 An automatic extension of six months for the filing of its annual 4 report shall be allowed any taxpayer if, within the time prescribed by 5 either of the preceding paragraphs, whichever is applicable, such 6 taxpayer files with the commissioner of finance an application for 7 extension in such form as the commissioner may prescribe by regulation 8 and pays on or before the date of such filing the amount properly esti- 9 mated as its tax. 10 2. Every report shall have annexed thereto a certification by the 11 president, vice-president, treasurer, assistant treasurer, chief 12 accounting officer or another officer of the taxpayer duly authorized so 13 to act to the effect that the statements contained therein are true. In 14 the case of an association, within the meaning of paragraph three of 15 section (a) of section seventy-seven hundred one of the internal revenue 16 code, a publicly-traded partnership treated as a corporation for 17 purposes of the internal revenue code pursuant to section seventy-seven 18 hundred four thereof and any business conducted by a trustee or trustees 19 wherein interest or ownership is evidenced by certificates or other 20 written instruments, such certification shall be made by any person duly 21 authorized so to act on behalf of such association, publicly-traded 22 partnership or business. The fact that an individual's name is signed on 23 a certification of the report shall be prima facie evidence that such 24 individual is authorized to sign and certify the report on behalf of the 25 corporation. Blank forms of reports shall be furnished by the commis- 26 sioner of finance, on application, but failure to secure such a blank 27 shall not release any corporation from the obligation of making any 28 report required by this subchapter. 29 2-a. The commissioner of finance may prescribe regulations and 30 instructions requiring returns of information to be made and filed in 31 conjunction with the reports required to be filed pursuant to this 32 section, relating to payments made to shareholders owning, directly or 33 indirectly, individually or in the aggregate, more than fifty percent of 34 the issued capital stock of the taxpayer, where such payments are treat- 35 ed as payments of interest in the computation of entire net income 36 reported on such reports. 37 3. If the amount of taxable income, alternative minimum taxable income 38 or other basis of tax for any year of any taxpayer, or of any sharehold- 39 er of any taxpayer which has elected to be taxed under subchapter s of 40 chapter one of the internal revenue code or of any shareholder of any 41 taxpayer with respect to which an election has been made to be treated 42 as a qualified subchapter s subsidiary under paragraph three of 43 subsection (b) of section thirteen hundred sixty-one of the internal 44 revenue code, as returned to the United States treasury department or 45 the New York state commissioner of taxation and finance is changed or 46 corrected by the commissioner of internal revenue or other officer of 47 the United States or the New York state commissioner of taxation and 48 finance or other competent authority, or where a renegotiation of a 49 contract or subcontract with the United States or the state of New York 50 results in a change in taxable income, alternative minimum taxable 51 income or other basis of tax, or where a recovery of a war loss results 52 in a computation or recomputation of any tax imposed by the United 53 States or the state of New York, or if a taxpayer or such shareholder of 54 a taxpayer, pursuant to subsection (d) of section sixty-two hundred 55 thirteen of the internal revenue code, executes a notice of waiver of 56 the restrictions provided in subsection (a) of said section, or if a

S. 8578 492

1 taxpayer, or such shareholder of a taxpayer, pursuant to subsection (f) 2 of section one thousand eighty-one of the tax law, executes a notice of 3 waiver of the restrictions provided in subsection (c) of said section, 4 such taxpayer shall report such changed or corrected taxable income, 5 alternative minimum taxable income or other basis of tax, or the results 6 of such renegotiation, or such computation, or recomputation, or such 7 execution of such notice of waiver and the changes or corrections of the 8 taxpayer's federal or New York state taxable income, alternative minimum 9 taxable income or other basis of tax on which it is based, within ninety 10 days, or one hundred twenty days, in the case of a taxpayer making a 11 combined report under this subchapter for such year, after such 12 execution or the final determination of such change or correction or 13 renegotiation, or such computation, or recomputation, or as required by 14 the commissioner of finance, and shall concede the accuracy of such 15 determination or state wherein it is erroneous. The allowance of a 16 tentative carryback adjustment based upon a net operating loss carryback 17 or net capital loss carryback pursuant to section sixty-four hundred 18 eleven of the internal revenue code shall be treated as a final determi- 19 nation for purposes of this subdivision. Any taxpayer filing an amended 20 return with such department shall also file within ninety days thereaft- 21 er an amended report with the commissioner of finance. 22 4. (a) Any taxpayer which owns or controls either directly or indi- 23 rectly substantially all the capital stock of one or more other corpo- 24 rations, or substantially all the capital stock of which is owned or 25 controlled either directly or indirectly by one or more other corpo- 26 rations or by interests which own or control either directly or indi- 27 rectly substantially all the capital stock of one or more other corpo- 28 rations, hereinafter referred to in this paragraph as "related 29 corporations", shall make a combined report covering any related corpo- 30 rations if there are substantial intercorporate transactions among the 31 related corporations, regardless of the transfer price for such inter- 32 corporate transactions. It is not necessary that there be substantial 33 intercorporate transactions between any one corporation and every other 34 related corporation. It is necessary, however, that there be substantial 35 intercorporate transactions between the taxpayer and a related corpo- 36 ration or, collectively, a group of such related corporations. The 37 report shall set forth such information as the commissioner of finance 38 may require. 39 In determining whether there are substantial intercorporate trans- 40 actions, the commissioner shall consider and evaluate all activities and 41 transactions of the taxpayer and its related corporations. Activities 42 and transactions that will be considered include, but are not limited 43 to: manufacturing, acquiring goods or property, or performing services, 44 for related corporations; selling goods acquired from related corpo- 45 rations; financing sales of related corporations; performing related 46 customer services using common facilities and employees for related 47 corporations; incurring expenses that benefit, directly or indirectly, 48 one or more related corporations; and transferring assets, including 49 such assets as accounts receivable, patents or trademarks from one or 50 more related corporations. 51 (1) No taxpayer may be permitted to make a report on a combined basis 52 covering any such other corporations where such taxpayer or any such 53 other corporation allocates in accordance with clause (A) of subpara- 54 graph six of paragraph (a) of subdivision three of section 11-604 of 55 this subchapter and such taxpayer or any such other corporation does not 56 so allocate.

S. 8578 493

1 (2) No taxpayer may be permitted to make a report on a combined basis 2 covering any such other corporations where such taxpayer or any such 3 other corporation allocates in accordance with subparagraph seven of 4 paragraph (a) of subdivision three of section 11-604 of this subchapter 5 and such taxpayer or any such other corporation does not so allocate. 6 (3) Except as provided in the first undesignated paragraph of this 7 subdivision, no combined report covering any corporation not a taxpayer 8 shall be required unless the commissioner of finance deems such a report 9 necessary, because of inter-company transactions or some agreement, 10 understanding, arrangement or transaction referred to in subdivision 11 five of this section, in order properly to reflect the tax liability 12 under this subchapter. 13 (4) A corporation organized under the laws of a country other than the 14 United States shall not be required or permitted to make a report on a 15 combined basis. 16 (5)(i) For purposes of this subparagraph, the term "closest control- 17 ling stockholder" means the corporation that indirectly owns or controls 18 over fifty percent of the voting stock of a captive REIT or captive RIC, 19 is subject to tax under this subchapter or otherwise required to be 20 included in a combined report under this subchapter, and is the fewest 21 tiers of corporations away in the ownership structure from the captive 22 REIT or captive RIC. The commissioner is authorized to prescribe by 23 regulation or published guidance the criteria for determining the clos- 24 est controlling stockholder. 25 (ii) A captive REIT or a captive RIC must be included in a combined 26 report with the corporation that directly owns or controls over fifty 27 percent of the voting stock of the captive REIT or captive RIC if that 28 corporation is subject to tax or required to be included in a combined 29 report under this subchapter. 30 (iii) If over fifty percent of the voting stock of a captive REIT or 31 captive RIC is not directly owned or controlled by a corporation that is 32 subject to tax or required to be included in a combined report under 33 this subchapter, then the captive REIT or captive RIC must be included 34 in a combined report with the corporation that is the closest control- 35 ling stockholder of the captive REIT or captive RIC. If the closest 36 controlling stockholder of the captive REIT or captive RIC is subject to 37 tax or otherwise required to be included in a combined report under this 38 subchapter, then the captive REIT or captive RIC must be included in a 39 combined report under this subchapter. 40 (iv) If the corporation that directly owns or controls the voting 41 stock of the captive REIT or captive RIC is described in subparagraph 42 one, two or four of this paragraph as a corporation not permitted to 43 make a combined report, then the provisions in clause (iii) of this 44 subparagraph must be applied to determine the corporation in whose 45 combined report the captive REIT or captive RIC should be included. If, 46 under clause (iii) of this subparagraph, the corporation that is the 47 closest controlling stockholder of the captive REIT or captive RIC is 48 described in subparagraph one, two or four of this paragraph as a corpo- 49 ration not permitted to make a combined report, then that corporation is 50 deemed to not be in the ownership structure of the captive REIT or 51 captive RIC, and the closest controlling stockholder will be determined 52 without regard to that corporation. 53 (v) If a captive REIT owns the stock of a qualified REIT subsidiary, 54 as defined in paragraph two of subsection (i) of section eight hundred 55 fifty-six of the internal revenue code, then the qualified REIT subsid- 56 iary must be included in a combined report with the captive REIT.

S. 8578 494

1 (vi) If a captive REIT or a captive RIC is required under this subpar- 2 agraph to be included in a combined report with another corporation, and 3 that other corporation is also required to be included in a combined 4 report with another related corporation or corporations under this para- 5 graph, then the captive REIT or the captive RIC must be included in that 6 combined report with those corporations. 7 (vii) If a captive REIT or a captive RIC is not required to be 8 included in a combined report with another corporation under clause (ii) 9 or (iii) of this subparagraph, or in a combined return under the 10 provisions of subparagraph (v) of paragraph two of subdivision (f) of 11 section 11-646 of this chapter, then the captive REIT or captive RIC is 12 subject to the opening provisions of this paragraph and the provisions 13 of subparagraph three of this paragraph. The captive REIT or captive RIC 14 must be included in a combined report under this subchapter with another 15 corporation if either the substantial intercorporate transactions 16 requirement in the opening provisions of this paragraph or the inter- 17 company transactions or agreement, understanding, arrangement or trans- 18 action requirement of subparagraph three of this paragraph is satisfied 19 and more than fifty percent of the voting stock of the captive REIT or 20 the captive RIC and substantially all of the capital stock of that other 21 corporation are owned and controlled, directly or indirectly, by the 22 same corporation. 23 (b)(1)(i) In the case of a combined report the tax shall be measured 24 by the combined entire net income or combined capital of all the corpo- 25 rations included in the report, including any captive REIT or captive 26 RIC; provided, however, in no event shall the tax measured by combined 27 capital exceed the limitation provided for in paragraph F of subdivision 28 one of section 11-604 of this subchapter. 29 (ii) In the case of a captive REIT or captive RIC required under this 30 subdivision to be included in a combined report, entire net income must 31 be computed as required under subdivision seven, in the case of a 32 captive REIT, or subdivision eight, in the case of a captive RIC, of 33 section 11-603 of this chapter. However, the deduction under the inter- 34 nal revenue code for dividends paid by the captive REIT or captive RIC 35 to any member of the affiliated group that includes the corporation that 36 directly or indirectly owns over fifty percent of the voting stock of 37 the captive REIT or captive RIC shall not be allowed for taxable years 38 beginning on or after January first, two thousand nine. The term "affil- 39 iated group" means "affiliated group" as defined in section fifteen 40 hundred four of the internal revenue code, but without regard to the 41 exceptions provided for in subsection (b) of that section. 42 (2) In computing combined entire net income intercorporate dividends 43 shall be eliminated, in computing combined business and investment capi- 44 tal intercorporate stock holdings and intercorporate bills, notes and 45 accounts receivable and payable and other intercorporate indebtedness 46 shall be eliminated and in computing combined subsidiary capital inter- 47 corporate stockholdings shall be eliminated. 48 5. In case it shall appear to the commissioner of finance that any 49 agreement, understanding or arrangement exists between the taxpayer and 50 any other corporation or any person or firm, whereby the activity, busi- 51 ness, income or capital of the taxpayer within the city is improperly or 52 inaccurately reflected, the commissioner of finance is authorized and 53 empowered, in its discretion and in such manner as it may determine, to 54 adjust items of income, deductions and capital, and to eliminate assets 55 in computing any allocation percentage provided only that any income 56 directly traceable thereto be also excluded from entire net income, so

S. 8578 495

1 as equitably to determine the tax. Where (a) any taxpayer conducts its 2 activity or business under any agreement, arrangement or understanding 3 in such manner as either directly or indirectly to benefit its members 4 or stockholders, or any of them, or any person or persons directly or 5 indirectly interested in such activity or business, by entering into any 6 transaction at more or less than a fair price which, but for such agree- 7 ment, arrangement or understanding, might have been paid or received 8 therefor, or (b) any taxpayer, a substantial portion of whose capital 9 stock is owned either directly or indirectly by another corporation, 10 enters into any transaction with such other corporation on such terms as 11 to create an improper loss or net income, the commissioner of finance 12 may include in the entire net income of the taxpayer the fair profits, 13 which, but for such agreement, arrangement or understanding, the taxpay- 14 er might have derived from such transaction. 15 6. An action may be brought at any time by the corporation counsel at 16 the instance of the commissioner of finance to compel the filing of 17 reports due under this subchapter. 18 7. Reports shall be preserved for five years, and thereafter until the 19 commissioner of finance orders them to be destroyed. 20 8. Where the state tax commission changes or corrects a taxpayer's 21 sales and compensating use tax liability with respect to the purchase or 22 use of items for which a sales or compensating use tax credit against 23 the tax imposed by this chapter was claimed, the taxpayer shall report 24 such change or correction to the commissioner of finance within ninety 25 days of the final determination of such change or correction, or as 26 required by the commissioner of finance, and shall concede the accuracy 27 of such determination or state wherein it is erroneous. Any taxpayer 28 filing an amended return or report relating to the purchase or use of 29 such items shall also file within ninety days thereafter a copy of such 30 amended return or report with the commissioner of finance. 31 § 11-606 Payment and lien of tax. 1. To the extent the tax imposed by 32 section 11-603 of this subchapter shall not have been previously paid 33 pursuant to section 11-608 of this subchapter, 34 (a) such tax, or the balance thereof, shall be payable to the commis- 35 sioner of finance in full at the time the report is required to be 36 filed, and 37 (b) such tax, or the balance thereof, imposed on any taxpayer which 38 ceases to do business in the city or to be subject to the tax imposed by 39 this subchapter shall be payable to the commissioner of finance at the 40 time the report is required to be filed; all other taxes of any such 41 taxpayer, which pursuant to the provisions of this section would other- 42 wise be payable subsequent to the time such report is required to be 43 filed, shall nevertheless be payable at such time. 44 If the taxpayer, within the time prescribed by section 11-605 of this 45 subchapter, shall have applied for an automatic extension of time to 46 file its annual report and shall have paid to the commissioner of 47 finance on or before the date such application is filed an amount prop- 48 erly estimated as provided by said section, the only amount payable in 49 addition to the tax shall be interest at the underpayment rate set by 50 the commissioner of finance pursuant to section 11-687 of this chapter, 51 or, if no rate is set, at the rate of seven and one-half percent per 52 annum upon the amount by which the tax, or the portion thereof payable 53 on or before the date the report was required to be filed, exceeds the 54 amount so paid. For purposes of this paragraph: 55 (1) an amount so paid shall be deemed properly estimated if it is 56 either: (A) not less than ninety percent of the tax as finally deter-

S. 8578 496

1 mined, computed without regard to any credit allowable under subdivision 2 eleven of section 11-604 of this subchapter, or (B) not less than the 3 tax shown, computed without regard to any credit allowable under subdi- 4 vision eleven of section 11-604 of this subchapter, on the taxpayer's 5 report for the preceding taxable year, if such preceding year was a 6 taxable year of twelve months; and 7 (2) the time when a report is required to be filed shall be determined 8 without regard to any extension of time for filing such report. 9 2. The commissioner of finance may grant a reasonable extension of 10 time for payment of any tax imposed by this subchapter under such condi- 11 tions as it deems just and proper. 12 3. Subdivision one of this section shall apply to a taxpayer which has 13 a right to a credit pursuant to subdivision eleven of section 11-604 of 14 this subchapter, except that the tax, or balance thereof, payable to the 15 commissioner of finance in full pursuant to subdivision one of this 16 section, at the time the report is required to be filed, shall be calcu- 17 lated and paid at such time as if the credit provided for in subdivision 18 eleven of section 11-604 of this subchapter were not allowed. 19 § 11-607 Declaration of estimated tax. 1. Every taxpayer subject to 20 the tax imposed by section 11-603 of this subchapter shall make a decla- 21 ration of its estimated tax for the current privilege period, containing 22 such information as the commissioner of finance may prescribe by regu- 23 lations or instructions, if such estimated tax can reasonably be 24 expected to exceed one thousand dollars. 25 2. The term "estimated tax" means the amount which a taxpayer esti- 26 mates to be the tax imposed by section 11-603 of this subchapter for the 27 current privilege period, less the amount which it estimates to be the 28 sum of any credits allowable against the tax other than the credit 29 allowable under subdivision eleven of section 11-604 of this subchapter. 30 3. In the case of a taxpayer which reports on the basis of a calendar 31 year, a declaration of estimated tax shall be filed on or before June 32 fifteenth of the current privilege period, except that if the require- 33 ments of subdivision one are first met: 34 (a) after May thirty-first and before September first of such 35 current privilege period, the declaration shall be filed on or before 36 September fifteenth, or 37 (b) after August thirty-first and before December first of such 38 current privilege period, the declaration shall be filed on or before 39 December fifteenth. 40 4. A taxpayer may amend a declaration under regulations of the 41 commissioner of finance. 42 5. If, on or before February fifteenth of the succeeding year in the 43 case of a taxpayer which reports on the basis of a calendar year, a 44 taxpayer files its report for the year for which the declaration is 45 required, and pays therewith the balance, if any, of the full amount 46 of the tax shown to be due on the report, 47 (a) such report shall be considered as its declaration if no decla- 48 ration is required to be filed during the calendar or fiscal year for 49 which the tax was imposed, but is otherwise required to be filed on or 50 before December fifteenth pursuant to subdivision three of this 51 section, and 52 (b) such report shall be considered as the amendment permitted by 53 subdivision four of this section to be filed on or before December 54 fifteenth if the tax shown on the report is greater than the estimated 55 tax shown on a declaration previously made.

S. 8578 497

1 6. This section shall apply to privilege periods of twelve months 2 other than a calendar year by the substitution of the months of such 3 fiscal year for the corresponding months specified in this section. 4 7. If the privilege period for which a tax is imposed by section 5 11-603 of this subchapter is less than twelve months, every taxpayer 6 required to make a declaration of estimated tax for such privilege 7 period shall make such a declaration in accordance with regulations of 8 the commissioner of finance. 9 8. The commissioner of finance may grant a reasonable extension of 10 time, not to exceed three months, for the filing of any declaration 11 required pursuant to this section, on such terms and conditions as it 12 may require. 13 § 11-608 Payments on account of estimated tax. 1. Every taxpayer 14 subject to the tax imposed by section 11-603 of this subchapter shall 15 pay with the report required to be filed for the preceding privilege 16 period, if any, or with an application for extension of the time and 17 filing such report, an amount equal to twenty-five per centum of the 18 preceding year's tax, computed without regard to the credit provided for 19 in subdivision twelve of section 11-604 of this subchapter, if such 20 preceding year's tax exceeded one thousand dollars. 21 2. The estimated tax with respect to which a declaration for such 22 privilege period is required shall be paid, in the case of a taxpayer 23 which reports on the basis of a calendar year, as follows: 24 (a) If the declaration is filed on or before June fifteenth, the esti- 25 mated tax shown thereon, after applying thereto the amount, if any, paid 26 during the same privilege period pursuant to subdivision one of this 27 section, shall be paid in three equal installments. One of such 28 installments shall be paid at the time of the filing of the declaration, 29 one shall be paid on the following September fifteenth, and one on the 30 following December fifteenth. 31 (b) If the declaration is filed after June fifteenth and not after 32 September fifteenth of such privilege period, and is not required to be 33 filed on or before June fifteenth of such period, the estimated tax 34 shown on such declaration, after applying thereto the amount, if any, 35 paid during the same privilege period pursuant to subdivision one of 36 this section, shall be paid in two equal installments. One of such 37 installments shall be paid at the time of the filing of the declaration 38 and one shall be paid on the following December fifteenth. 39 (c) If the declaration is filed after September fifteenth of such 40 privilege period, and is not required to be filed on or before September 41 fifteenth of such privilege period, the estimated tax shown on such 42 declaration, after applying thereto the amount, if any, paid in respect 43 to such privilege period pursuant to subdivision one of this section, 44 shall be paid in full at the time of the filing of the declaration. 45 (d) If the declaration is filed after the time prescribed therefor, or 46 after the expiration of any extension of time therefor, paragraphs (b) 47 and (c) of this subdivision shall not apply, and there shall be paid at 48 the time of such filing all installments of estimated tax payable at or 49 before such time, and the remaining installments shall be paid at the 50 times at which, and in the amounts in which, they would have been paya- 51 ble if the declaration had been filed when due. 52 3. If any amendment of a declaration is filed, the remaining install- 53 ments, if any, shall be ratably increased or decreased, as the case may 54 be, to reflect any increase or decrease in the estimated tax by reason 55 of such amendment, and if any amendment is made after September

S. 8578 498

1 fifteenth of the privilege period, any increase in the estimated tax by 2 reason thereof shall be paid at the time of making such amendment. 3 4. Any amount paid shall be applied after payment as a first install- 4 ment against the estimated tax of the taxpayer for the current privilege 5 period shown on the declaration required to be filed pursuant to section 6 11-607 of this subchapter or, if no declaration of estimated tax is 7 required to be filed by the taxpayer to such section, any such amount 8 shall be considered a payment on account of the tax shown on the report 9 required to be filed by the taxpayer for such privilege period. 10 5. Notwithstanding the provisions of section 11-679 of this chapter or 11 of section three-a of the general municipal law, if an amount paid 12 pursuant to subdivision one of this section exceeds the tax shown on the 13 report required to be filed by the taxpayer for the privilege period 14 during which the amount was paid, interest shall be allowed and paid on 15 the amount by which the amount so paid pursuant to such subdivision 16 exceeds such tax, at the overpayment rate set by the commissioner of 17 finance pursuant to section 11-687 of this chapter, or, if no rate is 18 set, at the rate of four percent per annum from the date of payment of 19 the amount so paid pursuant to such subdivision to the fifteenth day of 20 the third month following the close of the privilege period, provided, 21 however, that no interest shall be allowed or paid under this subdivi- 22 sion if the amount thereof is less than one dollar or if such interest 23 becomes payable solely because of a carryback of a net operating loss in 24 a subsequent privilege period. 25 6. As used in this section, "the preceding year's tax" means the tax 26 imposed upon the taxpayer by section 11-603 of this subchapter for the 27 preceding calendar or fiscal year, or, for purposes of computing the 28 first installment of estimated tax when an application has been filed 29 for extension of the time for filing the report required to be filed for 30 such preceding calendar or fiscal year, the amount properly estimated 31 pursuant to section 11-607 of this subchapter as the tax imposed upon 32 the taxpayer for such calendar or fiscal year. 33 7. This section shall apply to a privilege period of less than twelve 34 months in accordance with regulations of the commissioner of finance. 35 8. The provisions of this section shall apply to privilege periods of 36 twelve months other than a calendar year by the substitution of the 37 months of such fiscal year for the corresponding months specified in 38 such provisions. 39 9. The commissioner of finance may grant a reasonable extension of 40 time, not to exceed six months, for payment of any installment of esti- 41 mated tax required pursuant to this section, on such terms and condi- 42 tions as the commissioner may require including the furnishing of a bond 43 or other security by the taxpayer in an amount not exceeding twice the 44 amount for which any extension of time for payment is granted, provided 45 however that interest at the underpayment rate set by the commissioner 46 of finance pursuant to section 11-687 of this chapter, or, if no rate is 47 set, at the rate of seven and one-half percent per annum for the period 48 of the extension shall be charged and collected on the amount for which 49 any extension of time for payment is granted under this subdivision. 50 10. A taxpayer may elect to pay any installment of estimated tax prior 51 to the date prescribed in this section for payment thereof. 52 11. The portion of an overpayment attributable to a credit allowable 53 pursuant to subdivision eleven of section 11-604 of this subchapter may 54 not be credited against any payment due under this section. 55 § 11-609 Collection of taxes. Every foreign corporation, other than 56 a moneyed corporation, subject to the provisions of this subchapter,

S. 8578 499

1 except a corporation having authority to do business by virtue of 2 section thirteen hundred five of the business corporation law, shall 3 file in the department of state a certificate of designation in its 4 corporate name, signed and acknowledged by its president or a vice-pre- 5 sident or its secretary or treasurer, under its corporate seal, desig- 6 nating the secretary of state as its agent upon whom process in any 7 action provided for by this subchapter may be served within this state, 8 and setting forth an address to which the secretary of state shall mail 9 a copy of any such process against the corporation which may be served 10 upon the secretary of state. In case any such corporation shall have 11 failed to file such certificate of designation, it shall be deemed to 12 have designated the secretary of state as its agent upon whom such proc- 13 ess against it may be served; and until a certificate of designation 14 shall have been filed, the corporation shall be deemed to have directed 15 the secretary of state to mail copies of process served upon him or her 16 to the corporation at its last known office address within or without 17 the state. When a certificate of designation has been filed by such 18 corporation the secretary of state shall mail copies of process there- 19 after served upon the secretary of state to the address set forth in 20 such certificate. Any such corporation, from time to time, may change 21 the address to which the secretary of state is directed to mail copies 22 of process, by filing a certificate to that effect executed, signed and 23 acknowledged in like manner as a certificate of designation as provided 24 in this section. Service of process upon any such corporation or upon 25 any corporation having authority to do business by virtue of section 26 thirteen hundred five of the business corporation law, in any action 27 commenced at any time pursuant to the provisions of this subchapter, may 28 be made by either: (a) personally delivering to and leaving with the 29 secretary of state, a deputy secretary of state or with any person 30 authorized by the secretary of state to receive such service duplicate 31 copies thereof at the office of the department of state in the city of 32 Albany, in which event the secretary of state shall forthwith send by 33 registered mail, return receipt requested, one of such copies to the 34 corporation at the address designated by it or at its last known office 35 address within or without the state, or (b) personally delivering to and 36 leaving with the secretary of state, a deputy secretary of state or with 37 any person authorized by the secretary of state to receive such service, 38 a copy thereof at the office of the department of state in the city of 39 Albany and by delivering a copy thereof to, and leaving such copy with, 40 the president, vice-president, secretary, assistant secretary, treasur- 41 er, assistant treasurer, or cashier of such corporation, or the officer 42 performing corresponding functions under another name, or a director or 43 managing agent of such corporation, personally without the state. Proof 44 of such personal service without the state shall be filed with the clerk 45 of the court in which the action is pending within thirty days after 46 such service, and such service shall be complete ten days after proof 47 thereof is filed. 48 § 11-610 Limitations of time. The provisions of the civil practice 49 law and rules relative to the limitation of time enforcing a civil reme- 50 dy shall not apply to any proceeding or action taken to levy, appraise, 51 assess, determine or enforce the collection of any tax or penalty 52 prescribed by this subchapter, provided, however, that as to real estate 53 in the hands of persons who are owners thereof who would be purchasers 54 in good faith but for such tax or penalty and as to the lien on real 55 estate of mortgages held by persons who would be holders thereof in good 56 faith but for such tax or penalty, all such taxes and penalties shall

S. 8578 500

1 cease to be a lien on such real estate as against such purchasers or 2 holders after the expiration of ten years from the date such taxes 3 became due and payable. The limitations provided for in this section 4 shall not apply to any transfer from a corporation to a person or corpo- 5 ration with intent to avoid payment of any taxes, or where with like 6 intent the transfer is made to a grantee corporation, or any subsequent 7 grantee corporation, controlled by such grantor or which has any commu- 8 nity of interest with it, either through stock ownership or otherwise.

9 SUBCHAPTER 3 10 FINANCIAL CORPORATION TAX 11 PART 1 12 TAX ON STATE BANKS, TRUST COMPANIES, FINANCIAL 13 CORPORATIONS AND SAVINGS AND LOAN ASSOCIATIONS

14 § 11-611 Definitions. When used in this part: 15 1. The term "financial corporation" means every corporation doing a 16 banking business as defined in this section, other than a national bank- 17 ing association, a trust company all of the capital stock of which is 18 owned by not less than twenty savings banks organized under a law of 19 this state, or a corporation taxable under subchapter two of this chap- 20 ter, and shall include the mortgage facilities corporation created by 21 chapter five hundred sixty-four of the laws of nineteen hundred fifty- 22 six and any corporation eighty percent or more of whose voting stock is 23 beneficially owned by a corporation or corporations subject to article 24 three or article three-a of the banking law or a national banking asso- 25 ciation or associations, provided the corporation whose voting stock is 26 so owned is principally engaged in business which might be lawfully 27 conducted by a corporation subject to article three of the banking law 28 or a national banking association. 29 2. The word "paid", for the purpose of the deductions and credits 30 under this part, means "paid or accrued" or "paid or incurred," and the 31 terms "paid or incurred" and "paid or accrued" shall be construed 32 according to the method of accounting upon the basis of which the net 33 income is computed, under this part. The term "received," for the 34 purpose of the computation of net income under this part means "received 35 or accrued" and the term "received or accrued" shall be construed 36 according to the method of accounting upon the basis of which the net 37 income is computed under this part. 38 3. The word "dividend" means any distribution made by a corporation to 39 its shareholders or members, out of its earnings or profits, whether in 40 cash, or in property other than stock of the corporation. 41 4. The words "doing a banking business" means doing such business as a 42 corporation may be created to do under articles three, five, five-a, and 43 six of the banking law, or doing any business which a corporation is 44 authorized by such articles to do. 45 5. The words "foreign banker doing a banking business" in the city, 46 include every foreign corporation doing a banking business in the city, 47 except a national banking association. 48 6. The words "savings and loan association" mean every corporation 49 doing such business as a corporation may be created to do under article 50 ten of the banking law, including every federal savings and loan associ- 51 ation organized under authority of the United States. 52 § 11-612 Tax based on net income; imposition; minimum tax; new incor- 53 porations; dissolution; consolidations; mergers, etc. 54 1. For the privilege of doing business in the city:

S. 8578 501

1 (a) Every bank and savings and loan association organized under the 2 authority of this state; 3 (b) Every trust company incorporated, organized or formed under, by or 4 pursuant to a law of the state, other than a trust company all of the 5 stock of which is owned by not less than twenty savings banks organized 6 under a law of the state, and every domestic corporation authorized to 7 do a trust company's business solely or in connection with any other 8 business, under a general or special law of the state; 9 (c) Every other domestic financial corporation; 10 (d) Every incorporated foreign banker doing a banking business and 11 every other foreign financial corporation; and 12 (e) Every federal savings and loan association located within the 13 city, shall annually pay a tax at the rate of four and one-half per 14 centum except that for the years nineteen hundred seventy-one and those 15 following, the rate shall be five and sixty-three one hundredths per 16 centum, to be computed as provided in this part, upon the basis of its 17 net income for each calendar year, beginning with the calendar year 18 nineteen hundred sixty-six, next preceding the date when such tax 19 becomes due, if the taxpayer is required to file a declaration of esti- 20 mated tax and to make payments on account of such estimated tax as 21 provided by section 11-636 of this subchapter, upon the basis of its net 22 income for the calendar year with respect to which such declaration is 23 required to be filed. 24 2. Every such corporation for the privilege of doing business in the 25 city and every federal savings and loan association located in the city 26 shall be subject to a minimum tax of not less than ten dollars and not 27 less than one mill except that for the years nineteen hundred seventy- 28 one and those following such minimum tax shall be not less than twelve 29 and one-half dollars and not less than one and one-quarter mills upon 30 each dollar of such a part of its issued capital stock on the last day 31 of the calendar year preceding that in which such tax becomes due, at 32 its face value, as the gross income of such corporation derived from 33 business carried on within the city during such calendar year, bears to 34 its gross income derived from all business, both within and without the 35 city, during said year, but if such a corporation has stock without par 36 value, such stock shall be taken at its actual or market value, and not 37 less than five dollars per share, as may be determined by the commis- 38 sioner of finance; except that a savings bank and savings and loan asso- 39 ciation shall be subject to a minimum tax of not less than an amount 40 equal to two per centum of the amount of interest or dividends credited 41 by it to depositors or shareholders during the calendar year preceding 42 that in which such tax becomes due except that for the years nineteen 43 hundred seventy-one and those following such minimum tax shall be not 44 less than twelve and one-half dollars and not less than an amount equal 45 to two and one-half per centum of the amount of interest or dividends 46 credited by it to depositors or shareholders during the calendar year 47 preceding that in which such tax becomes due, provided that, in deter- 48 mining such amount each interest or dividend credit to a depositor or 49 shareholder shall be deemed to be the interest or dividend actually 50 credited or the interest or dividend which would have been credited if 51 it had been computed and credited at the rate of two per centum per 52 annum whichever is less and except also that in the case of a trust 53 company or savings bank incorporated in the calendar year preceding that 54 in which its first return under this part shall be due and after the 55 thirtieth day of June in such year, the minimum tax, computed as in this 56 subdivision provided, shall be reduced one-twelfth for each month, or

S. 8578 502

1 major portion thereof, subsequent to said thirtieth day of June during 2 which such trust company or savings bank did not exercise the privilege 3 of doing business in the city. 4 3. For the privilege of doing business in the city, every such domes- 5 tic corporation, except trust companies and savings banks, shall be 6 subject to a tax for the calendar year in which its organization certif- 7 icate is filed, and, for the privilege of doing business in the city, 8 every such foreign corporation shall be subject to a tax for the calen- 9 dar year in which it first does business in the city, and, every federal 10 savings and loan association located within the city shall be subject to 11 a tax for the calendar year in which it first becomes located within the 12 city, computed in the same manner and at the same rate as the minimum 13 tax under subdivision two of this section, except that the income form- 14 ing the basis for proration shall be the income for such calendar year, 15 and the issued capital stock shall be taken as of the last day of such 16 calendar year; provided, however, that the tax so computed shall be 17 reduced one-twelfth for each month, or major portion thereof, in such 18 calendar year, during which such corporation was not doing business in 19 the city, or, if a federal savings and loan association, was not located 20 in the city, and in no event shall the tax be less than ten dollars 21 except that for the year nineteen hundred seventy-one and those follow- 22 ing, in no event shall the tax be less than twelve and one-half dollars. 23 4. For the privilege of doing business in the city, every such trust 24 company and savings bank which shall become incorporated between the 25 thirty-first day of December and the succeeding first day of July, shall 26 be subject to a tax for such period, computed in the same manner and at 27 the same rate as the minimum tax under subdivision two of this section, 28 except that the income forming the basis for proration shall be the 29 income for such period; and the issued capital stock, or interest cred- 30 ited to depositors of a savings bank, shall be taken as of the last day 31 of such period; provided, however, that the tax so computed shall be 32 reduced one-half and an additional one-twelfth for each month, or major 33 portion thereof, in such period, during which such trust company or 34 savings bank was not doing business in the city, and in no event shall 35 the tax be less than ten dollars except that for the year nineteen 36 hundred seventy-one and those following, in no event shall the tax be 37 less than twelve and one-half dollars. 38 5. For the privilege of doing business in the city, every such corpo- 39 ration, except trust companies and savings banks, which shall be 40 dissolved between the thirty-first day of December and the succeeding 41 second day of September, and shall not become merged or consolidated 42 with another corporation taxable under this part and, every such foreign 43 corporation which shall cease to do business in the city during the same 44 period, and every federal savings and loan association which ceases to 45 be located in the city during the same period, and shall not become 46 merged or consolidated with another corporation taxable under this part, 47 shall pay a tax for the period from the thirty-first day of December up 48 to the time of dissolution, ceasing to do business in the city, or ceas- 49 ing to be located in the city, as the case may be, equal to that which 50 would have been payable had it not been dissolved, ceased to do business 51 in the city, or ceased to be located in the city, except that such tax 52 shall be reduced one-third and an additional one-twelfth for each month, 53 or major portion thereof, prior to such succeeding second day of Septem- 54 ber, during which such corporation was not doing business in the city, 55 or was not located in the city, and in no event shall the tax be less 56 than ten dollars except that for the year nineteen hundred seventy-one

S. 8578 503

1 and those following, in no event shall the tax be less than twelve and 2 one-half dollars. If such dissolution or cessation occurs between the 3 fifteenth day of March and the second day of September, and if such 4 corporation shall have filed its return on or before the fifteenth day 5 of March as required by section 11-633 of this subchapter, it may file a 6 claim for refund as provided in section 11-678 of this chapter, showing 7 any reduction in tax to which it may be entitled as provided in the 8 preceding sentence; and if it shall be made to appear that the amount of 9 tax due is less than the amount as computed on the basis of the original 10 return, the commissioner of finance shall adjust the computation of tax 11 accordingly. If the amount of tax as so adjusted shall be less than the 12 amount theretofore paid, the excess shall be refunded by the commission- 13 er of finance as provided in subdivision one of section 11-677 of this 14 chapter. 15 6. Every such trust company and savings bank, which shall be 16 dissolved, and shall not become merged or consolidated with another 17 corporation taxable under this part, shall, if dissolution takes place 18 between the thirtieth day of June and the succeeding first day of Janu- 19 ary, be subject to a tax, for that part of such period in which it had 20 been doing business, computed in the same manner and at the same rate as 21 the minimum tax under subdivision two of this section, except that the 22 income forming the basis for proration shall be the income for the 23 calendar year in which such dissolution occurs; and the issued capital 24 stock, or interest credited to depositors of a savings bank, shall be 25 taken as of the date of dissolution; provided, however, that the tax so 26 computed shall be reduced one-half and an additional one-twelfth for 27 each month, or major portion thereof, between the date of dissolution 28 and the succeeding first day of January. If dissolution occurs between 29 the thirty-first day of December and the succeeding sixteenth day of 30 March, such trust company and savings bank shall be subject to the same 31 tax that would have been due from it on or before the fifteenth day of 32 March had it not been dissolved, except that such tax shall be reduced 33 one-twelfth for each month, or major portion thereof, from the date of 34 dissolution to the succeeding first day of July, and shall be for the 35 period beginning on the preceding first day of July and ending on the 36 date of dissolution. In no event shall the tax under this subdivision 37 be less than ten dollars except that for the year nineteen hundred 38 seventy-one and those following, in no event shall the tax under this 39 subdivision be less than twelve and one-half dollars. 40 7. In the case of a consolidation or merger of taxpayers, or in case a 41 national bank taxable under part two of this subchapter shall be consol- 42 idated or merged with a taxpayer under this part, or in case of a series 43 of such transactions, there shall be added to the net income of the 44 taxpayer resulting from such consolidations or mergers the net income of 45 the taxpayers which are consolidated or merged for the period for which 46 the taxpayer resulting from such consolidation or merger is required to 47 render any return under this part, and if such resulting taxpayer is a 48 savings bank or savings and loan association, there shall be added to 49 the interest or dividends credited by it to depositors or shareholders 50 the amount of interest or dividends credited to depositors or sharehold- 51 ers during such period by the taxpayers which are consolidated or 52 merged, except that net income, interest or dividends shall not be 53 included if they have already been used as the basis for a tax under 54 this part, and the tax payable on filing such return shall be based upon 55 the entire net income reported therein or upon the entire amount of 56 interest or dividends so reported, as the case may be. The acquisition

S. 8578 504

1 by a taxpayer, directly or indirectly, of the assets or franchises of 2 another taxpayer or national bank shall be deemed a merger for the 3 purposes of this section. 4 8. The tax imposed by this part shall be for the calendar year next 5 preceding the year in which it becomes due; except that with respect to 6 corporations subject to a tax imposed under subdivision three, four, 7 five or six of this section, the tax shall be for the period therein 8 specified, and except that with respect to corporations required to file 9 a declaration of estimated tax and to make payments on account of such 10 estimated tax as provided by section 11-636 of this subchapter, all 11 payments of tax within a calendar year, whether computed on the basis of 12 net income for the current calendar year or on the basis of net income 13 for the preceding calendar year, shall be for the calendar year in which 14 the payments are required to be made. 15 9. In the event that it shall be finally determined by a court of 16 competent jurisdiction that the taxes imposed on national banking asso- 17 ciations by part two of this subchapter are unconstitutional or invalid 18 for the reason that they are not in conformity with the provisions of 19 section fifty-two hundred nineteen of the United States revised stat- 20 utes, then, in lieu of the taxes imposed by the provisions of this part, 21 every corporation that otherwise would have been subject to tax under 22 this part shall be subject to the tax imposed under subchapter two as of 23 July thirteenth, nineteen hundred sixty-six, and all of the provisions 24 of subchapter two, unless clearly inappropriate, shall be applicable 25 except subdivision four of section 11-603 of this chapter; and, in such 26 event, any payments made, reports or returns filed or any act of the 27 commissioner of finance or of a taxpayer purportedly under this subchap- 28 ter shall be treated as though made, filed or done pursuant to subchap- 29 ter two. 30 10. Cross reference. For years for which tax is imposed, see section 31 11-613 of this part. 32 § 11-613 Years for which imposed. 1. The tax imposed by section 33 11-612 of this part is imposed for each calendar year included within 34 the period beginning January first, nineteen hundred sixty-six and 35 ending December thirty-first, nineteen hundred seventy-two. 36 2. Cross reference. For tax imposed for years or periods subsequent to 37 nineteen hundred seventy-two, see part four of this subchapter. 38 § 11-614 Ascertainment of gain or loss. 1. For the purpose of ascer- 39 taining the gain derived or loss sustained from the sale or other dispo- 40 sition of property, real, personal or mixed, the basis shall be the cost 41 thereof, or the inventoried value if the inventory is made in accordance 42 with section 11-617 of this part. 43 2. Notwithstanding subdivision one of this section, with respect to 44 gain derived from the sale or other disposition of any property acquired 45 prior to January first, nineteen hundred sixty-six, except stock in 46 trade of the taxpayer or other property of a kind which would properly 47 be included in the inventory of the taxpayer if on hand at the close of 48 the taxable year, or property held by the taxpayer primarily for sale to 49 customers in the ordinary course of its trade or business, and accounts 50 or notes receivable acquired in the ordinary course of trade or business 51 from the sale of such stock in trade or property, or for services 52 rendered, net income shall not include: 53 (a) That portion of the gain included in determining net income pursu- 54 ant to subdivision one of this section with respect to each such proper- 55 ty, which exceeds:

S. 8578 505

1 (b) The amount of gain that would be included in determining net 2 income pursuant to subdivision one of this section with respect to each 3 such property if the basis of such property on the date of sale or other 4 disposition were equal to its fair market value on January first, nine- 5 teen hundred sixty-six, plus or minus all adjustments to basis made with 6 respect to each such property in computing net income for periods on or 7 after January first, nineteen hundred sixty-six provided that the total 8 adjustment to net income provided by this subdivision shall not exceed 9 the amount of the taxpayer's net gain from the sale or other disposition 10 of all such property, as determined pursuant to subdivision one of this 11 section. 12 3. In the case of any bond, with respect to which a deduction for 13 amortizable bond premium is allowable under subdivision nine of section 14 11-621 of this part, the basis for determining gain or loss shall be 15 reduced by the total amount of such deductions so allowable. 16 § 11-615 Exchange of property. Upon the sale or exchange of property 17 the entire amount of the gain or loss, determined under section 11-614 18 of this part, shall be recognized, except as provided in this section: 19 1. No gain or loss shall be recognized if common stock in a corpo- 20 ration is exchanged solely for common stock in the same corporation, or 21 if preferred stock in a corporation is exchanged solely for preferred 22 stock in the same corporation; 23 2. No gain or loss shall be recognized if stock or securities in a 24 corporation, a party to a reorganization are, in pursuance of the plan 25 or reorganization, exchanged solely for stock or securities in such 26 corporation or in another corporation a party to such reorganization; 27 3. No gain or loss shall be recognized if a taxpayer, a party to a 28 reorganization, exchanges property, in pursuance of the plan of reorgan- 29 ization, solely for stock or securities in another corporation a party 30 to such reorganization; and 31 4. No gain or loss shall be recognized if property is transferred to a 32 corporation by a taxpayer solely in exchange for stock or securities in 33 such corporation, and immediately after the exchange such taxpayer is in 34 control of the corporation; but in the case of an exchange by a taxpayer 35 and one or more other corporations or persons this subdivision shall 36 apply only if the amount of the stock and securities received by each is 37 substantially in proportion to its interest in the property prior to the 38 exchange. 39 5. If property, as a result of its destruction in whole or in part, 40 theft or seizure, or an exercise of the power of requisition or condem- 41 nation, or the threat of imminence thereof, is compulsorily or involun- 42 tarily converted into property similar or related in service or use to 43 the property so converted, or into money which is forthwith in good 44 faith, under regulations prescribed by the commissioner of finance, 45 expended in the acquisition of other property similar or related in 46 service or use to the property so converted, or in the acquisition of 47 control of a corporation owning such other property, or in the estab- 48 lishment of a replacement fund, no gain or loss shall be recognized. If 49 any part of the money is not so expended, the gain, if any, shall be 50 recognized, but in an amount not in excess of the money which is not so 51 expended. 52 6. If there is distributed, in pursuance of a plan of reorganization, 53 to a taxpayer shareholder in a corporation a party to the reorganiza- 54 tion, stock or securities in such corporation or in another corporation 55 a party to the reorganization, without the surrender by such taxpayer 56 shareholder of stock or securities in such a corporation, no gain to the

S. 8578 506

1 distributee from the receipt of such stock or securities shall be recog- 2 nized. 3 7. If an exchange would be within the provisions of subdivision one, 4 two, or four of this section if it were not for the fact that the prop- 5 erty received in exchange consists not only of property permitted by 6 such subdivision to be received without the recognition of gain, but 7 also of other property or money, then the gain, if any, to the recipient 8 shall be recognized, but in an amount not in excess of the sum of such 9 money and the fair market value of such other property. 10 8. If an exchange would be within the provisions of subdivision three 11 of this section if it were not for the fact that the property received 12 in exchange consists not only of stock or securities permitted by such 13 subdivision to be received without the recognition of gain, but also of 14 other property or money, then: 15 (a) If the taxpayer receiving such other property or money distributes 16 it in pursuance of the plan of reorganization, no gain to the taxpayer 17 shall be recognized from the exchange, but 18 (b) If the taxpayer receiving such other property or money does not 19 distribute it in pursuance of the plan of reorganization, the gain, if 20 any, to the taxpayer shall be recognized, but in an amount not in excess 21 of the sum of such money and the fair market value of such other proper- 22 ty so received, which is not so distributed. 23 9. If an exchange would be within the provisions of subdivision one, 24 two, three, or four of this section if it were not for the fact that the 25 property received in exchange consists not only of property permitted by 26 such subdivision to be received without the recognition of gain or loss, 27 but also of other property or money, then no loss from the exchange 28 shall be recognized. 29 10. As used in this section: 30 (a) The term "reorganization" means (i) a merger or consolidation, 31 including the acquisition by one corporation of at least a majority of 32 the voting stock and at least a majority of the total number of shares 33 of all other classes of stock of another corporation, or substantially 34 all the properties of another corporation, or (ii) a transfer by a 35 corporation of all or a part of its assets to another corporation if 36 immediately after the transfer the transferor or its stockholders or 37 both are in control of the corporation to which the assets are trans- 38 ferred, or (iii) a recapitalization, or (iv) a mere change in identity, 39 form or place of organization, however effected; 40 (b) The term "a party to a reorganization" includes a corporation 41 resulting from a reorganization and includes both corporations in the 42 case of an acquisition by one corporation of at least a majority of the 43 voting stock and at least a majority of the total number of shares of 44 all other classes of stock of another corporation; and 45 (c) The term "control" means the ownership of at least eighty per 46 centum of the voting stock and at least eighty per centum of the total 47 number of shares of all other classes of stock of the corporation. 48 11. No gain or loss shall be recognized upon the receipt by a taxpayer 49 of property distributed in complete liquidation of a corporation. For 50 the purposes of this subdivision a distribution shall be considered to 51 be in complete liquidation only if: 52 (a) the taxpayer receiving such property was, on the date of the 53 adoption of the plan of liquidation, and has continued to be at all 54 times until the receipt of the property, the owner of stock, in such 55 corporation, possessing at least eighty per centum of the total combined 56 voting power of all classes of stock entitled to vote and the owner of

S. 8578 507

1 at least eighty per centum of the total number of shares of all other 2 classes of stock, except non-voting stock which is limited and preferred 3 as to dividends, and was at no time on or after the date of the adoption 4 of the plan of liquidation and until the receipt of the property the 5 owner of a greater percentage of any class of stock than the percentage 6 of such class owned at the time of the receipt of the property; and 7 either: 8 (b) the distribution is by such corporation in complete cancellation 9 or redemption of all its stock, and the transfer of all the property 10 occurs within the base year; in such case the adoption by the sharehold- 11 ers of the resolution under which is authorized the distribution of all 12 the assets of the corporation in complete cancellation or redemption of 13 all its stock, shall be considered an adoption of a plan of liquidation, 14 even though no time for the completion of the transfer of the property 15 is specified on such resolution; or 16 (c) such distribution is one of a series of distributions by such 17 corporation in complete cancellation or redemption of all its stock in 18 accordance with a plan of liquidation under which the transfer of all 19 the property under the liquidation is to be completed within three years 20 from the close of the year during which is made the first of the series 21 of distributions under the plan, except that if such transfer is not 22 completed within such period, or if the taxpayer does not continue qual- 23 ified under paragraph (a) of this subdivision until the completion of 24 such transfer, no distribution under the plan shall be considered a 25 distribution in complete liquidation. 26 If such transfer of all the property does not occur within the year, 27 the commissioner of finance may require of the taxpayer such bond, or 28 waiver of the statute of limitations on assessment and collection, or 29 both, as the commissioner may deem necessary to insure, if the transfer 30 of the property is not completed within such three year period, or if 31 the taxpayer does not continue qualified under paragraph (a) of this 32 subdivision until the completion of such transfer, the assessment and 33 collection of all taxes then imposed under this part for such year or 34 subsequent years, to the extent attributable to property so received. A 35 distribution otherwise constituting a distribution in complete liqui- 36 dation within the meaning of this paragraph shall not be considered as 37 not constituting such a distribution merely because it does not consti- 38 tute a distribution or liquidation within the meaning of the corporate 39 law under which the distribution is made; and for the purposes of this 40 paragraph a transfer of property of such corporation to the taxpayer 41 shall not be considered as not constituting a distribution, or one of a 42 series of distributions, in complete cancellation or redemption of all 43 the stock of such corporation, merely because the carrying out of the 44 plan involves: (1) the transfer under the plan to the taxpayer by such 45 corporation of property, not attributable to shares owned by the taxpay- 46 er, upon an exchange described in subdivision three of this section, and 47 (2) the complete cancellation or redemption under the plan, as a result 48 of exchanges described in subdivision two of this section, of the shares 49 not owned by the taxpayers. 50 § 11-616 Exchange of property when no gain or loss is realized. When 51 property is exchanged for other property and no gain or loss is realized 52 under the provisions of the preceding section, the property received 53 shall be treated as taking the place of the property exchanged therefor. 54 Where no gain or loss is realized under the provisions of subdivision 55 eleven of section 11-615 of this part, the basis of the property 56 received shall be the same as it would be in the hands of the transferor

S. 8578 508

1 determined in accordance with the provisions of section 11-614 of this 2 part. 3 § 11-617 Inventory. Whenever in the opinion of the commissioner of 4 finance the use of inventories is necessary in order clearly to deter- 5 mine the income of any taxpayer, inventory shall be taken by such 6 taxpayer upon such basis as the commissioner of finance may prescribe, 7 conforming as nearly as may be to the best accounting practice in the 8 banking business most clearly reflecting the income. 9 § 11-618 Net income defined. The term "net income" means the gross 10 income of a taxpayer less the deductions allowed by this part. 11 § 11-619 Computation of net income. The net income shall be computed 12 in accordance with the method of accounting regularly employed in keep- 13 ing the books of such taxpayer; but if no such method of accounting has 14 been so employed, or if the method employed does not clearly reflect the 15 income, the computation shall be made upon such basis and in such manner 16 as in the opinion of the commissioner of finance does clearly reflect 17 the income. In determining net income, war losses, taxation of property 18 recovered, and basis of property shall be treated in substantially the 19 same manner as such losses, recoveries and basis are treated under the 20 applicable provisions of section thirteen hundred thirty-one of the 21 internal revenue code. 22 § 11-620 Gross income defined. 1. The term "gross income" includes 23 gains, profits and income derived from the business, of whatever kind 24 and in whatever form paid, including gains, profits or income from deal- 25 ings in property, whether real or personal, or gains, profits or income 26 received as compensation for services, as interest, rents, commissions, 27 brokerage or other fees, or otherwise in carrying on such business, 28 including all dividends received on stocks and all interest received 29 from federal, state, municipal or other bonds. 30 2. If the gross income of a taxpayer is derived from business carried 31 on both within and without the city, "gross income" means that propor- 32 tion thereof which is derived from business carried on within the city, 33 to be allocated and determined on the basis of separate accounting for 34 each office or branch or, at the election of the taxpayer, under rules 35 and regulations prescribed by the commissioner of finance. 36 3. "Gross income" of a savings bank shall include the amount received 37 by it in any taxable year as a distribution in liquidation of the mutual 38 savings bank fund. 39 § 11-621 Deductions. In computing net income there shall be allowed as 40 deductions: 41 1. All the ordinary and necessary expenses paid or incurred during the 42 year in carrying on business, including a reasonable allowance for sala- 43 ries or other compensation for personal services actually rendered, and 44 including rentals or other payments required to be made as a condition 45 to the continued use or possession for business purposes of property to 46 which the taxpayer has not taken or is not taking title or in which such 47 taxpayer has no equity. 48 2. All interest paid or accrued during the year on indebtedness. 49 3. Taxes, other than taxes on income or profits paid or accrued within 50 the year, imposed, first, by the authority of the United States, or of 51 any of its possessions, or, second, by the authority of any state, or 52 territory, or any county, school district, municipality, or other taxing 53 subdivisions of any state or territory, not including those assessed 54 against local benefits of a kind tending to increase the value of the 55 property assessed, or, third, by the authority of any foreign govern- 56 ment.

S. 8578 509

1 4. Losses sustained during the year and not compensated for by insur- 2 ance or otherwise, if incurred in business; unless in order to clearly 3 reflect the income the losses should in the opinion of the commissioner 4 of finance be accounted for as of a different period. No deduction shall 5 be allowed for any loss claimed to have been sustained in any sale or 6 other disposition of shares of stock or securities where it appears that 7 within thirty days before or after the date such sale or other disposi- 8 tion the taxpayer has acquired substantially identical property, and the 9 property so acquired is held by the taxpayer for any period after such 10 sale or other disposition, unless such claim is made with respect to a 11 transaction made in the ordinary course of business. If such acquisi- 12 tion is to the extent of part only of substantially identical property, 13 only a proportionate part of the loss shall be disallowed. 14 5. Debts ascertained to be worthless and charged off within the year; 15 or in the discretion of the commissioner of finance a reasonable addi- 16 tion to a reserve for bad debts. When satisfied that a debt is recovera- 17 ble only in part, the commissioner of finance may allow such debt to be 18 charged off in part. 19 6. A reasonable allowance for the exhaustion, wear and tear of proper- 20 ty used in business, including a reasonable allowance for obsolescence. 21 In the case of any such property acquired before January first, nineteen 22 hundred sixty-six, the amount of such deduction shall be equal to the 23 deduction properly taken for such property in reporting the tax due 24 pursuant to the former article nine-b of the tax law. With respect to 25 property such as described in subdivision twelve of this section, this 26 deduction may be computed and allowed as provided therein. 27 7. If the gross income be derived from business carried on within and 28 without the city, the deductions allowed by this section shall be allo- 29 cated and determined on the basis of separate accounting for each office 30 or branch or, at the election of the taxpayer, under rules and regu- 31 lations to be prescribed by the commissioner of finance. 32 8. In the case of any taxpayer who establishes or maintains a pension 33 trust to provide for the payment of reasonable pensions to its employ- 34 ees, there shall be allowed as a deduction, in addition to the contrib- 35 utions to such trust during the taxable year to cover the pension 36 liability accruing during the year, allowed as a deduction under subdi- 37 vision one of this section, a reasonable amount transferred or paid into 38 such trust during the taxable year in excess of such contributions, but 39 only if such amount (a) has not theretofore been allowable as a 40 deduction, and (b) is apportioned in equal parts over a period of ten 41 consecutive years beginning with the year in which the transfer or 42 payment is made or, under regulations of the commissioner of finance, 43 covers not more than one-tenth of the total pension liability with 44 respect to services rendered prior to such taxable year; provided that 45 said deduction shall be allowable only with respect to a taxable year, 46 whether the year of the transfer or payment or a subsequent year, of the 47 taxpayer ending within or with a taxable year of the trust with respect 48 to which the trust, by reason of its purposes or activities, is exempt 49 from federal income tax. 50 9. The amount of the amortizable bond premium on a bond for the year 51 shall be allowed as a deduction as hereinafter provided. In computing 52 such deduction: (a) the amount of the bond premium shall be determined 53 with reference to the amount of the basis, for determining loss on sale 54 or exchange, of such bond, and with reference to the amount payable on 55 maturity or on earlier call date, with adjustments proper to reflect 56 unamortized bond premium with respect to the bond, for the period prior

S. 8578 510

1 to July thirteenth, nineteen hundred sixty-six with respect to the 2 taxpayer with respect to such bond, and (b) the amortizable bond premium 3 of the year shall be the amount of the bond premium attributable to such 4 year. Accordingly, such determination shall be made in accordance with 5 the method of amortizing bond premium regularly employed by the holder 6 of such bond, if such method is reasonable, and in all other cases in 7 accordance with regulations of the commissioner of finance prescribing 8 reasonable methods of amortizing bond premium. This subdivision shall 9 apply only if the taxpayer shall so elect, in accordance with regu- 10 lations of the commissioner of finance, and such election shall be made 11 separately with respect to (1) bonds, the interest of which is wholly 12 taxable, and (2) bonds, the interest of which is wholly or partially tax 13 exempt, for purposes of the income tax imposed by chapter one of the 14 internal revenue code. If such election is made with respect to any bond 15 of the taxpayer described in clauses one or two of this subdivision, it 16 shall also apply to all bonds in the same class held by the taxpayer at 17 the beginning of the first year to which the election applies and to all 18 such bonds thereafter acquired by it and shall be binding for all subse- 19 quent years with respect to all such bonds of the taxpayer, unless upon 20 the application by the taxpayer, the commissioner of finance permits the 21 taxpayer, subject to such conditions as the commissioner of finance 22 deems necessary, to revoke such election. As used in this subdivision 23 the term "bond" means any bond, debenture, note or certificate or other 24 evidence of indebtedness, issued by any corporation and bearing inter- 25 est, including any like obligation issued by a government or political 26 subdivision thereof, with interest coupons or in registered form, but 27 does not include any such obligation which constitutes stock in trade of 28 the taxpayer or any such obligation of a kind which would properly be 29 included in the inventory of the taxpayer if on hand at the close of the 30 year, or any such obligation held by the taxpayer primarily for sale to 31 customers in the ordinary course of its trade or business. 32 10. In the case of a savings bank and savings and loan association, 33 amounts paid or credited to depositors or holders of accounts as inter- 34 est or dividends on their deposits or withdrawable accounts, if such 35 amounts are withdrawable on demand subject only to customary notice of 36 intention to withdraw. 37 11. A savings bank and savings and loan association may deduct in any 38 taxable year the amount of the repayment of any loan or advance from the 39 mutual savings bank fund in computing its net income and the amount of 40 interest or dividends subject to the minimum tax under subdivision three 41 of section 11-612 of this part. 42 12. (a) At the election of the taxpayer there shall be deducted from 43 gross income, or if gross income is derived from business carried on 44 within and without this city, from the portion thereof allocated within 45 the city, depreciation with respect to any property such as described in 46 paragraph (b) of this subdivision, not exceeding twice the depreciation 47 allowed with respect to the same property for federal income tax 48 purposes. 49 (b) Such deduction shall be allowed only with respect to tangible 50 property which is depreciable pursuant to section one hundred sixty-sev- 51 en of the internal revenue code, having a situs in this city and used in 52 the taxpayer's business, (i) constructed, reconstructed or erected after 53 December thirty-first, nineteen hundred sixty-five, pursuant to a 54 contract which was on or before December thirty-first, nineteen hundred 55 sixty-seven, and at all times thereafter, binding on the taxpayer or, 56 property, the physical construction, reconstruction or erection of which

S. 8578 511

1 began on or before December thirty-first, nineteen hundred sixty-seven 2 or which began after such date pursuant to an order placed on or before 3 December thirty-first, nineteen hundred sixty-seven, and then only with 4 respect to that portion of the basis thereof which is properly attribut- 5 able to such construction, reconstruction or erection after December 6 thirty-first, nineteen hundred sixty-five, or (ii) acquired after Decem- 7 ber thirty-first, nineteen hundred sixty-five, pursuant to a contract 8 which was, on or before December thirty-first, nineteen hundred sixty- 9 seven, and at all times thereafter, binding on the taxpayer or pursuant 10 to an order placed on or before December thirty-first, nineteen hundred 11 sixty-seven, by purchase as defined in section one hundred seventy-nine 12 (d) of the internal revenue code, if the original use of such property 13 commenced with the taxpayer, commenced in this city and commenced after 14 December thirty-first, nineteen hundred sixty-five, or (iii) acquired, 15 constructed, reconstructed or erected subsequent to December thirty- 16 first, nineteen hundred sixty-seven, if such acquisition, construction, 17 reconstruction or erection is pursuant to a plan of the taxpayer which 18 was in existence December thirty-first, nineteen hundred sixty-seven and 19 not thereafter substantially modified, and such acquisition, 20 construction, reconstruction or erection would qualify under the rules 21 in paragraph four, five or six of subsection (h) of section forty-eight 22 of the internal revenue code provided all references in such paragraphs 23 four, five and six to the dates October nine, nineteen hundred sixty-six 24 and October ten, nineteen hundred sixty-six shall be read as December 25 thirty-first, nineteen hundred sixty-seven. A taxpayer shall be allowed 26 a deduction under clause (i), (ii) or (iii) of this paragraph only if 27 the tangible property shall be delivered or the construction, recon- 28 struction or erection shall be completed on or before December thirty- 29 first, nineteen hundred sixty-nine, except in the case of tangible prop- 30 erty which is acquired, constructed, reconstructed or erected pursuant 31 to a contract which was, on or before December thirty-first, nineteen 32 hundred sixty-seven, and at all times thereafter, binding on the taxpay- 33 er. Provided, however, for any taxable year beginning on or after Janu- 34 ary first, nineteen hundred sixty-eight, a taxpayer shall not be allowed 35 a deduction under paragraph (a) of this subdivision with respect to 36 tangible personal property leased by it to any other person or corpo- 37 ration. Accordingly, any contract or agreement to lease or rent or for a 38 license to use such property shall be considered a lease. With respect 39 to property which the taxpayer uses itself for purposes other than leas- 40 ing for part of a taxable year and leases for a part of a taxable year, 41 the taxpayer shall be allowed a deduction under paragraph (a) of this 42 subdivision in proportion to the part of the year it uses such property. 43 (c) If the deduction allowable for any taxable year pursuant to this 44 subdivision exceeds the taxpayer's net income computed without the 45 allowance of such deduction and without the allowance of any deduction 46 pursuant to subdivision six of this section with references to the same 47 property, the excess may be carried over to the following taxable year 48 or years and may be deducted in computing net income for such year or 49 years. 50 (d) In any taxable year when property is sold or otherwise disposed 51 of, with respect to which a deduction has been allowed pursuant to this 52 subdivision, the gain or loss thereon shall be computed by adjusting the 53 basis of such property to reflect the deductions so allowed, and if the 54 taxpayer's gross income is derived from business carried on both within 55 and without the city, shall be allocated within the city. Provided, 56 however, that no loss shall be recognized for the purposes of this para-

S. 8578 512

1 graph with respect to a sale or other disposition of property to a 2 person whose acquisition thereof is not a purchase as defined in section 3 one hundred seventy-nine (d) of the internal revenue code. 4 § 11-622 Items not deductible. In computing net income no deduction 5 shall in any case be allowed in respect of: 6 (a) Any amount paid out for new buildings or for permanent improve- 7 ments or betterments made to increase the value of any property. 8 (b) Any amount expended in restoring property or in making good the 9 exhaustion thereof for which an allowance is or has been made.

10 PART 2 11 TAX ON NATIONAL BANKING ASSOCIATIONS 12 AND PRODUCTION CREDIT ASSOCIATIONS

13 § 11-623 Imposition of tax. 1. Pursuant to the authority conferred by 14 section fifty-two hundred nineteen of the United States revised statutes 15 and in conformity with the provisions contained in subdivision c of 16 clause one of such section, every national banking association organized 17 under authority of the United States and located within the city, shall 18 annually pay a tax, measured by its net income, to be computed, as 19 provided in this part, at the rate of four and one-half per centum 20 except that for the year nineteen hundred seventy-one and those follow- 21 ing the rate shall be five and sixty-three one hundredths per centum, 22 upon the basis of its net income for the calendar year next preceding 23 the date when such tax becomes due. Such tax shall be for the calendar 24 year next preceding the year in which it becomes due; except that with 25 respect to national banking associations required to file a declaration 26 of estimated tax and to make payments on account of such estimated tax 27 in accordance with the provisions of section 11-636 of this subchapter, 28 all payments of tax within a calendar year, whether computed on the 29 basis of net income for the current calendar year or on the basis of net 30 income for the preceding calendar year, shall be for the calendar year 31 in which the payments are required to be made. If, however, such a 32 national banking association shall be dissolved between the thirty-first 33 day of December and the succeeding second day of September, and shall 34 not become merged or consolidated with a corporation taxable under part 35 one of this subchapter, it shall pay a tax for the period from the thir- 36 ty-first day of December up to the time of dissolution equal to that 37 which would have been payable had it not been dissolved, except that 38 such tax shall be reduced by one-third and an additional one-twelfth for 39 each month, or major portion thereof, prior to such succeeding second 40 day of September, during which such corporation was so dissolved. If 41 such dissolution occurs between the fifteenth day of March and the 42 second day of September, and if such corporation shall have filed its 43 return on or before the fifteenth day of March as required by sections 44 11-630 and 11-633 of this subchapter, it may file a claim for refund as 45 provided in section 11-678 of this chapter, showing any reduction in tax 46 to which it may be entitled as provided by this section; and if it shall 47 be made to appear that the amount of tax due is less than the amount as 48 computed on the basis of the original return, the commissioner of 49 finance shall adjust the computation of tax accordingly. If the amount 50 of tax as so adjusted shall be less than the amount theretofore paid, 51 the excess shall be refunded by the commissioner of finance as provided 52 in subdivision one of section 11-677 of this chapter. 53 2. In the event that the taxes imposed by this part shall be finally 54 determined to be unconstitutional or invalid for the reason that they do

S. 8578 513

1 not conform with the provisions of section fifty-two hundred nineteen of 2 the United States revised statutes, then, in lieu of the taxes imposed 3 by the provisions of this part, every national banking association and 4 every production credit association that otherwise would have been 5 subject to tax under this part shall be subject to the tax imposed under 6 subchapter two as of July thirteenth, nineteen hundred sixty-six, and 7 all of the provisions of subchapter two, unless clearly inappropriate, 8 shall be applicable except subdivision four of section 11-603 of this 9 chapter; and, in such event, any payments made, reports or returns filed 10 or any act of the commissioner of finance or of a taxpayer purportedly 11 under this subchapter shall be treated as though made, filed or done 12 pursuant to subchapter two. 13 3. Cross reference. For years for which tax is imposed, see section 14 11-624 of this part. 15 § 11-624 Years for which imposed. 1. The tax imposed by section 16 11-623 of this part is imposed for each calendar year included within 17 the period beginning January first, nineteen hundred sixty-six and 18 ending December thirty-first, nineteen hundred seventy-two. 19 2. Cross reference. For tax imposed for years or periods subsequent to 20 nineteen hundred seventy-two, see part four of this subchapter. 21 § 11-625 Ascertainment of gain or loss; exchange of property. 1. 22 For the purpose of ascertaining the gain derived or loss sustained from 23 the sale or other disposition of property, real, personal or mixed, the 24 basis shall be the cost thereof, or the inventoried value if the inven- 25 tory is made in accordance with section 11-626 of this part. 26 2. Notwithstanding subdivision one of this section, with respect to 27 gain derived from the sale or other disposition of any property acquired 28 prior to January first, nineteen hundred sixty-six, except stock in 29 trade of the taxpayer or other property of a kind which would properly 30 be included in the inventory of the taxpayer if on hand at the close of 31 the taxable year, or property held by the taxpayer primarily for sale to 32 customers in the ordinary course of its trade or business and accounts 33 or notes receivable acquired in the ordinary course of trade or business 34 from the sale of such stock in trade or property, or for services 35 rendered, net income shall not include: 36 (a) That portion of the gain included in determining net income pursu- 37 ant to subdivision one of this section with respect to each such proper- 38 ty which exceeds: 39 (b) The amount of gain, if any, that would be included in determining 40 net income pursuant to subdivision one of this section with respect to 41 each such property if the basis of such property on the date of sale or 42 other disposition were equal to its fair market value on January first, 43 nineteen hundred sixty-six, plus or minus all adjustments to basis made 44 with respect to each such property in computing net income for periods 45 on or after January first, nineteen hundred sixty-six; provided that the 46 total adjustment to net income provided by this subdivision shall not 47 exceed the amount of the taxpayer's net gain from the sale or other 48 disposition of all such property, as determined pursuant to subdivision 49 one of this section. 50 3. Upon the sale or exchange of property the amount of the gain or 51 loss shall be determined in the manner prescribed by section 11-615 of 52 this subchapter and the basis of such property shall be determined in 53 the manner prescribed by section 11-616 of this subchapter. 54 4. In the case of any bond, with respect to which a deduction for 55 amortizable bond premium is allowable under paragraph (i) of subdivision 56 one of section 11-629 of this part, the basis for determining gain or

S. 8578 514

1 loss shall be reduced by the total amount of such deductions so allow- 2 able. 3 § 11-626 Inventory. Whenever in the opinion of the commissioner of 4 finance the use of inventories is necessary in order clearly to deter- 5 mine the income of any taxpayer, inventory shall be taken by such 6 taxpayer upon such basis as the commissioner of finance may prescribe, 7 conforming as nearly as may be to the best accounting practice in the 8 banking business and most clearly reflecting the income. 9 § 11-627 Net income defined; computation. The term "net income" 10 means the gross income of a taxpayer less the deductions allowed by this 11 part. The net income shall be computed in accordance with the method of 12 accounting regularly employed in keeping the books of such taxpayer; but 13 if no such method of accounting has been so employed, or if the method 14 employed does not clearly reflect the income, the computation shall be 15 made upon such basis and in such manner as in the opinion of the commis- 16 sioner of finance does clearly reflect the income. In determining net 17 income, war losses, taxation of property recovered, and basis of proper- 18 ty shall be treated in substantially the same manner as such losses, 19 recoveries and basis are treated under the applicable provisions of 20 section thirteen hundred thirty-one of the internal revenue code. 21 § 11-628 Gross income defined. 1. The term "gross income" includes 22 gains, profit and income derived from the business, of whatever kind and 23 in whatever form paid, including gains, profits or income from dealings 24 in property, whether real or personal, or gains, profits, or income 25 received as compensation for services, as interest, rents, commissions, 26 brokerage or other fees, or otherwise in carrying on such business, 27 including all dividends received on stocks and all interest received 28 from federal, state, municipal or other bonds. 29 2. If the gross income of such an association is derived from business 30 carried on both within and without the city, "gross income" means that 31 proportion thereof which is derived from business carried on within the 32 city, to be allocated and determined on the basis of separate accounting 33 for each office or branch or, at the election of the taxpayer, under 34 rules and regulations prescribed by the commissioner of finance. 35 § 11-629 Deductions. 1. In computing net income there shall be 36 allowed as deductions: 37 (a) All the ordinary and necessary expenses paid or incurred during 38 the year in carrying on business, including a reasonable allowance for 39 salaries or other compensation for personal services actually rendered, 40 and including rentals or other payments required to be made as a condi- 41 tion to the continued use or possession for business purposes of proper- 42 ty to which the taxpayer has not taken or is not taking title or in 43 which such taxpayer has no equity; 44 (b) All interest paid or accrued during the year on indebtedness; 45 (c) Taxes, other than taxes on income or profits paid or accrued with- 46 in the year, imposed, first, by the authority of the United States, or 47 of any of its possessions, or, second, by the authority of any state, or 48 territory, or any county, school district, municipality, or other taxing 49 subdivisions of any state or territory, not including those assessed 50 against local benefits of a kind tending to increase the value of the 51 property assessed, or, third, by the authority of any foreign govern- 52 ment; 53 (d) Losses sustained during the year and not compensated for by insur- 54 ance or otherwise, if incurred in business; unless in order to clearly 55 reflect the income the losses should in the opinion of the commissioner 56 of finance be accounted for as of a different period. No deduction

S. 8578 515

1 shall be allowed for any loss claimed to have been sustained in any sale 2 or other disposition of shares of stock or securities where it appears 3 that within thirty days before or after the date of such sale or other 4 disposition the taxpayer has acquired substantially identical property, 5 and the property so acquired is held by the taxpayer for any period 6 after such sale or other disposition, unless such claim is made with 7 respect to a transaction made in the ordinary course of business. If 8 such acquisition is to the extent of part only of substantially identi- 9 cal property, only a proportionate part of the loss shall be disallowed; 10 (e) Debts ascertained to be worthless and charged off within the year; 11 or in the discretion of the commissioner of finance a reasonable addi- 12 tion to a reserve for bad debts. When satisfied that a debt is recover- 13 able only in part, the commissioner of finance may allow such debt to be 14 charged off in part; 15 (f) A reasonable allowance for the exhaustion, wear and tear of prop- 16 erty used in business, including a reasonable allowance for obsoles- 17 cence. In the case of any such property acquired before January first, 18 nineteen hundred sixty-six, the amount of such deduction shall be equal 19 to the deduction properly taken for such property in reporting the tax 20 due. With respect to property such as described in paragraph (j) of 21 this subdivision, this deduction may be computed and allowed as provided 22 therein; 23 (g) If the gross income be derived from business carried on within and 24 without the city, the deductions allowed by this section shall be allo- 25 cated and determined on the basis of separate accounting for each office 26 or branch or, at the election of the taxpayer, under rules and regu- 27 lations to be prescribed by the commissioner of finance; 28 (h) In the case of any taxpayer, who establishes or maintains a 29 pension trust to provide for the payment of reasonable pensions to its 30 employees, there shall be allowed as a deduction, in addition to the 31 contributions to such trust during the taxable years, to cover the 32 pension liability accruing during the year, allowed as a deduction under 33 paragraph (a) of this subdivision, a reasonable amount transferred or 34 paid into such trust during the taxable year in excess of such contrib- 35 utions, but only if such amount: (1) has not theretofore been allowable 36 as a deduction, and (2) is apportioned in equal parts over a period of 37 ten consecutive years beginning with the year in which the transfer of 38 payment is made; provided that said deduction shall be allowable only 39 with respect to a taxable year, whether the year of the transfer or 40 payment or a subsequent year, of the taxpayer ending within or with a 41 taxable year of the trust with respect to which the trust, by reason of 42 its purposes or activities is exempt from federal income tax; 43 (i) The amount of the amortizable bond premium on a bond for the year 44 shall be allowed as a deduction as provided in this paragraph. In 45 computing such deduction, (a) the amount of the bond premium shall be 46 determined with reference to the amount of the basis, for determining 47 loss on sale or exchange, of such bond, and with reference to the amount 48 payable on maturity or on earlier call date, with adjustments proper to 49 reflect unamortized bond premium with respect to the bond, for the peri- 50 od prior to July thirteenth, nineteen hundred sixty-six with respect to 51 the taxpayer with respect to such bond, and (b) the amortizable bond 52 premium of the year shall be the amount of the bond premium attributable 53 to such year. Such determinations shall be made in accordance with the 54 method of amortizing bond premium regularly employed by the holder of 55 such bond, if such method is reasonable, and in all other cases in 56 accordance with regulations of the commissioner of finance prescribing

S. 8578 516

1 reasonable methods of amortizing bond premium. This paragraph shall 2 apply only if the taxpayer shall so elect, in accordance with regu- 3 lations of the commissioner of finance, and such election shall be made 4 separately with respect to: (1) bonds, the interest of which is wholly 5 taxable, and (2) bonds, the interest of which is wholly or partially tax 6 exempt, for purposes of the income tax imposed by chapter one of the 7 internal revenue code. If such election is made with respect to any bond 8 of the taxpayer described in clauses one or two of this subparagraph, it 9 shall also apply to all bonds in the same class held by the taxpayer at 10 the beginning of the first year to which the election applies and to all 11 such bonds thereafter acquired by it and shall be binding for all subse- 12 quent years with respect to all such bonds of the taxpayer, unless, upon 13 application by the taxpayer, the commissioner of finance permits the 14 taxpayer, subject to such conditions as the commissioner of finance 15 deems necessary, to revoke such election. As used in this paragraph, 16 the term "bond" means any bond, debenture, note, or certificate or other 17 evidence of indebtedness, issued by any corporation and bearing inter- 18 est, including any like obligation issued by a government or political 19 subdivision thereof, with interest coupons or in registered form, but 20 does not include any such obligation which constitutes stock in trade of 21 the taxpayer or any such obligation of a kind which would properly be 22 included in the inventory of the taxpayer if on hand at the close of the 23 year, or any such obligation held by the taxpayer primarily for sale to 24 customers in the ordinary course of its trade or business; and 25 (j) (1) At the election of the taxpayer there shall be deducted from 26 gross income, or if gross income is derived from business carried on 27 within and without this city, from the portion thereof allocated within 28 the city, depreciation with respect to any property such as described in 29 subparagraph two of this paragraph, not exceeding twice the depreciation 30 allowed with respect to the same property for federal income tax 31 purposes. 32 (2) Such deduction shall be allowed only with respect to tangible 33 property which is depreciable pursuant to section one hundred sixty-sev- 34 en of the internal revenue code, having a situs in this city and used in 35 the taxpayer's business, (i) constructed, reconstructed or erected after 36 December thirty-first, nineteen hundred sixty-five, pursuant to a 37 contract which was, on or before December thirty-first, nineteen hundred 38 sixty-seven, and at all times thereafter, binding on the taxpayer or 39 pursuant to an order placed on or before December thirty-first, nineteen 40 hundred sixty-seven, by purchase as defined in section one hundred 41 seventy-nine (d), of the internal revenue code, if the original use of 42 such property commenced with the taxpayer, commenced in this city and 43 commenced after December thirty-first, nineteen hundred sixty-five or 44 (ii) acquired, constructed, reconstructed, or erected subsequent to 45 December thirty-first, nineteen hundred sixty-seven, if such acquisi- 46 tion, construction, reconstruction or erection is pursuant to a plan of 47 the taxpayer which was in existence December thirty-first, nineteen 48 hundred sixty-seven and not thereafter substantially modified, and such 49 acquisition, construction, reconstruction or erection would qualify 50 under the rules in paragraph four, five or six of subsection (h) of 51 section forty-eight of the internal revenue code provided all references 52 in such paragraphs four, five and six to the dates October nine, nine- 53 teen hundred sixty-six, and October ten, nineteen hundred sixty-six, 54 shall read as December thirty-first, nineteen hundred sixty-seven. A 55 taxpayer shall be allowed a deduction under clause (i) or (ii) of this 56 subparagraph only if the tangible property shall be delivered or the

S. 8578 517

1 construction, reconstruction or erection shall be completed on or before 2 December thirty-first, nineteen hundred sixty-nine, except in the case 3 of tangible property which is acquired, constructed, reconstructed or 4 erected pursuant to a contract which was, on or before December thirty- 5 first, nineteen hundred sixty-seven, and at all times thereafter, bind- 6 ing on the taxpayer. Provided, however, for any taxable year beginning 7 on or after January first, nineteen hundred sixty-eight, a taxpayer 8 shall not be allowed a deduction under paragraph (a) of this subdivision 9 with respect to tangible personal property leased by it to any other 10 person or corporation. Any such contract or agreement to lease or rent 11 or for a license to use such property shall be considered a lease. With 12 respect to property which the taxpayer uses itself for purposes other 13 than leasing for part of a taxable year and leases for a part of a taxa- 14 ble year, the taxpayer shall be allowed a deduction under paragraph (a) 15 of this subdivision in proportion to the part of the year it uses such 16 property. 17 (3) If the deduction allowable for any taxable year pursuant to this 18 subdivision exceeds the taxpayer's net income computed without the 19 allowance of such deduction and without the allowance of any deduction 20 pursuant to paragraph (f) of this subdivision with reference to the same 21 property, the excess may be carried over to the following taxable year 22 or years and may be deducted in computing net income for such year or 23 years. 24 (4) In any taxable year when property is sold or otherwise disposed 25 of, with respect to which a deduction has been allowed pursuant to this 26 paragraph, the gain or loss thereon shall be computed by adjusting the 27 basis of such property to reflect the deductions so allowed, and if the 28 taxpayer's gross income is derived from business carried on both within 29 and without the city, shall be allocated within the city. Provided, 30 however, that no loss shall be recognized for the purposes of this para- 31 graph with respect to a sale or other disposition of property to a 32 person whose acquisition thereof is not a purchase as defined in section 33 one hundred seventy-nine (d) of the internal revenue code. 34 2. In computing net income no deduction shall in any case be allowed 35 in respect of: 36 (a) Any amount paid out for new buildings or for permanent improve- 37 ments or betterments made to increase the value of any property. 38 (b) Any amount expended in restoring or in making good the exhaustion 39 thereof for which an allowance is or has been made. 40 § 11-630 Administration; procedure; provisions of law applicable. 41 For the purpose of carrying into effect the provisions of this part, and 42 except as otherwise provided in this part, income shall be computed, 43 gain or loss ascertained, deductions made, apportionments and allo- 44 cations determined, at the same time and subject to the same limitations 45 and conditions, in so far as practicable, as is provided by part one of 46 this subchapter in relation to the tax imposed by such part. 47 § 11-631 Tax on production credit associations. Pursuant to the 48 authority conferred by the federal farm credit act of nineteen hundred 49 thirty-three, every production credit association organized under the 50 authority of the United States and located within the city after the 51 stock held in it by the federal production credit corporation has been 52 retired shall annually pay a tax measured by its net income, which shall 53 be computed in the same manner as the tax imposed upon national banking 54 associations by section 11-623 of this part and shall be subject to the 55 provisions of sections 11-624 of this part to 11-630 of this part inclu- 56 sive.

S. 8578 518

1 § 11-632 Applicability of part three. 1. This part shall be applica- 2 ble only to the taxes imposed by parts one and two of this subchapter. 3 2. Cross reference. For years for which parts one and two of this 4 subchapter impose a tax, see sections 11-613 and 11-624 of this subchap- 5 ter.

6 PART 3 7 ADMINISTRATION FOR PARTS 1 AND 2

8 § 11-633 Taxpayer's returns. 1. Every taxpayer, on or before March 9 fifteenth of each year, beginning with the year nineteen hundred sixty- 10 seven and ending with the year nineteen hundred seventy-three, shall 11 make a return subscribed by the taxpayer and affirmed by the taxpayer to 12 be true under the penalties of perjury to the commissioner of finance, 13 for the calendar year next preceding, as to the business or that portion 14 of the business of such taxpayer the income from which is the basis of 15 taxation under part one or two of this subchapter, except that every 16 trust company and savings bank which shall become incorporated between 17 the thirty-first day of December and the succeeding first day of July, 18 shall make its return for such period on or before September first, and 19 every taxpayer, other than a trust company and savings bank, which shall 20 commence to do business in the city or become located in the city, shall 21 make its return for the calendar year in which it commences to do busi- 22 ness or becomes located, on or before the twentieth day of January of 23 the year succeeding such calendar year, and except that every taxpayer, 24 other than a trust company and savings bank, which shall be dissolved, 25 cease to do business in the city or cease to be located in the city, 26 between the thirty-first day of December and the succeeding sixteenth 27 day of March and shall not become merged or consolidated with another 28 corporation taxable under the same part, shall make its return for such 29 period on or before the date of such dissolution, or cessation of busi- 30 ness, and every trust company and savings bank which shall be dissolved, 31 and shall not become merged or consolidated with another corporation 32 taxable under the same part, shall make its return, for the period for 33 which it is taxable under subdivision six of section 11-612 of this 34 subchapter on or before the date of such dissolution. Such return shall 35 be in such form and contain such information as the commissioner of 36 finance may require for the purpose of making any computation or other- 37 wise performing its duty under parts one, two, and three of this 38 subchapter. Such return shall state specifically the items of gross 39 income derived from such business and the deductions allowed by the part 40 for which the return is filed, the net income which is the basis of the 41 tax, and the amount of tax due. The return shall be subscribed by the 42 president, vice-president, treasurer, assistant treasurer, chief 43 accounting officer or any other officer of the taxpayer duly authorized 44 so to act. The fact that an individual's name is signed on the return 45 shall be prima facie evidence that such individual is authorized to 46 subscribe and affirm the return on behalf of the corporation. Blank 47 forms of return shall be furnished by the commissioner of finance upon 48 application, but failure to secure the form shall not relieve any 49 taxpayer from the obligation of making any return herein required. An 50 automatic extension of three months for the filing of its annual return 51 shall be allowed for any taxpayer if, within the time prescribed under 52 this subdivision for the filing thereof, such taxpayer files with the 53 commissioner of finance an application for extension in such form as the 54 commissioner of finance may prescribe by regulation and pays on or

S. 8578 519

1 before the date of such filing the amount properly estimated as its tax. 2 The commissioner of finance may grant a reasonable extension of time for 3 filing a return, which may be in addition to any three-month automatic 4 extension allowed, whenever in the commissioner's judgment good cause 5 exists and shall keep a record of every such extension and the reason 6 therefor. No such extension or extensions shall aggregate more than 7 three months, exclusive of any automatic extension. 8 2. If the amount of taxable income for any year of any taxpayer as 9 returned to the United States treasury department or the New York state 10 tax department is changed or corrected by the commissioner of internal 11 revenue or other officer of the United States or the New York state tax 12 commission or other competent authority; or if a taxpayer, pursuant to 13 subsection (d) of section sixty-two hundred thirteen of the internal 14 revenue code, executes a notice of waiver of the restrictions provided 15 in subsection (a) of such section, or if a taxpayer, pursuant to subdi- 16 vision (f) of section one thousand eighty-one of the tax law, executes a 17 notice of waiver of the restrictions provided in subdivision (c) of such 18 section, such taxpayer shall report such change or corrected taxable 19 income or such execution of such notice of waiver and the changes or 20 corrections of such taxpayer's federal or New York state taxable income 21 on which it is based, within ninety days after such execution or the 22 final determination of such change or correction, or as required by the 23 commissioner of finance, and shall concede the accuracy of such determi- 24 nation or state wherein it is erroneous. Any taxpayer filing an amended 25 return with such department shall also file within ninety days thereaft- 26 er an amended return with the commissioner of finance which shall 27 contain such information as it shall require. 28 § 11-634 Consolidated returns. Corporations which are affiliated 29 may, if authorized, and shall, if required, by the commissioner of 30 finance, under regulations prescribed by the commissioner of finance, 31 make a consolidated return for the purpose of parts one, two and three 32 of this subchapter. The commissioner of finance may, in his or her 33 discretion, authorize bank holding companies as defined in article 34 three-a of the banking law to make a consolidated return with affiliated 35 corporations taxable under part one and under part two of this subchap- 36 ter in which case the consolidated tax will be computed in accordance 37 with the provisions of part one of this subchapter. In all other cases 38 in which a corporation taxable under part two of this subchapter makes a 39 consolidated return with corporations taxable under part one of this 40 subchapter, the consolidated tax will be computed in accordance with the 41 provisions of part one of this subchapter. In any case in which a tax is 42 assessed upon the basis of a consolidated return, the total tax shall be 43 computed in the first instance as a unit and shall then be assessed upon 44 the respective affiliated corporations in such proportions as may be 45 agreed upon among them, or in the absence of any such agreement, then on 46 the basis of the net income properly assignable to each. 47 § 11-635 Payment of tax. Each taxpayer shall, at the time of filing 48 its return, pay to the commissioner of finance: 49 (a) the amount of tax payable under part one or two of this subchapter 50 as the same shall appear from the face of the return, or 51 (b) if payments of estimated tax have been made pursuant to section 52 11-636 of this part, the balance, if any, of the tax payable under part 53 one or two of this subchapter, as the same shall appear from the face of 54 the return, after applying thereto any payments made pursuant to said 55 section.

S. 8578 520

1 If the time for filing the return shall be extended, the taxpayer 2 shall pay in addition interest at the rate of six per centum per annum 3 from the time when the return was originally required to be filed to the 4 time of payment upon the amount by which the tax, or the portion thereof 5 payable when the return was required to be filed, exceeds the amount 6 then paid: 7 (1) a payment made on or before the date of filing of an application 8 for an automatic extension shall be deemed properly estimated if its 9 either: (A) not less than ninety per centum of the tax as finally 10 determined, or (B) not less than the tax shown on the taxpayer's return 11 for the preceding taxable year, if such preceding year was a taxable 12 year of twelve months; and 13 (2) the time when a return is required to be filed shall be determined 14 without regard to any extension of time for filing such return. 15 § 11-636 Declaration of estimated tax; payments on account of esti- 16 mated tax. 1. Every taxpayer subject to the tax imposed by part one or 17 two of this subchapter shall make a declaration of the estimated tax 18 upon the basis of its net income for the current calendar year, contain- 19 ing such information as the commissioner of finance may prescribe by 20 regulations or instructions, if such estimated tax can reasonably be 21 expected to exceed one thousand dollars. 22 2. The term "estimated tax" means the amount which a taxpayer esti- 23 mates to be the tax imposed upon it by part one or two of this subchap- 24 ter upon the basis of its net income for the current calendar year, less 25 the amount which it estimates to be the sum of any credits allowable 26 against the tax. 27 3. A declaration of estimated tax shall be filed on or before June 28 fifteenth of the calendar year upon the net income of which the tax is 29 based, except that if the requirements of subdivision one of this 30 section are first met: 31 (a) after June first and before October second of such calendar year, 32 the declaration shall be filed on or before October fifteenth, or 33 (b) after October first of such calendar year, the declaration shall 34 be filed on or before January fifteenth of the succeeding calendar year. 35 Notwithstanding any other provision of this subdivision, no declara- 36 tion need be filed prior to September eleventh, nineteen hundred sixty- 37 six. 38 4. A taxpayer may amend a declaration under regulations of the commis- 39 sioner of finance. 40 5. If, on or before February fifteenth of the succeeding year, a 41 taxpayer files its return for the calendar year upon the net income of 42 which the declaration is required to be based, and pays therewith the 43 balance, if any, of the full amount of the tax shown to be due on the 44 return, 45 (a) such return shall be considered as its declaration if no declara- 46 tion was required to be filed during such calendar year, but is other- 47 wise required to be filed on or before January fifteenth of the succeed- 48 ing year pursuant to subdivision three of this section, 49 (b) such return shall be considered as an amendment permitted by 50 subdivision four of this section to be filed on or before January 51 fifteenth if the tax shown on the return is greater than the estimated 52 tax shown on a declaration previously made. 53 6. The commissioner of finance may grant a reasonable extension of 54 time, not to exceed three months, for the filing of any declaration 55 required pursuant to this section, on such terms and conditions as the 56 commissioner may require.

S. 8578 521

1 7. Every taxpayer subject to the tax imposed by part one or two of 2 this subchapter shall pay with the return of tax, if any, required to be 3 filed upon the basis of its net income for the preceding calendar year, 4 or with an application for extension of the time for filing such return, 5 an amount equal to twenty-five per centum of the preceding year's tax, 6 if such preceding year's tax exceeded one thousand dollars. 7 8. The estimated tax with respect to which a declaration for such 8 calendar year is required pursuant to this section shall be paid as 9 follows: 10 (a) If the declaration is filed on or before June fifteenth, the esti- 11 mated tax shown thereon, after applying thereto the amount if any, paid 12 during the same calendar year pursuant to subdivision seven of this 13 section, shall be paid in three equal installments. One of such 14 installments shall be paid at the time of the filing of the declaration, 15 one shall be paid on the following October fifteenth, and one on the 16 following January fifteenth. 17 (b) If the declaration is filed after June fifteenth, and not after 18 October fifteenth of such calendar year, and is not required to be filed 19 on or before June fifteenth of such calendar year, the estimated tax 20 shown on such declaration, after applying thereto the amount, if any, 21 paid during the same calendar year pursuant to subdivision seven of this 22 section, shall be paid in two equal installments. One of such install- 23 ments shall be paid at the time of the filing of the declaration and one 24 shall be paid on the following January fifteenth. 25 (c) If the declaration is filed after October fifteenth of such calen- 26 dar year, and is not required to be filed on or before October fifteenth 27 of such calendar year, the estimated tax shown on such declaration, 28 after applying thereto the amount, if any, paid in respect of such 29 calendar year pursuant to subdivision seven of this section, shall be 30 paid in full at the time of the filing of the declaration. 31 (d) If the declaration is filed after the time prescribed therefor, or 32 after the expiration of any extension of time therefor, paragraphs (b) 33 and (c) of this subdivision shall not apply, and there shall be paid at 34 the time of such filing all installments of estimated tax payable at or 35 before such time, and the remaining installments shall be paid at the 36 times at which, and in the amounts in which, they would have been paya- 37 ble if the declaration had been filed when due. 38 9. If any amendment of a declaration is filed, the remaining install- 39 ments, if any, shall be ratably increased or decreased, as the case may 40 be, to reflect any increase or decrease in the estimated tax by reason 41 of such amendment, and if any amendment is made after October fifteenth 42 of the calendar year, any increase in the estimated tax by reason there- 43 of shall be paid at the time of making such amendment. 44 10. Any amount paid pursuant to subdivision seven of this section 45 shall be applied after payment as a first installment against the esti- 46 mated tax of the taxpayer shown on the declaration next required to be 47 filed pursuant to this section or, if no declaration of estimated tax is 48 required to be filed by the taxpayer pursuant to this section, any such 49 amount shall be considered a payment on account of the tax shown on the 50 return of tax required to be filed by the taxpayer upon the basis of its 51 net income for the calendar year during which such amount was paid. 52 11. Notwithstanding the provisions of section 11-679 of this chapter 53 or of section three-a of the general municipal law, if any amount paid 54 pursuant to subdivision seven of this section, exceeds the tax shown on 55 the return required to be filed by the taxpayer upon the basis of its 56 net income for the calendar year during which the amount was paid,

S. 8578 522

1 interest shall be allowed and paid on the amount by which the amount so 2 paid pursuant to such subdivision exceeds such tax, at the rate of six 3 per centum per annum from the date of payment of the amount so paid 4 pursuant to such subdivision to March fifteenth of the succeeding calen- 5 dar year, provided, however, that no interest shall be allowed or paid 6 under this subdivision if the amount thereof is less than one dollar. 7 12. As used in this section, "the preceding year's tax" means the tax 8 imposed upon the taxpayer by part one or two of this subchapter upon the 9 basis of its net income for the preceding calendar year, or, for 10 purposes of computing the first installment of estimated tax when an 11 application has been filed for extension of time for filing the return 12 required to be filed for such preceding calendar year, the amount prop- 13 erly estimated pursuant to section 11-635 of this part as the tax 14 imposed upon the basis of its net income for such calendar year. 15 13. This section shall apply to an income period of less than twelve 16 months in accordance with regulations of the commissioner of finance. 17 14. The commissioner of finance may grant a reasonable extension of 18 time, not to exceed six months, for payment of any installment of esti- 19 mated tax required pursuant to this section, on such terms and condi- 20 tions as the commissioner may require, including the furnishing of a 21 bond or other security by the taxpayer in an amount not exceeding twice 22 the amount for which any extension of time for payment is granted, 23 provided however, that interest at the rate of six per centum per annum 24 for the period of the extension shall be charged and collected on the 25 amount for which any extension of time for payment is granted under this 26 subdivision. 27 15. A taxpayer may elect to pay any installment of estimated tax prior 28 to the date prescribed in this section for payment thereof. 29 § 11-637 Real property taxable. Nothing in this subchapter shall be 30 construed to exempt the real property of any taxpayer from taxation to 31 the same extent, according to its value, as other real property is 32 taxed.

33 PART 4 34 BANKING CORPORATION TAX

35 § 11-638 General definitions. As used in this part: 36 (a) The word "taxpayer" means a corporation or association subject to 37 a tax imposed by this part. 38 (b) The phrase "taxable year" means the taxpayer's taxable year for 39 federal income tax purposes, or the part thereof during which the 40 taxpayer is subject to the tax imposed by this part. 41 (c) The term "international banking facility" shall mean an interna- 42 tional banking facility located in New York state and shall have the 43 same meaning as is set forth in the New York state banking law or regu- 44 lations of the New York state banking department or as is set forth in 45 the laws of the United States or regulations of the board of governors 46 of the federal reserve system. 47 (d) The term "subsidiary" means a corporation or association of which 48 over fifty percent of the number of shares of stock entitling the hold- 49 ers thereof to vote for the election of directors or trustees is owned 50 by the taxpayer. 51 (e) The term "subsidiary capital" means investments in the stock of 52 subsidiaries and any indebtedness from subsidiaries, exclusive of 53 accounts receivable acquired in the ordinary course of trade or business 54 for services rendered or for sales of property held primarily for sale

S. 8578 523

1 to customers, whether or not evidenced by written instrument, on which 2 interest is not claimed and deducted by the subsidiary for purposes of 3 taxation under this part or subchapter two of this chapter, provided, 4 however, there shall be deducted from subsidiary capital any liabilities 5 payable by their terms on demand or within one year from the date 6 incurred, other than loans or advances outstanding for more than a year 7 as of any date during the year covered by the return, which are attrib- 8 utable to subsidiary capital. 9 (f) The term "financial holding company" means a corporation that, 10 pursuant to subsection (l) of section four of the federal bank holding 11 company act of nineteen hundred fifty-six, as amended, has filed with 12 the federal reserve board a written declaration that the corporation 13 elects to be a financial holding company and whose election has not been 14 found to be ineffective by the federal reserve board. 15 § 11-639 Imposition of tax. (a) (1) For the privilege of doing busi- 16 ness in the city in a corporate or organized capacity, a tax, computed 17 under section 11-643 of this part, is hereby annually imposed on every 18 banking corporation for each of its taxable years, or any part thereof, 19 beginning on or after January first, nineteen hundred seventy-three and 20 before January first, two thousand fifteen. 21 (2) For the privilege of doing business in the city in a corporate or 22 organized capacity, a tax, computed under section 11-643 of this part, 23 is hereby annually imposed on every banking corporation for each taxable 24 year, or any part thereof, commencing on or after January first, two 25 thousand fifteen, where such banking corporation (i) has an election in 26 effect under subsection (a) of section thirteen hundred sixty-two of the 27 internal revenue code of 1986, as amended, or (ii) is a qualified 28 subchapter S subsidiary within the meaning of paragraph three of 29 subsection (b) of section thirteen hundred sixty-one of the internal 30 revenue code of nineteen eighty-six, as amended. 31 (b) In the case of a taxpayer whose taxable year is other than a 32 calendar year, there is hereby imposed a tax for the privilege of doing 33 business in the city in a corporate or organized capacity for the period 34 beginning January first, nineteen hundred seventy-three and extending 35 through the subsequent part of its first such taxable year ending after 36 such date. Such tax shall be computed under section 11-643 of this part 37 on the basis of such taxpayer's entire net income, or other applicable 38 basis as the case may be, for such period and shall be paid with a 39 return which shall be separately filed with the department of finance 40 not later than the fifteenth day of the third month succeeding the close 41 of such period. The requirements of sections 11-644 and 11-645 of this 42 part, relating to declarations and payments of estimated tax, except 43 subdivision (a) of section 11-645 of this part, shall not be applicable 44 to the tax imposed by this subdivision. 45 (c) For taxable years beginning on or after January first, two thou- 46 sand eleven, (1) a banking corporation is doing business in the city in 47 a corporate or organized capacity if (i) it has issued credit cards to 48 one thousand or more customers who have a mailing address within the 49 city as of the last day of its taxable year, or (ii) it has merchant 50 customer contracts with merchants and the total number of locations 51 covered by those contracts equals one thousand or more locations in the 52 city to whom the banking corporation remitted payments for credit card 53 transactions during the taxable year, or (iii) it has receipts of one 54 million dollars or more in the taxable year from its customers who have 55 been issued credit cards by the banking corporation and have a mailing 56 address within the city, or (iv) it has receipts of one million dollars

S. 8578 524

1 or more arising from merchant customer contracts with merchants relating 2 to locations in the city, or (v) the sum of the number of customers 3 described in subparagraph (i) of this paragraph plus the number of 4 locations covered by its contracts described in subparagraph (ii) of 5 this paragraph equals one thousand or more, or the amount of its 6 receipts described in subparagraphs (iii) and (iv) of this paragraph 7 equals one million dollars or more. For purposes of this paragraph, 8 receipts from processing credit card transactions for merchants include 9 merchant discount fees received by the banking corporation. 10 (2) As used in this subdivision, the term "credit card" includes bank, 11 credit, travel and entertainment cards. 12 (d) Cross-Reference. For the taxation of corporations that are not 13 described in paragraph two of subdivision (a) of this section, that were 14 taxable under this subchapter for tax years beginning before January 15 first, two thousand fifteen, see subchapter three-A of this chapter. 16 § 11-640 Banking, corporation defined; exempt corporations. (a) For 17 the purpose of this part, a banking corporation means: 18 (1) every corporation or association organized under the laws of this 19 state which is authorized to do a banking business or which is doing a 20 banking business; 21 (2) every corporation or association organized under the laws of any 22 other state or country which is doing a banking business; 23 (3) every national banking association organized under the authority 24 of the United States which is doing a banking business; 25 (4) every federal savings bank which is doing a banking business; 26 (5) every federal savings and loan association which is doing a bank- 27 ing business; 28 (6) a production credit association organized under the federal farm 29 credit act of nineteen hundred thirty-three, which is doing a banking 30 business and all of whose stock held by the federal production credit 31 corporation has been retired; 32 (7) every other corporation or association organized under the author- 33 ity of the United States which is doing a banking business; 34 (8) the mortgage facilities corporation created in article seven of 35 the private housing finance law; 36 (9) any corporation sixty-five percent or more of whose voting stock 37 is owned or controlled, directly or indirectly, by a corporation or 38 corporations subject to article three-a of the banking law, or regis- 39 tered under the federal bank holding company act of nineteen hundred 40 fifty-six, as amended, or registered as a savings and loan holding 41 company, but excluding a diversified savings and loan holding company, 42 under the federal national housing act, as amended, or by a corporation 43 or corporations described in paragraphs one through eight of this subdi- 44 vision, provided the corporation whose voting stock is so owned or 45 controlled is principally engaged in a business, regardless of where 46 conducted, which (i) might be lawfully conducted by a corporation 47 subject to article three of the banking law or by a national banking 48 association or (ii) is so closely related to banking or managing or 49 controlling banks as to be a proper incident thereto, as set forth in 50 paragraph eight of subsection (c) or subparagraph (F) of paragraph four 51 of subsection (k) of section four of the federal bank holding company 52 act of nineteen hundred fifty-six, as amended, or (iii) holds and 53 manages investment assets, including but not limited to bonds, notes, 54 debentures and other obligations for the payment of money, stocks, part- 55 nership interests or other equity interests, and other investment secu-

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1 rities, and which is not a business described in subparagraph (i) or 2 (ii) of this paragraph. 3 (b) Banking business defined. The words "banking business" as used in 4 this section mean such business as a corporation or association may be 5 created to do under article three, three-B, five, five-A, six or ten of 6 the banking law or any business which a corporation or association is 7 authorized by such article to do. However, with respect to a national 8 banking association organized under the authority of the United States, 9 a federal savings bank, a federal savings and loan association or a 10 production credit association, the words "banking business" as used in 11 this section mean such business as a national banking association, 12 federal savings bank, federal savings and loan association or production 13 credit association, respectively, may be created to do or is authorized 14 to do under the laws of the United States or this state. The words 15 "banking business" as used in this section shall also mean such business 16 as any corporation or association organized under the authority of the 17 United States or organized under the laws of any other state or country 18 has authority to do which is substantially similar to the business which 19 a corporation or association may be created to do under article three, 20 three-B, five, five-A, six or ten of the banking law or any business 21 which a corporation or association is authorized by such article to do. 22 (c) Exempt corporations. A trust company all of whose capital stock is 23 owned by twenty or more savings banks organized under New York law shall 24 be exempt from the tax under this part. 25 (d) Corporations taxable under subchapter two. Notwithstanding the 26 provisions of this part, all corporations of classes now or heretofore 27 taxable under subchapter two of this chapter shall continue to be taxa- 28 ble under subchapter two of this chapter, except: (1) corporations 29 organized under article five-A of the banking law; (2) corporations 30 subject to article three-A of the banking law, or registered under the 31 federal bank holding company act of nineteen hundred fifty-six, as 32 amended, or registered as a savings and loan holding company, but 33 excluding a diversified savings and loan holding company, under the 34 federal national housing act, as amended, which make a combined return 35 under the provisions of subdivision (f) of section 11-646 of this part; 36 (3) banking corporations described in paragraph nine of subdivision (a) 37 of this section; and (4) any captive REIT or captive RIC that is 38 required to be included in a combined return under the provisions of 39 section 11-646 of this part. Provided, however, that a corporation 40 described in paragraph three of this subdivision which was subject to 41 the tax imposed by subchapter two of this chapter for its taxable year 42 ending during nineteen hundred eighty-four may, on or before the due 43 date for filing its return, determined with regard to extensions, for 44 its taxable year ending during nineteen hundred eighty-five, make a one 45 time election to continue to be taxable under such subchapter two. Such 46 election shall continue to be in effect until revoked by the taxpayer. 47 In no event shall such election or revocation be for a part of a taxable 48 year. 49 (e) Corporations taxable under article thirty-three of the tax law. 50 Except for corporations described in subsection (l) of section fourteen 51 hundred fifty-three of the tax law, corporations liable to tax under 52 article thirty-three of the tax law shall not be subject to tax under 53 this part. 54 (f) A banking corporation organized under the laws of a country, or 55 any political subdivision thereof, other than the United States shall 56 not be deemed to be doing business in the city under this subchapter if

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1 its activities in the city are limited solely to (1) investing or trad- 2 ing in stocks and securities for its own account within the meaning of 3 clause (ii) of subparagraph (A) of paragraph two of subsection (b) of 4 section eight hundred sixty-four of the internal revenue code or (2) 5 investing or trading in commodities for its own account within the mean- 6 ing of clause (ii) of subparagraph (B) of paragraph two of subsection 7 (b) of section eight hundred sixty-four of the internal revenue code or 8 (3) any combination of activities described in paragraphs one and two of 9 this subdivision. 10 (g) Transitional provisions relating to the enactment and implementa- 11 tion of the federal Gramm-Leach-Bliley act. (1) Notwithstanding 12 anything to the contrary contained in this section other than subdivi- 13 sion (m) of this section, a corporation that was in existence before 14 January first, two thousand and was subject to tax under subchapter two 15 of this chapter for its last taxable year beginning before January 16 first, two thousand, shall continue to be taxable under subchapter two 17 of this chapter for all taxable years beginning on or after January 18 first, two thousand and before January first, two thousand one; 19 provided, however, this shall not apply to any taxable year during which 20 such corporation is a banking corporation described in paragraphs one 21 through eight of subdivision (a) of this section. Notwithstanding 22 anything to the contrary contained in this section other than subdivi- 23 sion (m) of this section, a banking corporation that was in existence 24 before January first, two thousand and was subject to tax under this 25 subchapter for its last taxable year beginning before January first, two 26 thousand, shall continue to be taxable under this subchapter for all 27 taxable years beginning on or after January first, two thousand and 28 before January first, two thousand one. Provided, however, that nothing 29 in this subdivision shall prohibit a corporation that elected pursuant 30 to subdivision (d) of this section to be taxable under subchapter two of 31 this chapter from revoking that election in accordance with such subdi- 32 vision (d). 33 For purposes of this paragraph, a corporation shall be considered to 34 be subject to tax under subchapter two of this chapter for a taxable 35 year if such corporation was not a taxpayer but was properly included in 36 a combined report filed pursuant to subdivision four of section 11-605 37 of this chapter for such taxable year and a corporation shall be consid- 38 ered to be subject to tax under this subchapter for a taxable year if 39 such corporation was not a taxpayer but was properly included in a 40 combined report filed pursuant to subdivision (f) or (g) of section 41 11-646 of this chapter for such taxable year. A corporation that was in 42 existence before January first, two thousand but first becomes a taxpay- 43 er in a taxable year beginning on or after January first, two thousand 44 and before January first, two thousand one, shall be considered for 45 purposes of this paragraph to have been subject to tax under subchapter 46 two of this chapter for its last taxable year beginning before January 47 first, two thousand if such corporation would have been subject to tax 48 under such subchapter for such taxable year if it had been a taxpayer 49 during such taxable year. A corporation that was in existence before 50 January first, two thousand but first becomes a taxpayer in a taxable 51 year beginning on or after January first, two thousand and before Janu- 52 ary first, two thousand one, shall be considered for purposes of this 53 paragraph to have been subject to tax under this subchapter for its last 54 taxable year beginning before January first, two thousand if such corpo- 55 ration would have been subject to tax under this subchapter for such 56 taxable year if it had been a taxpayer during such taxable year.

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1 (2) Notwithstanding anything to the contrary contained in this section 2 other than subdivision (m) of this section, a corporation formed on or 3 after January first, two thousand and before January first, two thousand 4 one may elect to be subject to tax under this subchapter or under 5 subchapter two of this chapter for its first taxable year beginning on 6 or after January first, two thousand and before January first, two thou- 7 sand one in which either (i) sixty-five percent or more of its voting 8 stock is owned or controlled, directly or indirectly by a financial 9 holding company, provided the corporation whose voting stock is so owned 10 or controlled is principally engaged in activities that are described in 11 paragraph four or five of subdivision (k) of section four of the federal 12 bank holding company act of nineteen hundred fifty-six, as amended and 13 the regulations promulgated pursuant to the authority of such section or 14 (ii) it is a financial subsidiary. An election under this paragraph may 15 not be made by a corporation described in paragraphs one through eight 16 of subdivision (a) of this section or in subdivision (e) of this 17 section. In addition, an election under this paragraph may not be made 18 by a corporation that is a party to a reorganization, as defined in 19 subsection (a) of section three hundred sixty-eight of the internal 20 revenue code of nineteen hundred eighty-six, as amended, of a corpo- 21 ration described in paragraph one of this subdivision if both corpo- 22 rations were sixty-five percent or more owned or controlled, directly or 23 indirectly by the same interests at the time of the reorganization. 24 An election under this paragraph must be made by the taxpayer on or 25 before the due date for filing its return, determined with regard to 26 extensions of time for filing, for the applicable taxable year. The 27 election to be taxed under subchapter two of this chapter shall be made 28 by the taxpayer by filing the return required pursuant to subdivision 29 one of section 11-605 of this chapter and the election to be taxed under 30 this subchapter shall be made by the taxpayer by filing the return 31 required pursuant to subdivision (a) of section 11-646 of this chapter. 32 Any election made pursuant to this paragraph shall be irrevocable and 33 shall apply to each subsequent taxable year beginning on or after Janu- 34 ary first, two thousand and before January first, two thousand one, 35 provided that the stock ownership requirements described in subparagraph 36 (i) of this paragraph are met or such corporation described in subpara- 37 graph (ii) of this paragraph continues as a financial subsidiary. 38 (3) For purposes of this section, a financial subsidiary means a 39 corporation (i) sixty-five percent or more of whose voting stock is 40 owned or controlled, directly or indirectly by a banking corporation 41 described in paragraph one, two or three of subdivision (a) of this 42 section and (ii) is described in subdivision (g) of section five thou- 43 sand one hundred thirty-six-A of the revised statutes of the United 44 States or section forty-six of the federal deposit insurance act. For 45 purposes of this subchapter, the term "banking corporation" shall 46 include a corporation electing to be taxed under this subchapter pursu- 47 ant to paragraph two of this subdivision for so long as such election 48 shall be in effect. 49 (4) The provisions of this subdivision shall not apply to a captive 50 REIT or a captive RIC. 51 (h) Transitional provisions relating to the enactment and implementa- 52 tion of the federal Gramm-Leach-Bliley act. (1) Notwithstanding anything 53 to the contrary contained in this section other than subdivision (m) of 54 this section, a corporation that was in existence before January first, 55 two thousand one and was subject to tax under subchapter two of this 56 chapter for its last taxable year beginning before January first, two

S. 8578 528

1 thousand one, shall continue to be taxable under subchapter two for all 2 taxable years beginning on or after January first, two thousand one and 3 before January first, two thousand three, provided, however, this shall 4 not apply to any taxable year during which such corporation is a banking 5 corporation described in paragraphs one through eight of subdivision (a) 6 of this section. Notwithstanding anything to the contrary contained in 7 this section other than subdivision (m) of this section, a banking 8 corporation that was in existence before January first, two thousand one 9 and was subject to tax under this subchapter for its last taxable year 10 beginning before January first, two thousand one, shall continue to be 11 taxable under this subchapter for all taxable years beginning on or 12 after January first, two thousand one and before January first, two 13 thousand three. Provided, however, that nothing in this subdivision 14 shall prohibit a corporation that elected pursuant to subdivision (d) of 15 this section to be taxable under subchapter two of this chapter from 16 revoking that election in accordance with subdivision (d) of this 17 section. 18 For purposes of this paragraph, a corporation shall be considered to 19 be subject to tax under subchapter two of this chapter for a taxable 20 year if such corporation was not a taxpayer but was properly included in 21 a combined report filed pursuant to subdivision four of section 11-605 22 of this chapter for such taxable year and a corporation shall be consid- 23 ered to be subject to tax under this subchapter for a taxable year if 24 such corporation was not a taxpayer but was properly included in a 25 combined report filed pursuant to subdivision (f) or (g) of section 26 11-646 of this chapter for such taxable year. A corporation that was in 27 existence before January first, two thousand one but first becomes a 28 taxpayer in a taxable year beginning on or after January first, two 29 thousand one and before January first, two thousand three, shall be 30 considered for purposes of this paragraph to have been subject to tax 31 under subchapter two of this chapter for its last taxable year beginning 32 before January first, two thousand one if such corporation would have 33 been subject to tax under such subchapter for such taxable year if it 34 had been a taxpayer during such taxable year. A corporation that was in 35 existence before January first, two thousand one but first becomes a 36 taxpayer in a taxable year beginning on or after January first, two 37 thousand one and before January first, two thousand three, shall be 38 considered for purposes of this paragraph to have been subject to tax 39 under this subchapter for its last taxable year beginning before January 40 first, two thousand one if such corporation would have been subject to 41 tax under this subchapter for such taxable year if it had been a taxpay- 42 er during such taxable year. 43 (2) Notwithstanding anything to the contrary contained in this section 44 other than subdivision (m) of this section, a corporation formed on or 45 after January first, two thousand one and before January first, two 46 thousand three may elect to be subject to tax under this subchapter or 47 under subchapter two of this chapter for its first taxable year begin- 48 ning on or after January first, two thousand one and before January 49 first, two thousand three in which either (i) sixty-five percent or more 50 of its voting stock is owned or controlled, directly or indirectly by a 51 financial holding company, provided the corporation whose voting stock 52 is so owned or controlled is principally engaged in activities that are 53 described in paragraph four or five of subdivision (k) of section four 54 of the federal bank holding company act of nineteen hundred fifty-six, 55 as amended and the regulations promulgated pursuant to the authority of 56 such section or (ii) it is a financial subsidiary. An election under

S. 8578 529

1 this paragraph may not be made by a corporation described in paragraphs 2 one through eight of subdivision (a) of this section or in subdivision 3 (e) of this section. In addition, an election under this paragraph may 4 not be made by a corporation that is a party to a reorganization, as 5 defined in subsection (a) of section three hundred sixty-eight of the 6 internal revenue code of nineteen hundred eighty-six, as amended, of a 7 corporation described in paragraph one of this subdivision if both 8 corporations were sixty-five percent or more owned or controlled, 9 directly or indirectly by the same interests at the time of the reorgan- 10 ization. 11 An election under this paragraph must be made by the taxpayer on or 12 before the due date for filing its return, determined with regard to 13 extensions of time for filing, for the applicable taxable year. The 14 election to be taxed under subchapter two of this chapter shall be made 15 by the taxpayer by filing the return required pursuant to subdivision 16 one of section 11-605 of this chapter and the election to be taxed under 17 this subchapter shall be made by the taxpayer by filing the return 18 required pursuant to subdivision (a) of section 11-646 of this chapter. 19 Any election made pursuant to this paragraph shall be irrevocable and 20 shall apply to each subsequent taxable year beginning on or after Janu- 21 ary first, two thousand one and before January first, two thousand 22 three, provided that the stock ownership requirements described in 23 subparagraph (i) of this paragraph are met or such corporation described 24 in subparagraph (ii) of this paragraph continues as a financial subsid- 25 iary. 26 (3) For purposes of this section, a financial subsidiary means a 27 corporation (i) sixty-five percent or more of whose voting stock is 28 owned or controlled, directly or indirectly by a banking corporation 29 described in paragraph one, two or three of subdivision (a) of this 30 section and (ii) is described in subdivision (g) of section five thou- 31 sand one hundred thirty-six-A of the revised statutes of the United 32 States or section forty-six of the federal deposit insurance act. For 33 purposes of this subchapter, the term "banking corporation" shall 34 include a corporation electing to be taxed under this subchapter pursu- 35 ant to paragraph two of this subdivision for so long as such election 36 shall be in effect. 37 (i) Transitional provisions relating to the enactment and implementa- 38 tion of the federal Gramm-Leach-Bliley act. (1) Notwithstanding anything 39 to the contrary contained in this section other than subdivision (m) of 40 this section, a corporation that was in existence before January first, 41 two thousand three and was subject to tax under subchapter two of this 42 chapter for its last taxable year beginning before January first, two 43 thousand three, shall continue to be taxable under subchapter two for 44 all taxable years beginning on or after January first, two thousand 45 three and before January first, two thousand four provided, however, 46 this shall not apply to any taxable year during which such corporation 47 is a banking corporation described in paragraphs one through eight of 48 subdivision (a) of this section. Notwithstanding anything to the contra- 49 ry contained in this section other than subdivision (m) of this section, 50 a banking corporation that was in existence before January first, two 51 thousand three and was subject to tax under this subchapter for its last 52 taxable year beginning before January first, two thousand three, shall 53 continue to be taxable under this subchapter for all taxable years 54 beginning on or after January first, two thousand three and before Janu- 55 ary first, two thousand four. Provided, however, that nothing in this 56 subdivision shall prohibit a corporation that elected pursuant to subdi-

S. 8578 530

1 vision (d) of this section to be taxable under subchapter two of this 2 chapter from revoking that election in accordance with subdivision (d) 3 of this section. 4 For purposes of this paragraph, a corporation shall be considered to 5 be subject to tax under subchapter two of this chapter for a taxable 6 year if such corporation was not a taxpayer but was properly included in 7 a combined report filed pursuant to subdivision four of section 11-605 8 of this chapter for such taxable year and a corporation shall be consid- 9 ered to be subject to tax under this subchapter for a taxable year if 10 such corporation was not a taxpayer but was properly included in a 11 combined report filed pursuant to subdivision (f) or (g) of section 12 11-646 of this chapter for such taxable year. A corporation that was in 13 existence before January first, two thousand three but first becomes a 14 taxpayer in a taxable year beginning on or after January first, two 15 thousand three and before January first, two thousand four, shall be 16 considered for purposes of this paragraph to have been subject to tax 17 under subchapter two of this chapter for its last taxable year beginning 18 before January first, two thousand three if such corporation would have 19 been subject to tax under such subchapter for such taxable year if it 20 had been a taxpayer during such taxable year. A corporation that was in 21 existence before January first, two thousand three but first becomes a 22 taxpayer in a taxable year beginning on or after January first, two 23 thousand three and before January first, two thousand four, shall be 24 considered for purposes of this paragraph to have been subject to tax 25 under this subchapter for its last taxable year beginning before January 26 first, two thousand three if such corporation would have been subject to 27 tax under this subchapter for such taxable year if it had been a taxpay- 28 er during such taxable year. 29 (2) Notwithstanding anything to the contrary contained in this section 30 other than subdivision (m) of this section, a corporation formed on or 31 after January first, two thousand three and before January first, two 32 thousand four may elect to be subject to tax under this subchapter or 33 under subchapter two of this chapter for its first taxable year begin- 34 ning on or after January first, two thousand three and before January 35 first, two thousand four in which either (i) sixty-five percent or more 36 of its voting stock is owned or controlled, directly or indirectly by a 37 financial holding company, provided the corporation whose voting stock 38 is so owned or controlled is principally engaged in activities that are 39 described in paragraphs four or five of subdivision (k) of section four 40 of the federal bank holding company act of nineteen hundred fifty-six, 41 as amended and the regulations promulgated pursuant to the authority of 42 such section or (ii) it is a financial subsidiary. An election under 43 this paragraph may not be made by a corporation described in paragraphs 44 one through eight of subdivision (a) of this section or in subdivision 45 (e) of this section. In addition, an election under this paragraph may 46 not be made by a corporation that is a party to a reorganization, as 47 defined in subsection (a) of section three hundred sixty-eight of the 48 internal revenue code of nineteen hundred eighty-six, as amended, of a 49 corporation described in paragraph one of this subdivision if both 50 corporations were sixty-five percent or more owned or controlled, 51 directly or indirectly by the same interests at the time of the reorgan- 52 ization. 53 An election under this paragraph must be made by the taxpayer on or 54 before the due date for filing its return, determined with regard to 55 extensions of time for filing, for the applicable taxable year. The 56 election to be taxed under subchapter two of this chapter shall be made

S. 8578 531

1 by the taxpayer by filing the return required pursuant to subdivision 2 one of section 11-605 of this chapter and the election to be taxed under 3 this subchapter shall be made by the taxpayer by filing the return 4 required pursuant to subdivision (a) of section 11-646 of this chapter. 5 Any election made pursuant to this paragraph shall be irrevocable and 6 shall apply to each subsequent taxable year beginning on or after Janu- 7 ary first, two thousand three and before January first, two thousand 8 four, provided that the stock ownership requirements described in 9 subparagraph (i) of this paragraph are met or such corporation described 10 in subparagraph (ii) of this paragraph continues as a financial subsid- 11 iary. 12 (3) For purposes of this section, a financial subsidiary means a 13 corporation (i) sixty-five percent or more of whose voting stock is 14 owned or controlled, directly or indirectly by a banking corporation 15 described in paragraph one, two or three of subdivision (a) of this 16 section and (ii) is described in subdivision (g) of section five thou- 17 sand one hundred thirty-six-A of the revised statutes of the United 18 States or section forty-six of the federal deposit insurance act. For 19 purposes of this subchapter, the term "banking corporation" shall 20 include a corporation electing to be taxed under this subchapter pursu- 21 ant to paragraph two of this subdivision for so long as such election 22 shall be in effect. 23 (j) Transitional provisions relating to the enactment and implementa- 24 tion of the federal Gramm-Leach-Bliley act. (1) Notwithstanding anything 25 to the contrary contained in this section other than subdivision (m) of 26 this section, a corporation that was in existence before January first, 27 two thousand four and was subject to tax under subchapter two of this 28 chapter for its last taxable year beginning before January first, two 29 thousand four, shall continue to be taxable under subchapter two for all 30 taxable years beginning on or after January first, two thousand four and 31 before January first, two thousand six. The preceding sentence shall not 32 apply to any taxable year during which such corporation is a banking 33 corporation described in paragraphs one through eight of subdivision (a) 34 of this section. Notwithstanding anything to the contrary contained in 35 this section other than subdivision (m) of this section, a banking 36 corporation that was in existence before January first, two thousand 37 four and was subject to tax under this subchapter for its last taxable 38 year beginning before January first, two thousand four, shall continue 39 to be taxable under this subchapter for all taxable years beginning on 40 or after January first, two thousand four and before January first, two 41 thousand six. Provided, however, that nothing in this subdivision shall 42 prohibit a corporation that elected pursuant to subdivision (d) of this 43 section to be taxable under subchapter two of this chapter from revoking 44 that election in accordance with subdivision (d) of this section. 45 For purposes of this paragraph, a corporation shall be considered to 46 be subject to tax under subchapter two of this chapter for a taxable 47 year if such corporation was not a taxpayer but was properly included in 48 a combined report filed pursuant to subdivision four of section 11-605 49 of this chapter for such taxable year and a corporation shall be consid- 50 ered to be subject to tax under this subchapter for a taxable year if 51 such corporation was not a taxpayer but was properly included in a 52 combined report filed pursuant to subdivision (f) or (g) of section 53 11-646 of this chapter for such taxable year. A corporation that was in 54 existence before January first, two thousand four but first becomes a 55 taxpayer in a taxable year beginning on or after January first, two 56 thousand four and before January first, two thousand six, shall be

S. 8578 532

1 considered for purposes of this paragraph to have been subject to tax 2 under subchapter two of this chapter for its last taxable year beginning 3 before January first, two thousand four if such corporation would have 4 been subject to tax under such subchapter for such taxable year if it 5 had been a taxpayer during such taxable year. A corporation that was in 6 existence before January first, two thousand four but first becomes a 7 taxpayer in a taxable year beginning on or after January first, two 8 thousand four and before January first, two thousand six, shall be 9 considered for purposes of this paragraph to have been subject to tax 10 under this subchapter for its last taxable year beginning before January 11 first, two thousand four if such corporation would have been subject to 12 tax under this subchapter for such taxable year if it had been a taxpay- 13 er during such taxable year. 14 (2) Notwithstanding anything to the contrary contained in this section 15 other than subdivision (m) of this section, a corporation formed on or 16 after January first, two thousand four and before January first, two 17 thousand six may elect to be subject to tax under this subchapter or 18 under subchapter two of this chapter for its first taxable year begin- 19 ning on or after January first, two thousand four and before January 20 first, two thousand six in which either (i) sixty-five percent or more 21 of its voting stock is owned or controlled, directly or indirectly by a 22 financial holding company, provided the corporation whose voting stock 23 is so owned or controlled is principally engaged in activities that are 24 described in paragraph four or five of subdivision (k) of section four 25 of the federal bank holding company act of nineteen hundred fifty-six, 26 as amended and the regulations promulgated pursuant to the authority of 27 such section or (ii) it is a financial subsidiary. An election under 28 this paragraph may not be made by a corporation described in paragraphs 29 one through eight of subdivision (a) of this section or in subdivision 30 (e) of this section. In addition, an election under this paragraph may 31 not be made by a corporation that is a party to a reorganization, as 32 defined in subsection (a) of section three hundred sixty-eight of the 33 internal revenue code of nineteen hundred eighty-six, as amended, of a 34 corporation described in paragraph one of this subdivision if both 35 corporations were sixty-five percent or more owned or controlled, 36 directly or indirectly by the same interests at the time of the reorgan- 37 ization. 38 An election under this paragraph must be made by the taxpayer on or 39 before the due date for filing its return, determined with regard to 40 extensions of time for filing, for the applicable taxable year. The 41 election to be taxed under subchapter two of this chapter shall be made 42 by the taxpayer by filing the return required pursuant to subdivision 43 one of section 11-605 of this chapter and the election to be taxed under 44 this subchapter shall be made by the taxpayer by filing the return 45 required pursuant to subdivision (a) of section 11-646 of this chapter. 46 Any election made pursuant to this paragraph shall be irrevocable and 47 shall apply to each subsequent taxable year beginning on or after Janu- 48 ary first, two thousand four and before January first, two thousand six, 49 provided that the stock ownership requirements described in subparagraph 50 (i) of this paragraph are met or such corporation described in subpara- 51 graph (ii) of this paragraph continues as a financial subsidiary. 52 (3) For purposes of this section, a financial subsidiary means a 53 corporation (i) sixty-five percent or more of whose voting stock is 54 owned or controlled, directly or indirectly by a banking corporation 55 described in paragraph one, two or three of subdivision (a) of this 56 section and (ii) is described in subdivision (g) of section five thou-

S. 8578 533

1 sand one hundred thirty-six-A of the revised statutes of the United 2 States or section forty-six of the federal deposit insurance act. For 3 purposes of this subchapter, the term "banking corporation" shall 4 include a corporation electing to be taxed under this subchapter pursu- 5 ant to paragraph two of this subdivision for so long as such election 6 shall be in effect. 7 (k) Transitional provisions relating to the enactment and implementa- 8 tion of the federal Gramm-Leach-Bliley act. (1) Notwithstanding anything 9 to the contrary contained in this section other than subdivision (m) of 10 this section, a corporation that was in existence before January first, 11 two thousand six and was subject to tax under subchapter two of this 12 chapter for its last taxable year beginning before January first, two 13 thousand six, shall continue to be taxable under subchapter two of this 14 chapter for all taxable years beginning on or after January first, two 15 thousand six and before January first, two thousand eight, provided, 16 however, this shall not apply to any taxable year during which such 17 corporation is a banking corporation described in paragraphs one through 18 eight of subdivision (a) of this section. Notwithstanding anything to 19 the contrary contained in this section other than subdivision (m) of 20 this section, a banking corporation that was in existence before January 21 first, two thousand six and was subject to tax under this subchapter for 22 its last taxable year beginning before January first, two thousand six, 23 shall continue to be taxable under this subchapter for all taxable years 24 beginning on or after January first, two thousand six and before January 25 first, two thousand eight. Provided, however, that nothing in this 26 subdivision shall prohibit a corporation that elected pursuant to subdi- 27 vision (d) of this section to be taxable under subchapter two of this 28 chapter from revoking that election in accordance with subdivision (d) 29 of this section. 30 For purposes of this paragraph, a corporation shall be considered to 31 be subject to tax under subchapter two of this chapter for a taxable 32 year if such corporation was not a taxpayer but was properly included in 33 a combined report filed pursuant to subdivision four of section 11-605 34 of this chapter for such taxable year and a corporation shall be consid- 35 ered to be subject to tax under this subchapter for a taxable year if 36 such corporation was not a taxpayer but was properly included in a 37 combined report filed pursuant to subdivision (f) or (g) of section 38 11-646 of this part for such taxable year. A corporation that was in 39 existence before January first, two thousand six but first becomes a 40 taxpayer in a taxable year beginning on or after January first, two 41 thousand six and before January first, two thousand eight, shall be 42 considered for purposes of this paragraph to have been subject to tax 43 under subchapter two of this chapter for its last taxable year beginning 44 before January first, two thousand six if such corporation would have 45 been subject to tax under such subchapter for such taxable year if it 46 had been a taxpayer during such taxable year. A corporation that was in 47 existence before January first, two thousand six but first becomes a 48 taxpayer in a taxable year beginning on or after January first, two 49 thousand six and before January first, two thousand eight, shall be 50 considered for purposes of this paragraph to have been subject to tax 51 under this subchapter for its last taxable year beginning before January 52 first, two thousand six if such corporation would have been subject to 53 tax under this subchapter for such taxable year if it had been a taxpay- 54 er during such taxable year. 55 (2) Notwithstanding anything to the contrary contained in this section 56 other than subdivision (m) of this section, a corporation formed on or

S. 8578 534

1 after January first, two thousand six and before January first, two 2 thousand eight may elect to be subject to tax under this subchapter or 3 under subchapter two of this chapter for its first taxable year begin- 4 ning on or after January first, two thousand six and before January 5 first, two thousand eight in which either (i) sixty-five percent or more 6 of its voting stock is owned or controlled, directly or indirectly by a 7 financial holding company, provided the corporation whose voting stock 8 is so owned or controlled is principally engaged in activities that are 9 described in paragraph four or five of subdivision (k) of section four 10 of the federal bank holding company act of nineteen hundred fifty-six, 11 as amended and the regulations promulgated pursuant to the authority of 12 such section or (ii) it is a financial subsidiary. An election under 13 this paragraph may not be made by a corporation described in paragraphs 14 one through eight of subdivision (a) of this section or in subdivision 15 (e) of this section. In addition, an election under this paragraph may 16 not be made by a corporation that is a party to a reorganization, as 17 defined in subsection (a) of section three hundred sixty-eight of the 18 internal revenue code of nineteen hundred eighty-six, as amended, of a 19 corporation described in paragraph one of this subdivision if both 20 corporations were sixty-five percent or more owned or controlled, 21 directly or indirectly by the same interests at the time of the reorgan- 22 ization. 23 An election under this paragraph must be made by the taxpayer on or 24 before the due date for filing its return, determined with regard to 25 extensions of time for filing, for the applicable taxable year. The 26 election to be taxed under subchapter two of this chapter shall be made 27 by the taxpayer by filing the return required pursuant to subdivision 28 one of section 11-605 of this chapter and the election to be taxed under 29 this subchapter shall be made by the taxpayer by filing the return 30 required pursuant to subdivision (a) of section 11-646 of this part. Any 31 election made pursuant to this paragraph shall be irrevocable and shall 32 apply to each subsequent taxable year beginning on or after January 33 first, two thousand six and before January first, two thousand eight, 34 provided that the stock ownership requirements described in subparagraph 35 (i) of this paragraph are met or such corporation described in subpara- 36 graph (ii) of this paragraph continues as a financial subsidiary. 37 (3) For purposes of this section, a financial subsidiary means a 38 corporation (i) sixty-five percent or more of whose voting stock is 39 owned or controlled, directly or indirectly by a banking corporation 40 described in paragraph one, two or three of subdivision (a) of this 41 section and (ii) is described in subdivision (g) of section five thou- 42 sand one hundred thirty-six-A of the revised statutes of the United 43 States or section forty-six of the federal deposit insurance act. For 44 purposes of this subchapter, the term "banking corporation" shall 45 include a corporation electing to be taxed under this subchapter pursu- 46 ant to paragraph two of this subdivision for so long as such election 47 shall be in effect. 48 (l) Transitional provisions relating to the enactment and implementa- 49 tion of the federal Gramm-Leach-Bliley act. (1) Notwithstanding anything 50 to the contrary contained in this section other than subdivision (m) of 51 this section, a corporation that was in existence before January first, 52 two thousand fourteen and was subject to tax under subchapter two of 53 this chapter for its last taxable year beginning before January first, 54 two thousand fourteen, shall continue to be taxable under such subchap- 55 ter for all taxable years beginning on or after January first, two thou- 56 sand fourteen and before January first, two thousand seventeen,

S. 8578 535

1 provided, however, this shall not apply to any taxable year during which 2 such corporation is a banking corporation described in paragraphs one 3 through eight of subdivision (a) of this section. Notwithstanding 4 anything to the contrary contained in this section other than subdivi- 5 sion (m) of this section, a banking corporation or corporation that was 6 in existence before January first, two thousand fourteen and was subject 7 to tax under this subchapter for its last taxable year beginning before 8 January first, two thousand fourteen, shall continue to be taxable under 9 this subchapter for all taxable years beginning on or after January 10 first, two thousand fourteen and before January first, two thousand 11 seventeen only if the corporation is a banking corporation as defined in 12 subdivision (a) of this section or the corporation satisfies the 13 requirements for a corporation to elect to be taxable under this 14 subchapter. Provided further, that nothing in this subdivision shall 15 prohibit a corporation that elected pursuant to subdivision (d) of this 16 section to be taxable under subchapter two of this chapter from revoking 17 that election in accordance with subdivision (d) of this section. For 18 purposes of this paragraph, a corporation shall be considered to be 19 subject to tax under subchapter two of this chapter for a taxable year 20 if such corporation was not a taxpayer but was properly included in a 21 combined report filed pursuant to subdivision four of section 11-605 of 22 this chapter for such taxable year and a corporation shall be considered 23 to be subject to tax under this subchapter for a taxable year if such 24 corporation was not a taxpayer but was properly included in a combined 25 report filed pursuant to subdivision (f) or (g) of section 11-646 of 26 this part for such taxable year. A corporation that was in existence 27 before January first, two thousand fourteen but first becomes a taxpayer 28 in a taxable year beginning on or after January first, two thousand 29 fourteen and before January first, two thousand seventeen, shall be 30 considered for purposes of this paragraph to have been subject to tax 31 under subchapter two of this chapter for its last taxable year beginning 32 before January first, two thousand fourteen if such corporation would 33 have been subject to tax under such subchapter for such taxable year if 34 it had been a taxpayer during such taxable year. A corporation that was 35 in existence before January first, two thousand fourteen but first 36 becomes a taxpayer in a taxable year beginning on or after January 37 first, two thousand fourteen and before January first, two thousand 38 seventeen, shall be considered for purposes of this paragraph to have 39 been subject to tax under this subchapter for its last taxable year 40 beginning before January first, two thousand fourteen if such corpo- 41 ration would have been subject to tax under this subchapter for such 42 taxable year if it had been a taxpayer during such taxable year. 43 (2) Notwithstanding anything to the contrary contained in this section 44 other than subdivision (m) of this section, a corporation formed on or 45 after January first, two thousand fourteen and before January first, two 46 thousand seventeen may elect to be subject to tax under this subchapter 47 or under subchapter two of this chapter for its first taxable year 48 beginning on or after January first, two thousand fourteen and before 49 January first, two thousand seventeen in which either (i) sixty-five 50 percent or more of its voting stock is owned or controlled, directly or 51 indirectly by a financial holding company, provided the corporation 52 whose voting stock is so owned or controlled is principally engaged in 53 activities that are described in paragraph four or five of subdivision 54 (k) of section four of the federal bank holding company act of nineteen 55 hundred fifty-six, as amended and the regulations promulgated pursuant 56 to the authority of such section or (ii) it is a financial subsidiary.

S. 8578 536

1 An election under this paragraph may not be made by a corporation 2 described in paragraphs one through eight of subdivision (a) of this 3 section or in subdivision (e) of this section. In addition, an election 4 under this paragraph may not be made by a corporation that is a party to 5 a reorganization, as defined in subsection (a) of section three hundred 6 sixty-eight of the internal revenue code of nineteen hundred eighty-six, 7 as amended, of a corporation described in paragraph one of this subdivi- 8 sion if both corporations were sixty-five percent or more owned or 9 controlled, directly or indirectly by the same interests at the time of 10 the reorganization. 11 An election under this paragraph must be made by the taxpayer on or 12 before the due date for filing its return, determined with regard to 13 extensions of time for filing, for the applicable taxable year. The 14 election to be taxed under subchapter two of this chapter shall be made 15 by the taxpayer by filing the return required pursuant to subdivision 16 one of section 11-605 of this chapter and the election to be taxed under 17 this subchapter shall be made by the taxpayer by filing the return 18 required pursuant to subdivision (a) of section 11-646 of this part. Any 19 election made pursuant to this paragraph shall be irrevocable and shall 20 apply to each subsequent taxable year beginning on or after January 21 first, two thousand fourteen and before January first, two thousand 22 seventeen, provided that the stock ownership and activities requirements 23 described in subparagraph (i) of this paragraph are met or such corpo- 24 ration described in subparagraph (ii) of this paragraph continues as a 25 financial subsidiary. 26 (3) For purposes of this section, a financial subsidiary means a 27 corporation (i) sixty-five percent or more of whose voting stock is 28 owned or controlled, directly or indirectly by a banking corporation 29 described in paragraph one, two or three of subdivision (a) of this 30 section and (ii) is described in subdivision (g) of section five thou- 31 sand one hundred thirty-six-A of the revised statutes of the United 32 States or section forty-six of the federal deposit insurance act. For 33 purposes of this subchapter, the term "banking corporation" shall 34 include a corporation electing to be taxed under this subchapter pursu- 35 ant to paragraph two of this subdivision for so long as such election 36 shall be in effect. 37 (m) (1) Notwithstanding anything in this part to the contrary, if any 38 of the conditions described in paragraph three of this subdivision apply 39 to a corporation that has made either the election to be taxable under 40 subchapter two of chapter six of this title pursuant to the Gramm-Leach- 41 Bliley transitional provisions in this section, or the election pursuant 42 to subdivision (d) of this section to continue to be taxable under 43 subchapter two of chapter six of this title, hereinafter the "electing 44 corporation", then such corporation shall be deemed to have revoked the 45 election as of the first day of the taxable year in which such condition 46 applied. 47 (2) Notwithstanding anything in this part to the contrary, if any of 48 the conditions described in paragraph three of this subdivision apply to 49 a corporation required to be taxable under subchapter two of chapter six 50 of this title pursuant to the Gramm-Leach-Bliley transitional provisions 51 in this section, hereinafter the "grandfathered corporation", such 52 corporation, if it is otherwise described in subdivision (a) of this 53 section, shall be taxable under this part as of the first day of the 54 taxable year in which such condition applied. 55 (3) The provisions of paragraph one and paragraph two of this subdivi- 56 sion shall apply if any of the following conditions exist or occur with

S. 8578 537

1 respect to the electing corporation or the grandfathered corporation in 2 a taxable year, including any short taxable year, beginning on or after 3 January first, two thousand nine: 4 (A) the corporation ceases to be a taxpayer under subchapter two of 5 chapter six of this title; 6 (B) the corporation becomes subject to the fixed dollar minimum tax 7 under clause four of subparagraph a of paragraph (E) of subdivision one 8 of section 11-604 of this chapter; 9 (C) the corporation has no wages or receipts allocable to the city 10 pursuant to subdivision three of section 11-604 of this chapter, or is 11 otherwise inactive; provided that this subparagraph shall not apply to a 12 corporation which is engaged in the active conduct of a trade or busi- 13 ness, or substantially all of the assets of which are stock and securi- 14 ties of corporations which are directly or indirectly controlled by it 15 and are engaged in the active conduct of a trade or business; 16 (D) sixty-five percent or more of the voting stock of the corporation 17 becomes owned or controlled directly by a corporation that acquired the 18 stock in a transaction, or series of related transactions, that quali- 19 fies as a purchase within the meaning of paragraph three of subsection 20 (h) of section three hundred thirty-eight of the internal revenue code 21 unless the corporation whose stock was acquired and the corporation 22 acquiring the stock were, immediately prior to such purchase, members of 23 the same affiliated group, as such term is defined in section fifteen 24 hundred four of the internal revenue code without regard to the exclu- 25 sions provided for in subsection (b) of such section; or 26 (E) the corporation, in a transaction or series of related trans- 27 actions, acquires assets, whether by contribution, purchase, or other- 28 wise, having an average value, determined in accordance with subdivision 29 two of section 11-604 of this chapter, or, if greater, a total tax 30 basis, in excess of forty percent of the average value, or, if greater, 31 the total tax basis, of all the assets of the corporation immediately 32 prior to such acquisition and as a result of such acquisition the corpo- 33 ration is principally engaged in a business that is different from the 34 business immediately prior to such acquisition, provided that such 35 different business is described in subparagraph (i) or (ii) of paragraph 36 nine of subdivision (a) of this section. 37 (n) Transitional provisions relating to the enactment and implementa- 38 tion of the federal Gramm-Leach-Bliley act. (1) Notwithstanding anything 39 to the contrary contained in this section other than subdivision (m) of 40 this section, a corporation that was in existence before January first, 41 two thousand seventeen and was subject to tax under subchapter two of 42 this chapter for its last taxable year beginning before January first, 43 two thousand seventeen, shall continue to be taxable under such subchap- 44 ter for all taxable years beginning on or after January first, two thou- 45 sand seventeen and before January first, two thousand twenty, provided, 46 however, this shall not apply to any taxable year during which such 47 corporation is a banking corporation described in paragraphs one through 48 eight of subdivision (a) of this section. Notwithstanding anything to 49 the contrary contained in this section other than subdivision (m) of 50 this section, a banking corporation or corporation that was in existence 51 before January first, two thousand seventeen and was subject to tax 52 under this subchapter for its last taxable year beginning before January 53 first, two thousand seventeen, shall continue to be taxable under this 54 subchapter for all taxable years beginning on or after January first, 55 two thousand seventeen and before January first, two thousand twenty 56 only if the corporation is a banking corporation as defined in subdivi-

S. 8578 538

1 sion (a) of this section or the corporation satisfies the requirements 2 for a corporation to elect to be taxable under this subchapter. Provided 3 further, that nothing in this subdivision shall prohibit a corporation 4 that elected pursuant to subdivision (d) of this section to be taxable 5 under subchapter two of this chapter from revoking that election in 6 accordance with subdivision (d) of this section. 7 For purposes of this paragraph, a corporation shall be considered to 8 be subject to tax under subchapter two of this chapter for a taxable 9 year if such corporation was not a taxpayer but was properly included in 10 a combined report filed pursuant to subdivision four of section 11-605 11 of this chapter for such taxable year and a corporation shall be consid- 12 ered to be subject to tax under this subchapter for a taxable year if 13 such corporation was not a taxpayer but was properly included in a 14 combined report filed pursuant to subdivision (f) or (g) of section 15 11-646 of this part for such taxable year. A corporation that was in 16 existence before January first, two thousand seventeen but first becomes 17 a taxpayer in a taxable year beginning on or after January first, two 18 thousand seventeen and before January first, two thousand twenty, shall 19 be considered for purposes of this paragraph to have been subject to tax 20 under subchapter two of this chapter for its last taxable year beginning 21 before January first, two thousand seventeen if such corporation would 22 have been subject to tax under such subchapter for such taxable year if 23 it had been a taxpayer during such taxable year. A corporation that was 24 in existence before January first, two thousand seventeen but first 25 becomes a taxpayer in a taxable year beginning on or after January 26 first, two thousand seventeen and before January first, two thousand 27 twenty, shall be considered for purposes of this paragraph to have been 28 subject to tax under this subchapter for its last taxable year beginning 29 before January first, two thousand seventeen if such corporation would 30 have been subject to tax under this subchapter for such taxable year if 31 it had been a taxpayer during such taxable year. 32 (2) Notwithstanding anything to the contrary contained in this section 33 other than subdivision (m) of this section, a corporation formed on or 34 after January first, two thousand seventeen and before January first, 35 two thousand twenty may elect to be subject to tax under this subchapter 36 or under subchapter two of this chapter for its first taxable year 37 beginning on or after January first, two thousand seventeen and before 38 January first, two thousand twenty in which either (i) sixty-five 39 percent or more of its voting stock is owned or controlled, directly or 40 indirectly by a financial holding company, provided the corporation 41 whose voting stock is so owned or controlled is principally engaged in 42 activities that are described in paragraphs four or five of subdivision 43 (k) of section four of the federal bank holding company act of nineteen 44 hundred fifty-six, as amended, and the regulations promulgated pursuant 45 to the authority of such section or (ii) it is a financial subsidiary. 46 An election under this paragraph may not be made by a corporation 47 described in paragraphs one through eight of subdivision (a) of this 48 section or in subdivision (e) of this section. In addition, an election 49 under this paragraph may not be made by a corporation that is a party to 50 a reorganization, as defined in subsection (a) of section three hundred 51 sixty-eight of the internal revenue code of nineteen hundred eighty-six, 52 as amended, of a corporation described in paragraph one of this subdivi- 53 sion if both corporations were sixty-five percent or more owned or 54 controlled, directly or indirectly, by the same interests at the time of 55 the reorganization.

S. 8578 539

1 An election under this paragraph shall be made by the taxpayer on or 2 before the due date for filing its return, determined with regard to 3 extensions of time for filing, for the applicable taxable year. The 4 election to be taxed under subchapter two of this chapter shall be made 5 by the taxpayer by filing the return required pursuant to subdivision 6 one of section 11-605 of this chapter and the election to be taxed under 7 this subchapter shall be made by the taxpayer by filing the return 8 required pursuant to subdivision (a) of section 11-646 of this part. Any 9 election made pursuant to this paragraph shall be irrevocable and shall 10 apply to each subsequent taxable year beginning on or after January 11 first, two thousand seventeen and before January first, two thousand 12 twenty, provided that the stock ownership and activities requirements 13 described in subparagraph (i) of this paragraph are met or such corpo- 14 ration described in subparagraph (ii) of this paragraph continues as a 15 financial subsidiary. 16 (3) For purposes of this subdivision, a financial subsidiary means a 17 corporation (i) sixty-five percent or more of whose voting stock is 18 owned or controlled, directly or indirectly by a banking corporation 19 described in paragraph one, two or three of subdivision (a) of this 20 section and (ii) is described in subdivision (g) of section five thou- 21 sand one hundred thirty-six-A of the revised statutes of the United 22 States or section forty-six of the federal deposit insurance act. For 23 purposes of this subchapter, the term "banking corporation" shall 24 include a corporation electing to be taxed under this subchapter pursu- 25 ant to paragraph two of this subdivision for so long as such election 26 shall be in effect. 27 § 11-641 Computations of entire net income. (a) Entire net income 28 means total net income from all sources which shall be the same as the 29 entire taxable income, but not alternative minimum taxable income, 30 (1) which the taxpayer is required to report to the United States 31 treasury department, or 32 (2) which the taxpayer, in the case of a corporation which is exempt 33 from federal income tax, other than the tax on unrelated business taxa- 34 ble income imposed under section five hundred eleven of the internal 35 revenue code, but which is subject to tax under this part, would have 36 been required to report to the United States treasury department but for 37 such exemption, or 38 (3) which, in the case of a corporation organized under the laws of a 39 country other than the United States, is effectively connected with the 40 conduct of a trade or business within the United States as determined 41 under section eight hundred eighty-two of the internal revenue code, or 42 (4) which the taxpayer would have been required to report to the 43 United States treasury department if the taxpayer had not elected to be 44 taxed under subchapter s of chapter one of the internal revenue code, or 45 (5) which the taxpayer would have been required to report to the 46 United States treasury department if no election had been made to treat 47 the taxpayer as a qualified subchapter s subsidiary under paragraph 48 three of subsection (b) of section thirteen hundred sixty-one of the 49 internal revenue code, subject to the modifications and adjustments 50 provided in this section. 51 (b) Entire net income shall be computed without the deduction or 52 exclusion of: 53 (1) (A) in the case of a corporation organized under the laws of a 54 country other than the United States, (i) any part of any income from 55 dividends or interest on any kind of stock, securities or indebtedness, 56 but only if such income is treated as effectively connected with the

S. 8578 540

1 conduct of a trade or business in the United States pursuant to section 2 eight hundred sixty-four of the internal revenue code, (ii) any income 3 exempt from federal taxable income under any treaty obligation of the 4 United States, but only if such income would be treated as effectively 5 connected in the absence of such exemption, provided that such treaty 6 obligation does not preclude the taxation of such income by a state, or 7 (iii) any income which would be treated as effectively connected if such 8 income were not excluded from gross income pursuant to subsection (a) of 9 section one hundred three of the internal revenue code; (B) in the case 10 of any other corporation, any part of any income from dividends or 11 interest on any kind of stock, securities or indebtedness; (C) except 12 that for purposes of subparagraphs (A) and (B) of this paragraph there 13 shall be excluded any amounts treated as dividends pursuant to section 14 seventy-eight of the internal revenue code and any amounts described in 15 paragraphs eleven and twelve of subdivision (e) of this section; 16 (2) taxes on or measured by income or profits paid or accrued within 17 the taxable year to the United States, or any of its possessions or to 18 any foreign country, taxes on or measured by income or profits paid or 19 accrued to the state or any subdivision thereof, including taxes imposed 20 under article nine, nine-A, thirteen-A, twenty-four-A, twenty-four-B of 21 the tax law, or under article thirty-two of the tax law as such article 22 was in effect on December thirty-first, two thousand fourteen and any 23 tax imposed under this part or subchapter two or three-A of this chap- 24 ter; 25 (4) for taxable years beginning after December thirty-first, nineteen 26 hundred eighty-one, except with respect to property which is a qualified 27 mass commuting vehicle described in subparagraph (D) of paragraph eight 28 of subsection (f) of section one hundred sixty-eight of the internal 29 revenue code, relating to qualified mass commuting vehicles, any amount 30 which the taxpayer claimed as a deduction in computing its federal taxa- 31 ble income solely as a result of an election made pursuant to the 32 provisions of such paragraph eight as it was in effect for agreements 33 entered into prior to January first, nineteen hundred eighty-four; 34 (5) for taxable years beginning after December thirty-first, nineteen 35 hundred eighty-one, except with respect to property which is a qualified 36 mass commuting vehicle described in subparagraph (D) of paragraph eight 37 of subsection (f) of section one hundred sixty-eight of the internal 38 revenue code, relating to qualified mass commuting vehicles, any amount 39 which the taxpayer would have been required to include in the computa- 40 tion of its federal taxable income had it not made the election permit- 41 ted pursuant to such paragraph eight as it was in effect for agreements 42 entered into prior to January first, nineteen hundred eighty-four; 43 (6) in the case of property placed in service in taxable years begin- 44 ning before nineteen hundred ninety-four, for taxable years beginning 45 after December thirty-first, nineteen hundred eighty-one, except with 46 respect to property subject to the provisions of section two hundred 47 eighty-F of the internal revenue code and property subject to the 48 provisions of section one hundred sixty-eight of the internal revenue 49 code which is placed in service in this state in taxable years beginning 50 after December thirty-first, nineteen hundred eighty-four, the amount 51 allowable as a deduction determined under section one hundred sixty- 52 eight of the internal revenue code; 53 (7) upon the disposition of property to which paragraph seven of 54 subdivision (e) of this section applies, the amount, if any, by which 55 the aggregate of the amounts described in such paragraph seven attribut-

S. 8578 541

1 able to such property exceeds the aggregate of the amounts described in 2 paragraph six of this subdivision attributable to such property; 3 (11) for taxable years beginning before January first, two thousand 4 ten, in the case of a taxpayer subject to the provisions of subdivision 5 (c) of section five hundred eighty-five of the internal revenue code, 6 the amount allowed as a deduction pursuant to section one hundred 7 sixty-six of such code; and 8 (12) for taxable years beginning before January first, two thousand 9 ten, for taxpayers subject to the provisions of subdivision (i) of this 10 section, twenty percent of the excess of (A) the amount determined 11 pursuant to such subdivision (i) over (B) the amount which would have 12 been allowable had such institution maintained its bad debt reserve for 13 all taxable years on the basis of actual experience. 14 (13) for taxable years ending after September tenth, two thousand one, 15 in the case of qualified property described in paragraph two of 16 subsection k of section one hundred sixty-eight of the internal revenue 17 code, other than qualified resurgence zone property defined in subdivi- 18 sion (p) of this section, and other than qualified New York Liberty Zone 19 property described in paragraph two of subsection b of section fourteen 20 hundred-L of the internal revenue code, without regard to clause (i) of 21 subparagraph (C) of such paragraph, the amount allowable as a deduction 22 under section one hundred sixty-seven of the internal revenue code. 23 (14) for taxable years beginning on or after January first, two thou- 24 sand four, in the case of a taxpayer that is not an eligible farmer as 25 defined in subsection (n) of section six hundred six of the tax law, the 26 amount allowable as a deduction under sections one hundred seventy-nine, 27 one hundred sixty-seven and one hundred sixty-eight of the internal 28 revenue code with respect to a sport utility vehicle that is not a 29 passenger automobile as defined in paragraph five of subsection (d) of 30 section two hundred eighty-F of the internal revenue code. 31 (15) The amount of any deduction allowed pursuant to section one 32 hundred ninety-nine of the internal revenue code. 33 (16) The amount of any federal deduction for taxes imposed under arti- 34 cle twenty-three of the tax law. 35 (17) For taxable years beginning in two thousand nineteen and two 36 thousand twenty, the amount of the increase in the federal interest 37 deduction allowed pursuant to paragraph ten of subdivision (j) of 38 section one hundred sixty-three of the internal revenue code. 39 (c)(1) Except as otherwise provided in paragraphs two and three of 40 this subdivision, in the case of the sale or exchange of property by a 41 taxpayer which has been subject to part one or two of this subchapter 42 three where the property has a higher adjusted basis for city tax 43 purposes than for federal tax purposes, there shall be allowed as a 44 deduction from entire net income, the portion of any gain or loss on 45 such sale which equals the difference in such basis. 46 (2) In case of property of a taxpayer, other than a savings bank, 47 acquired prior to January first, nineteen hundred sixty-six, and 48 disposed of thereafter, the computation of entire net income shall be 49 modified as follows: 50 (i) no gain shall be deemed to have been derived if either the cost or 51 the fair market price or value on January first, nineteen hundred 52 sixty-six, exceeds the value realized; 53 (ii) no loss shall be deemed to have been sustained if either the cost 54 or the fair market price or value on January first, nineteen hundred 55 sixty-six, is less than the value realized;

S. 8578 542

1 (iii) where both the cost and the fair market price or value on Janu- 2 ary first, nineteen hundred sixty-six, are less than the value realized, 3 the basis for computing gain shall be the cost or the fair market price 4 or value on such date, whichever is higher; 5 (iv) where both the cost and the fair market price or value on January 6 first, nineteen hundred sixty-six, are in excess of the value realized, 7 the basis for computing loss shall be the cost or the fair market price 8 or value on such date, whichever is lower. 9 (3) In case of property of a savings bank acquired prior to January 10 first, nineteen hundred sixty-six, and disposed of thereafter, in 11 computing entire net income the basis of such property shall be the fair 12 market price or value on January first, nineteen hundred sixty-six. 13 (d) Entire net income shall not include any refund or credit of a tax 14 for which no exclusion or deduction was allowed in determining the 15 taxpayer's entire net income under this subchapter or subchapter two of 16 this chapter, or imposed by article twenty-three of the tax law for any 17 prior year. 18 (e) There shall be allowed as a deduction in determining entire net 19 income, to the extent not deductible in determining federal taxable 20 income: 21 (1) interest on indebtedness incurred or continued to purchase or 22 carry obligations or securities the income from which is subject to tax 23 under this part but exempt from federal income tax, 24 (2) ordinary and necessary expenses paid or incurred during the taxa- 25 ble year attributable to income which is subject to tax under this part 26 but exempt from federal income tax, 27 (3) the amortizable bond premium for the taxable year on any bond the 28 interest on which is subject to tax under this part but exempt from 29 federal income tax, 30 (4) that portion of wages or salaries paid or incurred for the taxable 31 year for which a deduction is not allowed pursuant to the provisions of 32 section two hundred eighty-C of the internal revenue code, 33 (5) for taxable years beginning after December thirty-first, nineteen 34 hundred eighty-one, except with respect to property which is a qualified 35 mass commuting vehicle described in subparagraph (D) of paragraph eight 36 of subsection (f) of section one hundred sixty-eight of the internal 37 revenue code, relating to qualified mass commuting vehicles, any amount 38 which is included in the taxpayer's federal taxable income solely as a 39 result of an election made pursuant to the provisions of such paragraph 40 eight as it was in effect for agreements entered into prior to January 41 first, nineteen hundred eighty-four, 42 (6) for taxable years beginning after December thirty-first, nineteen 43 hundred eighty-one, except with respect to property which is a qualified 44 mass commuting vehicle described in subparagraph (D) of paragraph eight 45 of subsection (f) of section one hundred sixty-eight of the internal 46 revenue code, relating to qualified mass commuting vehicles, any amount 47 which the taxpayer could have excluded from federal taxable income had 48 it not made the election provided for in such paragraph eight as it was 49 in effect for agreements entered into prior to January first, nineteen 50 hundred eighty-four, 51 (7) in the case of property placed in service in taxable years begin- 52 ning before nineteen hundred ninety-four, for taxable years beginning 53 after December thirty-first, nineteen hundred eighty-one, except with 54 respect to property subject to the provisions of section two hundred 55 eighty-F of the internal revenue code and property subject to the 56 provisions of section one hundred sixty-eight of the internal revenue

S. 8578 543

1 code which is placed in service in this state in taxable years beginning 2 after December thirty-first, nineteen hundred eighty-four, and provided 3 a deduction has not been excluded from entire net income pursuant to 4 paragraph four of subdivision (b) of this section, an amount with 5 respect to property which is subject to the provisions of section one 6 hundred sixty-eight of the internal revenue code equal to the amount 7 allowable as the depreciation deduction under section one hundred 8 sixty-seven of the internal revenue code as such section would have 9 applied to property placed in service on December thirty-first, nineteen 10 hundred eighty, 11 (8) upon the disposition of property to which paragraph seven of this 12 subdivision applies, the amount, if any, by which the aggregate of the 13 amounts described in paragraph six of subdivision (b) of this section 14 attributable to such property exceeds the aggregate of the amounts 15 described in paragraph seven of this subdivision attributable to such 16 property, 17 (9) any amount of money or other property received from the federal 18 deposit insurance corporation pursuant to subsection (c) of section 19 thirteen of the federal deposit insurance act, as amended, regardless of 20 whether any note or other instrument is issued in exchange therefor, 21 (10) any amount of money or other property received from the federal 22 savings and loan insurance corporation pursuant to paragraph one, two, 23 three or four of subsection (f) of section four hundred six of the 24 federal national housing act, as amended, regardless of whether any note 25 or other instrument is issued in exchange therefor, 26 (11) (i) seventeen percent of interest income from subsidiary capital, 27 and 28 (ii) sixty percent of dividend income from subsidiary capital, and 29 (iii) sixty percent of the amount by which gains from subsidiary capi- 30 tal exceed losses from subsidiary capital, to the extent such gains and 31 losses were taken into account in determining the entire taxable income 32 referred to in subdivision (a) of this section, 33 (12) twenty-two and one-half percent of interest income on obligations 34 of New York state, or of any political subdivision thereof, or on obli- 35 gations of the United States, other than obligations held for resale in 36 connection with regular trading activities, 37 (13) for the taxable years beginning before January first, two thou- 38 sand ten, in the case of a taxpayer which recaptures its balance of the 39 reserve for losses on loans for federal income tax purposes pursuant to 40 subdivision (c) of section five hundred eight-five of the internal 41 revenue code, any amount which is included in federal taxable income 42 pursuant to subdivision (c) of section five hundred eighty-five of such 43 code, 44 (14) for taxable years beginning before January first, two thousand 45 ten, in the case of a taxpayer subject to the provisions of subdivision 46 (c) of section five hundred eighty-five of the internal revenue code, 47 any amount which is included in federal taxable income as a result of a 48 recovery of a loan, 49 (15) for taxable years beginning before January first, two thousand 50 ten, in the case of a taxpayer which is currently or has previously been 51 subject to subdivision (h) of this section, any amount which is included 52 in federal taxable income pursuant to paragraph two of subdivision (e) 53 of section five hundred ninety-three of the internal revenue code, and 54 any other amount so included as a result of a recovery of or termination 55 from the use of a bad debt reserve as defined in section five hundred 56 ninety-three of such code as in existence on December thirty-first,

S. 8578 544

1 nineteen hundred ninety-five as a result of federal legislation enacted 2 after December thirty-first, nineteen hundred ninety-five, 3 (16) one hundred percent of dividend income from subsidiary capital 4 received during the taxable year if that dividend income is directly 5 attributable to a dividend from a captive REIT or captive RIC for which 6 the captive REIT or captive RIC claimed a federal dividends paid 7 deduction and that captive REIT or captive RIC is included in a combined 8 report or return under subchapter two or part four of subchapter three 9 of this chapter. 10 (f) Provided the taxpayer has not made an election pursuant to para- 11 graph two of subdivision (b) of section 11-642 of this part, there shall 12 be allowed as a deduction in determining entire net income, to the 13 extent not deductible in determining federal taxable income, the 14 adjusted eligible net income of an international banking facility deter- 15 mined as follows: 16 (1) The eligible net income of an international banking facility shall 17 be the amount remaining after subtracting from the eligible gross income 18 the applicable expenses. 19 (2) Eligible gross income shall be the gross income derived by an 20 international banking facility from: 21 (A) making, arranging for, placing or servicing loans to foreign 22 persons, provided, however, that in the case of a foreign person which 23 is an individual, or which is a foreign branch of a domestic corpo- 24 ration, other than a bank, or which is a foreign corporation or foreign 25 partnership which is eighty per centum or more owned or controlled, 26 either directly or indirectly, by one or more domestic corporations, 27 other than banks, domestic partnerships or resident individuals, 28 substantially all the proceeds of the loan are intended for use outside 29 of the United States; 30 (B) making or placing deposits with foreign persons which are banks or 31 foreign branches of banks, including foreign subsidiaries or foreign 32 branches of the taxpayer, or with other international banking facili- 33 ties; or 34 (C) entering into foreign exchange trading or hedging transactions 35 related to any of the transactions described in this paragraph. 36 (3) Applicable expenses shall be any expenses or other deductions 37 attributable, directly or indirectly, to the eligible gross income 38 described in paragraph two of this subdivision. 39 (4) Adjusted eligible net income shall be determined by subtracting 40 from eligible net income the ineligible funding amount, and by subtract- 41 ing from the amount then remaining the floor amount. 42 (5) The ineligible funding amount shall be the amount, if any, deter- 43 mined by multiplying eligible net income by a fraction, the numerator of 44 which is the average aggregate amount for the taxable year of all 45 liabilities, including deposits, and other sources of funds of the 46 international banking facility which were not owed to or received from 47 foreign persons, and the denominator of which is the average aggregate 48 amount for the taxable year of all liabilities, including deposits and 49 other sources of funds of the international banking facility. 50 (6) The floor amount shall be the amount, if any, determined by multi- 51 plying the amount remaining after subtracting the ineligible funding 52 amount from the eligible net income by a fraction, not greater than one, 53 which is determined as follows: 54 (A) The numerator shall be 55 (i) the percentage, as set forth in subparagraph (C) of this para- 56 graph, of the average aggregate amount of the taxpayer's loans to

S. 8578 545

1 foreign persons and deposits with foreign persons which are banks or 2 foreign branches of banks, including foreign subsidiaries or foreign 3 branches of the taxpayer, which loans and deposits were recorded in the 4 financial accounts of the taxpayer for its branches, agencies and 5 offices within the state for taxable years nineteen hundred seventy- 6 five, nineteen hundred seventy-six and nineteen hundred seventy-seven, 7 minus 8 (ii) the average aggregate amount of such loans and such deposits for 9 the taxable year of the taxpayer, other than such loans and deposits of 10 an international banking facility, provided, however, that in no case 11 shall the amount determined in this clause exceed the amount determined 12 in clause (i) of this subparagraph; and 13 (B) The denominator shall be the average aggregate amount of the loans 14 to foreign persons and deposits with foreign persons which are banks or 15 foreign branches of banks, including foreign subsidiaries or foreign 16 branches of the taxpayer, which loans and deposits were recorded in the 17 financial accounts of the taxpayer's international banking facility for 18 the taxable year. 19 (C) The percentage shall be one hundred percent for the first taxable 20 year in which the taxpayer establishes an international banking facility 21 and for the next succeeding four taxable years. The percentage shall be 22 eighty percent for the fifth, sixty percent for the sixth, forty percent 23 for the seventh, and twenty percent for the eighth taxable year next 24 succeeding the year such taxpayer establishes such international banking 25 facility, and zero in the ninth succeeding year and thereafter. 26 (7) In the event adjusted eligible net income is a loss, such loss 27 shall be added to entire net income. 28 (8) For purposes of this subdivision, the term "foreign person" means: 29 (A) an individual who is not a resident of the United States, 30 (B) a foreign corporation, a foreign partnership or a foreign trust, 31 as defined in section seventy-seven hundred one of the internal revenue 32 code, other than a domestic branch thereof, 33 (C) a foreign branch of a domestic corporation, including the taxpay- 34 er, 35 (D) a foreign government or an international organization or an agency 36 of either, or 37 (E) an international banking facility. 38 For purposes of this paragraph, the terms "foreign" and "domestic" 39 shall have the same meaning as set forth in section seventy-seven 40 hundred one of the internal revenue code. 41 (g) Entire net income shall be computed without regard to the 42 reduction in the basis of property that is required by section three 43 hundred sixty-two of the internal revenue code, because of any amount of 44 money or other property received from the federal deposit insurance 45 corporation pursuant to subsection (c) of section thirteen of the feder- 46 al deposit insurance act, as amended, or from the federal savings and 47 loan insurance corporation pursuant to paragraph one, two, three or four 48 of subsection (f) of section four hundred six of the federal national 49 housing act, as amended. 50 (h)(1) For purposes of this subdivision, a "thrift institution" is a 51 banking corporation which satisfies the requirements of subparagraphs 52 (A) and (B) of this paragraph. 53 (A) Such banking corporation must be (i) a banking corporation as 54 defined in paragraph one of subdivision (a) of section 11-640 of this 55 part created or authorized to do business under article six or ten of 56 the banking law, (ii) a banking corporation as defined in paragraph two

S. 8578 546

1 or seven of subdivision (a) of section 11-640 of this part which is 2 doing a business substantially similar to the business which a corpo- 3 ration or association may be created to do under article six or ten of 4 the banking law or any business which a corporation or association is 5 authorized by such article to do, or (iii) a banking corporation as 6 defined in paragraph four or five of subdivision (a) of section 11-640 7 of this part. 8 (B) At least sixty percent of the amount of the total assets, at the 9 close of the taxable year, of such banking corporation must consist of 10 (i) cash; (ii) obligations of the United States or of a state or poli- 11 tical subdivision thereof, and stock or obligations of a corporation 12 which is an instrumentality of the United States or of a state or poli- 13 tical subdivision thereof, but not including obligations the interest on 14 which is excludable from gross income under section one hundred three of 15 the internal revenue code; (iii) loans secured by a deposit or share of 16 a member; (iv) loans secured by an interest in real property which is, 17 or from the proceeds of the loan, will become, residential real property 18 or real property used primarily for church purposes, loans made for the 19 improvement of residential real property or real property used primarily 20 for church purposes, provided that for purposes of this clause, residen- 21 tial real property shall include single or multifamily dwellings, facil- 22 ities in residential developments dedicated to public use or property 23 used on a nonprofit basis for residents, and mobile homes not used on a 24 transient basis; (v) property acquired through the liquidation of 25 defaulted loans described in clause (iv) of this subparagraph; (vi) any 26 regular or residual interest in a REMIC, as such term is defined in 27 section eight hundred sixty-D of the internal revenue code and any regu- 28 lar interest in a FASIT, as such term is defined in section eight 29 hundred sixty-L of the internal revenue code, but only in the proportion 30 which the assets of such REMIC or FASIT consist of property described in 31 clauses (i) through (v) of this subparagraph, except that if ninety-five 32 percent or more of the assets of such REMIC or FASIT are assets 33 described in clauses (i) through (v) of this subparagraph, the entire 34 interest in the REMIC or FASIT shall qualify; (vii) any mortgage-backed 35 security which represents ownership of a fractional undivided interest 36 in a trust, the assets of which consist primarily of mortgage loans, 37 provided that the real property which serves as security for the loans 38 is, or from the proceeds of the loan, will become, the type of property 39 described in clause (iv) of this subparagraph and any collateralized 40 mortgage obligation, the security for which consists primarily of mort- 41 gage loans, provided that the real property which serves as security for 42 the loans is, or from the proceeds of the loan, will become, the type of 43 property described in clause (iv) of this subparagraph; (viii) certif- 44 icates of deposit in, or obligations of, a corporation organized under a 45 state law which specifically authorizes such corporation to insure the 46 deposits or share accounts of member associations; (ix) loans secured by 47 an interest in real property located within any urban renewal area to be 48 developed for predominantly residential use under an urban renewal plan 49 approved by the Secretary of Housing and Urban Development under part A 50 or part B of title I of the Housing Act of nineteen hundred forty-nine, 51 as amended, or located within any area covered by a program eligible for 52 assistance under section one hundred three of the Demonstration Cities 53 and Metropolitan Development Act of nineteen hundred sixty-six, as 54 amended, and loans made for the improvement of any such real property; 55 (x) loans secured by an interest in educational, health, or welfare 56 institutions or facilities, including structures designed or used prima-

S. 8578 547

1 rily for residential purposes for students, residents, and persons under 2 care, employees, or members of the staff of such institutions or facili- 3 ties; (xi) loans made for the payment of expenses of college or univer- 4 sity education or vocational training; (xii) property used by the 5 taxpayer in the conduct of business which consists principally of 6 acquiring the savings of the public and investing in loans; (xiii) loans 7 for which the taxpayer is the creditor and which are wholly secured by 8 loans described in clause (iv) of this subparagraph, but excluding loans 9 for which the taxpayer is the creditor to any banking corporation 10 described in paragraphs one through seven of subdivision (a) of section 11 11-640 of this part or a real estate investment trust, as such term is 12 defined in section eight hundred fifty-six of the internal revenue code, 13 and excluding loans which are treated by the taxpayer as subsidiary 14 capital for purposes of the deductions provided by paragraph eleven of 15 subdivision (e) of this section; (xiv) small business loans or small 16 farm loans located in low-income or moderate-income census tracts or 17 block numbering areas delineated by the United States bureau of the 18 census in the most recent decennial census; and (xv) community develop- 19 ment loans or community development investments. For purposes of clause 20 (xv) of this subparagraph, a "community development loan" is a loan that 21 (I) has as its primary purpose community development, (II) has not been 22 reported or collected by the taxpayer for consideration in the taxpay- 23 er's community reinvestment act evaluation pursuant to the federal 24 community reinvestment act of nineteen hundred seventy-seven, as 25 amended, or section twenty-eight-b of the banking law as a mortgage loan 26 described in clause (iv) of this subparagraph or a small business loan, 27 small farm loan, or consumer loan, (III) benefits the taxpayer's assess- 28 ment area or areas for purposes of the federal community reinvestment 29 act of nineteen hundred seventy-seven, as amended or section twenty- 30 eight-b of the banking law or a broader statewide or regional area that 31 includes the taxpayer's assessment area, and (IV) is identified in the 32 taxpayer's books and records as a community development loan for 33 purposes of its community reinvestment act evaluation pursuant to the 34 federal community reinvestment act of nineteen hundred seventy-seven, as 35 amended or section twenty-eight-b of the banking law. For purposes of 36 clause (xv) of this subparagraph, a "community development investment" 37 is an investment in a security which has as its primary purpose communi- 38 ty development and which is identified in the taxpayer's books and 39 records as a qualified investment for purposes of its community rein- 40 vestment act evaluation pursuant to the federal community reinvestment 41 act of nineteen hundred seventy-seven, as amended or section twenty- 42 eight-b of the banking law. For purposes of this subparagraph, "communi- 43 ty development" means (I) affordable housing, including multifamily 44 rental housing for low-income or moderate-income individuals; (II) 45 community services targeted to low-income or moderate-income individ- 46 uals; (III) activities that promote economic development by financing 47 businesses or farms that meet the size eligibility standards of the 48 small business administration's development company or small business 49 investment company programs or have gross annual revenues of one million 50 dollars or less; (IV) activities that revitalize or stabilize low-income 51 or moderate-income census tracts or block numbering areas delineated by 52 the United States bureau of the census in the most recent decennial 53 census; or (V) activities that seek to prevent defaults and/or foreclo- 54 sures in loans included in items (I) and (III) of this subclause. 55 (C) At the election of the taxpayer, the percentage specified in 56 subparagraph (B) of this paragraph shall be applied on the basis of the

S. 8578 548

1 average assets outstanding during the taxable year, in lieu of the close 2 of the taxable year. For purposes of clause (iv) of subparagraph (B) of 3 this paragraph, if a multifamily structure securing a loan is used in 4 part for nonresidential use purposes, the entire loan is deemed a resi- 5 dential real property loan if the planned residential use exceeds eighty 6 percent of the property's planned use, determined as of the time the 7 loan is made. Also, for purposes of clause (iv) of subparagraph (B) of 8 this paragraph, loans made to finance the acquisition or development of 9 land shall be deemed to be loans secured by an interest in residential 10 real property if there is a reasonable assurance that the property will 11 become residential real property within a period of three years from the 12 date of acquisition of such land; but this shall not apply for any taxa- 13 ble year unless, within such three year period, such land becomes resi- 14 dential real property. For purposes of determining whether any interest 15 in a REMIC qualifies under clause (vi) of subparagraph (B) of this para- 16 graph, any regular interest in another REMIC held by such REMIC shall be 17 treated as a loan described in clauses (i), (ii), (iii), (iv) or (v) of 18 subparagraph (B) of this paragraph under principles similar to the prin- 19 ciple of such clause (vi); except that if such REMICS are part of a 20 tiered structure, they shall be treated as one REMIC for purposes of 21 such clause (vi). 22 (2) For taxable years beginning before January first, two thousand 23 ten, a thrift institution must exclude from the computation of its 24 entire net income any amount allowed as a deduction for federal income 25 tax purposes pursuant to section one hundred sixty-six, five hundred 26 eight-five or five hundred ninety-three of the internal revenue code. 27 (3) For taxable years beginning before January first, two thousand 28 ten, a thrift institution shall be allowed as a deduction in computing 29 entire net income the amount of a reasonable addition to its reserve for 30 bad debts. This amount shall be equal to the sum of: 31 (A) the amount determined to be a reasonable addition to the reserve 32 for losses on nonqualifying loans, computed in the same manner as is 33 provided with respect to additions to the reserves for losses on loans 34 of banks under paragraph one of subdivision (i) of this section, plus 35 (B) the amount determined by the taxpayer to be a reasonable addition 36 to the reserve for losses on qualifying real property loans, but such 37 amount shall not exceed the amount determined under paragraph four or 38 five of this subdivision, whichever is the larger, but the amount deter- 39 mined under this subparagraph shall in no case be greater than the larg- 40 er of: 41 (i) the amount determined under paragraph five of this subdivision, or 42 (ii) the amount which, when added to the amount determined under 43 subparagraph (A) of this paragraph, equals the amount by which twelve 44 percent of the total deposits or withdrawable accounts of depositors of 45 the taxpayer at the close of such year exceeds the sum of its surplus, 46 undivided profits and reserves at the beginning of such year, taking 47 into account any portion thereof attributable to the period before the 48 first taxable year beginning after December thirty-first, nineteen 49 hundred fifty-one. 50 The taxpayer must include in its tax return for each year a computa- 51 tion of the amount of the addition to the bad debt reserve determined 52 under this subdivision. The use of a particular method in the return for 53 a taxable year is not a binding election by the taxpayer. 54 (4)(A) Subject to subparagraphs (B) and (C) of this paragraph, the 55 amount determined under this paragraph for the taxable year shall be an

S. 8578 549

1 amount equal to thirty-two percent of the entire net income for such 2 year. 3 (B) The amount determined under subparagraph (A) of this paragraph 4 shall be reduced, but not below zero, by the amount determined under 5 subparagraph (A) of paragraph three of this subdivision. 6 (C) The amount determined under this paragraph shall not exceed the 7 amount necessary to increase the balance at the close of the taxable 8 year of the reserve for losses on qualifying real property loans to six 9 percent of such loans outstanding at such time. 10 (D) For purposes of this paragraph, entire net income shall be 11 computed 12 (i) by excluding from income any amount included therein by reason of 13 subparagraph (B) of paragraph eight of this subdivision, 14 (ii) without regard to any deduction allowable for any addition to the 15 reserve for bad debts, and 16 (iii) by excluding from income an amount equal to the net gain for the 17 taxable year arising from the sale or exchange of stock of a corporation 18 or of obligations the interest on which is excludable from gross income 19 under section one hundred three of the internal revenue code. 20 (iv) Whenever a thrift institution is properly includable in a 21 combined return, entire net income, for purposes of this paragraph, 22 shall not exceed the lesser of the thrift institution's separately 23 computed entire net income as adjusted pursuant to clauses (i) through 24 (iii) of this subparagraph or the combined group's entire net income as 25 adjusted pursuant to clauses (i) through (iii) of this subparagraph. 26 (5) The amount determined under this paragraph for the taxable year 27 shall be computed in the same manner as is provided under paragraph one 28 of subdivision (i) of this section with respect to additions to reserves 29 for losses on loans of banks. Provided, however, that for any taxable 30 year beginning after nineteen hundred ninety-five, for purposes of such 31 computation, the base year shall be the later of (A) the last taxable 32 year beginning in nineteen hundred ninety-five or (B) the last taxable 33 year before the current year in which the amount determined under the 34 provisions of subparagraph (B) of paragraph three of this subdivision 35 exceeded the amount allowable under this paragraph. 36 (6) (A) (i) Each taxpayer described in paragraph one of this subdivi- 37 sion shall establish and maintain a New York reserve for losses on qual- 38 ifying real property loans, a New York reserve for losses on nonqualify- 39 ing loans and a supplemental reserve for losses on loans. Such reserves 40 shall be maintained for all subsequent taxable years that this subdivi- 41 sion applies to the taxpayer. 42 (ii) For purposes of this subdivision, such reserves shall be treated 43 as reserves for bad debts, but no deduction shall be allowed for any 44 addition to the supplemental reserve for losses on loans. 45 (iii) Except as provided in this clause, the balances of each such 46 reserve at the beginning of the first day of the first taxable year 47 beginning after December thirty-first, nineteen hundred ninety-five 48 shall be the same as the balances maintained for federal income tax 49 purposes in accordance with paragraph one of subdivision (c) of section 50 five hundred ninety-three of the internal revenue code as in existence 51 on December thirty-first, nineteen hundred ninety-five for the last day 52 of the last tax year beginning before January first, nineteen hundred 53 ninety-six. A taxpayer which maintained a New York reserve for loan 54 losses on qualifying real property loans in the last tax year beginning 55 before January first, nineteen hundred ninety-six shall have a continua-

S. 8578 550

1 tion of such New York reserve balance in lieu of the amount determined 2 under this clause. 3 (iv) Notwithstanding clause (ii) of this subparagraph, any amount 4 allocated to the reserve for losses on qualifying real property loans 5 pursuant to paragraph five of subdivision (c) of section five hundred 6 ninety-three of the internal revenue code as in effect immediately prior 7 to the enactment of the Tax Reform Act of nineteen hundred seventy six 8 shall not be treated as a reserve for bad debts for any purpose other 9 than determining the amount referred to in subparagraph (B) of paragraph 10 three of this subdivision, and for such purpose such amount shall be 11 treated as remaining in such reserve. 12 (B) Any debt becoming worthless or partially worthless in respect of a 13 qualifying real property loan shall be charged to the reserve for losses 14 on such loans and any debt becoming worthless or partially worthless in 15 respect of a nonqualifying loan shall be charged to the reserve for 16 losses on nonqualifying loans, except that any such debt may, at the 17 election of the taxpayer, be charged in whole or in part to the supple- 18 mental reserve for losses on loans. 19 (C) The New York reserve for losses on qualifying real property loans 20 shall be increased by the amount determined under subparagraph (B) of 21 paragraph three of this subdivision and the New York reserve for losses 22 on nonqualifying loans shall be increased by the amount determined under 23 subparagraph (A) of paragraph three of this subdivision. 24 (7)(A) For purposes of this subdivision, the term "qualifying real 25 property loan" shall mean any loan secured by an interest in improved 26 real property or secured by an interest in real property which is to be 27 improved out of the proceeds of the loan. Such term shall include any 28 mortgage-backed security which represents ownership of a fractional 29 undivided interest in a trust, the assets of which consist primarily of 30 mortgage loans, provided that the real property which serves as security 31 for the loans is, or from the proceeds of the loan, will become, the 32 type of property described in clauses (i) through (v) of subparagraph 33 (B) of paragraph one of this subdivision. However, such term shall not 34 include: (i) any loan evidenced by a security, as defined in subpara- 35 graph (C) of paragraph two of subdivision (g) of section one hundred 36 sixty-five of the internal revenue code; (ii) any loan, whether or not 37 evidenced by a security, as defined in such subparagraph (C) of para- 38 graph two of subdivision (g) of section one hundred sixty-five, the 39 primary obligor of which is (I) a government or political subdivision or 40 instrumentality thereof, (II) a banking corporation, or (III) any corpo- 41 ration sixty-five percent or more of whose voting stock is owned or 42 controlled, directly or indirectly, by the taxpayer or by a banking 43 corporation or bank holding company that owns or controls, directly or 44 indirectly, sixty-five percent or more of the voting stock of the 45 taxpayer; (iii) any loan, to the extent secured by a deposit in or share 46 of the taxpayer; or (iv) any loan which, within a sixty-day period 47 beginning in one taxable year of the creditor and ending in its next 48 taxable year, is made or acquired and then repaid or disposed of, unless 49 the transactions by which such loan was made or acquired and then repaid 50 or disposed of are established to be for bona fide business purposes. 51 (B) For purposes of this subdivision, the term "nonqualifying loan" 52 shall mean any loan which is not a qualifying real property loan. 53 (C) For purposes of this subdivision, the term "loan" shall mean debt, 54 as the term "debt" is used in section one hundred sixty-six of the 55 internal revenue code.

S. 8578 551

1 (D) A regular or residual interest in a REMIC, as such term is defined 2 in section eight hundred sixty-D of the internal revenue code, shall be 3 treated as a qualifying real property loan, except that, if less than 4 ninety-five percent of the assets of such REMIC are qualifying real 5 property loans, determined as if the taxpayer held the assets of the 6 REMIC, such interest shall be so treated only in the proportion which 7 the assets of such REMIC consist of such loans. For purposes of deter- 8 mining whether any interest in a REMIC qualifies under the provisions of 9 this paragraph, any interest in another REMIC held by such REMIC shall 10 be treated as a qualifying real property loan under principles similar 11 to the principles of this paragraph, except that if such REMICS are part 12 of a tiered structure, they shall be treated as one REMIC for purposes 13 of this paragraph. 14 (8)(A) Any distribution of property, as defined in subdivision (a) of 15 section three hundred seventeen of the internal revenue code, by a 16 thrift institution to a shareholder with respect to its stock, if such 17 distribution is not allowable as a deduction under section five hundred 18 ninety-one of such code, shall be treated as made 19 (i) first out of its New York earnings and profits accumulated in 20 taxable years beginning after December thirty-first, nineteen hundred 21 fifty-one, to the extent thereof, 22 (ii) then out of the New York reserve for losses on qualifying real 23 property loans, to the extent additions to such reserve exceed the addi- 24 tions which would have been allowed under paragraph five of this subdi- 25 vision, 26 (iii) then out of the supplemental reserve for losses on loans, to the 27 extent thereof, 28 (iv) then out of such other accounts as may be proper. 29 This subparagraph shall apply in the case of any distribution in redemp- 30 tion of stock or in partial or complete liquidation of a thrift institu- 31 tion, except that any such distribution shall be treated as made first 32 out of the amount referred to in clause (ii) of this subparagraph, 33 second out of the amount referred to in clause (iii) of this subpara- 34 graph, third out of the amount referred to in clause (i) of this subpar- 35 agraph and then out of such other accounts as may be proper. This 36 subparagraph shall not apply to any transaction to which section three 37 hundred eighty-one of such code, relating to carryovers and certain 38 corporate acquisitions, applies, or to any distribution to the federal 39 savings and loan insurance corporation or the federal deposit insurance 40 corporation in redemption of an interest in an association or institu- 41 tion, if such interest was originally received by the federal savings 42 and loan insurance corporation or the federal deposit insurance corpo- 43 ration in exchange for financial assistance pursuant to subdivision (f) 44 of section four hundred six of the federal national housing act or 45 pursuant to subsection (c) of section thirteen of the federal deposit 46 insurance act. 47 (B) If any distribution is treated under subparagraph (A) of this 48 paragraph as having been made out of the reserves described in clauses 49 (ii) and (iii) of such subparagraph, the amount charged against such 50 reserve shall be the amount which, when reduced by the amount of tax 51 imposed under the internal revenue code and attributable to the inclu- 52 sion of such amount in gross income, is equal to the amount of such 53 distribution; and the amount so charged against such reserve shall be 54 included in the entire net income of the taxpayer. 55 (C) (i) For purposes of clause (ii) of subparagraph (A) of this para- 56 graph, additions to the New York reserve for losses on qualifying real

S. 8578 552

1 property loans for the taxable year in which the distribution occurs 2 shall be taken into account. 3 (ii) For purposes of computing under this subdivision the amount of a 4 reasonable addition to the New York reserve for losses on qualifying 5 real property loans for any taxable year, the amount charged during any 6 year to such reserve pursuant to the provisions of subparagraph (B) of 7 this paragraph shall not be taken into account. 8 (9) A taxpayer which maintains a New York reserve for losses on quali- 9 fying real property loans and which ceases to meet the definition of a 10 thrift institution as defined in paragraph one of this subdivision, must 11 include in its entire net income for the last taxable year such para- 12 graph applied the excess of its New York reserve for losses on qualify- 13 ing real property loans over the greater of (A) its reserve for losses 14 on qualifying real property loans as of the last day of the last taxable 15 year such reserve is maintained for federal income tax purposes or (B) 16 the balance of the New York reserve for losses on qualifying real prop- 17 erty loans which would be allowable to the taxpayer for the last taxable 18 year such taxpayer met such definition of a thrift institution if the 19 taxpayer had computed its reserve balance pursuant to the method 20 described in subparagraph (A) of paragraph one of subdivision (i) of 21 this section. 22 (i) (1) For taxable years beginning before January first, two thousand 23 ten, a taxpayer subject to the provisions of subdivision (c) of section 24 five hundred eighty-five of the internal revenue code and not subject to 25 subdivision (h) of this section may, in computing entire net income, 26 deduct an amount equal to or less than the amount determined pursuant to 27 subparagraph (A) of this paragraph or subparagraph (B) of this para- 28 graph, whichever is greater. Provided, however, in no event shall the 29 deduction be less than the amount determined pursuant to such subpara- 30 graph (A). 31 (A) The amount determined pursuant to this subparagraph shall be the 32 amount necessary to increase the balance of its New York reserve for 33 losses on loans, at the close of the taxable year, to the amount which 34 bears the same ratio to loans outstanding at the close of the taxable 35 year as (i) the total bad debts sustained during the taxable year and 36 the five preceding taxable years, or, with the approval of the commis- 37 sioner of finance, a shorter period, adjusted for recoveries of bad 38 debts during such period, bears to (ii) the sum of the loans outstanding 39 at the close of such six or fewer taxable years. 40 (B)(i) The amount determined pursuant to this subparagraph shall be 41 the amount necessary to increase the balance of its New York reserve for 42 losses on loans, at the close of the taxable year, to the lower of: 43 (I) the balance of the reserve at the close of the base year, or 44 (II) if the amount of loans outstanding at the close of the taxable 45 year is less than the amount of loans outstanding at the close of the 46 base year, the amount which bears the same ratio to loans outstanding at 47 the close of the taxable year as the balance of the reserve at the close 48 of the base year bears to the amount of loans outstanding at the close 49 of the base year. 50 (ii) For purposes of this paragraph, the base year shall be (I) for 51 taxable years beginning in nineteen hundred eighty-seven, the last taxa- 52 ble year before the most recent adoption of the experience method for 53 federal income tax purposes or for purposes of this part, whichever is 54 earlier, and (II) for taxable years beginning after nineteen hundred 55 eighty-seven, the last taxable year beginning before nineteen hundred 56 eighty-eight.

S. 8578 553

1 (2) (A) For taxable years beginning before January first, two thousand 2 ten, each taxpayer described in paragraph one of this subdivision shall 3 establish and maintain a New York reserve for losses on loans. Such 4 reserve shall be maintained for all subsequent taxable years. The 5 balance of the New York reserve for losses on loans at the beginning of 6 the first day of the first taxable year the taxpayer becomes subject to 7 this subdivision shall be the same as the balance at the beginning of 8 such day of the reserve for losses on loans maintained for federal 9 income tax purposes. The New York reserve for losses on loans shall be 10 reduced by an amount equal to the deduction allowed, but not more than 11 the amount allowable, for worthless debts for federal income tax 12 purposes pursuant to section one hundred sixty-six of the internal 13 revenue code plus the amount, if any, charged against its reserve for 14 losses on loans pursuant to paragraph four of subdivision (c) of section 15 five hundred eighty-five of such code. 16 (B) For purposes of subparagraph (A) of this paragraph, a taxpayer 17 which had previously been subject to the provisions of subdivision (h) 18 of this section shall establish a New York reserve for losses on loans 19 equal to the sum of (i) the greater of (I) the balance of its federal 20 reserve for losses on qualifying real property loans as of the first day 21 of the first taxable year the taxpayer becomes subject to the provisions 22 of this subdivision or (II) the greater of the amounts determined under 23 subparagraphs (A) and (B) of paragraph nine of subdivision (h) of this 24 section in the year such paragraph applied to the taxpayer, (ii) the 25 greater of (I) the balance in its federal reserve for losses on nonqual- 26 ifying loans as of the first day of the first taxable year the taxpayer 27 becomes subject to this subdivision or (II) the balance in its New York 28 reserve for losses on nonqualifying loans as of the last date the 29 taxpayer was subject to the provisions of subdivision (h) of this 30 section, and (iii) the balance in its supplemental reserve for losses on 31 loans as of the last date the taxpayer was subject to the provisions of 32 subdivision (h) of this section. 33 (3) The determination and treatment of the New York reserve balance, 34 including any additions thereto, subtractions therefrom, or recapture 35 thereof, for: 36 (A) any banking corporation which was subject to tax for federal 37 income tax purposes but not subject to tax under this part for prior 38 taxable years, 39 (B) any taxpayer which ceases to be subject to tax under this part, or 40 (C) any other unusual circumstances, 41 shall be determined by the commissioner of finance. Provided, however, 42 any banking corporation which was subject to tax for federal income tax 43 purposes but not subject to tax under this part for prior taxable years 44 shall have as its opening New York reserve for losses on loans the 45 amount determined by applying the provisions of subparagraph (A) of 46 paragraph one of this subdivision to loans outstanding at the close of 47 its last taxable year for federal income tax purposes ending prior to 48 the first taxable year for which the taxpayer is subject to tax under 49 this part and provided, further, that the provisions of subparagraph (B) 50 of paragraph one of this subdivision shall not apply. 51 (j) (1) For any taxable year beginning in nineteen hundred seventy- 52 three or for any period for which a tax is imposed under subdivision (b) 53 of section 11-639 of this part, entire net income shall be computed 54 without regard to the amount allowable as a deduction for bad debts or 55 an addition to a reserve for bad debts in computing federal taxable 56 income for the taxable year, but, in lieu thereof, a deduction shall be

S. 8578 554

1 allowed to the extent and in the manner authorized by subdivision five 2 of section 11-621 or subdivision (e) of section 11-629 of this subchap- 3 ter as if such provisions were set forth in full in this part and by 4 treating such provisions as applicable under this part. 5 (2) In the case of property placed in service prior to January first, 6 nineteen hundred seventy-three, for which the taxpayer properly adopted 7 a different method of computing depreciation under section 11-621 or 8 section 11-629 of this subchapter than was adopted for federal income 9 tax purposes with respect to such property, entire net income under this 10 part shall be computed without regard to the amount allowable as a 11 deduction for depreciation of such property in computing federal taxable 12 income for the taxable year but, in lieu thereof, shall be computed as 13 if such deduction were determined by the method of depreciation adopted 14 with respect to such property under section 11-621 or 11-629 of this 15 subchapter. 16 (3) In computing entire net income, the amount allowable as a 17 deduction for charitable contributions for federal income tax purposes 18 shall be: (a) increased for the first taxable year or period beginning 19 in nineteen hundred seventy-three by the amount of any contributions 20 made during such taxable year or period which were not allowable as a 21 deduction for charitable contributions for federal income tax purposes 22 for such taxable year or period because of an election pursuant to para- 23 graph two of subsection (a) of section one hundred seventy of the inter- 24 nal revenue code and which were not deductible in computing the tax due 25 under part one or two of this subchapter, and (b) decreased by any 26 amount allowed as a deduction for federal income tax purposes for the 27 taxable year under section one hundred seventy of the internal revenue 28 code as a carryover of excess contributions which are not made in such 29 taxable year and which were deductible in computing the tax due under 30 part one or two of this subchapter. 31 (4) There shall be excluded from the computation of entire net income 32 any amount allowed as a deduction for federal income tax purposes for 33 the taxable year under section twelve hundred twelve of the internal 34 revenue code as a capital loss carry forward to the taxable year, which 35 was deductible as a loss in computing the tax due under part one or two 36 of this subchapter. 37 (5) There shall be excluded from the computation of entire net income 38 the amount of any income or gain from the sale of real or personal prop- 39 erty which is includible in determining federal taxable income for the 40 taxable year pursuant to the installment method under section four 41 hundred fifty-three of the internal revenue code, to the extent that 42 such income or gain was includible in the computation of the tax due 43 under part one or two of this subchapter. 44 (6) To the extent not otherwise provided in this part, there shall be 45 excluded from entire net income the amount necessary to prevent the 46 taxation under this part of any other amount of income or gain which was 47 properly included in income or gain and was taxable under part one or 48 two of this subchapter and there shall be disallowed as a deduction in 49 computing entire net income any amount which was allowed as a deduction 50 in computing the tax due under such parts. 51 (k) (1) At the election of the taxpayer, there shall be deducted from 52 the portion of its entire net income allocated within the city, depreci- 53 ation with respect to any property such as described in paragraph two of 54 this subdivision, not exceeding twice the depreciation allowed with 55 respect to the same property for federal income tax purposes. Such 56 deduction shall be allowed only upon condition that entire net income be

S. 8578 555

1 computed without any deduction for depreciation or amortization of the 2 same property, and the total of all deductions allowed under parts one 3 and two of this subchapter three and this part in any taxable year or 4 years with respect to the depreciaton of any such property shall not 5 exceed its cost or other basis. 6 (2) Such deduction shall be allowed only with respect to tangible 7 property which is depreciable pursuant to section one hundred sixty-sev- 8 en of the internal revenue code, having a situs in this city and used in 9 the taxpayer's business, (i) constructed, reconstructed or erected after 10 December thirty-first, nineteen hundred sixty-five, pursuant to a 11 contract which was, on or before December thirty-first, nineteen hundred 12 sixty-seven, and at all times thereafter, binding on the taxpayer or, 13 property, the physical construction, reconstruction or erection of which 14 began on or before December thirty-first, nineteen hundred sixty-seven 15 or which began after such date pursuant to an order placed on or before 16 December thirty-first, nineteen hundred sixty-seven, and then only with 17 respect to that portion of the basis thereof which is properly attribut- 18 able to such construction, reconstruction or erection after December 19 thirty-first, nineteen hundred sixty-five, or (ii) acquired after Decem- 20 ber thirty-first, nineteen hundred sixty-five, pursuant to a contract 21 which was, on or before December thirty-first, nineteen hundred sixty- 22 seven, and at all times thereafter, binding on the taxpayer or pursuant 23 to an order placed on or before December thirty-first, nineteen hundred 24 sixty-seven, by purchase as defined in subdivision (d) of section one 25 hundred seventy-nine of the internal revenue code, if the original use 26 of such property commenced with the taxpayer, commenced in this city and 27 commenced after December thirty-first, nineteen hundred sixty-five, or 28 (iii) acquired, constructed, reconstructed, or erected subsequent to 29 December thirty-first, nineteen hundred sixty-seven, if such acquisi- 30 tion, construction, reconstruction or erection is pursuant to a plan of 31 the taxpayer which was in existence December thirty-first, nineteen 32 hundred sixty-seven and not thereafter substantially modified, and such 33 acquisition, construction, reconstruction or erection would qualify 34 under the rules in paragraph four, five or six of subsection (h) of 35 section forty-eight of the internal revenue code provided all references 36 in such paragraphs four, five and six to the dates October nine, nine- 37 teen hundred sixty-six, and October ten, nineteen hundred sixty-six, 38 shall be read as December thirty-first, nineteen hundred sixty-seven. A 39 taxpayer shall be allowed a deduction under clause (i), (ii) or (iii) of 40 this paragraph only if the tangible property shall be delivered or the 41 construction, reconstruction or erection shall be completed on or before 42 December thirty-first, nineteen hundred sixty-nine, except in the case 43 of tangible property which is acquired, constructed, reconstructed or 44 erected pursuant to a contract which was, on or before December thirty- 45 first, nineteen hundred sixty-seven, and at all times thereafter, bind- 46 ing on the taxpayer. Provided, however, for any taxable year beginning 47 on or after January first, nineteen hundred sixty-eight, a taxpayer 48 shall not be allowed a deduction under paragraph one of this subdivision 49 with respect to tangible personal property leased by it to any other 50 person or corporation, provided, that any contract or agreement to lease 51 or rent or for a license to use such property shall be considered a 52 lease. With respect to property which the taxpayer uses itself for 53 purposes other than leasing for part of a taxable year and leases for a 54 part of a taxable year, the taxpayer shall be allowed a deduction under 55 paragraph one of this subdivision in proportion to the part of the year 56 it uses such property.

S. 8578 556

1 (3) If the deduction allowable for any taxable year pursuant to this 2 subdivision exceeds the portion of the taxpayer's entire net income 3 allocated to this city for such year, the excess may be carried over to 4 the following taxable year or years and may be deducted from the portion 5 of the taxpayer's entire net income allocated to this city for such year 6 or years. 7 (4) In any taxable year when property is sold or otherwise disposed 8 of, with respect to which a deduction has been allowed pursuant to this 9 subdivision, subdivision twelve of section 11-621 or subdivision (j) of 10 section 11-629 of this subchapter, the gain or loss entering into the 11 computation of federal taxable income shall be disregarded in computing 12 entire net income, and there shall be added or subtracted from the 13 portion of entire net income allocated within the city the gain or loss 14 upon such sale or other disposition. In computing such gain or loss the 15 basis of the property sold or disposed of shall be adjusted to reflect 16 the deduction allowed with respect to such property pursuant to para- 17 graph one of this subdivision. Provided, however, that no loss shall be 18 recognized for the purposes of this paragraph with respect to a sale or 19 other disposition of property to a person whose acquisition thereof is 20 not a purchase as defined in subdivision (d) of section one hundred 21 seventy-nine of the internal revenue code. 22 (k-1) A net operating loss deduction shall be allowed which shall be 23 presumably the same as the net operating loss deduction allowed under 24 section one hundred seventy-two of the internal revenue code, except 25 that in every instance where such deduction is allowed under this 26 subchapter: 27 (1) any net operating loss included in determining such deduction 28 shall be adjusted to reflect the inclusions and exclusions from entire 29 net income required by the other provisions of this section; 30 (2) such deduction shall not include any net operating loss sustained 31 during any taxable year beginning prior to January first, two thousand 32 nine, or during any taxable year in which the taxpayer was not subject 33 to the tax imposed by this subchapter; 34 (3) such deduction shall not exceed the deduction for the taxable year 35 allowed under section one hundred seventy-two of the internal revenue 36 code augmented by the excess of the amount allowed as a deduction pursu- 37 ant to subdivision (h) or (i) of this section, whichever is applicable, 38 over the amount allowed as a deduction pursuant to section one hundred 39 sixty-six or five hundred eighty-five of the internal revenue code, for 40 each taxable year in which the taxpayer had a net operating loss which 41 is carried to the taxable year of the deduction under this provision, in 42 the aggregate, except to the extent such excess was previously deducted 43 in computing entire net income; and 44 (4) the net operating loss deduction allowed under section one hundred 45 seventy-two of the internal revenue code shall for purposes of this 46 subdivision be determined as if the taxpayer had elected under such 47 section to relinquish the entire carryback period with respect to net 48 operating losses. 49 (k-2) Notwithstanding any other provision of this section to the 50 contrary, for taxable years beginning before January first, two thousand 51 twenty-one, any amendment to section one hundred seventy-two of the 52 internal revenue code made after March first, two thousand twenty shall 53 not apply to this part. 54 (1) If the period covered by a return under this part is other than 55 the period covered by the return to the United States treasury depart- 56 ment, entire net income and alternative entire net income shall be

S. 8578 557

1 determined by multiplying the taxable income reported to such depart- 2 ment, as adjusted pursuant to the provisions of this part, by the number 3 of calendar months or major parts thereof covered by the return under 4 this part and dividing by the number of calendar months or major parts 5 thereof covered by the return to such department. If it shall appear 6 that such method of determining entire net income or alternative entire 7 net income does not properly reflect the taxpayer's income during the 8 period covered by the return under this part, the commissioner of 9 finance shall be authorized in his or her discretion to determine such 10 entire net income or alternative entire net income solely on the basis 11 of the taxpayer's income during the period covered by its return under 12 this part. 13 (m) The commissioner of finance, may, whenever necessary in order to 14 properly reflect the entire net income of any taxpayer, determine the 15 year or period in which any item of income or deduction shall be 16 included, without regard to the method of accounting employed by the 17 taxpayer. 18 (n) Notwithstanding any other provision of this subchapter, for taxa- 19 ble years beginning on or after August first, two thousand two, in the 20 case of a taxpayer that is a partner in a partnership subject to the tax 21 imposed by chapter eleven of this title as a utility, as defined in 22 subdivision six of section 11-1101 of such chapter, entire net income 23 shall not include the taxpayer's distributive or pro rata share for 24 federal income tax purposes of any item of income, gain, loss or 25 deduction of such partnership, or any item of income, gain, loss or 26 deduction of such partnership that the taxpayer is required to take into 27 account separately for federal income tax purposes. 28 (n-1) for taxable years ending after September tenth, two thousand 29 one, in the case of qualified property described in paragraph two of 30 subsection k of section one hundred sixty-eight of the internal revenue 31 code, other than qualified resurgence zone property described in subdi- 32 vision (p) of this section, and other than qualified New York Liberty 33 Zone property described in paragraph two of subsection b of section 34 fourteen hundred-L of the internal revenue code, without regard to 35 clause (i) of subparagraph (C) of such paragraph, a taxpayer shall be 36 allowed with respect to such property the depreciation deduction allow- 37 able under section one hundred sixty-seven as such section would have 38 applied to such property had it been acquired by the taxpayer on Septem- 39 ber tenth, two thousand one, provided, however, that for taxable years 40 beginning on or after January first, two thousand four, in the case of a 41 passenger motor vehicle or a sport utility vehicle subject to the 42 provisions of subdivision (r) of this section, the limitation under 43 clause (i) of subparagraph (A) of paragraph one of subdivision (a) of 44 section two hundred eighty-F of the internal revenue code applicable to 45 the amount allowed as a deduction under this paragraph shall be deter- 46 mined as of the date such vehicle was placed in service and not as of 47 September tenth, two thousand one. 48 (o) for taxable years ending after September tenth, two thousand one, 49 upon the disposition of property to which subdivision (n) of this 50 section applies, the amount of any gain or loss includible in entire net 51 income shall be adjusted to reflect the inclusions and exclusions from 52 entire net income pursuant to paragraph thirteen of subdivision (b) and 53 subdivision (n) of this section attributable to such property. 54 (p) for purposes of subdivisions (n) and (o) of this section, quali- 55 fied resurgence zone property shall mean qualified property described in 56 paragraph two of subsection k of section one hundred sixty-eight of the

S. 8578 558

1 internal revenue code substantially all of the use of which is in the 2 resurgence zone, as defined below, and is in the active conduct of a 3 trade or business by the taxpayer in such zone, and the original use of 4 which in the resurgence zone commences with the taxpayer after September 5 tenth, two thousand one. The resurgence zone shall mean the area of New 6 York county bounded on the south by a line running from the intersection 7 of the Hudson River with the Holland Tunnel, and running thence east to 8 Canal Street, then running along the centerline of Canal Street to the 9 intersection of the Bowery and Canal Street, running thence in a south- 10 easterly direction diagonally across Manhattan Bridge Plaza, to the 11 Manhattan Bridge, and thence along the centerline of the Manhattan 12 Bridge to the point where the centerline of the Manhattan Bridge would 13 intersect with the easterly bank of the East River, and bounded on the 14 north by a line running from the intersection of the Hudson River with 15 the Holland Tunnel and running thence north along West Avenue to the 16 intersection of Clarkson Street then running east along the centerline 17 of Clarkson Street to the intersection of Washington Avenue, then 18 running south along the centerline of Washington Avenue to the inter- 19 section of West Houston Street, then east along the centerline of West 20 Houston Street, then at the intersection of the Avenue of the Americas 21 continuing east along the centerline of East Houston Street to the east- 22 erly bank of the East River. 23 (q) Related members expense add back. (1) Definitions. (A) Related 24 member. "Related member" means a related person as defined in subpara- 25 graph (c) of paragraph three of subsection (b) of section four hundred 26 sixty-five of the internal revenue code, except that "fifty percent" 27 shall be substituted for "ten percent". 28 (B) Effective rate of tax. "Effective rate of tax" means, as to any 29 city, the maximum statutory rate of tax imposed by the city on or meas- 30 ured by a related member's net income multiplied by the apportionment 31 percentage, if any, applicable to the related member under the laws of 32 said jurisdiction. For purposes of this definition, the effective rate 33 of tax as to any city is zero where the related member's net income tax 34 liability in said city is reported on a combined or consolidated return 35 including both the taxpayer and the related member where the reported 36 transactions between the taxpayer and the related member are eliminated 37 or offset. Also, for purposes of this definition, when computing the 38 effective rate of tax for a city in which a related member's net income 39 is eliminated or offset by a credit or similar adjustment that is 40 dependent upon the related member either maintaining or managing intan- 41 gible property or collecting interest income in that city, the maximum 42 statutory rate of tax imposed by said city shall be decreased to reflect 43 the statutory rate of tax that applies to the related member as effec- 44 tively reduced by such credit or similar adjustment. 45 (C) Royalty payments. Royalty payments are payments directly connected 46 to the acquisition, use, maintenance or management, ownership, sale, 47 exchange, or any other disposition of licenses, trademarks, copyrights, 48 trade names, trade dress, service marks, mask works, trade secrets, 49 patents and any other similar types of intangible assets as determined 50 by the commissioner of finance, and include amounts allowable as inter- 51 est deductions under section one hundred sixty-three of the internal 52 revenue code to the extent such amounts are directly or indirectly for, 53 related to or in connection with the acquisition, use, maintenance or 54 management, ownership, sale, exchange or disposition of such intangible 55 assets.

S. 8578 559

1 (D) Valid business purpose. A valid business purpose is one or more 2 business purposes, other than the avoidance or reduction of taxation, 3 which alone or in combination constitute the primary motivation for some 4 business activity or transaction, which activity or transaction changes 5 in a meaningful way, apart from tax effects, the economic position of 6 the taxpayer. The economic position of the taxpayer includes an increase 7 in the market share of the taxpayer, or the entry by the taxpayer into 8 new business markets. 9 (2) Royalty expense add backs. (A) For the purpose of computing entire 10 net income, a taxpayer must add back royalty payments directly or indi- 11 rectly paid, accrued, or incurred in connection with one or more direct 12 or indirect transactions with one or more related members during the 13 taxable year to the extent deductible in calculating federal taxable 14 income. 15 (B) Exceptions. (i) The adjustment required in this subdivision shall 16 not apply to the portion of the royalty payment that the taxpayer estab- 17 lishes, by clear and convincing evidence of the type and in the form 18 specified by the commissioner of finance, meets all of the following 19 requirements: (I) the related member was subject to tax in this city or 20 another city within the United States or a foreign nation or some combi- 21 nation thereof on a tax base that included the royalty payment paid, 22 accrued or incurred by the taxpayer; (II) the related member during the 23 same taxable year directly or indirectly paid, accrued or incurred such 24 portion to a person that is not a related member; and (III) the trans- 25 action giving rise to the royalty payment between the taxpayer and the 26 related member was undertaken for a valid business purpose. 27 (ii) The adjustment required in this subdivision shall not apply if 28 the taxpayer establishes, by clear and convincing evidence of the type 29 and in the form specified by the commissioner of finance, that: (I) the 30 related member was subject to tax on or measured by its net income in 31 this city or another city within the United States, or some combination 32 thereof; (II) the tax base for such tax included the royalty payment 33 paid, accrued or incurred by the taxpayer; and (III) the aggregate 34 effective rate of tax applied to the related member in those jurisdic- 35 tions is no less than eighty percent of the statutory rate of tax that 36 applied to the taxpayer under section 11-643.5 of this part for the 37 taxable year. 38 (iii) The adjustment required in this subdivision shall not apply if 39 the taxpayer establishes, by clear and convincing evidence of the type 40 and in the form specified by the commissioner of finance, that: (I) the 41 royalty payment was paid, accrued or incurred to a related member organ- 42 ized under the laws of a country other than the United States; (II) the 43 related member's income from the transaction was subject to a comprehen- 44 sive income tax treaty between such country and the United States; (III) 45 the related member was subject to tax in a foreign nation on a tax base 46 that included the royalty payment paid, accrued or incurred by the 47 taxpayer; (IV) the related member's income from the transaction was 48 taxed in such country at an effective rate of tax at least equal to that 49 imposed by this city; and (V) the royalty payment was paid, accrued or 50 incurred pursuant to a transaction that was undertaken for a valid busi- 51 ness purpose and using terms that reflect an arm's length relationship. 52 (iv) The adjustment required in this subdivision shall not apply if 53 the taxpayer and the commissioner of finance agree in writing to the 54 application or use of alternative adjustments or computations. The 55 commissioner of finance may, in his or her discretion, agree to the 56 application or use of alternative adjustments or computations when he or

S. 8578 560

1 she concludes that in the absence of such agreement the income of the 2 taxpayer would not be properly reflected. 3 (r) For taxable years beginning on or after January first, two thou- 4 sand four, in the case of a taxpayer that is not an eligible farmer as 5 defined in subsection (n) of section six hundred six of the tax law, a 6 taxpayer shall be allowed with respect to a sport utility vehicle that 7 is not a passenger automobile as defined in paragraph five of subsection 8 (d) of section two hundred eighty-F of the internal revenue code, the 9 deductions allowable under sections one hundred seventy-nine, one 10 hundred sixty-seven and one hundred sixty-eight of the internal revenue 11 code, determined as if such sport utility vehicle were a passenger auto- 12 mobile as defined in such paragraph five. 13 (s) Upon the disposition of property to which subdivision (r) of this 14 section applies, the amount of any gain or loss includible in entire net 15 income shall be adjusted to reflect the modification provided in such 16 subdivision attributable to such property. 17 (t) Entire net income shall not include the amount of any grant 18 received through either the COVID-19 pandemic small business recovery 19 grant program, pursuant to section sixteen-ff of the New York state 20 urban development corporation act, or the small business resilience 21 grant program administered by the department of small business services, 22 to the extent the amount of either such grant is included in federal 23 taxable income. 24 § 11-641.1 Computation of alternative entire net income. (a) Alterna- 25 tive entire net income means entire net income as determined pursuant to 26 section 11-641 of this part, except that the deductions described in 27 paragraphs eleven and twelve of subdivision (e) of section 11-641 of 28 this part shall not be allowed. 29 (b) Any election made pursuant to paragraph two of subdivision (b) of 30 section 11-642 of this part with respect to the modification provided 31 for in subdivision (f) of section 11-641 of this part shall be deemed to 32 have been made for purposes of computing alternative entire net income. 33 § 11-642 Allocation. (a) In general. If a taxpayer's entire net 34 income, alternative entire net income, or taxable assets are derived 35 from business carried on within and without the city, the taxpayer shall 36 for purposes of computing allocation percentages compute payroll, 37 receipts, and deposits percentages in accordance with the following 38 rules: 39 (1) The taxpayer shall ascertain the percentage which eighty percent 40 of the total wages, salaries and other personal service compensation 41 during the taxable year of employees within the city, except wages, 42 salaries and other personal service compensation of general executive 43 officers, bears to the total wages, salaries and other personal service 44 compensation during the taxable year of all the taxpayer's employees 45 within and without the city, except wages, salaries and other personal 46 service compensation of general executive officers. 47 (2) (A) The taxpayer shall ascertain the percentage which the receipts 48 of the taxpayer arising during the taxable year from: 49 (i) loans, including a taxpayer's portion of a participation in a 50 loan, and financing leases within the city, and all other business 51 receipts earned within the city, bear to 52 (ii) the total amount of the taxpayer's receipts from loans, including 53 a taxpayer's portion of a participation in a loan, and financing leases 54 and all other business receipts within and without the city.

S. 8578 561

1 (B) All interest from loans and financing leases is located where the 2 greater portion of income producing activity related to the loan or 3 financing lease occurred; provided, however: 4 (i) In the case of a taxpayer described in paragraph one, two, three, 5 four, five or seven of subdivision (a) of section 11-640 of this part, a 6 loan or financing lease attributed by such taxpayer to a branch without 7 the city shall be presumed to be properly so attributed provided that 8 such presumption may be rebutted if the commissioner of finance demon- 9 strates that the greater portion of income producing activity related to 10 the loan or financing lease did not occur at such branch. Where such 11 presumption has been rebutted, the loan or financing lease shall be 12 presumed to be within the city if the taxpayer had a branch within the 13 city at the time the loan or financing lease was made. The taxpayer may 14 rebut such presumption by demonstrating that the greater portion of 15 income producing activity related to the loan or financing lease did not 16 occur within the city. In the case of a loan or financing lease which is 17 recorded on the books of a place without the city which is not a branch, 18 it shall be presumed that the greater portion of income producing activ- 19 ity related to such loan or financing lease occurred within the city if 20 the taxpayer had a branch within the city at the time the loan or 21 financing lease was made. The taxpayer may rebut such presumption by 22 demonstrating that the greater portion of income producing activity 23 related to the loan or financing lease did not occur within the city. 24 (ii) In the case of a taxpayer described in paragraph six or nine of 25 subdivision (a) of section 11-640 of this part, a loan or financing 26 lease attributed by such taxpayer to a bona fide office without the city 27 shall be presumed to be properly so attributed provided that such 28 presumption may be rebutted if the commissioner of finance demonstrates 29 that the greater portion of income producing activity related to the 30 loan or financing lease did not occur without the city. 31 (C) Receipts from lease transactions other than financing leases 32 referred to in subparagraph (B) are located where the property subject 33 to the lease is located. 34 (D) (i) Interest, and fees and penalties in the nature of interest, 35 from bank, credit, travel and entertainment card receivables are earned 36 within the city if the mailing address of the card holder in the records 37 of the taxpayer is in the city; and 38 (ii) Service charges and fees from such cards are earned within the 39 city if the card is serviced in the city; and 40 (iii) Receipts from merchant discounts are earned within the city if 41 the merchant is located within the city. 42 (E) The portion of total net gains and other income from trading 43 activities, including but not limited to foreign exchange, options and 44 financial futures, and from investment activities which is attributed 45 within the city shall be ascertained by multiplying such total net gains 46 and other income by a fraction the numerator of which is the average 47 value of the trading assets and investment assets attributable to the 48 city and the denominator of which is the average value of all trading 49 and investment assets. A trading asset or investment asset is attribut- 50 able to the city if the greater portion of income producing activity 51 related to the trading asset or investment asset occurred within the 52 city. 53 (F) Fees or charges from the issuance of letters of credit, travelers 54 checks and money orders are earned within the city if such letters of 55 credit, travelers checks or money orders are issued within the city.

S. 8578 562

1 (G) Rules for receipts from certain services to investment companies. 2 (1) For taxable years beginning on or after January first, two thousand 3 one, the portion of receipts received from an investment company arising 4 from the sale of management, administration or distribution services to 5 such investment company determined in accordance with clause two of this 6 subparagraph shall be deemed to arise from services performed within the 7 city, such portion referred to herein as the Staten Island city portion. 8 (2) The Staten Island city portion shall be the product of (i) the 9 total of such receipts from the sale of such services and (ii) a frac- 10 tion. The numerator of that fraction is the sum of the monthly percent- 11 ages, as defined hereinafter, determined for each month of the invest- 12 ment company's taxable year for federal income tax purposes which 13 taxable year ends within the taxable year of the taxpayer, but excluding 14 any month during which the investment company had no outstanding shares. 15 The monthly percentage for each such month is determined by dividing (i) 16 the number of shares in the investment company which are owned on the 17 last day of the month by shareholders that are domiciled in the city by 18 (ii) the total number of shares in the investment company outstanding on 19 that date. The denominator of the fraction is the number of such monthly 20 percentages. 21 (3)(i) For purposes of this subparagraph, the term "domicile", in the 22 case of an individual, shall have the meaning as in chapter seventeen of 23 this title; an estate or trust is domiciled in the city if it is a city 24 resident estate or trust as defined in paragraph three of subdivision 25 (b) of section 11-1705 of this code; a business entity is domiciled in 26 the city if the location of the actual seat of management or control is 27 in the city. It shall be presumed that the domicile of a shareholder, 28 with respect to any month, is his, her or its mailing address on the 29 records of the investment company as of the last day of such month. 30 (ii) For purposes of this subparagraph, the term "investment company" 31 means a regulated investment company, as defined in section eight 32 hundred fifty-one of the internal revenue code, and a partnership to 33 which subdivision (a) of section seven thousand seven hundred four of 34 the internal revenue code applies, by virtue of paragraph three of 35 subdivision (c) of section seven thousand seven hundred four of such 36 code, and that meets the requirements of subdivision (b) of section 37 eight hundred fifty-one of such code. This shall be applied to the 38 taxable year for federal income tax purposes of the business entity that 39 is asserted to constitute an investment company that ends within the 40 taxable year of the taxpayer. 41 (iii) For purposes of this subparagraph, the term "receipts from an 42 investment company" includes amounts received directly from an invest- 43 ment company as well as amounts received from the shareholders in such 44 investment company in their capacity as such. 45 (iv) For purposes of this subparagraph, the term "management services" 46 means the rendering of investment advice to an investment company, 47 making determinations as to when sales and purchases of securities are 48 to be made on behalf of an investment company, or the selling or 49 purchasing of securities constituting assets of an investment company, 50 and related activities, but only where such activity or activities are 51 performed pursuant to a contract with the investment company entered 52 into pursuant to subdivision (a) of section fifteen of the federal 53 investment company act of nineteen hundred forty, as amended. 54 (v) For purposes of this subparagraph, the term "distribution 55 services" means the services of advertising, servicing investor 56 accounts, including redemptions, marketing shares or selling shares of

S. 8578 563

1 an investment company, but, in the case of advertising, servicing inves- 2 tor accounts, including redemptions, or marketing shares, only where 3 such service is performed by a person who is, or was, in the case of a 4 closed end company, also engaged in the service of selling such shares. 5 In the case of an open end company, such service of selling shares must 6 be performed pursuant to a contract entered into pursuant to subdivision 7 (b) of section fifteen of the federal investment company act of nineteen 8 hundred forty, as amended. 9 (vi) For purposes of this subparagraph, the term "administration 10 services" includes clerical, accounting, bookkeeping, data processing, 11 internal auditing, legal and tax services performed for an investment 12 company but only if the provider of such service or services during the 13 taxable year in which such service or services are sold also sells 14 management or distribution services, as defined in clause (v) of this 15 subparagraph, to such investment company. 16 (H) All receipts from the performance of services not described in 17 this paragraph are earned within the city if the services are performed 18 in the city. When a service is performed both within and without the 19 city, the receipts shall be allocated within and without the city in 20 accordance with rules and regulations of the commissioner of finance. 21 (I) All other receipts not described in subparagraphs (B) through (H) 22 of this paragraph shall be attributable within and without the city in 23 accordance with rules and regulations issued by the commissioner of 24 finance. 25 (3) The taxpayer shall ascertain the percentage which the average 26 value of deposits maintained at branches within the city during the 27 taxable year, bears to the average value of all the taxpayer's deposits 28 maintained at branches within and without the city during the taxable 29 year. 30 (4) Each percentage computed pursuant to this subsection shall be 31 computed on a cash or accrual basis according to the method of account- 32 ing used for the taxable year. The receipts percentage shall include 33 only receipts which are included in alternative entire net income for 34 the taxable year. The deposits and payroll percentages shall include 35 only deposits and payroll the expenses of which are included in the 36 computation of alternative entire net income for the taxable year. 37 (5) For purposes of this section: 38 (A) The term "bona fide office" means an office at which the taxpayer 39 carries on its business in a regular and systematic manner and which is 40 continuously maintained, occupied and used by employees of the taxpayer. 41 (B) The term "branch" means a bona fide office which is used by the 42 taxpayer on a regular and systematic basis to (i) approve loans, regard- 43 less of whether the approval of certain classes of loans requires review 44 or final approval by another office of the taxpayer, (ii) accept loan 45 repayments, (iii) disburse funds, and (iv) conduct one or more other 46 functions of a banking business. 47 (6) If it shall appear to the commissioner of finance that the allo- 48 cation percentage determined in subdivision (b), (c), or (d) of this 49 section does not properly reflect the activity, business, income or 50 assets of a taxpayer within the city, the commissioner of finance shall 51 be authorized in his discretion to adjust it by (1) excluding one or 52 more of the factors therein, (2) including one or more other factors, or 53 (3) any other similar or different method calculated to effect a fair 54 and proper allocation of the income or assets reasonably attributable to 55 the city.

S. 8578 564

1 (7) The commissioner of finance from time to time shall publish all 2 rulings of general public interest with respect to any application of 3 the provisions of paragraph six of this subdivision. 4 (b) Allocation of entire net income. 5 (1) If a taxpayer's entire net income is derived from business carried 6 on both within and without the city, the portion thereof which is 7 derived from business carried on within the city shall be determined by 8 multiplying its entire net income by the income allocation percentage 9 determined as follows: add the percentages ascertained under paragraphs 10 one, two and three of subdivision (a) of this section, plus an addi- 11 tional percentage equal to the receipts percentage ascertained under 12 paragraph two of such subdivision and an additional percentage equal to 13 the deposits percentage ascertained under paragraph three of such subdi- 14 vision, and divide the result by the number of percentages so added 15 together. 16 (1-a) Notwithstanding the provisions of paragraph one of this subdivi- 17 sion, each banking corporation described in paragraph nine of subdivi- 18 sion (a) of section 11-640 of this part subject to the tax imposed by 19 this part that substantially provides management, administrative or 20 distribution services to an investment company, as such terms are 21 defined in subparagraph (G) of paragraph two of subdivision (a) of this 22 section, shall determine the portion of its entire net income derived 23 from business carried on within the city by multiplying such income by 24 an income allocation percentage obtained as follows: 25 (A) For taxable years beginning in two thousand nine, the income allo- 26 cation percentage shall be determined by adding together the following 27 percentages: 28 (i) the product of eighteen percent and the percentage determined 29 under paragraph one of subdivision (a) of this section, 30 (ii) the product of forty-six percent and the percentage determined 31 under paragraph two of subdivision (a) of this section, and 32 (iii) the product of thirty-six percent and the percentage determined 33 under paragraph three of subdivision (a) of this section. 34 (B) For taxable years beginning in two thousand ten, the income allo- 35 cation percentage shall be determined by adding together the following 36 percentages: 37 (i) the product of sixteen percent and the percentage determined under 38 paragraph one of subdivision (a) of this section, 39 (ii) the product of fifty-two percent and the percentage determined 40 under paragraph two of subdivision (a) of this section, and 41 (iii) the product of thirty-two percent and the percentage determined 42 under paragraph three of subdivision (a) of this section. 43 (C) For taxable years beginning in two thousand eleven, the income 44 allocation percentage shall be determined by adding together the follow- 45 ing percentages: 46 (i) the product of fourteen percent and the percentage determined 47 under paragraph one of subdivision (a) of this section, 48 (ii) the product of fifty-eight percent and the percentage determined 49 under paragraph two of subdivision (a) of this section, and 50 (iii) the product of twenty-eight percent and the percentage deter- 51 mined under paragraph three of subdivision (a) of this section. 52 (D) For taxable years beginning in two thousand twelve, the income 53 allocation percentage shall be determined by adding together the follow- 54 ing percentages: 55 (i) the product of twelve percent and the percentage determined under 56 paragraph one of subdivision (a) of this section,

S. 8578 565

1 (ii) the product of sixty-four percent and the percentage determined 2 under paragraph two of subdivision (a) of this section, and 3 (iii) the product of twenty-four percent and the percentage determined 4 under paragraph three of subdivision (a) of this section. 5 (E) For taxable years beginning in two thousand thirteen, the income 6 allocation percentage shall be determined by adding together the follow- 7 ing percentages: 8 (i) the product of ten percent and the percentage determined under 9 paragraph one of subdivision (a) of this section, 10 (ii) the product of seventy percent and the percentage determined 11 under paragraph two of subdivision (a) of this section, and 12 (iii) the product of twenty percent and the percentage determined 13 under paragraph three of subdivision (a) of this section. 14 (F) For taxable years beginning in two thousand fourteen, the income 15 allocation percentage shall be determined by adding together the follow- 16 ing percentages: 17 (i) the product of eight percent and the percentage determined under 18 paragraph one of subdivision (a) of this section, 19 (ii) the product of seventy-six percent and the percentage determined 20 under paragraph two of subdivision (a) of this section, and 21 (iii) the product of sixteen percent and the percentage determined 22 under paragraph three of subdivision (a) of this section. 23 (G) For taxable years beginning in two thousand fifteen, the income 24 allocation percentage shall be determined by adding together the follow- 25 ing percentages: 26 (i) the product of six percent and the percentage determined under 27 paragraph one of subdivision (a) of this section, 28 (ii) the product of eighty-two percent and the percentage determined 29 under paragraph two of subdivision (a) of this section, and 30 (iii) the product of twelve percent and the percentage determined 31 under paragraph three of subdivision (a) of this section. 32 (H) For taxable years beginning in two thousand sixteen, the income 33 allocation percentage shall be determined by adding together the follow- 34 ing percentages: 35 (i) the product of four percent and the percentage determined under 36 paragraph one of subdivision (a) of this section, 37 (ii) the product of eighty-eight percent and the percentage determined 38 under paragraph two of subdivision (a) of this section, and 39 (iii) the product of eight percent and the percentage determined under 40 paragraph three of subdivision (a) of this section. 41 (I) For taxable years beginning in two thousand seventeen, the income 42 allocation percentage shall be determined by adding together the follow- 43 ing percentages: 44 (i) the product of two percent and the percentage determined under 45 paragraph one of subdivision (a) of this section, 46 (ii) the product of ninety-four percent and the percentage determined 47 under paragraph two of subdivision (a) of this section, and 48 (iii) the product of four percent and the percentage determined under 49 paragraph three of subdivision (a) of this section. 50 (J) For taxable years beginning after two thousand seventeen, the 51 income allocation percentage shall be the percentage determined under 52 paragraph two of subdivision (a) of this section. 53 (K) The commissioner shall promulgate rules necessary to implement the 54 provisions of this paragraph under such circumstances where any of the 55 percentages to be determined under paragraph one, two or three of subdi-

S. 8578 566

1 vision (a) of this section cannot be determined because the taxpayer has 2 no compensation, receipts or deposits within or without the city. 3 (2) (A) In lieu of the modification provided for in subdivision (f) of 4 section 11-641 of this part, relating to a modification for the adjusted 5 eligible net income of an international banking facility, a taxpayer 6 may, in the manner prescribed by the commissioner of finance, elect to 7 modify on an annual basis its income allocation percentage in the manner 8 described in clauses (i), (ii) and (iii) of this paragraph below: 9 (i) wages, salaries and other personal service compensation properly 10 attributable to the production of eligible gross income of the taxpay- 11 er's international banking facility shall not be included in the compu- 12 tation of wages, salaries and other personal service compensation of 13 employees within the city, 14 (ii) receipts properly attributable to the production of eligible 15 gross income of the taxpayer's international banking facility shall not 16 be included in the computation of receipts within the city, and 17 (iii) deposits from foreign persons which are properly attributable to 18 the production of eligible gross income of the taxpayer's international 19 banking facility shall not be included in the computation of deposits 20 maintained at branches within the city. 21 (B) For purposes of this paragraph, the term "eligible gross income" 22 refers to such term as set out in subdivision (f) of section 11-641 of 23 this part except that the term "foreign person" as defined in paragraph 24 eight of such subdivision (f) shall not include a foreign branch of the 25 taxpayer and in no event shall transactions between the taxpayer's 26 international banking facility and its foreign branches be considered. 27 (c) Allocation of alternative entire net income. If a taxpayer's 28 alternative entire net income is derived from business carried on both 29 within and without the city, the portion thereof which is derived from 30 business carried on within the city shall be determined by multiplying 31 its alternative entire net income by the alternative entire net income 32 allocation percentage determined as follows: 33 (1) Recompute the payroll percentage under paragraph one of subdivi- 34 sion (a) of this section without giving consideration to the phrase 35 "eighty percent of," add to the resulting percentage the percentages 36 ascertained under paragraphs two and three of such subdivision, and 37 divide the result by the number of percentages so added together. 38 (2) When an election has been made pursuant to paragraph two of subdi- 39 vision (b) of this section, relating to international banking facili- 40 ties, the taxpayer shall make the modifications described in such para- 41 graph for purposes of its alternative entire net income allocation 42 percentage. 43 (d) Allocation of taxable assets. If the taxpayer's taxable assets are 44 derived from business carried on both within and without the city, the 45 portion thereof which is derived from business carried on within the 46 city shall be determined by multiplying its taxable assets by an asset 47 allocation percentage determined in the same manner as the income allo- 48 cation percentage under subdivision (b) of this section is determined 49 when the election provided for in paragraph two of such subdivision has 50 been made, except that the modifications described in clauses (i), (ii) 51 and (iii) of subparagraph (A) of such paragraph shall not be made. 52 § 11-643 Computation of tax for taxable years ending on or before 53 December thirty-first, nineteen hundred seventy-three. For taxable 54 years ending on or before December thirty-first, nineteen hundred seven- 55 ty-three, the tax imposed by section 11-639 of this part shall be the 56 greater of the following computations:

S. 8578 567

1 (a) Basic tax. Five and sixty-three one-hundredths percent of the 2 taxpayer's entire net income, or the portion thereof allocated to this 3 city, for the taxable year or part thereof. 4 (b) Alternative minimum tax. If the tax under subdivision (a) of this 5 section is less than any of the following amounts, the tax shall be the 6 largest of the following amounts: 7 (1) Except for a savings bank and savings and loan association, one 8 and one-quarter mills upon each dollar of such part of the taxpayer's 9 issued capital stock on the last day of the taxable year, at its face 10 value, but if such taxpayer has stock without par value, such stock 11 shall be taken at its actual or market value, and not less than five 12 dollars per share, as may be determined by the commissioner of finance, 13 as the gross income of such taxpayer derived from business carried on 14 within the city, during such taxable year, bears to its gross income 15 derived from all business, both within and without the city during said 16 year; except that if the period covered by the return is other than 17 twelve months, the tax shall be prorated on the basis of the number of 18 months or major portions thereof included in the return. For purposes of 19 this paragraph, the term "gross income" shall have the same meaning as 20 it has in the laws of the United States relating to federal income 21 taxes. 22 (2) For a savings bank and savings and loan association, one and 23 forty-three one-hundredths percent of the interest or dividends credited 24 by it to depositors or shareholders during the taxable year, provided 25 that, in determining such amount, each interest or dividend credit to a 26 depositor or shareholder shall be deemed to be the interest or dividend 27 actually credited or the interest or dividend which would have been 28 credited if it had been computed and credited at the rate of three and 29 one-half percent per annum, whichever is less. 30 (3) Twelve and one-half dollars. 31 § 11-643.1 Computation of tax for taxable years beginning on or after 32 January first, nineteen hundred seventy-four and ending on or before 33 December thirty-first, nineteen hundred seventy-four. For taxable years 34 beginning on or after January first, nineteen hundred seventy-four and 35 ending on or before December thirty-first, nineteen hundred seventy- 36 four, the tax imposed by section 11-639 of this part shall be the great- 37 er of the following computations: 38 (a) Basic tax. Six and seven hundred fifty-six one-thousandths 39 percent of the taxpayer's entire net income, or the portion thereof 40 allocated to this city, for the taxable year, or part thereof. 41 (b) Alternative minimum tax. If the tax under subdivision (a) of 42 this section is less than any of the following amounts, the tax shall be 43 the largest of the following amounts: 44 (1) Except for a savings bank and savings and loan association, one 45 and one-half mills upon each dollar of such part of the taxpayer's 46 issued capital stock on the last day of the taxable year, at its face 47 value, but if such taxpayer has stock without par value, such stock 48 shall be taken at its actual or market value, and not less than five 49 dollars per share, as may be determined by the commissioner of finance, 50 as the gross income of such taxpayer derived from business carried on 51 within the city, during such taxable year bears to its gross income 52 derived from all business, both within and without the city during said 53 year; except that if the period covered by the return is other than 54 twelve months, the tax shall be prorated on the basis of the number of 55 months or major portions thereof included in the return. For purposes 56 of this paragraph, the term "gross income" shall have the same meaning

S. 8578 568

1 as it has in the laws of the United States relating to federal income 2 taxes. 3 (2) For a savings bank and savings and loan association, one and seven 4 hundred sixteen one-thousandths percent of the interest or dividends 5 credited by it to depositors or shareholders during the taxable year, 6 provided that, in determining such amount, each interest or dividend 7 credit to a depositor or shareholder shall be deemed to be the interest 8 or dividend actually credited or the interest or dividend which would 9 have been credited if it had been computed and credited at the rate of 10 three and one-half percent per annum, whichever is less. 11 (3) Fifteen dollars. 12 § 11-643.2 Computation of tax for taxable years beginning in nineteen 13 hundred seventy-three and ending in nineteen hundred seventy-four. For 14 each taxable year beginning in nineteen hundred seventy-three and ending 15 in nineteen hundred seventy-four, two tentative taxes shall be computed, 16 the first as provided in section 11-643 and the second as provided in 17 section 11-643.1 of this part, and the tax for each such year shall be 18 the sum of that proportion of each tentative tax which the number of 19 days in nineteen hundred seventy-three and the number of days in nine- 20 teen hundred seventy-four, respectively, which fall within the taxable 21 year, bears to the number of days in the entire taxable year. 22 § 11-643.3 Computation of tax for taxable years beginning on or after 23 January first, nineteen hundred seventy-five and before January first, 24 nineteen hundred eighty-five. For taxable years beginning on or after 25 January first, nineteen hundred seventy-five and before January first, 26 nineteen hundred eighty-five, the tax imposed by section 11-639 of this 27 part shall be the greater of the following computations: 28 (a) Basic tax. (1) Except for a savings bank and savings and loan 29 association, thirteen and eight hundred twenty-three one-thousandths 30 percent of the taxpayer's entire net income, or the portion thereof 31 allocated to this city, for the taxable year, or part thereof. 32 (2) For a savings bank and savings and loan association, twelve and 33 one hundred thirty-four thousandths percent of the taxpayer's entire net 34 income, or the portion thereof allocated to this city, for the taxable 35 year, or part thereof. 36 (b) Alternative minimum tax. If the tax under subdivision (a) of 37 this section is less than any of the following amounts, the tax shall be 38 the largest of the following amounts: 39 (1) Except for a savings bank and savings and loan association, two 40 and six-tenths mills upon each dollar of such part of the taxpayer's 41 issued capital stock on the last day of the taxable year, at its face 42 value, but if such taxpayer has stock without par value, such stock 43 shall be taken at its actual or market value, and not less than five 44 dollars per share, as may be determined by the commissioner of finance, 45 as the gross income of such taxpayer derived from business carried on 46 within the city during such taxable year bears to its gross income 47 derived from all business, both within and without the city during said 48 year; except that if the period covered by the return is other than 49 twelve months, the tax shall be prorated on the basis of the number of 50 months or major portions thereof included in the return. For purposes 51 of this paragraph, the term "gross income" shall have the same meaning 52 as it has in the laws of the United States relating to federal income 53 taxes. 54 (2) Except as otherwise provided in paragraph three of this subdivi- 55 sion, for a savings bank and savings and loan association, two and five 56 hundred seventy-four one-thousandths percent of the interest or divi-

S. 8578 569

1 dends credited by it to depositors or shareholders during any taxable 2 year, provided that, in determining such amount, each interest or divi- 3 dend credit to a depositor or shareholder shall be deemed to be the 4 interest or dividend actually credited or the interest or dividend which 5 would have been credited if it had been computed and credited at the 6 rate of three and one-half percent per annum, whichever is less. 7 (3) (i) For a savings bank and savings and loan association, for any 8 quarterly accounting period in which such savings bank or savings and 9 loan association credits or pays dividends to its depositors or share- 10 holders on or after the first day of October, nineteen hundred eighty- 11 one but before the first day of July, nineteen hundred eighty-six, and 12 after such credit or payment the net worth of such savings bank or 13 savings and loan association is less than five percent of the amount due 14 depositors, one and eight hundred twenty-four one-thousandths percent of 15 the interest or dividends credited by it to a depositor or shareholder 16 during such accounting period, provided that, in determining such 17 amount, each interest or dividend credit to depositors or shareholders 18 shall be deemed to be the interest or dividend actually credited or the 19 interest or dividend which would have been credited if it had been 20 computed and credited at the rate of three and one-half percent per 21 annum, whichever is less. In determining the lesser of the amount of 22 interest or dividends actually credited to depositors or shareholders or 23 the amount of interest or dividends which would have been credited if 24 such interest or dividends had been computed and credited at the rate of 25 three and one-half percent per annum, the provisions of subparagraph 26 (ii) of this paragraph shall not be considered. 27 (ii) For purposes of the computation provided for in subparagraph (i) 28 of this paragraph, except where the tax computed under subparagraph (i) 29 of this paragraph is computed as if the interest or dividends were 30 computed and credited at the rate of three and one-half percent per 31 annum, that portion of the interest or dividends credited on or after 32 the first day of October, nineteen hundred eighty-one but before the 33 first day of July, nineteen hundred eighty-six by: 34 (A) a savings bank to a depositor or shareholder which is attributable 35 to an increase or a deemed increase in the gross earnings, surplus fund, 36 or net worth of the savings bank, which increase became available for 37 interest or dividends upon the prior written approval of the superinten- 38 dent of banks pursuant to the provisions of subdivision four of section 39 two hundred forty-four of the banking law; or 40 (B) a savings and loan association to a depositor or shareholder which 41 is attributable to an increase or a deemed increase in gross income, 42 undivided profits, surplus account or net worth of the savings and loan 43 association, which increase became available for interest or dividends 44 upon the prior written approval of the superintendent of banks pursuant 45 to the provisions of subdivision two of section three hundred eighty- 46 seven of the banking law; or 47 (C) a federal savings bank or a federal savings and loan association 48 to a depositor or shareholder, which would have required and received 49 prior written approval of the superintendent of banks in respect to 50 increases in gross income, gross earnings, undivided profits, surplus 51 funds, surplus accounts or net worth available for dividends pursuant to 52 the provisions of subdivision four of section two hundred forty-four of 53 the banking law and subdivision two of section three hundred eighty-sev- 54 en of the banking law, respectively, were the provisions of sections two 55 hundred forty-four and three hundred eighty-seven of the banking law 56 applicable to federal savings banks and federal savings and loan associ-

S. 8578 570

1 ations shall not be considered to have been credited to depositors or 2 shareholders. Where the tax computed under subparagraph (i) of this 3 paragraph is computed as if the interest or dividends were computed and 4 credited at the rate of three and one-half percent per annum, the amount 5 of interest or dividends which shall not be considered to have been 6 credited to depositors or shareholders is an amount which bears the same 7 ratio to the interest or dividends which would have been credited at the 8 rate of three and one-half percent per annum as the amount of that 9 portion of the interest or dividends paid or credited on or after the 10 first day of October, nineteen hundred eighty-one but before the first 11 day of July, nineteen hundred eighty-six, which is attributable to an 12 increase or deemed increase in gross income, gross earnings, undivided 13 profits, surplus funds, surplus account or net worth available for divi- 14 dends pursuant to the provisions of subdivision four of section two 15 hundred forty-four of the banking law or subdivision two of section 16 three hundred eighty-seven of the banking law, bears to the amount of 17 interest or dividends actually credited. For purposes of this clause, 18 the determination of whether a federal savings bank or federal savings 19 and loan association would have required and received prior written 20 approval of the superintendent of banks shall be made by the superinten- 21 dent of banks, upon application and upon such forms as he or she may 22 require, by applying the provision of subdivision four of section two 23 hundred forty-four of the banking law, as if such provisions were appli- 24 cable to federal savings banks, and subdivision two of section three 25 hundred eighty-seven of the banking law, as if such provisions were 26 applicable to federal savings and loan associations, and the superinten- 27 dent of banks may require and examine such information as he or she may 28 deem necessary to make such determinations. 29 (4) (i) Except for a savings bank and savings and loan association, 30 twenty-five dollars. 31 (ii) For a savings bank and savings and loan association, twenty 32 dollars. 33 § 11-643.4 Computation of tax for taxable years beginning in nineteen 34 hundred seventy-four and ending in nineteen hundred seventy-five. For 35 each taxable year beginning in nineteen hundred seventy-four and ending 36 in nineteen hundred seventy-five, two tentative taxes shall be computed, 37 the first as provided in section 11-643.1 and the second as provided in 38 section 11-643.3 of this part, and the tax for each such year shall be 39 the sum of that proportion of each tentative tax which the number of 40 days in nineteen hundred seventy-four and the number of days in nineteen 41 hundred seventy-five, respectively, which fall within the taxable year, 42 bears to the number of days in the entire taxable year. 43 § 11-643.5 Computation of tax for taxable years beginning on or after 44 January first, nineteen hundred eighty-five. For taxable years beginning 45 on or after January first, nineteen hundred eighty-five, the tax imposed 46 by section 11-639 of this part shall be the greater of the following 47 computations: 48 (a) Basic tax. Nine percent of the taxpayer's entire net income, or 49 the portion thereof allocated to the city, for the taxable year or part 50 thereof. 51 (b) Alternative minimum tax. If the tax under subdivision (a) of this 52 section is less than any of the following amounts, the tax shall be the 53 larger of the following amounts: 54 (1) For taxable years beginning before two thousand eleven, except in 55 the case of a corporation organized under the laws of a country other 56 than the United States, one-tenth of a mill upon each dollar of taxable

S. 8578 571

1 assets, or the portion thereof allocated to the city. For taxable years 2 beginning after two thousand ten, except in the case of a taxpayer 3 described in clause (i), (ii), or (iii) of this subparagraph, one-tenth 4 of a mill upon each dollar of taxable assets, or the portion thereof 5 allocated to the city. 6 (i) In the case of a taxpayer whose net worth ratio is less than five 7 percent but greater than or equal to four percent and whose total assets 8 are comprised of thirty-three percent or more of mortgages, one-twenty- 9 fifth of a mill upon each dollar of taxable assets, or the portion ther- 10 eof allocated to the city. 11 (ii) In the case of a taxpayer whose net worth ratio is less than four 12 percent and whose total assets are comprised of thirty-three percent or 13 more of mortgages, one-fiftieth of a mill upon each dollar of taxable 14 assets, or the portion thereof allocated to the city. 15 (iii) A taxpayer, whether or not a qualified institution as defined in 16 subparagraph (B) of paragraph five of subsection (f) of section four 17 hundred six of the federal national housing act, as amended, or as 18 defined in paragraph two of subsection (i) of section thirteen of the 19 federal deposit insurance act, as amended, shall not be subject to the 20 provisions of this paragraph for that portion of the taxable year in 21 which it had outstanding net worth certificates issued in accordance 22 with paragraph five of subsection (f) of section four hundred six of the 23 federal national housing act, as amended, or issued in accordance with 24 subsection (i) of section thirteen of the federal deposit insurance act, 25 as amended. 26 (iv) For the purposes of this part: (A) the term "taxable assets" 27 shall mean the average value of total assets reduced by any amount of 28 money or other property received from or attributable to amounts 29 received from the federal deposit insurance corporation pursuant to 30 subsection (c) of section thirteen of the federal deposit insurance act, 31 as amended, or the federal savings and loan insurance corporation pursu- 32 ant to paragraph one, two, three or four of subsection (f) of section 33 four hundred six of the federal national housing act, as amended. Total 34 assets are those assets which are properly reflected on a balance sheet 35 the income or expenses of which are properly reflected, or would have 36 been properly reflected if not fully depreciated or expensed or depreci- 37 ated or expensed to a nominal amount, in the computation of alternative 38 entire net income for the taxable year or in the computation of the 39 eligible net income of the taxpayer's international banking facility for 40 the taxable year. 41 (B) The term "net worth ratio" shall mean the percentage of net worth 42 to assets on the last day of the taxable year. The term "net worth" 43 means the sum of preferred stock, common stock, surplus, capital 44 reserves, undivided profits, mutual capital certificates, reserve for 45 contingencies, reserve for loan losses and reserve for security losses 46 minus assets classified loss. The term "assets" means the sum of mort- 47 gage loans, nonmortgage loans, repossessed assets, real estate held for 48 development or investment or resale, cash, deposits, investment securi- 49 ties, fixed assets and other assets, such as financial futures, goodwill 50 and other intangible assets, minus assets classified loss. In no event 51 shall assets be reduced by reserves for losses. 52 (C) The term "mortgages" shall mean loans secured by real property 53 within or without the state, participations in and securities collater- 54 alized by pools of residential mortgages, whether or not issued or guar- 55 anteed by a United States government agency, and loans secured by stock 56 in a cooperative housing corporation. The percentage of total assets

S. 8578 572

1 comprised of mortgages shall be an amount equal to the ratio of the 2 average of the four quarterly balances of such mortgages ending within 3 the taxable year, to the average of the four quarterly balances of all 4 assets ending within the taxable year. Such quarterly balances shall be 5 computed in the same manner as the report of condition required for 6 federal deposit insurance corporation or federal savings and loan insur- 7 ance corporation purposes, whether or not such report is required. For 8 taxable periods of less than one year, the taxpayer shall compute such 9 ratio using the number of such quarterly balances ending within such 10 taxable period. 11 (2) For taxable years beginning before two thousand eleven, in the 12 case of a corporation organized under the laws of a country other than 13 the United States, (i) two and six-tenths mills upon each dollar of such 14 part of the taxpayer's issued capital stock on the last day of the taxa- 15 ble year, at its face value, but if such taxpayer has stock without par 16 value, such stock shall be taken at its actual or market value, and not 17 less than five dollars per share, as may be determined by the commis- 18 sioner of finance, or (ii) if the taxpayer does not have issued capital 19 stock, two and six-tenths mills upon each dollar of such part of the 20 amount by which its average total assets exceeds its average total 21 liabilities, as the gross income of such taxpayer derived from business 22 carried on within the city during such taxable year bears to its gross 23 income derived from all business, both within and without the city 24 during said year; except that if the period covered by the return is 25 other than twelve months, the tax shall be prorated on the basis of the 26 number of months or major portions thereof included in the return. For 27 purposes of this paragraph, the term "gross income" shall have the same 28 meaning as it has in the laws of the United States relating to federal 29 income taxes. 30 (3) Three percent of the taxpayer's alternative entire net income, or 31 portion thereof allocated to the city, for the taxable year, or part 32 thereof. 33 (4) One hundred twenty-five dollars. 34 § 11-643.7. Relocation and employment assistance credit. (a) In addi- 35 tion to any other credit allowed by this part, a taxpayer that has 36 obtained the certifications required by chapter six-B of title twenty- 37 two of the code of the preceding municipality shall be allowed a credit 38 against the tax imposed by this part. The amount of the credit shall be 39 the amount determined by multiplying five hundred dollars or, in the 40 case of a taxpayer that has obtained pursuant to chapter six-B of such 41 title twenty-two a certification of eligibility dated on or after July 42 first, nineteen hundred ninety-five, one thousand dollars or, in the 43 case of an eligible business that has obtained pursuant to chapter six-B 44 of such title twenty-two a certification of eligibility dated on or 45 after July first, two thousand, for a relocation to eligible premises 46 located within a revitalization area defined in subdivision (n) of 47 section 22-621 of the code of the preceding municipality, three thousand 48 dollars, by the number of eligible aggregate employment shares main- 49 tained by the taxpayer during the taxable year with respect to partic- 50 ular premises to which the taxpayer has relocated; provided, however, 51 with respect to a relocation for which no application for a certificate 52 of eligibility is submitted prior to July first, two thousand three to 53 eligible premises that are not within a revitalization area, if the date 54 of such relocation as determined pursuant to subdivision (j) of section 55 22-621 of the code of the preceding municipality is before July first, 56 nineteen hundred ninety-five, the amount to be multiplied by the number

S. 8578 573

1 of eligible aggregate employment shares shall be five hundred dollars, 2 and with respect to a relocation for which no application for a certif- 3 icate of eligibility is submitted prior to July first, two thousand 4 three, to eligible premises that are within a revitalization area, if 5 the date of such relocation as determined pursuant to subdivision (j) of 6 such section is before July first, nineteen hundred ninety-five, the 7 amount to be multiplied by the number of eligible aggregate employment 8 shares shall be five hundred dollars, and if the date of such relocation 9 as determined pursuant to subdivision (j) of such section is on or after 10 July first, nineteen hundred ninety-five, and before July first, two 11 thousand, one thousand dollars; provided, however, that no credit shall 12 be allowed for the relocation of any retail activity or hotel services; 13 and provided that in the case of an eligible business that has obtained 14 pursuant to chapter six-B of such title twenty-two certifications of 15 eligibility for more than one relocation, the portion of the total 16 amount of eligible aggregate employment shares to be multiplied by the 17 dollar amount specified in this subdivision for each such certification 18 of a relocation shall be the number of total attributed eligible aggre- 19 gate employment shares determined with respect to such relocation pursu- 20 ant to subdivision (o) of section 22-621 of the code of the preceding 21 municipality. For purposes of this section, the terms "eligible aggre- 22 gate employment shares," "relocate," "retail activity" and "hotel 23 services" shall have the meanings ascribed by section 22-621 of the code 24 of the preceding municipality. 25 (b) The credit allowed under this section with respect to eligible 26 aggregate employment shares maintained with respect to particular prem- 27 ises to which the taxpayer has relocated shall be allowed for the first 28 taxable year during which such eligible aggregate employment shares are 29 maintained with respect to such premises and for any of the twelve 30 succeeding taxable years during which eligible aggregate employment 31 shares are maintained with respect to such premises; provided that the 32 credit allowed for the twelfth succeeding taxable year shall be calcu- 33 lated by multiplying the number of eligible aggregate employment shares 34 maintained with respect to such premises in the twelfth succeeding taxa- 35 ble year by the lesser of one and a fraction the numerator of which is 36 such number of days in the taxable year of relocation less the number of 37 days the eligible business maintained employment shares in the eligible 38 premises in the taxable year of relocation and the denominator of which 39 is the number of days in such twelfth succeeding taxable year during 40 which such eligible aggregate employment shares are maintained with 41 respect to such premises. Except as provided in subdivision (d) of this 42 section, if the amount of the credit allowable under this section for 43 any taxable year exceeds the tax imposed for such year, the excess may 44 be carried over, in order, to the five immediately succeeding taxable 45 years and, to the extent not previously deductible, may be deducted from 46 the taxpayer's tax for such years. 47 (c) The credit allowable under this section shall be deducted after 48 the credit allowed by section 11-643.8, but prior to the deduction of 49 any other credit allowed by this part. 50 (d) In the case of a taxpayer that has obtained a certification of 51 eligibility pursuant to chapter six-B of title twenty-two of the code of 52 the preceding municipality dated on or after July first, two thousand 53 for a relocation to eligible premises located within the revitalization 54 area defined in subdivision (n) of section 22-621 of the code of the 55 preceding municipality, the credits allowed under this section, or in 56 the case of a taxpayer that has relocated more than once, the portion of

S. 8578 574

1 such credits attributed to such certification of eligibility pursuant to 2 subdivision (a) of this section, against the tax imposed by this chapter 3 for the taxable year of such relocation and for the four taxable years 4 immediately succeeding the taxable year of such relocation, shall be 5 deemed to be overpayments of tax by the taxpayer to be credited or 6 refunded, without interest, in accordance with the provisions of section 7 11-677 of this chapter. For such taxable years, such credits or portions 8 thereof may not be carried over to any succeeding taxable year; 9 provided, however, that this subdivision shall not apply to any relo- 10 cation for which an application for a certification of eligibility was 11 not submitted prior to July first, two thousand three, unless the date 12 of such relocation is on or after July first, two thousand. 13 § 11-643.8 Credit relating to certain distributions from partnerships. 14 (a) If a banking corporation is a partner in an unincorporated business 15 taxable under chapter five of this title, and is required to include in 16 entire net income its distributive share of income, gain, loss and 17 deductions of, or guaranteed payments from, such unincorporated busi- 18 ness, such banking corporation shall be allowed a credit against the tax 19 imposed by this part equal to the lesser of the amounts determined in 20 paragraphs one and two of this subdivision: 21 (1) The amount determined in this paragraph is the product of (A) the 22 sum of (i) the tax imposed by chapter five of this title on the unincor- 23 porated business for its taxable year ending within or with the taxable 24 year of the banking corporation and paid by the unincorporated business 25 and (ii) the amount of any credit or credits taken by the unincorporated 26 business under section 11-503 of this title, except the credit allowed 27 by subdivision (b) of such section, for its taxable year ending within 28 or with the taxable year of the banking corporation, to the extent that 29 such credits do not reduce such unincorporated business's tax below 30 zero, and (B) a fraction, the numerator of which is the net total of the 31 banking corporation's distributive share of income, gain, loss and 32 deductions of, and guaranteed payments from, the unincorporated business 33 for such taxable year and the denominator of which is the sum, for such 34 taxable year, of the net total distributive shares of income, gain, loss 35 and deductions of, and guaranteed payments to, all partners of the unin- 36 corporated business for whom or which such net total, as separately 37 determined for each partner, is greater than zero. 38 (2) The amount determined in this paragraph is the product of (A) the 39 excess of (i) the basic tax computed pursuant to subdivision (a) of 40 section 11-643.5 of this part, without allowance of any credits allowed 41 by this part, over (ii) the basic tax so computed, determined as if the 42 banking corporation had no such distributive share or guaranteed 43 payments with respect to the unincorporated business, and (B) a frac- 44 tion, the numerator of which is four and the denominator of which is 45 nine, provided, however, that the amounts computed in clauses (i) and 46 (ii) of this paragraph shall be computed with the following modifica- 47 tions: 48 (I) if, prior to taking into account any distributive share or guaran- 49 teed payments from any unincorporated business, the entire net income of 50 the partner is less than zero, such entire net income shall be treated 51 as zero; and 52 (II) if such partner's net total distributive share of income, gain, 53 loss and deductions of, and guaranteed payments from any unincorporated 54 business is less than zero, such net total shall be treated as zero. 55 The amount determined in this paragraph shall not be less than zero.

S. 8578 575

1 (b) (1) Notwithstanding anything to the contrary in subdivision (a) of 2 this section, in the case of a banking corporation that, before the 3 application of this section or any other credit allowed by this part, is 4 liable for the basic tax computed under subdivision (a) of section 5 11-643.5 of this part, the credit or the sum of the credits that may be 6 taken by such banking corporation for a taxable year under this section 7 with respect to an unincorporated business or unincorporated businesses 8 in which it is a partner shall not exceed the tax so computed, without 9 allowance of any credits allowed by this part, multiplied by a fraction 10 the numerator of which is four and the denominator of which is nine. If 11 the credit allowed under this subdivision or the sum of such credits 12 exceeds the product of such tax and such fraction, the amount of the 13 excess may be carried forward, in order, to each of the seven immediate- 14 ly succeeding taxable years and, to the extent not previously taken, 15 shall be allowed as a credit in each of such years. In applying such 16 provisions, the credit determined for the taxable year under subdivision 17 (a) of this section shall be taken before taking any credit carryforward 18 pursuant to this paragraph and the credit carryforward attributable to 19 the earliest taxable year shall be taken before taking a credit carry- 20 forward attributable to a subsequent taxable year. 21 (2) Notwithstanding anything to the contrary in subdivision (a) of 22 this section, in the case of a banking corporation that, before the 23 application of this section or any other credit allowed by this part, is 24 liable for the alternative minimum tax on alternative entire net income 25 under paragraph three of subdivision (b) of section 11-643.5 of this 26 part, the maximum credit that may be taken in any taxable year is the 27 amount that will reduce the tax so computed, without allowance of any 28 credits allowed by this part, to zero. For purposes of this paragraph 29 each dollar of credit shall be applied so as to reduce such tax by 30 seventy-five cents. If the amount of credit allowed under this section 31 or the sum of such credits exceeds the amount that may be taken against 32 such tax, the amount of the excess may be carried forward, in order, to 33 each of the seven immediately succeeding taxable years and, to the 34 extent not previously taken, shall be allowed as a credit in each of 35 such years. In applying such provisions, the credit determined for the 36 taxable year under subdivision (a) of this section shall be taken before 37 taking any credit carryforward pursuant to this subdivision and the 38 credit carryforward attributable to the earliest taxable year shall be 39 taken before taking a credit carryforward attributable to a subsequent 40 taxable year. 41 (3) No credit under this section may be taken in a taxable year by a 42 taxpayer that, in the absence of such credit, would be liable for the 43 tax computed on the basis of taxable assets under paragraph one of this 44 subdivision, the tax computed on the basis of issued capital stock under 45 paragraph two of this subdivision or the fixed-dollar minimum tax under 46 paragraph four of subdivision (b) of section 11-643.5 of this part. 47 (c) For banking corporations that file a report on a combined basis 48 pursuant to subdivision (f) of section 11-646 of this part, the credit 49 allowed by this section shall be computed as if the combined group were 50 the partner in each unincorporated business from which any of the 51 members of such group had a distributive share or guaranteed payments, 52 provided, however, if more than one member of the combined group is a 53 partner in the same unincorporated business, for purposes of the calcu- 54 lation required in paragraph one of subdivision (a) of this section, the 55 numerator of the fraction described in subparagraph (B) of such para- 56 graph one shall be the sum of the net total distributive shares of

S. 8578 576

1 income, gain, loss and deductions of, and guaranteed payments from, the 2 unincorporated business of all of the partners of the unincorporated 3 business within the combined group for which such net total, as sepa- 4 rately determined for each partner, is greater than zero, and the denom- 5 inator of such fraction shall be the sum of the net total distributive 6 shares of income, gain, loss and deductions of, and guaranteed payments 7 from, the unincorporated business of all partners in the unincorporated 8 business for whom or which such net total, as separately determined for 9 each partner, is greater than zero. 10 (d) The credit allowed by this section shall not be allowed to a part- 11 ner in an unincorporated business with respect to any tax paid by the 12 unincorporated business under chapter five of this title for any taxable 13 year beginning before July first, nineteen hundred ninety-four. 14 (e) Notwithstanding any other provisions of this part, the credit 15 allowable under this section shall be taken prior to the taking of any 16 other credit allowed by this part. Notwithstanding any other provisions 17 of this part, the application of this section shall not change the basis 18 on which the taxpayer's tax is computed under subdivision (a) or (b) of 19 section 11-643.5 of this part. 20 § 11-644 Declarations of estimated tax. (a) Requirements of declara- 21 tion. Every taxpayer subject to the tax imposed by subdivision (a) of 22 section 11-639 of this part shall make a declaration of its estimated 23 tax for the current taxable year, containing such information as the 24 commissioner of finance may prescribe by regulations or instructions, if 25 such estimated tax can reasonably be expected to exceed one thousand 26 dollars. 27 (b) Definition of estimated tax. The term "estimated tax" means the 28 amount which a taxpayer estimates to be the tax imposed by subdivision 29 (a) of section 11-639 of this part for the current taxable year, less 30 the amount which it estimates to be the sum of any credits allowable 31 against the tax. 32 (c) Time for filing declaration. A declaration of estimated tax shall 33 be filed on or before June fifteenth of the current taxable year in the 34 case of a taxpayer which reports on the basis of a calendar year, except 35 that if the requirements of subdivision (a) of this section are first 36 met: 37 (1) after May thirty-first and before September first of such current 38 taxable year, the declaration shall be filed on or before September 39 fifteenth, or 40 (2) after August thirty-first and before December first of such 41 current taxable year, the declaration shall be filed on or before Decem- 42 ber fifteenth. 43 (d) Amendments of declaration. A taxpayer may amend a declaration 44 under regulations of the commissioner of finance. 45 (e) Return as declaration. If, on or before February fifteenth of the 46 succeeding year in the case of a taxpayer whose taxable year is a calen- 47 dar year, a taxpayer files its return for the year for which the decla- 48 ration is required, and pays therewith the balance, if any, of the full 49 amount of the tax shown to be due on the return: 50 (1) such return shall be considered as its declaration if no declara- 51 tion was required to be filed during the taxable year for which the tax 52 was imposed, but is otherwise required to be filed on or before December 53 fifteenth pursuant to paragraph two of subdivision (c) of this section, 54 and 55 (2) such return shall be considered as the amendment permitted by 56 subdivision (d) of this section to be filed on or before December

S. 8578 577

1 fifteenth if the tax shown on the return is greater than the estimated 2 tax shown on a declaration previously made. 3 (f) Fiscal year. This section shall apply to taxable years of twelve 4 months other than a calendar year by the substitutions of the months of 5 such fiscal year for the corresponding months specified in this section. 6 (g) Short taxable period. If the taxable period for which a tax is 7 imposed by subdivision (a) of section 11-639 of this part is less than 8 twelve months, every taxpayer required to make a declaration of esti- 9 mated tax for such taxable period shall make such a declaration in 10 accordance with regulations of the commissioner of finance. 11 (h) Extension of time. The commissioner of finance may grant a 12 reasonable extension of time, not to exceed three months, for the filing 13 of any declaration required pursuant to this section, on such terms and 14 conditions as the commissioner may require. 15 § 11-645 Payments of estimated tax. (a) Every taxpayer subject to 16 the tax imposed by section 11-639 of this part shall pay an amount equal 17 to twenty-five percent of the preceding year's tax, if such preceding 18 year's tax exceeded one thousand dollars. Such amount shall be paid 19 with the return required to be filed for the preceding taxable year or 20 with an application for the extension of the time for filing such 21 return. Provided, however, that for the first taxable year or period 22 commencing on or after January first, nineteen hundred seventy-three, 23 the installment required by this subdivision shall be paid with the 24 return required to be filed for the tax imposed pursuant to part one or 25 two of this subchapter three computed on the basis of net income for the 26 calendar year nineteen hundred seventy-two, or under the minimum tax 27 provisions of section 11-612 of this subchapter. 28 (b) Other installments. The estimated tax for each taxable year with 29 respect to which a declaration of estimated tax is required to be filed 30 under this part shall be paid, in the case of a taxpayer which reports 31 on the basis of a calendar year, as follows: 32 (1) If the declaration is filed on or before June fifteenth, the esti- 33 mated tax shown thereon, after applying thereto the amount, if any, paid 34 during the same taxable year pursuant to subdivision (a) of this 35 section, shall be paid in three equal installments. One of such 36 installments shall be paid at the time of the filing of the declaration, 37 one shall be paid on the following September fifteenth, and one on the 38 following December fifteenth. 39 (2) If the declaration is filed after June fifteenth and not after 40 September fifteenth of such taxable year, and is not required to be 41 filed on or before June fifteenth of such year, the estimated tax shown 42 on such declaration, after applying thereto the amount, if any, paid 43 during the same taxable year pursuant to subdivision (a) of this 44 section, shall be paid in two equal installments. One of such install- 45 ments shall be paid at the time of the filing of the declaration and one 46 shall be paid on the following December fifteenth. 47 (3) If the declaration is filed after September fifteenth of such 48 taxable year, and is not required to be filed on or before September 49 fifteenth of such year, the estimated tax shown on such declaration, 50 after applying thereto the amount, if any, paid in respect of such year 51 pursuant to subdivision (a) of this section, shall be paid in full at 52 the time of the filing of the declaration. 53 (4) If the declaration is filed after the time prescribed therefor, 54 or after the expiration of any extension of time therefor, paragraphs 55 two and three of this subdivision shall not apply and there shall be 56 paid at the time of such filing all installments of estimated tax paya-

S. 8578 578

1 ble at or before such time, and the remaining installments shall be paid 2 at the times at which, and in the amounts in which, they would have been 3 payable if the declaration had been filed when due. 4 (c) Amendments of declarations. If any amendment of a declaration is 5 filed, the remaining installments, if any, shall be ratably increased or 6 decreased, as the case may be, to reflect any increase or decrease in 7 the estimated tax by reason of such amendment, and if any amendment is 8 made after September fifteenth of the taxable year, any increase in the 9 estimated tax by reason thereof shall be paid at the time of making such 10 amendment. 11 (d) Application of installments based on the preceding year's tax. 12 Any amount paid pursuant to subdivision (a) of this section shall be 13 applied as a first installment against the estimated tax of the taxpayer 14 for the taxable year shown on the declaration required to be filed 15 pursuant to section 11-644 of this part, or if no declaration of esti- 16 mated tax is required to be filed by the taxpayer pursuant to such 17 section, any such amount shall be considered a payment on account of the 18 tax shown on the return required to be filed by the taxpayer for such 19 taxable year. 20 (e) Interest on certain installments based on the preceding year's 21 tax. Notwithstanding the provisions of section 11-679 of this chapter or 22 of section three-a of the general municipal law, if an amount paid 23 pursuant to subdivision (a) of this section exceeds the tax shown on the 24 return required to be filed by the taxpayer for the taxable year during 25 which the amount was paid, interest shall be allowed and paid on the 26 amount by which the amount so paid pursuant to such subdivision exceeds 27 such tax, at the overpayment rate set by the commissioner of finance 28 pursuant to section 11-687 of this chapter, or, if no rate is set, at 29 the rate of six percent per annum from the date of payment of the amount 30 so paid pursuant to such subdivision to the fifteenth day of the third 31 month following the close of the taxable year, provided, however, that 32 no interest shall be allowed or paid under this subdivision if the 33 amount thereof is less than one dollar. 34 (f) The preceding year's tax defined. As used in this section, "the 35 preceding year's tax" means the tax imposed upon the taxpayer by subdi- 36 vision (a) of section 11-639 of this part for the preceding taxable 37 year, or, for purposes of computing the first installment of estimated 38 tax when an application has been filed for extension of the time for 39 filing the return required to be filed for such preceding taxable year, 40 the amount properly estimated pursuant to paragraph one of subdivision b 41 of section 11-647 of this part as the tax imposed upon the taxpayer for 42 such taxable year. Provided, however, that for the first taxable year 43 or period commencing on or after January first, nineteen hundred seven- 44 ty-three, the term "preceding year's tax" as used in this section shall 45 mean the tax imposed upon the taxpayer pursuant to part one or two of 46 this subchapter three which was computed on the basis of net income for 47 the calendar year nineteen hundred seventy-two, or under the minimum tax 48 provisions of subdivision two of section 11-612 of this subchapter, or 49 for purposes of computing the first installment of estimated tax for 50 such first taxable year or period when an application has been filed for 51 an extension of the time for filing the return required to be filed for 52 the tax imposed pursuant to part one or two of this subchapter three 53 which was computed on the basis of net income for the calendar year 54 nineteen hundred seventy-two, or under the minimum tax provisions of 55 section 11-612 of this subchapter, the amount of tax properly estimated

S. 8578 579

1 for purposes of such part one or two pursuant to section 11-635 of this 2 subchapter. 3 (g) Application to short taxable period. This section shall apply to 4 a taxable period of less than twelve months in accordance with regu- 5 lations of the commissioner of finance. 6 (h) Fiscal year. The provisions of this section shall apply to taxa- 7 ble years of twelve months other than a calendar year by the substi- 8 tution of the months of such fiscal year for the corresponding months 9 specified in such provisions. 10 (i) Extension of time. The commissioner of finance may grant a 11 reasonable extension of time, not to exceed six months, for payment of 12 any installment of estimated tax required pursuant to this section, on 13 such terms and conditions as the commissioner may require, including the 14 furnishing of a bond or other security by the taxpayer in an amount not 15 exceeding twice the amount for which any extension of time for payment 16 is granted, provided, however that interest at the underpayment rate set 17 by the commissioner of finance pursuant to section 11-687 of this chap- 18 ter, or, if no rate is set, at the rate of seven and one-half percent 19 per annum for the period of the extension shall be charged and collected 20 on the amount for which any extension of time for payment is granted 21 under this subdivision. 22 (j) Payment of installments in advance. A taxpayer may elect to pay 23 any installment of estimated tax prior to the date prescribed in this 24 section for payment thereof. 25 § 11-646 Returns. (a) Every taxpayer shall annually on or before 26 the fifteenth day of the third month following the close of each of its 27 taxable years transmit to the commissioner of finance a return in a form 28 prescribed by the commissioner setting forth such information as the 29 commissioner of finance may prescribe and every taxpayer which ceases to 30 exercise its franchise in the city or to be subject to the tax imposed 31 by this part shall transmit to the commissioner of finance a return on 32 the date of such cessation or at such other time as the commissioner of 33 finance may require covering each year or period for which no return was 34 therefore filed. 35 (b) Every taxpayer shall also transmit such other returns and such 36 facts and information as the commissioner of finance may require in the 37 administration of this part. 38 (c) The commissioner of finance may grant a reasonable extension of 39 time for filing returns whenever good cause exists. An automatic exten- 40 sion of six months for the filing of its annual return shall be allowed 41 any taxpayer, if within the time prescribed by subdivision (a) of this 42 section, such taxpayer files with the commissioner of finance an appli- 43 cation for extension in such form as said commissioner of finance may 44 prescribe by regulation and pays on or before the date of such filing 45 the amount properly estimated as its tax. 46 (d) Every return shall have annexed thereto a certification by the 47 president, vice president, treasurer, assistant treasurer, chief 48 accounting officer or any other officer of the taxpayer duly authorized 49 so to act to the effect that the statements contained therein are true. 50 The fact that an individual's name is signed on a certification of the 51 return shall be prima facie evidence that such individual is authorized 52 to sign and certify the return on behalf of the corporation. 53 (e) If the amount of taxable income, alternative minimum taxable 54 income or other basis of tax for any year of any taxpayer, or of any 55 shareholder of any taxpayer that has elected to be taxed under subchap- 56 ter s of chapter one of the internal revenue code or of any shareholder

S. 8578 580

1 of any taxpayer with respect to which an election has been made to be 2 treated as a qualified subchapter s subsidiary under paragraph three of 3 subsection (b) of section thirteen hundred sixty-one of the internal 4 revenue code as returned to the United States treasury department or the 5 New York state commissioner of taxation and finance is changed or 6 corrected by the commissioner of internal revenue or other officer of 7 the United States or the New York state commissioner of taxation and 8 finance or other competent authority, or if a taxpayer or such share- 9 holder of a taxpayer, pursuant to subsection (d) of section sixty-two 10 hundred thirteen of the internal revenue code, executes a notice of 11 waiver of the restrictions provided in subsection (a) of said section, 12 or if a taxpayer or such shareholder of a taxpayer, pursuant to 13 subsection (f) of section one thousand eighty-one of the tax law, 14 executes a notice of waiver of the restrictions provided in subsection 15 (c) of such section, such taxpayer shall report such changed or 16 corrected taxable income, alternative minimum taxable income or other 17 basis of tax or such execution of such notice of waiver and the changes 18 or corrections of the taxpayer's federal or New York state taxable 19 income, alternative minimum taxable income or other basis of tax on 20 which it is based, within ninety days, or one hundred twenty days, in 21 the case of a taxpayer making a combined return under this subchapter 22 for such year, after such execution or the final determination of such 23 change or correction, or as required by the commissioner of finance, and 24 shall concede the accuracy of such determination or state wherein it is 25 erroneous. The allowance of a tentative carryback adjustment based upon 26 a net capital loss carryback pursuant to section sixty-four hundred 27 eleven of the internal revenue code, shall be treated as a final deter- 28 mination for purposes of this subdivision. Any taxpayer filing an 29 amended return with such department shall also file within ninety days, 30 or one hundred twenty days, in the case of a taxpayer making a combined 31 return under this subchapter for such year, thereafter an amended return 32 with the commissioner of finance which shall contain such information as 33 the commissioner shall require. 34 (f) (1) For purposes of this subdivision, the term "bank holding 35 company" means any corporation subject to article three-A of the banking 36 law, or registered under the federal bank holding company act of nine- 37 teen hundred fifty-six, as amended, or registered as a savings and loan 38 holding company, but excluding a diversified savings and loan holding 39 company, under the federal national housing act, as amended. 40 (2) (i) Any banking corporation or bank holding company which is doing 41 business in the city in a corporate or organized capacity, and 42 (A) which owns or controls, directly or indirectly, eighty percent or 43 more of the voting stock of one or more banking corporations or bank 44 holding companies, or 45 (B) whose voting stock is eighty percent or more owned or controlled, 46 directly or indirectly, by a banking corporation or a bank holding 47 company, 48 shall make a return on a combined basis under this part covering 49 itself and such corporations described in clause (A) or (B) of this 50 subparagraph and shall set forth such information as the commissioner of 51 finance may require unless the taxpayer or the commissioner of finance 52 shows that the inclusion of such a corporation in the combined return 53 fails to properly reflect the tax liability of such corporation under 54 this part. Provided, however, that no banking corporation or bank hold- 55 ing company not a taxpayer shall be subject to the requirements of this 56 subparagraph unless the commissioner of finance deems that the applica-

S. 8578 581

1 tion of such requirements is necessary in order to properly reflect the 2 tax liability under this part, because of intercompany transactions or 3 some agreement, understanding, arrangement or transaction of the type 4 referred to in subdivision (g) of this section. 5 (ii) In the discretion of the commissioner of finance, any banking 6 corporation or bank holding company which is doing business in the city 7 in a corporate or organized capacity, and 8 (A) which owns or controls, directly or indirectly, sixty-five percent 9 or more of the voting stock of one or more banking corporations or bank 10 holding companies, or 11 (B) whose voting stock is sixty-five percent or more owned or 12 controlled, directly or indirectly, by a banking corporation or a bank 13 holding company, may be required or permitted to make a return on a 14 combined basis under this part covering itself and such corporations 15 described in clause (A) or (B) of this subparagraph and shall set forth 16 such information as the commissioner of finance may require; provided, 17 however, that no combined return shall be required or permitted unless 18 the commissioner of finance deems such report necessary in order to 19 properly reflect the tax liability under this part of any one or more of 20 such banking corporations or bank holding companies. 21 (iii) In the discretion of the commissioner of finance, banking corpo- 22 rations or bank holding companies which are each sixty-five percent or 23 more owned or controlled, directly or indirectly, by the same interest 24 may be permitted or required to make a return on a combined basis under 25 this part and shall set forth such information as the commissioner of 26 finance may require, if at least one such banking corporation or bank 27 holding company is doing business in the city in a corporate or organ- 28 ized capacity. No combined return shall be required or permitted unless 29 the commissioner of finance deems such report necessary in order to 30 properly reflect the tax liability under this part of any one or more of 31 such banking corporations or bank holding companies. 32 (iv) (A) Notwithstanding any provision of this paragraph, any bank 33 holding company exercising its corporate franchise or doing business in 34 the city may make a return on a combined basis without seeking the 35 permission of the commissioner with any banking corporation exercising 36 its corporate franchise or doing business in the city in a corporate or 37 organized capacity sixty-five percent or more of whose voting stock is 38 owned or controlled, directly or indirectly, by such bank holding compa- 39 ny, for the first taxable year beginning on or after January first, two 40 thousand and before January first, two thousand twenty during which such 41 bank holding company registers for the first time under the federal bank 42 holding company act, as amended, and also elects to be a financial hold- 43 ing company. In addition, for each subsequent taxable year beginning 44 after January first, two thousand and before January first, two thousand 45 twenty, any such bank holding company may file on a combined basis with- 46 out seeking the permission of the commissioner with any banking corpo- 47 ration that is exercising its corporate franchise or doing business in 48 the city and sixty-five percent or more of whose voting stock is owned 49 or controlled, directly or indirectly, by such bank holding company if 50 either such banking corporation is exercising its corporate franchise or 51 doing business in the city in a corporate or organized capacity for the 52 first time during such subsequent taxable year, or sixty-five percent or 53 more of the voting stock of such banking corporation is owned or 54 controlled, directly or indirectly, by such bank holding company for the 55 first time during such subsequent taxable year. Provided however, for 56 each subsequent taxable year beginning after January first, two thousand

S. 8578 582

1 and before January first, two thousand twenty, a banking corporation 2 described in this clause which filed on a combined basis with any such 3 bank holding company in a previous taxable year, must continue to file 4 on a combined basis with such bank holding company if such banking 5 corporation, during such subsequent taxable year, continues to exercise 6 its corporate franchise or do business in the city in a corporate or 7 organized capacity and sixty-five percent or more of such banking corpo- 8 ration's voting stock continues to be owned or controlled, directly or 9 indirectly, by such bank holding company, unless the permission of the 10 commissioner has been obtained to file on a separate basis for such 11 subsequent taxable year. Provided further, however, for each subsequent 12 taxable year beginning after January first, two thousand and before 13 January first, two thousand twenty, a banking corporation described in 14 this clause which did not file on a combined basis with any such bank 15 holding company in a previous taxable year, may not file on a combined 16 basis with such bank holding company during any such subsequent taxable 17 year unless the permission of the commissioner has been obtained to file 18 on a combined basis for such subsequent taxable year. 19 (B) Notwithstanding any provision of this paragraph other than clause 20 (A) of this subparagraph, the commissioner may not require a bank hold- 21 ing company which, during a taxable year beginning on or after January 22 first, two thousand and before January first, two thousand twenty, 23 registers for the first time during such taxable year under the federal 24 bank holding company act, as amended, and also elects to be a financial 25 holding company, to make a return on a combined basis for any taxable 26 year beginning on or after January first, two thousand and before Janu- 27 ary first, two thousand twenty with a banking corporation sixty-five 28 percent or more of whose voting stock is owned or controlled, directly 29 or indirectly, by such bank holding company. 30 (v)(A) For purposes of this subparagraph, the term "closest control- 31 ling stockholder" means the corporation that indirectly owns or controls 32 over fifty percent of the voting stock of a captive REIT or captive RIC, 33 is subject to tax under this subchapter or otherwise required to be 34 included in a combined return under this chapter and is the fewest tiers 35 of corporations away in the ownership structure from the captive REIT or 36 captive RIC. The commissioner is authorized to prescribe by regulation 37 or published guidance the criteria for determining the closest control- 38 ling stockholder. 39 (B) A captive REIT or a captive RIC must be included in a combined 40 return with the banking corporation or bank holding company that direct- 41 ly owns or controls over fifty percent of the voting stock of the 42 captive REIT or captive RIC if that banking corporation or bank holding 43 company is subject to tax or required to be included in a combined 44 return under this subchapter. 45 (C) If over fifty percent of the voting stock of a captive REIT or 46 captive RIC is not directly owned or controlled by a banking corporation 47 or bank holding company that is subject to tax or required to be 48 included in a combined return under this subchapter, then the captive 49 REIT or captive RIC must be included in a combined return with the 50 corporation that is the closest controlling stockholder of the captive 51 REIT or captive RIC. If the closest controlling stockholder of the 52 captive REIT or captive RIC is a banking corporation or bank holding 53 company that is subject to tax or otherwise required to be included in a 54 combined return under this subchapter, then the captive REIT or captive 55 RIC must be included in a combined return under this subchapter.

S. 8578 583

1 (D) If the corporation which directly owns or controls the voting 2 stock of the captive REIT or captive RIC is described in subparagraph 3 (ii) of paragraph four of this subdivision as a corporation not permit- 4 ted to make a combined return, then the provisions in clause (C) of this 5 subparagraph must be applied to determine the corporation in whose 6 combined return the captive REIT or captive RIC should be included. If, 7 under clause (C) of this subparagraph, the corporation that is the clos- 8 est controlling stockholder of the captive REIT or captive RIC is 9 described in subparagraph (ii) or (iv) of paragraph four of this subdi- 10 vision as a corporation not permitted to make a combined return, then 11 that corporation is deemed to not be in the ownership structure of the 12 captive REIT or captive RIC, and the closest controlling stockholder 13 will be determined without regard to that corporation. 14 (E) If a captive REIT owns the stock of a qualified REIT subsidiary, 15 as defined in paragraph two of subsection (i) of section eight hundred 16 fifty-six of the internal revenue code, then the qualified REIT subsid- 17 iary must be included in any combined return required to be made by the 18 captive REIT that owns its stock. 19 (F) If a captive REIT or a captive RIC is required under this subpara- 20 graph to be included in a combined return with another corporation, and 21 that other corporation is required to be included in a combined return 22 with another corporation under other provisions of this subdivision, the 23 captive REIT or captive RIC must be included in that combined return 24 with those corporations. 25 (G) If the banking corporation or bank holding company that directly 26 or indirectly owns or controls over fifty percent of the voting stock of 27 the captive REIT or captive RIC and is the closest controlling stock- 28 holder of the captive REIT or captive RIC is a member of an affiliated 29 group (1) that does not include any corporation that is engaged in a 30 business that a subsidiary of a bank holding company would not be 31 permitted to engage in, unless such business is de minimis, and (2) 32 whose members own assets the combined average value of which does not 33 exceed eight billion dollars, then the captive REIT or captive RIC must 34 not be included in a combined return under this subchapter. In that 35 instance, the captive REIT or captive RIC is subject to the provisions 36 of subdivision seven or eight of section 11-603 of this chapter. The 37 term "affiliated group" means "affiliated group" as defined in section 38 fifteen hundred four of the internal revenue code, but without regard to 39 the exceptions provided for in subsection (b) of such section. 40 (vi) For taxable years beginning on or after January first two thou- 41 sand eleven, a banking corporation doing business in the city solely 42 because it meets one or more of the tests in subparagraphs (i) through 43 (v) of paragraph one of subdivision (c) of section 11-639 of this chap- 44 ter, referred to in this subparagraph as the "credit card bank", will 45 not be included in a combined return pursuant to subparagraph (i) of 46 this paragraph with another banking corporation or bank holding company 47 which is doing business in the city unless the credit card bank or the 48 commissioner shows that the inclusion of the credit card bank in the 49 combined return is necessary to properly reflect the tax liability of 50 the credit card bank, the banking corporation or bank holding company 51 under this subchapter. However, any banking corporation that meets one 52 or more of the tests in subparagraphs (i) through (v) of paragraph one 53 of subsection (c) of section 11-639 of this chapter and was included in 54 a combined return for its last taxable year beginning before January 55 first, two thousand eleven may continue to be included in a combined 56 return for future taxable years, provided that once that banking corpo-

S. 8578 584

1 ration has been included in a combined return for any taxable year 2 beginning on or after January first, two thousand eleven, it must 3 continue to be included in a combined return until it obtains the 4 consent of the commissioner to cease being included in a combined return 5 because the combined return no longer properly reflects the tax liabil- 6 ity under this subchapter of any of the corporations included in the 7 combined return. Further, the credit card bank will be included in a 8 combined return with (A) any banking corporation not subject to tax 9 under this subchapter sixty-five percent or more of whose voting stock 10 is owned or controlled, directly or indirectly, by the credit card bank, 11 or (B) any banking corporation or bank holding company not subject to 12 tax under this subchapter which owns or controls, directly or indirect- 13 ly, sixty-five percent or more of the voting stock of the credit card 14 bank, or (C) any banking corporation not subject to tax under this 15 subchapter sixty-five percent or more of the voting stock of which is 16 owned or controlled, directly or indirectly, by the same corporation or 17 corporations that own or control, directly or indirectly, sixty-five 18 percent or more of the voting stock of the credit card bank, if the 19 corporation or corporations described in clauses (A), (B) and (C) of 20 this subparagraph provide services for or support to the credit card 21 bank's operations, unless the credit card bank or the commissioner shows 22 that the inclusion of any of those corporations in the combined return 23 fails to properly reflect the tax liability of the credit card bank. For 24 purposes of this subparagraph, services for or support to the credit 25 card bank's operations include such activities as billing, credit inves- 26 tigation and reporting, marketing, research, advertising, mailing, 27 customer service, information technology, lending and financing 28 services, and communications services, but will not include accounting, 29 legal or personnel services. 30 (3) (i) In the case of a combined return, the tax shall be measured by 31 the combined entire net income, combined alternative entire net income 32 or combined assets of all the corporations included in the return, 33 including any captive REIT or captive RIC. The allocation percentage 34 shall be computed based on the combined factors with respect to all the 35 corporations included in the combined return. In computing combined 36 entire net income and alternative entire net income intercorporate divi- 37 dends and all other intercorporate transactions shall be eliminated and 38 in computing combined assets intercorporate stockholdings and intercor- 39 porate bills, notes and accounts receivable and payable and other inter- 40 corporate indebtedness shall be eliminated. 41 (ii) In the case of a captive REIT required under this subdivision to 42 be included in a combined return, "entire net income" means "real estate 43 investment trust taxable income" as defined in paragraph two of subdivi- 44 sion (b) of section eight hundred fifty-seven, as modified by section 45 eight hundred fifty-eight, of the internal revenue code, plus the amount 46 taxable under paragraph three of subdivision (b) of section eight 47 hundred fifty-seven of that code, subject to the modifications required 48 by section 11-641 of this chapter. In the case of a captive RIC required 49 under this subdivision to be included in a combined return, "entire net 50 income" means "investment company taxable income" as defined in para- 51 graph two of subdivision (b) of section eight hundred fifty-two, as 52 modified by section eight hundred fifty-five, of the internal revenue 53 code, plus the amount taxable under paragraph three of subdivision (b) 54 of section eight hundred fifty-two of such code, subject to the modifi- 55 cations required by section 11-641 of this chapter. However, the 56 deduction under the internal revenue code for dividends paid by the

S. 8578 585

1 captive REIT or captive RIC to any member of the affiliated group that 2 includes the corporation that directly or indirectly owns over fifty 3 percent of the voting stock of the captive REIT or captive RIC shall be 4 limited to twenty-five percent for taxable years beginning on or after 5 January first, two thousand nine and before January first, two thousand 6 eleven and shall not be allowed for taxable years beginning on or after 7 January first, two thousand eleven. The term "affiliated group" means 8 "affiliated group" as defined in section fifteen hundred four of the 9 internal revenue code, but without regard to the exceptions provided for 10 in subsection (b) of such section. 11 (4) (i) In no event shall an item of income or expense of a corpo- 12 ration organized under the laws of a country other than the United 13 States be included in a combined return unless it is includible in 14 entire net income or alternative entire net income, as the case may be, 15 nor shall an asset of such a corporation be included in a combined 16 return unless it is included in taxable assets. 17 (ii) In no event shall a corporation organized under the laws of the 18 United States, this state or any other state, be included in a combined 19 return with a corporation organized under the laws of a country other 20 than the United States. 21 (iii) In no event shall a corporation which has made an election 22 pursuant to subdivision (d) of section 11-640 of this part to be subject 23 to the tax imposed by subchapter two of this chapter be included in a 24 combined return for those taxable years for which it is subject to the 25 tax imposed by subchapter two of this chapter. 26 (5) Tax liability under this part may be deemed to be improperly 27 reflected because of intercompany transactions or some agreement, under- 28 standing, arrangement or transaction referred to in subdivision (g) of 29 this section. 30 (g) In case it shall appear to the commissioner of finance that any 31 agreement, understanding or arrangement exists between the taxpayer and 32 any other corporation or any person or firm, whereby the activity, busi- 33 ness, income or assets of the taxpayer within the city is improperly or 34 inaccurately reflected, the commissioner of finance is authorized and 35 empowered, in his or her discretion and in such manner as he or she may 36 determine, to adjust items of income or deductions in computing entire 37 net income or alternative entire net income and to adjust assets, and to 38 adjust wages, salaries and other personal service compensation, receipts 39 or deposits in computing any allocation percentage, provided only that 40 entire net income or alternative entire net income be adjusted accord- 41 ingly and that any asset directly traceable to the elimination of any 42 receipt be eliminated from assets so as to accurately determine the tax. 43 If however, in the determination of the commissioner of finance, such 44 adjustments do not, or cannot effectively provide for the accurate 45 determination of the tax, the commissioner of finance shall be author- 46 ized to require the filing of a combined report by the taxpayer and any 47 such other corporations. Where (1) any taxpayer conducts its activity or 48 business under any agreement, arrangement or understanding in such 49 manner as either directly or indirectly to benefit its members or stock- 50 holders, or any of them, or any person or persons directly or indirectly 51 interested in such activity or business, by entering into any trans- 52 action at more or less than a fair price which, but for such agreement, 53 arrangement or understanding, might have been paid or received therefor, 54 or (2) any taxpayer enters into any transaction with another corporation 55 on such terms as to create an improper loss or net income, the commis- 56 sioner of finance may include in the entire net income or alternative

S. 8578 586

1 entire net income of the taxpayer the fair profits which, but for such 2 agreement, arrangement or understanding, the taxpayer might have derived 3 from such transaction. 4 § 11-647 Payment of tax. (a) To the extent the tax imposed for 5 section 11-639 of this part shall not have been previously paid pursuant 6 to section 11-645 of this part: 7 (1) such tax, or the balance thereof, shall be payable to the commis- 8 sioner of finance in full at the time its return is required to be 9 filed, and 10 (2) such tax, or the balance thereof, imposed on any taxpayer which 11 ceased to exercise its franchise or to be subject to the tax imposed by 12 this part shall be payable to the commissioner of finance at the time 13 the return is required to be filed, provided such tax of a domestic 14 corporation which continues to possess its franchise shall be subject to 15 adjustment as the circumstances may require; all other taxes of any such 16 taxpayer, which pursuant to the provisions of this subdivision would 17 otherwise be payable subsequent to the time such return is required to 18 be filed, shall nevertheless be payable at such time. 19 (b) If the taxpayer, within the time prescribed by subdivision (c) of 20 section 11-646 of this part, shall have applied for an automatic exten- 21 sion of time to file its annual return and shall have paid to the 22 commissioner of finance on or before the date of such application is 23 filed an amount properly estimated as provided by said subdivision the 24 only amount payable in addition to the tax shall be interest at the 25 underpayment rate set by the commissioner of finance pursuant to section 26 11-687 of this chapter, or, if no rate is set, at the rate of seven and 27 one-half percent per annum upon the amount by which the tax, or portion 28 thereof payable on or before the date the return was required to be 29 filed, exceeds the amount so paid, provided that: 30 (1) an amount so paid shall be deemed properly estimated if it is 31 either: (i) not less than ninety per cent of the tax as finally deter- 32 mined, or (ii) not less than the tax shown on the taxpayer's return for 33 the preceding taxable year, if such preceding year was a taxable year of 34 twelve months; and 35 (2) the time when a return is required to be filed shall be determined 36 without regard to any extension of time for filing such return. 37 (c) The commissioner of finance may grant a reasonable extension of 38 time for payment of any tax imposed by this part under such conditions 39 as the commissioner deems just and proper.

40 SUBCHAPTER 3-A 41 CORPORATE TAX OF 2015 42 Section 11-651 Applicability. 43 11-652 Definitions. 44 11-653 Imposition of tax; exemptions. 45 11-654 Computation of tax. 46 11-654.1 Net operating loss. 47 11-654.2 Receipts allocation. 48 11-654.3 Combined reports. 49 11-655 Reports. 50 11-656 Payment and lien of tax. 51 11-657 Declaration of estimated tax. 52 11-658 Payments on account of estimated tax. 53 11-659 Collection of taxes. 54 11-660 Limitations of time.

S. 8578 587

1 § 11-651 Applicability. 1. Notwithstanding anything to the contrary in 2 this chapter, this subchapter shall apply to corporations for tax years 3 commencing on or after January first, two thousand fifteen, except that 4 it shall not apply to any corporation that (a) has an election in effect 5 under subsection (a) of section thirteen hundred sixty-two of the inter- 6 nal revenue code, as amended, or (b) is a qualified subchapter S subsid- 7 iary within the meaning of paragraph three of subsection (b) of section 8 thirteen hundred sixty-one of the internal revenue code, as amended, in 9 any tax year commencing on or after such date. Subchapters two and three 10 of this chapter shall not apply to corporations to which this subchapter 11 applies for tax years commencing on or after January first, two thousand 12 fifteen, except to the extent provided in this subchapter and to the 13 extent that the effect of the application of subchapters two and three 14 to tax years commencing prior to January first, two thousand fifteen 15 carries over to tax years commencing on or after January first, two 16 thousand fifteen. 17 2. Each reference in the tax law or this code to subchapters two or 18 three of this chapter, or any of the provisions thereof, shall be deemed 19 a reference also to this subchapter, and any of the applicable 20 provisions thereof, where appropriate and with all necessary modifica- 21 tions. 22 § 11-652 Definitions. 1. (a) The term "corporation" includes (1) an 23 association within the meaning of paragraph three of subsection (a) of 24 section seventy-seven hundred one of the internal revenue code, includ- 25 ing, when applicable, a limited liability company, (2) a joint-stock 26 company or association, (3) a publicly traded partnership treated as a 27 corporation for purposes of the internal revenue code pursuant to 28 section seventy-seven hundred four thereof and (4) any business 29 conducted by a trustee or trustees wherein interest or ownership is 30 evidenced by certificate or other written instrument; 31 (b) (1) Notwithstanding paragraph (a) of this subdivision, an unincor- 32 porated organization that (i) is described in subparagraph one or three 33 of paragraph (a) of this subdivision, (ii) was subject to the provisions 34 of chapter five of this title for its taxable year beginning in nineteen 35 hundred ninety-five, and (iii) made a one-time election not to be treat- 36 ed as a corporation and, instead, to continue to be subject to the 37 provisions of chapter five of this title for its taxable years beginning 38 in nineteen hundred ninety-six and thereafter, shall continue to be 39 subject to the provisions of chapter five of this title for its taxable 40 years beginning in nineteen hundred ninety-six. 41 (2) An election under this paragraph shall continue to be in effect 42 until revoked by the unincorporated organization. An election under this 43 paragraph shall be revoked by the filing of a return under this subchap- 44 ter for the first taxable year with respect to which such revocation is 45 to be effective. Such return shall be filed on or before the due date, 46 determined with regard to extensions, for filing such return. In no 47 event shall such election or revocation be for a part of a taxable year. 48 (c) Notwithstanding paragraph (a) of this subdivision, a corporation 49 shall not include an entity classified as a partnership for federal 50 income tax purposes. 51 2. The term "subsidiary" means a corporation of which over fifty per 52 centum of the number of shares of stock entitling the holders thereof to 53 vote for the election of directors or trustees is owned by the taxpayer. 54 2-a. The term "taxpayer" means any corporation subject to tax under 55 this subchapter. 56 3. Intentionally omitted.

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1 3-a. The term "stock" means an interest in a corporation that is 2 treated as equity for federal income tax purposes. 3 4. (a) The term "investment capital" means investments in stocks that: 4 (i) satisfy the definition of a capital asset under section one thousand 5 two hundred twenty-one of the internal revenue code at all times the 6 taxpayer owned such stocks during the taxable year; (ii) are held by the 7 taxpayer for investment for more than one year; (iii) the dispositions 8 of which are, or would be, treated by the taxpayer as generating long- 9 term capital gains or losses under the internal revenue code; (iv) for 10 stocks acquired on or after January first, two thousand fifteen, at any 11 time after the close of the day in which they are acquired, have never 12 been held for sale to customers in the regular course of business; and 13 (v) before the close of the day on which the stock was acquired, are 14 clearly identified in the taxpayer's records as stock held for invest- 15 ment in the same manner as required under paragraph one of subdivision 16 (a) of section one thousand two hundred thirty-six of the internal 17 revenue code for the stock of a dealer in securities to be eligible for 18 capital gain treatment, whether or not the taxpayer is a dealer of secu- 19 rities subject to section one thousand two hundred thirty-six, provided, 20 however, that for stock acquired prior to October first, two thousand 21 fifteen that was not subject to subdivision (a) of section one thousand 22 two hundred thirty-six of the internal revenue code, such identification 23 in the taxpayer's records must occur before October first, two thousand 24 fifteen. Stock in a corporation that is conducting a unitary business 25 with the taxpayer, stock in a corporation that is included in a combined 26 report with the taxpayer pursuant to the commonly owned group election 27 in subdivision three of section 11-654.3 of this subchapter, and stock 28 issued by the taxpayer shall not constitute investment capital. For 29 purposes of this subdivision, if the taxpayer owns or controls, directly 30 or indirectly, less than twenty percent of the voting power of the stock 31 of a corporation, that corporation will be presumed to be conducting a 32 business that is not unitary with the business of the taxpayer. 33 (b) There shall be deducted from investment capital any liabilities 34 which are directly or indirectly attributable to investment capital. If 35 the amount of those liabilities exceeds the amount of investment capi- 36 tal, the amount of investment capital shall be zero. 37 (c) Investment capital shall not include any such investments the 38 income from which is excluded from entire net income pursuant to the 39 provisions of paragraph (c-1) of subdivision eight of this section, and 40 that investment capital shall be computed without regard to liabilities 41 directly or indirectly attributable to such investments, but only if air 42 carriers organized in the United States and operating in the foreign 43 country or countries in which the taxpayer has its major base of oper- 44 ations and in which it is organized, resident or headquartered, if not 45 in the same country as its major base of operations, are not subject to 46 any tax based on or measured by capital imposed by such foreign country 47 or countries or any political subdivision thereof, or if taxed, are 48 provided an exemption, equivalent to that provided for herein, from any 49 tax based on or measured by capital imposed by such foreign country or 50 countries and from any such tax imposed by any political subdivision 51 thereof. 52 (d) If a taxpayer acquires stock that is a capital asset under section 53 one thousand two hundred twenty-one of the internal revenue code during 54 the taxable year and owns that stock on the last day of the taxable 55 year, it will be presumed, solely for the purposes of determining wheth- 56 er that stock should be classified as investment capital after it is

S. 8578 589

1 acquired, that the taxpayer held that stock for more than one year. 2 However, if the taxpayer does not in fact own that stock at the time it 3 actually files its original report for the taxable year in which it 4 acquired the stock, then such presumption shall not apply and the actual 5 period of time during which the taxpayer owned the stock shall be used 6 to determine whether the stock should be classified as investment capi- 7 tal after it is acquired. If the taxpayer relies on such presumption but 8 does not own the stock for more than one year, the taxpayer must 9 increase its total business capital in the immediately succeeding taxa- 10 ble year by the amount included in investment capital for that stock, 11 net of any liabilities attributable to that stock computed as provided 12 in paragraph (b) of this subdivision and must increase its business 13 income in the immediately succeeding taxable year by the amount of 14 income and net gains, but not less than zero, from that stock included 15 in investment income, less any interest deductions directly or indirect- 16 ly attributable to that stock, as provided in subdivision five of this 17 section. 18 (e) When income or gain from a debt obligation or other security 19 cannot be allocated to the city using the business allocation percentage 20 as a result of the United States constitutional principles, the debt 21 obligation or other security will be included in investment capital. 22 5. (a)(i) The term "investment income" means income, including capital 23 gains in excess of capital losses, from investment capital, to the 24 extent included in computing entire net income, less, in the discretion 25 of the commissioner of finance, any interest deductions allowable in 26 computing entire net income which are directly or indirectly attribut- 27 able to investment capital or investment income, provided, however, that 28 in no case shall investment income exceed entire net income. 29 (ii) If the amount of interest deductions subtracted under subpara- 30 graph (i) of this paragraph exceeds investment income, the excess of 31 such amount over investment income must be added back to entire net 32 income. 33 (iii) If the taxpayer's investment income determined without regard to 34 the interest deductions subtracted under subparagraph (i) of this para- 35 graph comprises more than eight percent of the taxpayer's entire net 36 income, investment income determined without regard to such interest 37 deductions cannot exceed eight percent of the taxpayer's entire net 38 income. 39 (b) In lieu of subtracting from investment income the amount of those 40 interest deductions, the taxpayer may make a revocable election to 41 reduce its total investment income, determined after applying the limi- 42 tation in subparagraph (iii) of paragraph (a) of this subdivision, by 43 forty percent. If the taxpayer makes this election, the taxpayer must 44 also make the elections provided for in paragraphs (b) and (c) of subdi- 45 vision five-a of this section. If the taxpayer subsequently revokes this 46 election, the taxpayer must revoke the elections provided for in para- 47 graphs (b) and (c) of subdivision five-a of this section. A taxpayer 48 that does not make this election because it has no investment capital 49 will not be precluded from making those other elections. 50 (c) Investment income shall not include any amount treated as divi- 51 dends pursuant to section seventy-eight of the internal revenue code. 52 5-a. (a) The term "other exempt income" means the sum of exempt CFC 53 income and exempt unitary corporation dividends. 54 (b) "Exempt CFC income" means (i) except to the extent described in 55 subparagraph (ii) of this paragraph, the income required to be included 56 in the taxpayer's federal gross income pursuant to subsection (a) of

S. 8578 590

1 section nine hundred fifty-one of the internal revenue code, received 2 from a corporation that is conducting a unitary business with the 3 taxpayer but is not included in a combined report with the taxpayer, and 4 (ii) such income required to be included in the taxpayer's federal gross 5 income pursuant to subsection (a) of such section nine hundred fifty-one 6 of the internal revenue code by reason of subsection (a) of section nine 7 hundred sixty-five of the internal revenue code, as adjusted by 8 subsection (b) of section nine hundred sixty-five of the internal reven- 9 ue code, and without regard to subsection (c) of such section, received 10 from a corporation that is not included in a combined report with the 11 taxpayer, less, (iii) in the discretion of the commissioner of finance, 12 any interest deductions directly or indirectly attributable to that 13 income. In lieu of subtracting from its exempt CFC income the amount of 14 those interest deductions, the taxpayer may make a revocable election to 15 reduce its total exempt CFC income by forty percent. If the taxpayer 16 makes this election, the taxpayer must also make the elections provided 17 for in paragraph (b) of subdivision five of this section and paragraph 18 (c) of this subdivision. If the taxpayer subsequently revokes this 19 election, the taxpayer must revoke the elections provided for in para- 20 graph (b) of subdivision five of this section and paragraph (c) of this 21 subdivision. A taxpayer which does not make this election because it has 22 no exempt CFC income will not be precluded from making those other 23 elections. The income described in subparagraph (ii) of this paragraph 24 shall not constitute investment income. 25 (c) "Exempt unitary corporate dividends" means those dividends from a 26 corporation that is conducting a unitary business with the taxpayer but 27 is not included in a combined report with the taxpayer, less, in the 28 discretion of the commissioner of finance, any interest deductions 29 directly or indirectly attributable to such income. Other than dividend 30 income received from corporations that are taxable under chapter eleven 31 of this title, except for vendors of utility services that are also 32 taxable under this subchapter, or would be taxable under chapter eleven 33 of this title, except for vendors of utility services that are also 34 taxable under this subchapter, if subject to tax and corporations that 35 would have been taxable as insurance corporations under former part IV, 36 title R, chapter forty-six of the administrative code of the city of New 37 York as in effect on June thirtieth, nineteen hundred seventy-four, in 38 lieu of subtracting from this dividend income those interest deductions, 39 the taxpayer may make a revocable election to reduce the total amount of 40 this dividend income by forty percent. If the taxpayer makes this 41 election, the taxpayer must also make the elections provided for in 42 paragraph (b) of subdivision five of this section and paragraph (b) of 43 this subdivision. If the taxpayer subsequently revokes this election, 44 the taxpayer must revoke the elections provided for in paragraph (b) of 45 subdivision five of this section and paragraph (b) of this subdivision. 46 A taxpayer that does not make this election because it has not received 47 any exempt unitary corporation dividends or is precluded from making 48 this election for dividends received from corporations that are taxable 49 under chapter eleven of this title, except for vendors of utility 50 services that are also taxable under this subchapter, or would be taxa- 51 ble under chapter eleven of this title if subject to tax, except for 52 vendors of utility services that are also taxable under this subchapter, 53 shall not be precluded from making those other elections. 54 (d) If the taxpayer attributes interest deductions to other exempt 55 income and the amount deducted exceeds other exempt income, the excess 56 of the interest deductions over other exempt income must be added back

S. 8578 591

1 to entire net income. In no case shall other exempt income exceed entire 2 net income. 3 (e) Other exempt income shall not include any amount treated as divi- 4 dends pursuant to section seventy-eight of the internal revenue code. 5 6. (a) The term "business capital" means all assets, other than 6 investment capital and stock issued by the taxpayer, less liabilities 7 not deducted from investment capital; provided, however, business capi- 8 tal shall include only those assets the income, loss or expense of which 9 are properly reflected, or would have been properly reflected if not 10 fully depreciated or expensed or depreciated or expensed to a nominal 11 amount, in the computation of entire net income for the taxable year. 12 (b) Provided, further, "business capital" shall not include assets to 13 the extent employed for the purpose of generating income which is 14 excluded from entire net income pursuant to the provisions of paragraph 15 (c-1) of subdivision eight of this section and shall be computed without 16 regard to liabilities directly or indirectly attributable to such 17 assets, but only if air carriers organized in the United States and 18 operating in the foreign country or countries in which the taxpayer has 19 its major base of operations and in which it is organized, resident or 20 headquartered, if not in the same country as its major base of oper- 21 ations, are not subject to any tax based on or measured by capital 22 imposed by such foreign country or countries or any political subdivi- 23 sion thereof, or if taxed, are provided an exemption, equivalent to that 24 provided for herein, from any tax based on or measured by capital 25 imposed by such foreign country or countries and from any such tax 26 imposed by any political subdivision thereof. 27 7. The term "business income" means entire net income minus investment 28 income and other exempt income. In no event shall the sum of investment 29 income and other exempt income exceed entire net income. If the taxpayer 30 makes the election provided for in subparagraph one of paragraph (a) of 31 subdivision five of section 11-654.2 of this subchapter, then all income 32 from qualified financial instruments shall constitute business income. 33 8. The term "entire net income" means total net income from all sourc- 34 es, which shall be presumably the same as the entire taxable income, 35 which, except as hereafter provided in this subdivision, 36 (i) the taxpayer is required to report to the United States treasury 37 department, or 38 (ii) the taxpayer, in the case of a corporation that is exempt from 39 federal income tax, other than the tax on unrelated business taxable 40 income imposed under section five hundred eleven of the internal revenue 41 code, but which is subject to tax under this subchapter, would have been 42 required to report to the United States treasury department but for such 43 exemption, or 44 (iii) in the case of an alien corporation that under any provision of 45 the internal revenue code is not treated as a "domestic corporation" as 46 defined in section seven thousand seven hundred one of such code, is 47 effectively connected with the conduct of a trade or business within the 48 United States as determined under section eight hundred eighty-two of 49 the internal revenue code. 50 (a) Entire net income shall not include: 51 (1) Intentionally omitted; 52 (2) Intentionally omitted; 53 (2-a) any amounts treated as dividends pursuant to section seventy- 54 eight of the internal revenue code to the extent such dividends are not 55 deducted under section two hundred fifty of such code; 56 (3) bona fide gifts;

S. 8578 592

1 (4) income and deductions with respect to amounts received from school 2 districts and from corporations and associations, organized and operated 3 exclusively for religious, charitable or educational purposes, no part 4 of the net earnings of which inures to the benefit of any private share- 5 holder or individual, for the operation of school buses; 6 (5) any refund or credit of a tax imposed under this chapter, or 7 imposed by article nine, nine-A, twenty-three, or former article thir- 8 ty-two of the tax law, for which tax no exclusion or deduction was 9 allowed in determining the taxpayer's entire net income under this 10 subchapter, subchapter two, or subchapter three of this chapter for any 11 prior year; 12 (6) Intentionally omitted; 13 (7) that portion of wages and salaries paid or incurred for the taxa- 14 ble year for which a deduction is not allowed pursuant to the provisions 15 of section two hundred eighty-C of the internal revenue code; 16 (8) except with respect to property which is a qualified mass commut- 17 ing vehicle described in subparagraph (D) of paragraph eight of 18 subsection (f) of section one hundred sixty-eight of the internal reven- 19 ue code, relating to qualified mass commuting vehicles, and property of 20 a taxpayer principally engaged in the conduct of an aviation, steamboat, 21 ferry or navigation business, or two or more of such businesses, which 22 is placed in service before taxable years beginning in nineteen hundred 23 eighty-nine, any amount which is included in the taxpayer's federal 24 taxable income solely as a result of an election made pursuant to the 25 provisions of such paragraph eight as it was in effect for agreements 26 entered into prior to January first, nineteen hundred eighty-four; 27 (9) except with respect to property which is a qualified mass commut- 28 ing vehicle described in subparagraph (D) of paragraph eight of 29 subsection (f) of section one hundred sixty-eight of the internal reven- 30 ue code, relating to qualified mass commuting vehicles, and property of 31 a taxpayer principally engaged in the conduct of an aviation, steamboat, 32 ferry or navigation business, or two or more of such businesses, which 33 is placed in service before taxable years beginning in nineteen hundred 34 eighty-nine, any amount which the taxpayer could have excluded from 35 federal taxable income had it not made the election provided for in such 36 paragraph eight as it was in effect for agreements entered into prior to 37 January first, nineteen hundred eighty-four; 38 (10) the amount deductible pursuant to paragraph (j) of this subdivi- 39 sion; 40 (11) upon the disposition of property to which paragraph (j) of this 41 subdivision applies, the amount, if any, by which the aggregate of the 42 amounts described in subparagraph eleven of paragraph (b) of this subdi- 43 vision attributable to such property exceeds the aggregate of the 44 amounts described in paragraph (j) of this subdivision attributable to 45 such property; 46 (12) the amount deductible pursuant to paragraph (k) of this subdivi- 47 sion; 48 (13) the amount deductible pursuant to paragraph (o) of this subdivi- 49 sion; 50 (14) the amount computed pursuant to paragraph (q), (r) or (s) of this 51 subdivision, but only the amount determined pursuant to one of such 52 paragraphs; and 53 (15) the amount computed pursuant to paragraph (t) of this subdivi- 54 sion. 55 (16) The amount of any gain added back to determine entire net income 56 in a previous taxable year pursuant to subparagraph twenty-three of

S. 8578 593

1 paragraph (b) of subdivision eight of this section is included in feder- 2 al gross income for the taxable year. 3 (17) The amount of any grant received through either the COVID-19 4 pandemic small business recovery grant program, pursuant to section 5 sixteen-ff of the New York state urban development corporation act, or 6 the small business resilience grant program administered by the depart- 7 ment of small business services, to the extent the amount of either such 8 grant is included in federal taxable income. 9 (a-1) Notwithstanding any other provision of this subchapter, in the 10 case of a taxpayer that is a partner in a partnership subject to the tax 11 imposed by chapter eleven of this title as a utility, as defined in 12 subdivision six of section 11-1101 of such chapter, entire net income 13 shall not include the taxpayer's distributive or pro rata share for 14 federal income tax purposes of any item of income, gain, loss or 15 deduction of such partnership, or any item of income, gain, loss or 16 deduction of such partnership that the taxpayer is required to take into 17 account separately for federal income tax purposes. 18 (b) Entire net income shall be determined without the exclusion, 19 deduction or credit of: 20 (1) in the case of an alien corporation that under any provision of 21 the internal revenue code is not treated as a "domestic corporation" as 22 defined in section seven thousand seven hundred one of such code, (i) 23 any part of any income from dividends or interest on any kind of stock, 24 securities or indebtedness, but only if such income is treated as effec- 25 tively connected with the conduct of a trade or business in the United 26 States pursuant to section eight hundred sixty-four of the internal 27 revenue code, (ii) any income exempt from federal taxable income under 28 any treaty obligation of the United States, but only if such income 29 would be treated as effectively connected in the absence of such 30 exemption provided that such treaty obligation does not preclude the 31 taxation of such income by a state, or (iii) any income which would be 32 treated as effectively connected if such income were not excluded from 33 gross income pursuant to subsection (a) of section one hundred three of 34 the internal revenue code; 35 (2) any part of any income from dividends or interest of any kind of 36 stock, securities, or indebtedness; 37 (3) taxes on or measured by profits or income paid or accrued to the 38 United States, any of its possessions, territories or commonwealths, 39 including taxes in lieu of any of the foregoing taxes otherwise general- 40 ly imposed by any possession, territory or commonwealth of the United 41 States, or taxes paid or accrued to the state under article nine, 42 nine-A, thirteen-A or thirty-two of the tax law as in effect on December 43 thirty-first, two thousand fourteen; 44 (3-a) taxes on or measured by profits or income, or which include 45 profits or income as a measure, paid or accrued to any other state of 46 the United States, or any political subdivision thereof, or to the 47 District of Columbia, including taxes expressly in lieu of any of the 48 foregoing taxes otherwise generally imposed by any other state of the 49 United States, or any political subdivision thereof, or the District of 50 Columbia; 51 (4) taxes imposed under this chapter; 52 (4-a) Intentionally omitted; 53 (4-b) the amount allowed as an exclusion or a deduction imposed by the 54 tax law in determining the entire taxable income for a relocation 55 described in subdivision thirteen of section 11-654 of this subchapter 56 which the taxpayer is required to report to the United States treasury

S. 8578 594

1 department but only such portion of such exclusion or deduction which is 2 not in excess of the amount of the credit allowed pursuant to subdivi- 3 sion thirteen of section 11-654 of this subchapter; 4 (4-c) the amount allowed as an exclusion or a deduction imposed by the 5 tax law for a relocation described in subdivision fourteen of section 6 11-654 of this subchapter in determining the entire taxable income which 7 the taxpayer is required to report to the United States treasury depart- 8 ment but only such portion of such exclusion or deduction which is not 9 in excess of the amount of the credit allowed pursuant to subdivision 10 fourteen of section 11-654 of this subchapter; 11 (4-d) Intentionally omitted; 12 (4-e) Intentionally omitted; 13 (5) Intentionally omitted; 14 (6) any amount allowed as a deduction for the taxable year under 15 section one hundred seventy-two of the internal revenue code, including 16 carryovers of deductions from prior taxable years; 17 (7) any amount by reason of the granting, issuing or assuming of a 18 restricted stock option, as defined in the internal revenue code of 19 nineteen hundred fifty-four, or by reason of the transfer of the share 20 of stock upon the exercise of the option, unless such share is disposed 21 of by the grantee of the option within two years from the date of the 22 granting of the option or within six months after the transfer of such 23 share to the grantee; 24 (8) Intentionally omitted; 25 (9) except with respect to property which is a qualified mass commut- 26 ing vehicle described in subparagraph (D) of paragraph eight of 27 subsection (f) of section one hundred sixty-eight of the internal reven- 28 ue code, relating to qualified mass commuting vehicles, and property of 29 a taxpayer principally engaged in the conduct of an aviation, steamboat, 30 ferry or navigation business, or two or more of such businesses, which 31 is placed in service before taxable years beginning in nineteen hundred 32 eighty-nine, any amount which the taxpayer claimed as a deduction in 33 computing its federal taxable income solely as a result of an election 34 made pursuant to the provisions of such paragraph eight as it was in 35 effect for agreements entered into prior to January first, nineteen 36 hundred eighty-four; 37 (10) except with respect to property which is a qualified mass commut- 38 ing vehicle described in subparagraph (D) of paragraph eight of 39 subsection (f) of section one hundred sixty-eight of the internal reven- 40 ue code, relating to qualified mass commuting vehicles, and property of 41 a taxpayer principally engaged in the conduct of an aviation, steamboat, 42 ferry or navigation business, or two or more of such businesses, which 43 is placed in service before taxable years beginning in nineteen hundred 44 eighty-nine, any amount which the taxpayer would have been required to 45 include in the computation of its federal taxable income had it not made 46 the election permitted pursuant to such paragraph eight as it was in 47 effect for agreements entered into prior to January first, nineteen 48 hundred eighty-four; 49 (11) in the case of property placed in service in taxable years begin- 50 ning before nineteen hundred ninety-four, for taxable years beginning 51 after December thirty-first, nineteen hundred eighty-one, except with 52 respect to property subject to the provisions of section two hundred 53 eighty-F of the internal revenue code, property subject to the 54 provisions of section one hundred sixty-eight of the internal revenue 55 code which is placed in service in this state in taxable years beginning 56 after December thirty-first, nineteen hundred eighty-four and property

S. 8578 595

1 of a taxpayer principally engaged in the conduct of an aviation, steam- 2 boat, ferry or navigation business, or two or more of such businesses, 3 which is placed in service before taxable years beginning in nineteen 4 hundred eighty-nine, the amount allowable as a deduction determined 5 under section one hundred sixty-eight of the internal revenue code; 6 (12) upon the disposition of property to which paragraph (j) of this 7 subdivision applies, the amount, if any, by which the aggregate of the 8 amounts described in such paragraph (j) attributable to such property 9 exceeds the aggregate of the amounts described in subparagraph eleven of 10 this paragraph attributable to such property; 11 (13) Intentionally omitted; 12 (14) Intentionally omitted; 13 (15) Intentionally omitted; 14 (16) in the case of qualified property described in paragraph two of 15 subsection (k) of section one hundred sixty-eight of the internal reven- 16 ue code, other than qualified resurgence zone property described in 17 paragraph (m) of this subdivision, and other than qualified New York 18 Liberty Zone property described in paragraph two of subsection (b) of 19 section fourteen hundred-L of the internal revenue code, without regard 20 to clause (i) of subparagraph (C) of such paragraph, the amount allow- 21 able as a deduction under section one hundred sixty-seven of the inter- 22 nal revenue code; 23 (17) in the case of a taxpayer that is not an eligible farmer as 24 defined in subsection (n) of section six hundred six of the tax law, the 25 amount allowable as a deduction under sections one hundred seventy-nine, 26 one hundred sixty-seven and one hundred sixty-eight of the internal 27 revenue code with respect to a sport utility vehicle that is not a 28 passenger automobile as defined in paragraph five of subsection (d) of 29 section two hundred eighty-F of the internal revenue code; 30 (18) the amount of any deduction allowed pursuant to section one 31 hundred ninety-nine of the internal revenue code; 32 (19) the amount of any federal deduction for taxes imposed under arti- 33 cle twenty-three of the tax law; 34 (20) the amount of any federal deduction allowed pursuant to 35 subsection (c) of section nine hundred sixty-five of the internal reven- 36 ue code; 37 (21) the amount of any federal deduction allowed pursuant to subpara- 38 graph (A) of paragraph one of subdivision (a) of section two hundred 39 fifty of the internal revenue code. 40 (22) For taxable years beginning in two thousand nineteen and two 41 thousand twenty, the amount of the increase in the federal interest 42 deduction allowed pursuant to paragraph ten of subdivision (j) of 43 section one hundred sixty-three of the internal revenue code. 44 (23) The amount of any gain excluded from federal gross income for the 45 taxable year by subparagraph (A) of paragraph (1) of subsection (a) of 46 section one thousand four hundred-Z-two of the internal revenue code. 47 (c) Intentionally omitted. 48 (c-1)(1) Notwithstanding any other provision of this subchapter, in 49 the case of a taxpayer which is a foreign air carrier holding a foreign 50 air carrier permit issued by the United States department of transporta- 51 tion pursuant to section four hundred two of the federal aviation act of 52 nineteen hundred fifty-eight, as amended, and which is qualified under 53 subparagraph two of this paragraph, entire net income shall not include, 54 and shall be computed without the deduction of, amounts directly or 55 indirectly attributable to, (i) any income derived from the interna- 56 tional operation of aircraft as described in and subject to the

S. 8578 596

1 provisions of section eight hundred eighty-three of the internal revenue 2 code, (ii) income without the United States which is derived from the 3 operation of aircraft, and (iii) income without the United States which 4 is of a type described in subdivision (a) of section eight hundred 5 eighty-one of the internal revenue code except that it is derived from 6 sources without the United States. Entire net income shall include 7 income described in clauses (i), (ii) and (iii) of this subparagraph in 8 the case of taxpayers not described in the previous sentence; 9 (2) A taxpayer is qualified under this subparagraph if air carriers 10 organized in the United States and operating in the foreign country or 11 countries in which the taxpayer has its major base of operations and in 12 which it is organized, resident or headquartered, if not in the same 13 country as its major base of operations, are not subject to any income 14 tax or other tax based on or measured by income or receipts imposed by 15 such foreign country or countries or any political subdivision thereof, 16 or if so subject to such tax, are provided an exemption from such tax 17 equivalent to that provided for herein. 18 (d) The commissioner of finance may, whenever necessary in order to 19 properly reflect the entire net income of any taxpayer, determine the 20 year or period in which any item of income or deduction shall be 21 included, without regard to the method of accounting employed by the 22 taxpayer. 23 (e) The entire net income of any bridge commission created by act of 24 congress to construct a bridge across an international boundary means 25 its gross income less the expense of maintaining and operating its prop- 26 erties, the annual interest upon its bonds and other obligations, and 27 the annual charge for the retirement of such bonds or obligations at 28 maturity. 29 (f) Intentionally omitted. 30 (g) At the election of the taxpayer, a deduction shall be allowed for 31 expenditures paid or incurred during the taxable year for the 32 construction, reconstruction, erection or improvement of industrial 33 waste treatment facilities and air pollution control facilities. 34 (1)(i) The term "industrial waste treatment facilities" shall mean 35 facilities for the treatment, neutralization or stabilization of indus- 36 trial waste, as the term "industrial waste" is defined in section 37 17-0105 of the environmental conservation law, from a point immediately 38 preceding the point of such treatment, neutralization or stabilization 39 to the point of disposal, including the necessary pumping and transmit- 40 ting facilities, but excluding such facilities installed for the primary 41 purpose of salvaging materials which are usable in the manufacturing 42 process or are marketable. 43 (ii) The term "air pollution control facilities" shall mean facilities 44 which remove, reduce, or render less noxious air contaminants emitted 45 from an air contamination source, as the terms "air contaminant" and 46 "air contamination source" are defined in section 19-0107 of the envi- 47 ronmental conservation law, from a point immediately preceding the point 48 of such removal, reduction or rendering to the point of discharge of 49 air, meeting emission standards as established by the air pollution 50 control board, but excluding such facilities installed for the primary 51 purpose of salvaging materials which are usable in the manufacturing 52 process or are marketable and excluding those facilities which rely for 53 their efficacy on dilution, dispersion or assimilation of air contam- 54 inants in the ambient air after emission. 55 (2) However, such deduction shall be allowed only (i) with respect to 56 tangible property which is depreciable, pursuant to section one hundred

S. 8578 597

1 sixty-seven of the internal revenue code, having a situs in the city and 2 used in the taxpayer's trade or business, the construction, recon- 3 struction, erection or improvement of which, in the case of industrial 4 waste treatment facilities, is initiated on or after January first, 5 nineteen hundred sixty-six, and only for expenditures paid or incurred 6 prior to January first, nineteen hundred seventy-two, or which, in the 7 case of air pollution control facilities, is initiated on or after Janu- 8 ary first, nineteen hundred sixty-six, and 9 (ii) on condition that such facilities have been certified by the 10 state commissioner of environmental conservation or the state commis- 11 sioner's designated representative, in the same manner as provided for 12 in section 17-0707 or 19-0309 of the environmental conservation law, as 13 applicable, as complying with applicable provisions of the environmental 14 conservation law, the state sanitary code and regulations, permits or 15 orders issued pursuant thereto, and 16 (iii) on condition that entire net income for the taxable year and all 17 succeeding taxable years be computed without any deductions for such 18 expenditures or for depreciation of the same property other than the 19 deductions allowed by this paragraph except to the extent that the basis 20 of the property may be attributable to factors other than such expendi- 21 tures, or in case a deduction is allowable pursuant to this paragraph 22 for only a part of such expenditures, on condition that any deduction 23 allowed for federal income tax purposes for such expenditures or for 24 depreciation of the same property be proportionately reduced in comput- 25 ing entire net income for the taxable year and all succeeding taxable 26 years, and 27 (iv) where the election provided for in paragraph (d) of subdivision 28 three of section 11-604 of this chapter or the election provided for in 29 subdivision (k) of section 11-641 of this chapter has not been exercised 30 in respect to the same property. 31 (3)(i) If expenditures in respect to an industrial waste treatment 32 facility or an air pollution control facility have been deducted as 33 provided herein and if within ten years from the end of the taxable year 34 in which such deduction was allowed such property or any part thereof is 35 used for the primary purpose of salvaging materials which are usable in 36 the manufacturing process or are marketable, the taxpayer shall report 37 such change of use in its report for the first taxable year during which 38 it occurs, and the commissioner of finance may recompute the tax for the 39 year or years for which such deduction was allowed and any carryback or 40 carryover year, and may assess any additional tax resulting from such 41 recomputation within the time fixed by paragraph (h) of subdivision 42 three of section 11-674 of this chapter. 43 (ii) If a deduction is allowed as herein provided for expenditures 44 paid or incurred during any taxable year on the basis of a temporary 45 certificate of compliance issued pursuant to the environmental conserva- 46 tion law and if the taxpayer fails to obtain a permanent certificate of 47 compliance upon completion of the facilities with respect to which such 48 temporary certificate was issued, the taxpayer shall report such failure 49 in its report for the taxable year during which such facilities are 50 completed, and the commissioner of finance may recompute the tax for the 51 year or years for which such deduction was allowed and any carryback or 52 carryover year, and may assess any additional tax resulting from such 53 recomputation within the time fixed by paragraph (h) of subdivision 54 three of section 11-674 of this chapter. 55 (4) In any taxable year when property is sold or otherwise disposed 56 of, with respect to which a deduction has been allowed pursuant to this

S. 8578 598

1 paragraph, such deduction shall be disregarded in computing gain or 2 loss, and the gain or loss on the sale or other disposition of such 3 property shall be the gain or loss entering into the computation of 4 entire taxable income which the taxpayer is required to report to the 5 United States treasury for such taxable year; 6 (h) With respect to gain derived from the sale or other disposition of 7 any property acquired prior to January first, nineteen hundred sixty- 8 six; which had a federal adjusted basis on such date, or on the date of 9 its sale or other disposition prior to January first, nineteen hundred 10 sixty-six, lower than its fair market value on January first, nineteen 11 hundred sixty-six or the date of its sale or other disposition prior 12 thereto, except property described in subsections one and four of 13 section twelve hundred twenty-one of the internal revenue code, there 14 shall be deducted from entire net income, the difference between (1) the 15 amount of the taxpayer's federal taxable income, and (2) the amount of 16 the taxpayer's federal taxable income, if smaller than the amount 17 described in subparagraph one of this paragraph, computed as if the 18 federal adjusted basis of each such property, on the sale or other 19 disposition of which gain was derived, on the date of the sale or other 20 disposition had been equal to either (i) its fair market value on Janu- 21 ary first, nineteen hundred sixty-six or the date of its sale or other 22 disposition prior to January first, nineteen hundred sixty-six, plus or 23 minus all adjustments to basis made with respect to such property for 24 federal income tax purposes for periods on and after January first, 25 nineteen hundred sixty-six or (ii) the amount realized from its sale or 26 disposition, whichever is lower; provided, however, that the total 27 modification provided by this paragraph shall not exceed the amount of 28 the taxpayer's net gain from the sale or other disposition of all such 29 property. 30 (i) If the period covered by a report under this subchapter is other 31 than the period covered by the report of the United States treasury 32 department, entire net income shall be determined by multiplying the 33 federal taxable income, as adjusted pursuant to the provisions of this 34 subchapter, by the number of calendar months or major parts thereof 35 covered by the report under this subchapter and dividing by the number 36 of calendar months or major parts thereof covered by the report to such 37 department. If it shall appear that such method of determining entire 38 net income does not properly reflect the taxpayer's income during the 39 period covered by the report under this subchapter, the commissioner of 40 finance shall be authorized in his or her discretion to determine such 41 entire net income solely on the basis of the taxpayer's income during 42 the period covered by its report under this subchapter. 43 (j) In the case of property placed in service in taxable years begin- 44 ning before nineteen hundred ninety-four, for taxable years beginning 45 after December thirty-first, nineteen hundred eighty-one, except with 46 respect to property subject to the provisions of section two hundred 47 eighty-F of the internal revenue code and property subject to the 48 provisions of section one hundred sixty-eight of the internal revenue 49 code which is placed in service in this state in taxable years beginning 50 after December thirty-first, nineteen hundred eighty-four, and provided 51 a deduction has not been excluded from entire net income pursuant to 52 subparagraph nine of paragraph (b) of this subdivision, a taxpayer shall 53 be allowed with respect to property which is subject to the provisions 54 of section one hundred sixty-eight of the internal revenue code the 55 depreciation deduction allowable under section one hundred sixty-seven 56 of the internal revenue code as such section would have applied to prop-

S. 8578 599

1 erty placed in service on December thirty-first, nineteen hundred 2 eighty. This paragraph shall not apply to property of a taxpayer prin- 3 cipally engaged in the conduct of an aviation, steamboat, ferry or navi- 4 gation business, or two or more of such businesses, which is placed in 5 service before taxable years beginning in nineteen hundred eighty-nine. 6 (k) In the case of qualified property described in paragraph two of 7 subsection (k) of section one hundred sixty-eight of the internal reven- 8 ue code, other than qualified resurgence zone property described in 9 paragraph (m) of this subdivision, and other than qualified New York 10 Liberty Zone property described in paragraph two of subsection (b) of 11 section fourteen hundred-L of the internal revenue code, without regard 12 to clause (i) of subparagraph (C) of such paragraph, the depreciation 13 deduction allowable under section one hundred sixty-seven as such 14 section would have applied to such property had it been acquired by the 15 taxpayer on September tenth, two thousand one, provided, however, that 16 for taxable years beginning on or after January first, two thousand 17 four, in the case of a passenger motor vehicle or a sport utility vehi- 18 cle subject to the provisions of paragraph (o) of this subdivision, the 19 limitation under clause (i) of subparagraph (A) of paragraph one of 20 subdivision (a) of section two hundred eighty-F of the internal revenue 21 code applicable to the amount allowed as a deduction under this para- 22 graph shall be determined as of the date such vehicle was placed in 23 service and not as of September tenth, two thousand one. 24 (l) Upon the disposition of property to which paragraph (k) of this 25 subdivision applies, the amount of any gain or loss includible in entire 26 net income shall be adjusted to reflect the inclusions and exclusions 27 from entire net income pursuant to subparagraph twelve of paragraph (a) 28 and subparagraph sixteen of paragraph (b) of this subdivision attribut- 29 able to such property. 30 (m) For purposes of this paragraph and paragraph (l) of this subdivi- 31 sion, qualified resurgence zone property shall mean qualified property 32 described in paragraph two of subsection (k) of section one hundred 33 sixty-eight of the internal revenue code substantially all of the use of 34 which is in the resurgence zone, as defined below, and is in the active 35 conduct of a trade or business by the taxpayer in such zone, and the 36 original use of which in the resurgence zone commences with the taxpayer 37 after September tenth, two thousand one. The resurgence zone shall mean 38 the area of New York county bounded on the south by a line running from 39 the intersection of the Hudson River with the Holland Tunnel, and 40 running thence east to Canal Street, then running along the centerline 41 of Canal Street to the intersection of the Bowery and Canal Street, 42 running thence in a southeasterly direction diagonally across Manhattan 43 Bridge Plaza, to the Manhattan Bridge, and thence along the centerline 44 of the Manhattan Bridge to the point where the centerline of the Manhat- 45 tan Bridge would intersect with the easterly bank of the East River, and 46 bounded on the north by a line running from the intersection of the 47 Hudson River with the Holland Tunnel and running thence north along West 48 Avenue to the intersection of Clarkson Street then running east along 49 the centerline of Clarkson Street to the intersection of Washington 50 Avenue, then running south along the centerline of Washington Avenue to 51 the intersection of West Houston Street, then east along the centerline 52 of West Houston Street, then at the intersection of the Avenue of the 53 Americas continuing east along the centerline of East Houston Street to 54 the easterly bank of the East River. 55 (n) Related members expense add back. (1) For purposes of this para- 56 graph: (i) "Related member" means a related person as defined in subpar-

S. 8578 600

1 agraph (c) of paragraph three of subsection (b) of section four hundred 2 sixty-five of the internal revenue code, except that "fifty percent" 3 shall be substituted for "ten percent". 4 (ii) "Effective rate of tax" means, as to any city, the maximum statu- 5 tory rate of tax imposed by the city on or measured by a related 6 member's net income multiplied by the allocation percentage, if any, 7 applicable to the related member under the laws of said jurisdiction. 8 For purposes of this definition, the effective rate of tax as to any 9 city is zero where the related member's net income tax liability in said 10 city is reported on a combined or consolidated return including both the 11 taxpayer and the related member where the reported transactions between 12 the taxpayer and the related member are eliminated or offset. Also, for 13 purposes of this definition, when computing the effective rate of tax 14 for a city in which a related member's net income is eliminated or 15 offset by a credit or similar adjustment that is dependent upon the 16 related member either maintaining or managing intangible property or 17 collecting interest income in that city, the maximum statutory rate of 18 tax imposed by said city shall be decreased to reflect the statutory 19 rate of tax that applies to the related member as effectively reduced by 20 such credit or similar adjustment. 21 (iii) Royalty payments are payments directly connected to the acquisi- 22 tion, use, maintenance or management, ownership, sale, exchange, or any 23 other disposition of licenses, trademarks, copyrights, trade names, 24 trade dress, service marks, mask works, trade secrets, patents and any 25 other similar types of intangible assets as determined by the commis- 26 sioner of finance, and include amounts allowable as interest deductions 27 under section one hundred sixty-three of the internal revenue code to 28 the extent such amounts are directly or indirectly for, related to or in 29 connection with the acquisition, use, maintenance or management, owner- 30 ship, sale, exchange or disposition of such intangible assets. 31 (iv) A valid business purpose is one or more business purposes, other 32 than the avoidance or reduction of taxation, which alone or in combina- 33 tion constitute the primary motivation for some business activity or 34 transaction, which activity or transaction changes in a meaningful way, 35 apart from tax effects, the economic position of the taxpayer. The 36 economic position of the taxpayer includes an increase in the market 37 share of the taxpayer, or the entry by the taxpayer into new business 38 markets. 39 (2) Royalty expense add backs. (i) Except where a taxpayer is included 40 in a combined report pursuant to section 11-654.3 of this subchapter 41 with the applicable related member, for the purpose of computing entire 42 net income or other applicable taxable basis, a taxpayer must add back 43 royalty payments directly or indirectly paid, accrued, or incurred in 44 connection with one or more direct or indirect transactions with one or 45 more related members during the taxable year to the extent deductible in 46 calculating federal taxable income. 47 (ii) Exceptions. (A) The adjustment required in this paragraph shall 48 not apply to the portion of the royalty payment that the taxpayer estab- 49 lishes, by clear and convincing evidence of the type and in the form 50 specified by the commissioner of finance, meets all of the following 51 requirements: (I) the related member was subject to tax in this city or 52 another city within the United States or a foreign nation or some combi- 53 nation thereof on a tax base that included the royalty payment paid, 54 accrued or incurred by the taxpayer; (II) the related member during the 55 same taxable year directly or indirectly paid, accrued or incurred such 56 portion to a person that is not a related member; and (III) the trans-

S. 8578 601

1 action giving rise to the royalty payment between the taxpayer and the 2 related member was undertaken for a valid business purpose. 3 (B) The adjustment required in this paragraph shall not apply if the 4 taxpayer establishes, by clear and convincing evidence of the type and 5 in the form specified by the commissioner of finance, that: (I) the 6 related member was subject to tax on or measured by its net income in 7 this city or another city within the United States, or some combination 8 thereof; (II) the tax base for said tax included the royalty payment 9 paid, accrued or incurred by the taxpayer; and (III) the aggregate 10 effective rate of tax applied to the related member in those jurisdic- 11 tions is no less than eighty percent of the statutory rate of tax that 12 applied to the taxpayer under section 11-604 of this chapter for the 13 taxable year. 14 (C) The adjustment required in this paragraph shall not apply if the 15 taxpayer establishes, by clear and convincing evidence of the type and 16 in the form specified by the commissioner of finance, that: (I) the 17 royalty payment was paid, accrued or incurred to a related member organ- 18 ized under the laws of a country other than the United States; (II) the 19 related member's income from the transaction was subject to a comprehen- 20 sive income tax treaty between such country and the United States; (III) 21 the related member was subject to tax in a foreign nation on a tax base 22 that included the royalty payment paid, accrued or incurred by the 23 taxpayer; (IV) the related member's income from the transaction was 24 taxed in such country at an effective rate of tax at least equal to that 25 imposed by this city; and (V) the royalty payment was paid, accrued or 26 incurred pursuant to a transaction that was undertaken for a valid busi- 27 ness purpose and using terms that reflect an arm's length relationship. 28 (D) The adjustment required in this paragraph shall not apply if the 29 taxpayer and the commissioner of finance agree in writing to the appli- 30 cation or use of alternative adjustments or computations. The commis- 31 sioner of finance may, in his or her discretion, agree to the applica- 32 tion or use of alternative adjustments or computations when he or she 33 concludes that in the absence of such agreement the income of the 34 taxpayer would not be properly reflected. 35 (o) In the case of a taxpayer that is not an eligible farmer as 36 defined in subsection (n) of section six hundred six of the tax law, the 37 deductions allowable under sections one hundred seventy-nine, one 38 hundred sixty-seven and one hundred sixty-eight of the internal revenue 39 code with respect to a sport utility vehicle that is not a passenger 40 automobile as defined in paragraph five of subsection (d) of section two 41 hundred eighty-F of the internal revenue code, determined as if such 42 sport utility vehicle were a passenger automobile as defined in such 43 paragraph five. For purposes of subparagraph sixteen of paragraph (b) 44 and paragraph (k) of this subdivision, the terms qualified resurgence 45 zone property and qualified New York Liberty Zone property described in 46 paragraph two of subsection b of section fourteen hundred-L of the 47 internal revenue code shall not include any sport utility vehicle that 48 is not a passenger automobile as defined in paragraph five of subsection 49 (d) of section two hundred eighty-F of the internal revenue code. 50 (p) Upon the disposition of property to which paragraph (o) of this 51 subdivision applies, the amount of any gain or loss includible in entire 52 net income shall be adjusted to reflect the inclusions and exclusions 53 from entire net income pursuant to subparagraph thirteen of paragraph 54 (a) and subparagraph seventeen of paragraph (b) of this subdivision 55 attributable to such property.

S. 8578 602

1 (q) Subtraction modification for community banks and small thrifts. 2 (1) A taxpayer that is a qualified community bank as defined in subpara- 3 graph two of this paragraph or a small thrift institution as defined in 4 subparagraph two-a of this paragraph shall be allowed a deduction in 5 computing entire net income equal to the amount computed under subpara- 6 graph three of this paragraph. 7 (2) To be a qualified community bank, a taxpayer must satisfy the 8 following conditions: 9 (i) It is a bank or trust company organized under or subject to the 10 provisions of article three of the banking law or a comparable provision 11 of the laws of another state, or a national banking association. 12 (ii) The average value during the taxable year of the assets of the 13 taxpayer, or, if the taxpayer is included in a combined report, the 14 assets of the combined reporting group of the taxpayer under section 15 11-654.3 of this subchapter, must not exceed eight billion dollars. 16 (2-a) To be a small thrift institution, a taxpayer must satisfy the 17 following conditions: 18 (i) It is a savings bank, a savings and loan association, or other 19 savings institution chartered and supervised as such under federal or 20 state law. 21 (ii) The average value during the taxable year of the assets of the 22 taxpayer, or, if the taxpayer is included in a combined report, the 23 assets of the combined reporting group of the taxpayer under section 24 11-654.3 of this subchapter, must not exceed eight billion dollars. 25 (3)(i) The subtraction modification shall be computed as follows: 26 (A) Multiply the taxpayer's net interest income from loans during the 27 taxable year by a fraction, the numerator of which is the gross interest 28 income during the taxable year from qualifying loans and the denominator 29 of which is the gross interest income during the taxable year from all 30 loans. 31 (B) Multiply the amount determined in subclause (A) of this clause by 32 fifty percent. This product is the amount of the deduction allowed under 33 this paragraph. 34 (ii)(A) Net interest income from loans shall mean gross interest 35 income from loans less gross interest expense from loans. Gross interest 36 expense from loans is determined by multiplying gross interest expense 37 by a fraction, the numerator of which is the average total value of 38 loans owned by the thrift institution or community bank during the taxa- 39 ble year and the denominator of which is the average total assets of the 40 thrift institution or community bank during the taxable year. 41 (B) Measurement of assets. For purposes of this clause: (I) Total 42 assets are those assets that are properly reflected on a balance sheet, 43 computed in the same manner as is required by the banking regulator of 44 the taxpayers included in the combined return. In addition, total assets 45 includes leased real property that is not properly reflected on a 46 balance sheet. 47 (II) Assets will only be included if the income or expenses of which 48 are properly reflected, or would have been properly reflected if not 49 fully depreciated or expensed, or depreciated or expensed to a nominal 50 amount, in the computation of the taxpayer's entire net income for the 51 taxable year. Assets will not include deferred tax assets and intangible 52 assets identified as "goodwill". 53 (III) Tangible real and personal property, such as buildings, land, 54 machinery, and equipment, shall be valued at cost. Leased real property 55 that is not properly reflected on the balance sheet will be valued at 56 the annual lease payment multiplied by eight. Intangible property, such

S. 8578 603

1 as loans and investments, shall be valued at book value exclusive of 2 reserves. 3 (IV) Average assets are computed using the assets measured on the 4 first day of the taxable year, and on the last day of each subsequent 5 quarter of the taxable year or month or day during the taxable year. 6 (iii) A qualifying loan is a loan that meets the conditions specified 7 in subclause (A) of this clause and subclause (B) of this clause. 8 (A) The loan is originated by the qualified community bank or small 9 thrift institution or purchased by the qualified community bank or small 10 thrift institution immediately after its origination in connection with 11 a commitment to purchase made by the bank or thrift institution prior to 12 the loan's origination. 13 (B) The loan is a small business loan or a residential mortgage loan, 14 the principal amount of which loan is five million dollars or less, and 15 either the borrower is located in this city as determined under section 16 11-654.2 of this subchapter and the loan is not secured by real proper- 17 ty, or the loan is secured by real property located in the city. 18 (C) A loan that meets the definition of a qualifying loan in a prior 19 taxable year, including years prior to the effective date of this para- 20 graph, remains a qualifying loan in taxable years during and after which 21 such loan is acquired by another corporation in the taxpayer's combined 22 reporting group under section 11-654.3 of this subchapter. 23 (r) A small thrift institution or a qualified community bank, as 24 defined in paragraph (q) of this subdivision, that maintained a captive 25 REIT on April first, two thousand fourteen shall utilize a REIT 26 subtraction equal to one hundred sixty percent of the dividends paid 27 deductions allowed to that captive REIT for the taxable year for federal 28 income tax purposes and shall not be allowed to utilize the subtraction 29 modification for community banks and small thrifts under paragraph (q) 30 of this subdivision or the subtraction modification for qualified resi- 31 dential loan portfolios under paragraph (s) of this subdivision in any 32 tax year in which such thrift institution or community bank maintains 33 that captive REIT. 34 (s) Subtraction modification for qualified residential loan portfo- 35 lios. (1)(i) A taxpayer that is either a thrift institution as defined 36 in subparagraph three of this paragraph or a qualified community bank as 37 defined in subparagraph two of paragraph (q) of this subdivision and 38 maintains a qualified residential loan portfolio as defined in subpara- 39 graph two of this paragraph shall be allowed as a deduction in computing 40 entire net income the amount, if any, by which (A) thirty-two percent of 41 its entire net income determined without regard to this paragraph 42 exceeds (B) the amounts deducted by the taxpayer pursuant to sections 43 one hundred sixty-six and five hundred eighty-five of the internal 44 revenue code less any amounts included in federal taxable income as a 45 result of a recovery of a loan. 46 (ii)(A) If the taxpayer is in a combined report under section 11-654.3 47 of this subchapter, this deduction will be computed on a combined basis. 48 In that instance, the entire net income of the combined reporting group 49 for purposes of this paragraph shall be multiplied by a fraction, the 50 numerator of which is the average total assets of all the thrift insti- 51 tutions and qualified community banks included in the combined report 52 and the denominator of which is the average total assets of all the 53 corporations included in the combined report. 54 (B) Measurement of assets. For purposes of this paragraph: (I) Total 55 assets are those assets that are properly reflected on a balance sheet, 56 computed in the same manner as is required by the banking regulator of

S. 8578 604

1 the taxpayers included in the combined return. In addition, total assets 2 includes leased real property that is not properly reflected on a 3 balance sheet. 4 (II) Assets will only be included if the income or expenses of which 5 are properly reflected, or would have been properly reflected if not 6 fully depreciated or expensed, or depreciated or expensed to a nominal 7 amount, in the computation of the combined group's entire net income for 8 the taxable year. Assets will not include deferred tax assets and intan- 9 gible assets identified as "goodwill". 10 (III) Tangible real and personal property, such as buildings, land, 11 machinery, and equipment shall be valued at cost. Leased real property 12 that is not properly reflected on a balance sheet will be valued at the 13 annual lease payment multiplied by eight. Intangible property, such as 14 loans and investments, shall be valued at book value exclusive of 15 reserves. 16 (IV) Intercorporate stockholdings and bills, notes and accounts 17 receivable, and other intercorporate indebtedness between the corpo- 18 rations included in the combined report shall be eliminated. 19 (V) Average assets are computed using the assets measured on the first 20 day of the taxable year, and on the last day of each subsequent quarter 21 of the taxable year or month or day during the taxable year. 22 (2) Qualified residential loan portfolio. (i) A taxpayer maintains a 23 qualified residential loan portfolio if at least sixty percent of the 24 amount of the total assets at the close of the taxable year of the 25 thrift institution or qualified community bank consists of the assets 26 described in subclauses (A) through (L) of this clause, with the appli- 27 cation of the rule in the last undesignated subclause of this clause. If 28 the taxpayer is a member of a combined group, the determination of 29 whether there is a qualified residential loan portfolio will be made by 30 aggregating the assets of the thrift institutions and qualified communi- 31 ty banks that are members of the combined group. Assets: (A) cash, which 32 includes cash and cash equivalents including cash items in the process 33 of collection, deposits with other financial institutions, including 34 corporate credit unions, balances with federal reserve banks and federal 35 home loan banks, federal funds sold, and cash and cash equivalents on 36 hand. Cash shall not include any balances serving as collateral for 37 securities lending transactions; (B) obligations of the United States or 38 of a state or political subdivision thereof, and stock or obligations of 39 a corporation which is an instrumentality or a government sponsored 40 enterprise of the United States or of a state or political subdivision 41 thereof; (C) loans secured by a deposit or share of a member; (D) loans 42 secured by an interest in real property which is, or, from the proceeds 43 of the loan, will become, residential real property or real property 44 used primarily for church purposes, loans made for the improvement of 45 residential real property or real property used primarily for church 46 purposes, provided that for purposes of this subclause, residential real 47 property shall include single or multi-family dwellings, facilities in 48 residential developments dedicated to public use or property used on a 49 nonprofit basis for residents, and mobile homes not used on a transient 50 basis; (E) property acquired through the liquidation of defaulted loans 51 described in subclause (D) of this clause; (F) any regular or residual 52 interest in a REMIC, as such term is defined in section eight hundred 53 sixty-D of the internal revenue code, but only in the proportion which 54 the assets of such REMIC consist of property described in subclauses (A) 55 through (E) of this clause, except that if ninety-five percent or more 56 of the assets of such REMIC are assets described in such subclauses, the

S. 8578 605

1 entire interest in the REMIC shall qualify; (G) any mortgage-backed 2 security which represents ownership of a fractional undivided interest 3 in a trust, the assets of which consist primarily of mortgage loans, 4 provided that the real property which serves as security for the loans 5 is, or from the proceeds of the loan, will become, the type of property 6 described in subclause (D) of this clause and any collateralized mort- 7 gage obligation, the security for which consists primarily of mortgage 8 loans that maintain as security the type of property described in 9 subclause (D) of this clause; (H) certificates of deposit in, or obli- 10 gations of, a corporation organized under a state law which specifically 11 authorizes such corporation to insure the deposits or share accounts of 12 member associations; (I) loans secured by an interest in educational, 13 health, or welfare institutions or facilities, including structures 14 designed or used primarily for residential purposes for students, resi- 15 dents, and persons under care, employees, or members of the staff of 16 such institutions or facilities; (J) loans made for the payment of 17 expenses of college or university education or vocational training; (K) 18 property used by the taxpayer in support of business which consists 19 principally of acquiring the savings of the public and investing in 20 loans; and (L) loans for which the taxpayer is the creditor and which 21 are wholly secured by loans described in subclause (D) of this clause. 22 The value of accrued interest receivable and any loss-sharing commit- 23 ment or other loan guaranty by a governmental agency will be considered 24 part of the basis in the loans to which the accrued interest or loss 25 protection applies. 26 (ii) At the election of the taxpayer, the percentage specified in 27 clause (i) of this subparagraph shall be applied on the basis of the 28 average assets outstanding during the taxable year, in lieu of the close 29 of the taxable year. The taxpayer can elect to compute an average using 30 the assets measured on the first day of the taxable year and on the last 31 day of each subsequent quarter, or month or day during the taxable year. 32 This election may be made annually. 33 (iii) For purposes of subclause (D) of clause (i) of this subpara- 34 graph, if a multifamily structure securing a loan is used in part for 35 nonresidential use purposes, the entire loan is deemed a residential 36 real property loan if the planned residential use exceeds eighty percent 37 of the property's planned use, measured, at the taxpayer's election, by 38 using square footage or gross rental revenue, and determined as of the 39 time the loan is made. 40 (iv) For purposes of subclause (D) of clause (i) of this subparagraph, 41 loans made to finance the acquisition or development of land shall be 42 deemed to be loans secured by an interest in residential real property 43 if there is a reasonable assurance that the property will become resi- 44 dential real property within a period of three years from the date of 45 acquisition of such land; provided, however, this shall not apply for 46 any taxable year unless, within such three-year period, such land 47 becomes residential real property. For purposes of determining whether 48 any interest in a REMIC qualifies under subclause (F) of clause (i) of 49 this subparagraph, any regular interest in another REMIC held by such 50 REMIC shall be treated as a loan described in subclauses (A) through (E) 51 under principles similar to the principle of such subclause (F), except 52 that if such REMICs are part of a tiered structure, they shall be treat- 53 ed as one REMIC for purposes of such subclause (F). 54 (3) For purposes of this paragraph, a "thrift institution" is a 55 savings bank, a savings and loan association, or other savings institu- 56 tion chartered and supervised as such under federal or state law.

S. 8578 606

1 (t) Subtraction modification for qualified affordable housing and low 2 income community loans. 3 (1) A taxpayer that owns a qualifying loan within the meaning of 4 clause (iii) of subparagraph two of this paragraph shall be allowed a 5 deduction in computing entire net income equal to the amount computed 6 under subparagraph two of this paragraph. 7 (2)(i) The deduction allowed in subparagraph one of this paragraph 8 shall be equal to: 9 (A) if the total average value during the taxable year of the assets 10 of the taxpayer, or if the taxpayer is included in a combined report, 11 the assets of the combined reporting group of the taxpayer under section 12 11-654.3 of this subchapter, does not exceed one hundred billion 13 dollars, the taxpayer's net interest income from qualifying loans, or 14 (B) if the total average value during the taxable year of the assets 15 of the taxpayer, or if the taxpayer is included in a combined report, 16 the assets of the combined reporting group of the taxpayer under section 17 11-654.3 of this subchapter, exceeds one hundred billion dollars but is 18 less than one hundred fifty billion dollars, the taxpayer's net interest 19 income from qualifying loans multiplied by a fraction, the numerator of 20 which is one hundred fifty billion dollars minus the total average value 21 during the taxable year of the assets of the taxpayer, or if the taxpay- 22 er is included in a combined report, the assets of the combined report- 23 ing group of the taxpayer under section 11-654.3 of this subchapter, and 24 the denominator of which is fifty billion dollars. 25 (ii)(A) Net interest income from qualifying loans shall mean the 26 taxpayer's net interest income from loans during the taxable year multi- 27 plied by a fraction, the numerator of which is the gross interest income 28 during the taxable year from qualifying loans and the denominator of 29 which is the gross interest income from all loans. 30 (B) Net interest income from loans shall mean gross interest income 31 during the taxable year from loans less gross interest expense from 32 loans. Gross interest expense from loans is determined by multiplying 33 gross interest expense by a fraction, the numerator of which is the 34 average total value of loans owned by the taxpayer during the taxable 35 year and the denominator of which is the average total assets of the 36 taxpayer for the year. 37 (C) Measurement of assets. For purposes of this paragraph: 38 (I) Total assets are those assets that are properly reflected on a 39 balance sheet, computed in the same manner as is required by the banking 40 regulator, if applicable, of the taxpayers included in the combined 41 return. In addition, total assets includes leased real property that is 42 not properly reflected on a balance sheet. 43 (II) Assets will only be included if the income or expenses of which 44 are properly reflected, or would have been properly reflected if not 45 fully depreciated or expensed, or depreciated or expensed to a nominal 46 amount, in the computation of the taxpayer's entire net income for the 47 taxable year. Assets will not include deferred tax assets and intangible 48 assets identified as "goodwill". 49 (III) Tangible real and personal property, such as buildings, land, 50 machinery, and equipment, shall be valued at cost. Leased real property 51 that is not properly reflected on a balance sheet will be valued at the 52 annual lease payment multiplied by eight. Intangible property, such as 53 loans and investments, shall be valued at book value exclusive of 54 reserves.

S. 8578 607

1 (IV) Average assets are computed using the assets measured on the 2 first day of the taxable year, and on the last day of each subsequent 3 quarter of the taxable year or month or day during the taxable year. 4 (iii) A qualifying loan is a loan that meets the conditions specified 5 in subclause (A) through subclause (E) of this clause. 6 (A) The loan is originated by the taxpayer lender or purchased by the 7 taxpayer immediately after its origination in connection with a commit- 8 ment to purchase made by the taxpayer prior to the loan's origination. 9 (B) Satisfies conditions of item (I) or (II) of this subclause. 10 (I) The loan is secured by a housing accommodation located within the 11 city, where there are rental units in such housing accommodation that 12 are qualifying units, which for purposes of this subclause, means units 13 subject to rent control, rent stabilization or to a regulatory agree- 14 ment, provided that, each such loan will be considered a qualifying loan 15 for purposes of this paragraph only in proportion to a percentage equal 16 to the number of qualifying units divided by the total number of all 17 residential and commercial units located on the site of the real proper- 18 ty securing the loan, as determined as of the date the loan is made. 19 (II) To the extent not included in item (I) of this subclause, loans 20 secured by residential real property located in a low-income community. 21 For purposes of this paragraph, low-income community areas are census 22 tracts within the city in which the poverty rate for such tract is at 23 least twenty percent and the median family income for such tract does 24 not exceed eighty percent of metropolitan area median family income. 25 This determination will be made by reference to the poverty and median 26 family income census data for application of section forty-five-D of the 27 internal revenue code. 28 (C) The loan is not treated as a qualifying loan in the computation of 29 a subtraction from entire net income pursuant to paragraph (q) of this 30 subdivision. 31 (D) If the taxpayer applies a subtraction pursuant to paragraph (r) of 32 this subdivision, the interest or net gains from the loan are not recog- 33 nized by a captive REIT as defined in section 11-601 of this chapter. 34 (E) A loan that meets the definition of a qualifying loan in a prior 35 taxable year, including years prior to the effective date of this para- 36 graph, remains a qualifying loan in taxable years during and after which 37 such loan is acquired by another corporation in the taxpayer's combined 38 reporting group under section 11-654.3 of this subchapter. 39 (iv) For purposes of this paragraph, the following terms shall mean: 40 (A) "Housing accommodations" shall mean a multiple dwelling that 41 contains at least five dwelling units together with the land on which 42 such structure is situated. 43 (B) "Regulatory agreement" shall mean a written agreement with or 44 approved by any local, municipal, state, federal or other government 45 agency that requires the provision of housing accommodations for fami- 46 lies and persons of low or moderate income, and binds the owner of such 47 real property and its successors and assigns. A regulatory agreement may 48 include such other terms and conditions as the locality, municipality, 49 state, or federal government shall determine. 50 (C) "Rent stabilization" shall mean, collectively, the rent stabiliza- 51 tion law of nineteen hundred sixty-nine, the rent stabilization code, 52 and the emergency tenant protection act of nineteen seventy-four, 53 together with any successor statutes or regulations addressing substan- 54 tially the same subject matter. 55 9. (a) The term "calendar year" means a period of twelve calendar 56 months, or any shorter period beginning on the date the taxpayer becomes

S. 8578 608

1 subject to the tax imposed by this subchapter, ending on the thirty- 2 first day of December, provided the taxpayer keeps its books on the 3 basis of such period or on the basis of any period ending on any day 4 other than the last day of a calendar month, or provided the taxpayer 5 does not keep books, and includes, in case the taxpayer changes the 6 period on the basis of which it keeps its books from a fiscal year to a 7 calendar year, the period from the close of its last old fiscal year up 8 to and including the following December thirty-first. 9 (b) The term "fiscal year" means a period of twelve calendar months, 10 or any shorter period beginning on the date the taxpayer becomes subject 11 to the tax imposed by this subchapter, ending on the last day of any 12 month other than December, provided the taxpayer keeps its books on the 13 basis of such period, and includes, in case the taxpayer changes the 14 period on the basis of which it keeps its books from a calendar year to 15 a fiscal year or from one fiscal year to another fiscal year, the period 16 from the close of its last old calendar or fiscal year up to the date 17 designated as the close of its new fiscal year. 18 10. The term "tangible personal property" means corporeal personal 19 property, such as machinery, tools, implements, goods, wares and 20 merchandise, and does not mean money, deposits in banks, shares of 21 stock, bonds, notes, credits or evidences of an interest property and 22 evidences of debt. 23 11. The term "internal revenue code" means, unless otherwise specif- 24 ically stated in this subchapter, the internal revenue code of 1986, as 25 amended. 26 12. The term "combinable captive insurance company" means an entity 27 that is treated as an association taxable as a corporation under the 28 internal revenue code: 29 (a) more than fifty percent of the voting stock of which is owned or 30 controlled, directly or indirectly, by a single entity that is treated 31 as an association taxable as a corporation under the internal revenue 32 code and not exempt from federal income tax; 33 (b) that is licensed as a captive insurance company under the laws of 34 this state or another jurisdiction; 35 (c) whose business includes providing, directly and indirectly, insur- 36 ance or reinsurance covering the risks of its parent and/or members of 37 its affiliated group; and 38 (d) fifty percent or less of whose gross receipts for the taxable year 39 consist of premiums from arrangements that constitute insurance for 40 federal income tax purposes. 41 For purposes of this subdivision, "affiliated group" has the same 42 meaning as that term is given in section fifteen hundred four of the 43 internal revenue code, except that the term "common parent corporation" 44 in that section is deemed to mean any person, as defined in section 45 seven thousand seven hundred one of the internal revenue code and refer- 46 ences to "at least eighty percent" in section fifteen hundred four of 47 the internal revenue code are to be read as "fifty percent or more;" 48 section fifteen hundred four of the internal revenue code is to be read 49 without regard to the exclusions provided for in subsection (b) of that 50 section; "premiums" has the same meaning as that term is given in para- 51 graph one of subdivision (c) of section fifteen hundred ten of the tax 52 law, except that it includes consideration for annuity contracts and 53 excludes any part of the consideration for insurance, reinsurance or 54 annuity contracts that do not provide bona fide insurance, reinsurance 55 or annuity benefits; and "gross receipts" includes the amounts included 56 in gross receipts for purposes of paragraph fifteen of subsection (c) of

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1 section five hundred one of the internal revenue code, except that those 2 amounts also include all premiums as defined in this subdivision. 3 13. The term "partnership" includes a syndicate, group, pool, joint 4 venture, or other unincorporated organization, through or by means of 5 which any business, financial operation, or venture is carried on, and 6 which is not a corporation as defined in subdivision one of this 7 section, or a trust or estate that is separate from its owner under part 8 one of subchapter J of chapter one of subtitle A of the internal revenue 9 code; and the term "partner" includes a member in such syndicate, group, 10 pool, joint venture, or organization. 11 § 11-653 Imposition of tax; exemptions. 1. (a) For the privilege of 12 doing business, or of employing capital, or of owning or leasing proper- 13 ty in the city in a corporate or organized capacity, or of maintaining 14 an office in the city, or of deriving receipts from activity in the 15 city, for all or any part of each of its fiscal or calendar years, every 16 domestic or foreign corporation, except corporations specified in subdi- 17 vision four of this section, shall annually pay a tax, upon the basis of 18 its business income, or upon such other basis as may be applicable as 19 hereinafter provided, for such fiscal or calendar year or part thereof, 20 on a report which shall be filed, except as hereinafter provided, on or 21 before the fifteenth day of March next succeeding the close of each such 22 year, or, in the case of a taxpayer which reports on the basis of a 23 fiscal year, within two and one-half months after the close of such 24 fiscal year, and shall be paid as hereinafter provided. 25 (b) A corporation is deriving receipts from activity in the city if it 26 has receipts within the city of one million dollars or more in a taxable 27 year. For purposes of this section, the term "receipts" means the 28 receipts that are subject to the allocation rules set forth in section 29 11-654.2 of this subchapter, and the term "receipts within the city" 30 means the receipts included in the numerator of the receipts fraction 31 determined under section 11-654.2 of this subchapter. For purposes of 32 this paragraph, receipts from processing credit card transactions for 33 merchants include merchant discount fees received by the corporation. 34 (c) A corporation is doing business in the city if (1) it has issued 35 credit cards to one thousand or more customers who have a mailing 36 address within the city as of the last day of its taxable year, (2) it 37 has merchant customer contracts with merchants and the total number of 38 locations covered by those contracts equals one thousand or more 39 locations in the city to whom the corporation remitted payments for 40 credit card transactions during the taxable year, or (3) the sum of the 41 number of customers described in subparagraph one of this paragraph plus 42 the number of locations covered by its contracts described in subpara- 43 graph two of this paragraph equals one thousand or more. As used in this 44 subdivision, the term "credit card" includes bank, credit, travel and 45 entertainment cards. 46 (d)(1) A corporation with less than one million dollars but at least 47 ten thousand dollars of receipts within the city in a taxable year that 48 is part of a unitary group that meets the ownership test under section 49 11-654.3 of this subchapter is deriving receipts from activity in the 50 city if the receipts within the city of the members of the unitary group 51 that have at least ten thousand dollars of receipts within the city in 52 the aggregate meet the threshold set forth in paragraph (b) of this 53 subdivision. 54 (2) A corporation that does not meet any of the thresholds set forth 55 in paragraph (c) of this subdivision but has at least ten customers, or 56 locations, or customers and locations, as described in paragraph (c) of

S. 8578 610

1 this subdivision, and is part of a unitary group that meets the owner- 2 ship test under section 11-654.3 of this subchapter, is doing business 3 in the city if the number of customers, locations, or customers and 4 locations, within the city of the members of the unitary group that have 5 at least ten customers, locations, or customers and locations, within 6 the city in the aggregate meets any of the thresholds set forth in para- 7 graph (c) of this subdivision. 8 (3) For purposes of this paragraph, any corporation described in para- 9 graph (c) of subdivision two of section 11-654.3 of this subchapter 10 shall not be considered. 11 (e) At the end of each year, the commissioner shall review the cumula- 12 tive percentage change in the consumer price index. The commissioner 13 shall adjust the receipt thresholds set forth in this subdivision if the 14 consumer price index has changed by ten percent or more since January 15 first, two thousand twenty-two, or since the date that the thresholds 16 were last adjusted under this subdivision. The thresholds shall be 17 adjusted to reflect the cumulative percentage change in the consumer 18 price index. The adjusted thresholds shall be rounded to the nearest one 19 thousand dollars. As used in this paragraph, "consumer price index" 20 means the consumer price index for all urban consumers (CPI-U) available 21 from the bureau of labor statistics of the United States department of 22 labor. Any adjustment shall apply to tax periods that begin after the 23 adjustment is made. 24 (f) If a partnership is doing business, employing capital, owning or 25 leasing property in the city, or maintaining an office in the city, or 26 deriving receipts from activity in the city, any corporation that is a 27 partner in such partnership shall be subject to tax under this subchap- 28 ter as described in the regulations of the commissioner of finance. 29 2. A foreign corporation shall not be deemed to be doing business, 30 employing capital, owning or leasing property, or maintaining an office 31 in the city, or deriving receipts from activity in the city, for the 32 purposes of this subchapter, by reason of: 33 (a) the maintenance of cash balances with banks or trust companies in 34 the city, or 35 (b) the ownership of shares of stock or securities kept in the city, 36 if kept in a safe deposit box, safe, vault or other receptacle rented 37 for the purpose, or if pledged as collateral security, or if deposited 38 with one or more banks or trust companies, or brokers who are members of 39 a recognized security exchange, in safekeeping or custody accounts, or 40 (c) the taking of any action by any such bank or trust company or 41 broker, which is incidental to the rendering of safekeeping or custodian 42 service to such corporation, or 43 (d) the maintenance of an office in the city by one or more officers 44 or directors of the corporation who are not employees of the corporation 45 if the corporation otherwise is not doing business in the city, and does 46 not employ capital or own or lease property in the city, or 47 (e) the keeping of books or records of a corporation in the city if 48 such books or records are not kept by employees of such corporation and 49 such corporation does not otherwise do business, employ capital, own or 50 lease property or maintain an office in the city, or 51 (f) any combination of such activities. 52 2-a. An alien corporation shall not be deemed to be doing business, 53 employing capital, owning or leasing property, or maintaining an office 54 in the city, or deriving receipts from activity in the city, for the 55 purposes of this subchapter, if its activities in the city are limited 56 solely to:

S. 8578 611

1 (a) investing or trading in stocks and securities for its own account 2 within the meaning of clause (ii) of subparagraph (A) of paragraph (2) 3 of subsection (b) of section eight hundred sixty-four of the internal 4 revenue code, or: 5 (b) investing or trading in commodities for its own account within the 6 meaning of clause (ii) of subparagraph (B) of paragraph (2) of 7 subsection (b) of section eight hundred sixty-four of the internal 8 revenue code, or 9 (c) any combination of activities described in paragraphs (a) and (b) 10 of this subdivision. 11 An alien corporation that under any provision of the internal revenue 12 code is not treated as a "domestic corporation" as defined in section 13 seven thousand seven hundred one of such code and has no effectively 14 connected income for the taxable year pursuant to clause three of the 15 opening paragraph of subdivision eight of section 11-652 of this 16 subchapter shall not be subject to tax under this subchapter for that 17 taxable year. For purposes of this subchapter, an alien corporation is a 18 corporation organized under the laws of a country, or any political 19 subdivision thereof, other than the United States, or organized under 20 the laws of a possession, territory or commonwealth of the United 21 States. 22 3. Any receiver, referee, trustee, assignee or other fiduciary, or any 23 officer or agent appointed by any court, who conducts the business of 24 any corporation, shall be subject to the tax imposed by this subchapter 25 in the same manner and to the same extent as if the business were 26 conducted by the agents or officers of such corporation. A dissolved 27 corporation which continues to conduct business shall also be subject to 28 the tax imposed by this subchapter. 29 4. (a) Corporations subject to tax under chapter eleven of this title, 30 any trust company organized under a law of this state all of the stock 31 of which is owned by not less than twenty savings banks organized under 32 a law of this state, housing companies organized and operating pursuant 33 to the provisions of article two of the private housing finance law, 34 housing development fund companies organized pursuant to the provisions 35 of article eleven of the private housing finance law, corporations 36 described in section three of the tax law, a corporation principally 37 engaged in the operation of marine vessels whose activities in the city 38 are limited exclusively to the use of property in interstate or foreign 39 commerce, provided, however, such a corporation will not be subject to 40 tax under this subchapter solely because it maintains an office in the 41 city, or employs capital in the city, in connection with such use of 42 property, a corporation principally engaged in the conduct of a ferry 43 business and operating between any of the boroughs of the city under a 44 lease granted by the city and a corporation principally engaged in the 45 conduct of an aviation, steamboat, ferry or navigation business, or two 46 or more of such businesses, all of the capital stock of which is owned 47 by a municipal corporation of this state, shall not be subject to tax 48 under this subchapter; provided, however, that any corporation, other 49 than (1) a utility corporation subject to the supervision of the state 50 department of public service, and (2) for taxable years beginning on or 51 after August first, two thousand two, a utility as defined in subdivi- 52 sion six of section 11-1101 of this title, which is subject to tax under 53 chapter eleven of this title as a vendor of utility services, shall be 54 subject to tax under this subchapter, but in computing the tax imposed 55 by this section pursuant to the provisions of clause (i) of subparagraph 56 one of paragraph (e) of subdivision one of section 11-654 of this

S. 8578 612

1 subchapter, business income allocated to the city pursuant to paragraph 2 (a) of subdivision three of such section shall be reduced by the 3 percentage which such corporation's gross operating income subject to 4 tax under chapter eleven of this title is of its gross operating income. 5 (b) The term "gross operating income", when used in paragraph (a) of 6 this subdivision, means receipts received in or by reason of any trans- 7 action had and consummated in the city, including cash, credits and 8 property of any kind or nature, whether or not such transaction is made 9 for profit, without any deduction therefrom on account of the cost of 10 the property sold, the cost of materials used, labor or other services, 11 delivery costs or any other costs whatsoever, interest or discount paid 12 or any other expenses whatsoever. 13 (c) If it shall appear to the commissioner of finance that the appli- 14 cation of the provisions of paragraph (a) of this subdivision, does not 15 fairly and equitably reflect the portion of the taxpayer's business 16 income allocable to the city which is attributable to its city activ- 17 ities which are not taxable under chapter eleven of this title, the 18 commissioner of finance may prescribe other means or methods of deter- 19 mining such portion, including the use of the books and records of the 20 taxpayer, if the commissioner of finance finds that such means or meth- 21 ods used in keeping them fairly and equitably reflect such portion. 22 5. Intentionally omitted. 23 6. Intentionally omitted. 24 7. For any taxable year of a real estate investment trust, as defined 25 in section eight hundred fifty-six of the internal revenue code, in 26 which such trust is subject to federal income taxation under section 27 eight hundred fifty-seven of such code, such trust shall be subject to a 28 tax computed under either clause (i) of subparagraph one of paragraph 29 (e) of subdivision one of section 11-654 of this subchapter, or clause 30 (iv), whichever is greater. In the case of such a real estate investment 31 trust, including a captive REIT as defined in section 11-601 of this 32 chapter, the term "entire net income" means "real estate investment 33 trust taxable income" as defined in paragraph two of subdivision (b) of 34 section eight hundred fifty-seven, as modified by section eight hundred 35 fifty-eight, of the internal revenue code plus the amount taxable under 36 paragraph three of subdivision (b) of section eight hundred fifty-seven 37 of such code, subject to the modifications required by subdivision eight 38 of section 11-652 of this subchapter including the modifications 39 required by paragraphs (d) and (e) of subdivision three of section 40 11-654 of this subchapter. 41 8. For any taxable year of a regulated investment company, as defined 42 in section eight hundred fifty-one of the internal revenue code, in 43 which such company is subject to federal income taxation under section 44 eight hundred fifty-two of such code, such company shall be subject to a 45 tax computed under either clause one or four of subparagraph (a) of 46 paragraph E of subdivision one of section 11-654 of this subchapter, 47 whichever is greater. In the case of such a regulated investment compa- 48 ny, including a captive RIC as defined in section 11-601 of this chap- 49 ter, the term "entire net income" used in subdivision one of this 50 section means "investment company taxable income" as defined in para- 51 graph two of subdivision (b) of section eight hundred fifty-two, as 52 modified by section eight hundred fifty-five, of the internal revenue 53 code plus the amount taxable under paragraph three of subdivision (b) of 54 section eight hundred fifty-two of such code subject to the modifica- 55 tions required by subdivision eight of section 11-652 of this subchap-

S. 8578 613

1 ter, including the modification required by paragraphs (d) and (e) of 2 subdivision three of section 11-654 of this subchapter. 3 9. An organization described in paragraph two or twenty-five of 4 subsection (c) of section five hundred one of the internal revenue code 5 shall be exempt from all taxes imposed by this subchapter. 6 § 11-654 Computation of tax. 1. (a) Intentionally omitted. 7 (b) Intentionally omitted. 8 (c) Intentionally omitted. 9 (d) Intentionally omitted. 10 (e) The tax imposed by subdivision one of section 11-653 of this 11 subchapter shall be, in the case of each taxpayer: 12 (1) whichever of the following amounts is the greatest: 13 (i) an amount computed on its business income or the portion of such 14 business income allocated within the city as hereinafter provided, 15 subject to the application of paragraphs (j) and (k) of this subdivision 16 and any modification required by paragraphs (d) and (e) of subdivision 17 three of this section, at the rate of (1) nine per centum for financial 18 corporations, as defined in this clause, or (2) eight and eighty-five 19 one hundredths per centum for all other corporations. For purposes of 20 this clause, "financial corporation" means a corporation or, if the 21 corporation is included in a combined group, a combined group, that (A) 22 has total assets reflected on its balance sheet at the end of its taxa- 23 ble year in excess of one hundred billion dollars, computed under gener- 24 ally accepted accounting principles and (B)(I) allocates more than fifty 25 percent of the receipts included in the denominator of its receipts 26 fraction, determined under section 11-654.2 of this subchapter, pursuant 27 to subdivision five of section 11-654.2 of this subchapter for its taxa- 28 ble year, or (II) is itself or is included in a combined group in which 29 more than fifty percent of the total assets reflected on its balance 30 sheet at the end of its taxable year are held by one or more corpo- 31 rations that are classified as (a) registered under state law as a bank 32 holding company or registered under the Federal Bank Holding Company Act 33 of 1956 (12 U.S.C. § 1841, et seq., as amended), or registered as a 34 savings and loan holding company under the Federal National Housing Act 35 (12 U.S.C. 1701, as amended), (b) a national bank organized and existing 36 as a national bank association pursuant to the provisions of the 37 National Bank Act, 12 U.S.C. 21 et. seq., (c) a savings association or 38 federal savings bank as defined in the Federal Deposit Insurance Act, 12 39 U.S.C. § 1813(b)(1), (d) a bank, savings association, or thrift institu- 40 tion incorporated or organized under the laws of any state, (e) a corpo- 41 ration organized under the provisions of 12 U.S.C. §§ 611 to 631, (f) an 42 agency or branch or a foreign depository as defined in 12 U.S.C. § 3101, 43 (g) a registered securities or commodities broker or dealer registered 44 as such by the securities and exchange commission or the commodities 45 futures trading commission, which shall include an OTC derivatives deal- 46 er as defined under regulations of the securities and exchange commis- 47 sion at title 17, part 240, section 3b-12 of the code of federal regu- 48 lations (17 CFR 240.3b-12), or (h) any corporation whose voting stock is 49 more than fifty percent owned, directly or indirectly, by any person or 50 business entity described in subitems (a) through (g) of this item, 51 other than an insurance company taxable under article thirty-three of 52 the tax law; or 53 (ii) an amount computed by multiplying its total business capital, or 54 the portion thereof allocated within the city, as hereinafter provided, 55 (A) except as provided in subclauses (B) and (C) of this clause, by 56 fifteen one-hundredths per centum;

S. 8578 614

1 (B) in the case of a cooperative housing corporation as defined in the 2 internal revenue code, by four one-hundredths per centum; 3 (C) in the case of the portion of total business capital directly 4 attributable to a corporation that is or would be taxable under chapter 5 eleven of this title, except for a vendor of utility services that is 6 taxable under both chapter eleven of this title and this subchapter, or 7 a corporation that would have been taxable as an insurance corporation 8 under former part IV, title R, chapter forty-six of the administrative 9 code of the city of New York as in effect on June thirtieth, nineteen 10 hundred seventy-four, by seven and one-half one-hundredths per centum; 11 and 12 (D) subtracting ten thousand dollars from the sum of the amount of tax 13 computed pursuant to subclauses (A), (B) and (C) of this clause, 14 provided that if such amount of tax is less than zero it shall be deemed 15 to be zero; and 16 (E) provided that in no event shall the amount of tax computed pursu- 17 ant to subclause (D) of this clause on the taxpayer's total business 18 capital, or the portion thereof allocated within the city, exceed ten 19 million dollars, or 20 (iii) Intentionally omitted.

21 (iv) If New York city receipts are: Fixed dollar minimum 22 tax is: 23 Not more than $100,000 $25 24 More than $100,000 but not over $250,000 $75 25 More than $250,000 but not over $500,000 $175 26 More than $500,000 but not over $1,000,000 $500 27 More than $1,000,000 but not over $5,000,000 $1,500 28 More than $5,000,000 but not over $25,000,000 $3,500 29 More than $25,000,000 but not over $50,000,000 $5,000 30 More than $50,000,000 but not over $100,000,000 $10,000 31 More than $100,000,000 but not over $250,000,000 $20,000 32 More than $250,000,000 but not over $500,000,000 $50,000 33 More than $500,000,000 but not over $1,000,000,000 $100,000 34 Over $1,000,000,000 $200,000

35 For purposes of this clause, New York city receipts are the receipts 36 computed in accordance with section 11-654.2 of this subchapter for the 37 taxable year. If the taxable year is less than twelve months, the amount 38 prescribed by this clause shall be reduced by twenty-five percent if the 39 period for which the taxpayer is subject to tax is more than six months 40 but not more than nine months and by fifty percent if the period for 41 which the taxpayer is subject to tax is not more than six months. If the 42 taxable year is less than twelve months, the amount of New York city 43 receipts for purposes of this clause is determined by dividing the 44 amount of the receipts for the taxable year by the number of months in 45 the taxable year and multiplying the result by twelve. 46 (f) Intentionally omitted. 47 (g) Intentionally omitted. 48 (h) Intentionally omitted. 49 (i) Intentionally omitted. 50 (j) (1) If the amount of business income allocated within the city as 51 hereinafter provided is less than one million dollars, the amount 52 computed in clause (i) of subparagraph one of paragraph (e) of this 53 subdivision shall be at the rate of six and five-tenths per centum of 54 the amount of business income allocated within the city as hereinafter

S. 8578 615

1 provided, subject to any modification required by paragraphs (d) and (e) 2 of subdivision three of this section; 3 (2) Subject to subparagraph three of this paragraph, if the amount of 4 business income allocated within the city as hereinafter provided is one 5 million dollars or greater but less than one million five hundred thou- 6 sand dollars, the amount computed in clause (i) of subparagraph one of 7 paragraph (e) of this subdivision shall be at the rate of (i) six and 8 five-tenths per centum, plus (ii) two and thirty-five one-hundredths per 9 centum multiplied by a fraction the numerator of which is allocated 10 business income less one million dollars and the denominator of which is 11 five hundred thousand dollars, of the amount of business income allo- 12 cated within the city as hereinafter provided, subject to any modifica- 13 tion required by paragraphs (d) and (e) of subdivision three of this 14 section; 15 (3) Provided, however, notwithstanding anything to the contrary, if 16 the amount of business income before allocation is two million dollars 17 or greater but less than three million dollars, the rate of tax provided 18 for in this paragraph shall not be less than (i) six and five-tenths per 19 centum, plus (ii) two and thirty-five one-hundredths per centum multi- 20 plied by a fraction the numerator of which is business income before 21 allocation less two million dollars and the denominator of which is one 22 million dollars, and provided, however, notwithstanding anything to the 23 contrary, if the amount of business income before allocation is three 24 million dollars or greater, the rate of tax shall be eight and eighty- 25 five one-hundredths percentum or, in the case of a financial corpo- 26 ration, as defined in clause (i) of subparagraph one of paragraph (e) of 27 subdivision one of section 11-654, if the amount of business income 28 before allocation is three million dollars or greater the rate of tax 29 shall be nine per centum. 30 (k)(1) For qualified New York manufacturing corporations as defined in 31 subparagraph four of this paragraph, if the amount of business income 32 allocated within the city as hereinafter provided is less than ten 33 million dollars, the amount computed in clause (i) of subparagraph one 34 of paragraph (e) of this subdivision shall be at the rate of four and 35 four hundred twenty-five one thousandths per centum, of its business 36 income allocated within the city as hereinafter provided, subject to any 37 modification required by paragraphs (d) and (e) of subdivision three of 38 this section; 39 (2) Subject to subparagraph three of this paragraph for qualified New 40 York manufacturing corporations as defined in subparagraph four of this 41 paragraph, if the amount of business income allocated within the city as 42 hereinafter provided is ten million dollars or greater but less than 43 twenty million dollars, the amount computed in clause (i) of subpara- 44 graph one of paragraph (e) of this subdivision shall be at the rate of 45 (i) four and four hundred twenty-five one-thousandths per centum, plus 46 (ii) four and four hundred twenty-five one-thousandths per centum multi- 47 plied by a fraction the numerator of which is allocated business income 48 less ten million dollars and the denominator of which is ten million 49 dollars, of its business income or the portion of such business income 50 allocated within the city as hereinafter provided, subject to any 51 modification required by paragraphs (d) and (e) of subdivision three of 52 this section; 53 (3) Notwithstanding anything to the contrary, if the amount of busi- 54 ness income before allocation is twenty million dollars or greater but 55 less than forty million dollars, the rate of tax provided for in this 56 paragraph shall not be less than (i) four and four hundred twenty-five

S. 8578 616

1 one-thousandths per centum, plus (ii) four and four hundred twenty-five 2 one-thousandths per centum multiplied by a fraction the numerator of 3 which is business income before allocation less twenty million dollars 4 and the denominator of which is twenty million dollars, and provided, 5 however, notwithstanding anything to the contrary, if the amount of 6 business income before allocation is forty million dollars or greater, 7 the rate of tax shall be eight and eighty-five one-hundredths per 8 centum. 9 (4)(i) As used in this subparagraph, the term "manufacturing corpo- 10 ration" means a corporation principally engaged in the manufacturing and 11 sale thereof of tangible personal property; and the term "manufacturing" 12 includes the process, including the assembly process (A) of working raw 13 materials into wares suitable for use or (B) which gives new shapes, new 14 qualities or new combinations to matter which already has gone through 15 some artificial process, by the use of machinery, tools, appliances and 16 other similar equipment. Moreover, in the case of a combined report, a 17 combined group shall be considered a "manufacturing corporation" for 18 purposes of this subparagraph only if the combined group during the 19 taxable year is principally engaged in the activities set forth in this 20 paragraph, or any combination thereof. A taxpayer or, in the case of a 21 combined report, a combined group, shall be "principally engaged" in 22 activities described in this subparagraph if, during the taxable year, 23 more than fifty percent of the gross receipts of the taxpayer or 24 combined group, respectively, are derived from receipts from the sale of 25 goods produced by such activities. In computing a combined group's gross 26 receipts, intercorporate receipts shall be eliminated. 27 (ii) A "qualified New York manufacturing corporation" is a manufactur- 28 ing corporation that has property in the state that is described in 29 subparagraph five of this paragraph and either (A) the adjusted basis of 30 such property for New York state tax purposes at the close of the taxa- 31 ble year is at least one million dollars or (B) more than fifty percent 32 of its real and personal property is located in the state. 33 (5) For purposes of subclause (A) of clause (ii) of subparagraph four 34 of this paragraph, property includes tangible personal property and 35 other tangible property, including buildings and structural components 36 of buildings, which are: depreciable pursuant to section one hundred 37 sixty-seven of the internal revenue code, have a useful life of four 38 years or more, are acquired by purchase as defined in subsection (d) of 39 section one hundred seventy-nine of the internal revenue code, have a 40 situs in the state and are principally used by the taxpayer in the 41 production of goods by manufacturing. Property used in the production of 42 goods shall include machinery, equipment or other tangible property 43 which is principally used in the repair and service of other machinery, 44 equipment or other tangible property used principally in the production 45 of goods and shall include all facilities used in the production opera- 46 tion, including storage of material to be used in production and of the 47 products that are produced. 48 2. The amount of investment capital and business capital shall be 49 determined by taking the average value of the gross assets included 50 therein, less liabilities deductible therefrom pursuant to the 51 provisions of subdivisions four and six of section 11-652 of this 52 subchapter, and, if the period covered by the report is other than a 53 period of twelve calendar months, by multiplying such value by the 54 number of calendar months or major parts thereof included in such peri- 55 od, and dividing the product thus obtained by twelve. For purposes of 56 this subdivision, real property and marketable securities shall be

S. 8578 617

1 valued at fair market value and the value of personal property other 2 than marketable securities shall be the value thereof shown on the books 3 and records of the taxpayer in accordance with generally accepted 4 accounting principles. 5 3. The portion of the business income of a taxpayer to be allocated to 6 the city shall be determined as follows: 7 (a) multiply its business income by a business allocation percentage 8 to be determined by: 9 (1) ascertaining the percentage which the average value of the taxpay- 10 er's real and tangible personal property, whether owned or rented to it, 11 within the city during the period covered by its report bears to the 12 average value of all the taxpayer's real and tangible personal property, 13 whether owned or rented to it, wherever situated during such period. For 14 the purpose of this subparagraph, the term "value of the taxpayer's real 15 and tangible personal property" shall mean the adjusted bases of such 16 properties for federal income tax purposes, except that in the case of 17 rented property such value shall mean the product of (i) eight and (ii) 18 the gross rents payable for the rental of such property during the taxa- 19 ble year; provided, however, that the taxpayer may make a one-time, 20 revocable election, pursuant to regulations promulgated by the commis- 21 sioner of finance to use fair market value as the value of all of its 22 real and tangible personal property, provided that such election is made 23 on or before the due date for filing a report under section 11-655 of 24 this subchapter for the taxpayer's first taxable year commencing on or 25 after January first, two thousand fifteen and provided that such 26 election shall not apply to any taxable year with respect to which the 27 taxpayer is included on a combined report unless each of the taxpayers 28 included on such report has made such an election which remains in 29 effect for such year or to any taxpayer that was subject to tax under 30 subchapter two of this chapter and did not have an election in effect 31 under subparagraph one of paragraph (a) of subdivision three of section 32 11-604 of this chapter on December thirty-first, two thousand fourteen; 33 (2) ascertaining the percentage determined under section 11-654.2 of 34 this subchapter; 35 (3) ascertaining the percentage of the total wages, salaries and other 36 personal service compensation, similarly computed, during such period of 37 employees within the city, except general executive officers, to the 38 total wages, salaries and other personal service compensation, similarly 39 computed, during such period of all the taxpayer's employees within and 40 without the city, except general executive officers; and 41 (4) adding together the percentages so determined and dividing the 42 result by the number of percentages. 43 (5) Intentionally omitted. 44 (6) Intentionally omitted. 45 (7) Intentionally omitted. 46 (8) Intentionally omitted. 47 (9) Intentionally omitted. 48 (10) Notwithstanding subparagraphs one through four of this paragraph, 49 the business allocation percentage, to the extent that it is computed by 50 reference to the percentages determined under subparagraphs one, two and 51 three of this paragraph, shall be computed in the manner set forth in 52 this subparagraph. 53 (i) Intentionally omitted. 54 (ii) Intentionally omitted. 55 (iii) Intentionally omitted. 56 (iv) Intentionally omitted.

S. 8578 618

1 (v) Intentionally omitted. 2 (vi) Intentionally omitted. 3 (vii) For taxable years beginning in two thousand fifteen, the busi- 4 ness allocation percentage shall be determined by adding together the 5 following percentages: 6 (A) the product of ten percent and the percentage determined under 7 subparagraph one of this paragraph; 8 (B) the product of eighty percent and the percentage determined under 9 subparagraph two of this paragraph; and 10 (C) the product of ten percent and the percentage determined under 11 subparagraph three of this paragraph. 12 (viii) For taxable years beginning in two thousand sixteen, the busi- 13 ness allocation percentage shall be determined by adding together the 14 following percentages: 15 (A) the product of six and one-half percent and the percentage deter- 16 mined under subparagraph one of this paragraph; 17 (B) the product of eighty-seven percent and the percentage determined 18 under subparagraph two of this paragraph; and 19 (C) the product of six and one-half percent and the percentage deter- 20 mined under subparagraph three of this paragraph. 21 (ix) For taxable years beginning in two thousand seventeen, the busi- 22 ness allocation percentage shall be determined by adding together the 23 following percentages: 24 (A) the product of three and one-half percent and the percentage 25 determined under subparagraph one of this paragraph; 26 (B) the product of ninety-three percent and the percentage determined 27 under subparagraph two of this paragraph; and 28 (C) the product of three and one-half percent and the percentage 29 determined under subparagraph three of this paragraph. 30 (x) For taxable years beginning after two thousand seventeen, the 31 business allocation percentage shall be the percentage determined under 32 subparagraph two of this paragraph. 33 (xi) The commissioner of finance shall promulgate rules necessary to 34 implement the provisions of this subparagraph under such circumstances 35 where any of the percentages to be determined under subparagraph one, 36 two or three of this paragraph cannot be determined because the taxpayer 37 has no property, receipts or wages within or without the city. 38 (xii) Notwithstanding the provisions of clauses (viii), (ix), and (x) 39 of this subparagraph, for taxable years beginning on or after January 40 first, two thousand eighteen, a taxpayer that has fifty million dollars 41 or less of receipts allocated to the city as determined under section 42 11-654.2 of this subchapter, or, if the taxpayer is included in a 43 combined group, a combined group that has fifty million dollars or less 44 of receipts allocated to the city as determined under section 11-654.2 45 of this subchapter, may make a one-time election to determine its busi- 46 ness allocation percentage by adding together the following percentages: 47 (A) the product of three and one-half percent and the percentage 48 determined under subparagraph one of this paragraph; 49 (B) the product of ninety-three percent and the percentage determined 50 under subparagraph two of this paragraph; and 51 (C) the product of three and one-half percent and the percentage 52 determined under subparagraph three of this paragraph. 53 The election provided for in this clause must be made on an original 54 or amended report filed pursuant to section 11-655 of this subchapter 55 for the taxpayer's or, if the taxpayer is included in a combined group, 56 the combined group's, first taxable year commencing on or after January

S. 8578 619

1 first, two thousand eighteen and shall remain in effect until revoked by 2 the taxpayer, or if the taxpayer is included in a combined group, the 3 combined group. An election shall be revoked under this clause on an 4 original or amended report filed pursuant to section 11-655 of this 5 subchapter for the taxpayer's, or if the taxpayer is included in a 6 combined group, the combined group's, first taxable year with respect to 7 which such revocation is to be effective. If the taxpayer is a member of 8 a combined group, an election or revocation by the taxpayer under this 9 clause shall apply to all members of the combined group. 10 (11) A foreign air carrier described in the first sentence of subpara- 11 graph one of paragraph (c-1) of subdivision eight of section 11-652 of 12 this subchapter shall determine its business allocation percentage 13 pursuant to subparagraphs one through four of this paragraph, as modi- 14 fied by subparagraph ten of this paragraph, except that the numerators 15 and denominators involved in such computation shall exclude property to 16 the extent employed in generating income excluded from entire net income 17 for the taxable year pursuant to paragraph (c-1) of subdivision eight of 18 section 11-652 of this subchapter, exclude such receipts as are excluded 19 from entire net income for the taxable year pursuant to paragraph (c-1) 20 of subdivision eight of section 11-652 of this subchapter, and exclude 21 wages, salaries or other personal service compensation which are direct- 22 ly attributable to the generation of income excluded from entire net 23 income for the taxable year pursuant to paragraph (c-1) of subdivision 24 eight of section 11-652 of this subchapter. 25 (b) Intentionally omitted. 26 (c) Intentionally omitted. 27 (d) In any taxable year when property is sold or otherwise disposed 28 of, with respect to which a deduction has been allowed pursuant to 29 subparagraph one or two of paragraph (d) of subdivision three of section 30 11-604 of this chapter or subdivision (k) of section 11-641 of this 31 chapter in any period in which the taxpayer was subject to tax under 32 subchapter two of this chapter, the gain or loss thereon entering into 33 the computation of federal taxable income shall be disregarded in 34 computing entire net income, and there shall be added to or subtracted 35 from the portion of entire net income allocated within the city the gain 36 or loss upon such sale or other disposition. In computing such gain or 37 loss the basis of the property sold or disposed of shall be adjusted to 38 reflect the deduction allowed with respect to such property pursuant to 39 subparagraph one or two of paragraph (d) of subdivision three of section 40 11-604 of this chapter. Provided, however, that no loss shall be recog- 41 nized for the purposes of this subparagraph with respect to a sale or 42 other disposition of property to a person whose acquisition thereof is 43 not a purchase as defined in subsection (d) of section one hundred 44 seventy-nine of the internal revenue code. 45 (e) In any taxable year when property is sold or otherwise disposed 46 of, with respect to which a deduction has been allowed pursuant to 47 subparagraph one or two of paragraph (e) of subdivision three of section 48 11-604 of this chapter in any period the taxpayer was subject to tax 49 under subchapter two of this chapter, the gain or loss thereon entering 50 into the computation of federal taxable income shall be disregarded in 51 computing entire net income, and there shall be added to or subtracted 52 from the portion of entire net income allocated within the city the gain 53 or loss upon such sale or other disposition. In computing such gain or 54 loss the basis of the property sold or disposed of shall be adjusted to 55 reflect the deduction allowed with respect to such property pursuant to 56 subparagraph one or two of paragraph (e) of subdivision three of section

S. 8578 620

1 11-604 of this chapter. Provided, however, that no loss shall be recog- 2 nized for the purposes of this subparagraph with respect to a sale or 3 other disposition of property to a person whose acquisition thereof is 4 not a purchase as defined in subsection (d) of section one hundred 5 seventy-nine of the internal revenue code. 6 4. The portion of the business capital of a taxpayer to be allocated 7 within the city shall be determined by multiplying the amount thereof by 8 the business allocation percentage determined as hereinabove provided. 9 4-a. A corporation that is a partner in a partnership shall compute 10 tax under this subchapter using any method required or permitted in 11 regulations of the commissioner of finance. 12 5. Intentionally omitted. 13 6. Intentionally omitted. 14 7. Intentionally omitted. 15 8. Intentionally omitted. 16 9. If it shall appear to the commissioner of finance that any business 17 allocation percentage determined as hereinabove provided does not prop- 18 erly reflect the activity, business, income or capital of a taxpayer 19 within the city, the commissioner of finance shall be authorized in his 20 or her discretion to adjust it, or the taxpayer may request that the 21 commissioner of finance adjust it, by (a) excluding one or more of the 22 factors therein, (b) including one or more other factors, such as 23 expenses, purchases, contract values, minus subcontract values, (c) 24 excluding one or more assets in computing such allocation percentage, 25 provided the income therefrom, is also excluded in determining entire 26 net income, or (d) any other similar or different method calculated to 27 effect a fair and proper allocation of the income and capital reasonably 28 attributable to the city. The party seeking the adjustment shall bear 29 the burden of proof to demonstrate that the business allocation percent- 30 age determined pursuant to this section does not result in a proper 31 reflection of the taxpayer's income or capital within the city and that 32 the proposed adjustment is appropriate. The commissioner of finance from 33 time to time shall publish all rulings of general public interest with 34 respect to any application of the provisions of this subdivision. 35 10. Intentionally omitted. 36 11. Intentionally omitted. 37 12. Intentionally omitted. 38 13. (a) In addition to any other credit allowed by this section, a 39 taxpayer shall be allowed a credit against the tax imposed by this 40 subchapter to be credited or refunded without interest, in the manner 41 hereinafter provided in this section. 42 (1)(i) Where a taxpayer shall have relocated to the city from a 43 location outside the state, and by such relocation shall have created a 44 minimum of one hundred industrial or commercial employment opportu- 45 nities; and where such taxpayer shall have entered into a written lease 46 for the relocation premises, the terms of which lease provide for 47 increased additional payments to the landlord which are based solely and 48 directly upon any increase or addition in real estate taxes imposed on 49 the leased premises, the taxpayer upon approval and certification by the 50 industrial and commercial incentive board as hereinafter provided shall 51 be entitled to a credit against the tax imposed by this subchapter. The 52 amount of such credit shall be an amount equal to the annual increased 53 payments actually made by the taxpayer to the landlord which are solely 54 and directly attributable to an increase or addition to the real estate 55 tax imposed upon the leased premises. Such credit shall be allowed only

S. 8578 621

1 to the extent that the taxpayer has not otherwise claimed said amount as 2 a deduction against the tax imposed by this subchapter. 3 (ii) The industrial and commercial incentive board in approving and 4 certifying to the qualifications of the taxpayer to receive such tax 5 credit shall first determine that the applicant has met the requirements 6 of this section, and further, that the granting of the tax credit to the 7 applicant is in the "public interest". In determining that the granting 8 of the tax credit is in the public interest, the board shall make affir- 9 mative findings that: the granting of the tax credit to the applicant 10 will not effect an undue hardship on similar taxpayers already located 11 within the city; the existence of this tax incentive has been instru- 12 mental in bringing about the relocation of the applicant to the city; 13 and the granting of the tax credit will foster the economic recovery and 14 economic development of the city. 15 (iii) The tax credit, if approved and certified by the industrial and 16 commercial incentive board, must be utilized annually by the taxpayer 17 for the length of the term of the lease or for a period not to exceed 18 ten years from the date of relocation whichever period is shorter. 19 (2) When used in this subdivision: 20 (i) "Employment opportunity" means the creation of a full time posi- 21 tion of gainful employment for an industrial or commercial employee and 22 the actual hiring of such employee for the said position. 23 (ii) "Industrial employee" means one engaged in the manufacture or 24 assembling of tangible goods or the processing of raw materials. 25 (iii) "Commercial employee" means one engaged in the buying, selling 26 or otherwise providing of goods or services other than on a retail 27 basis. 28 (iv) "Retail" means the selling or otherwise disposing or furnishing 29 of tangible goods or services directly to the ultimate user or consumer. 30 (v) "Full time position" means the hiring of an industrial or commer- 31 cial employee in a position of gainful employment where the number of 32 hours worked by such employees is not less than thirty hours during any 33 given work week. 34 (vi) "Industrial and commercial incentive board" means the board 35 created pursuant to part three of subchapter two of chapter two of this 36 title. 37 (b) The credit allowed under this subdivision for any taxable year 38 shall be deemed to be an overpayment of tax by the taxpayer to be cred- 39 ited or refunded, without interest, in accordance with the provisions of 40 section 11-677 of this chapter. 41 14. (a) In addition to any other credit allowed by this section, a 42 taxpayer shall be allowed a credit against the tax imposed by this 43 subchapter to be credited or refunded without interest, in the manner 44 hereinafter provided in this section. The amount of such credit shall 45 be: 46 (1) A maximum of three hundred dollars for each commercial employment 47 opportunity and a maximum of five hundred dollars for each industrial 48 employment opportunity relocated to the city from an area outside the 49 state. Such credit shall be allowed to a taxpayer who relocates a mini- 50 mum of ten employment opportunities. The credit shall be allowed against 51 employment opportunity relocation costs incurred by the taxpayer. Such 52 credit shall be allowed only to the extent that the taxpayer has not 53 claimed a deduction for allowable employment opportunity relocation 54 costs. The credit allowed hereunder may be taken by the taxpayer in 55 whole or in part in the year in which the employment opportunity is 56 relocated by such taxpayer or either of the two years succeeding such

S. 8578 622

1 event, provided, however, no credit shall be allowed under this subdivi- 2 sion to a taxpayer for industrial employment opportunities relocated to 3 premises (i) that are within an industrial business zone established 4 pursuant to section 22-626 of the code of the preceding municipality and 5 (ii) for which a binding contract to purchase or lease was first entered 6 into by the taxpayer on or after July first, two thousand five. 7 The commissioner of finance is empowered to promulgate rules and regu- 8 lations and to prescribe the form of application to be used by a taxpay- 9 er seeking the such credit. 10 (2) When used in this subdivision: 11 (i) "Employment opportunity" means the creation of a full time posi- 12 tion of gainful employment for an industrial or commercial employee and 13 the actual hiring of such employee for the said position. 14 (ii) "Industrial employee" means one engaged in the manufacture or 15 assembling of tangible goods or the processing of raw materials. 16 (iii) "Commercial employee" means one engaged in the buying, selling 17 or otherwise providing of goods or services other than on a retail 18 basis. 19 (iv) "Retail" means the selling or otherwise disposing of tangible 20 goods directly to the ultimate user or consumer. 21 (v) "Full time position" means the hiring of an industrial or commer- 22 cial employee in a position of gainful employment where the number of 23 hours worked by such employee is not less than thirty hours during any 24 given work week. 25 (vi) "Employment opportunity relocation costs" means the costs 26 incurred by the taxpayer in moving furniture, files, papers and office 27 equipment into the city from a location outside the state; the costs 28 incurred by the taxpayer in the moving and installation of machinery and 29 equipment into the city from a location outside the state; the costs of 30 installation of telephones and other communications equipment required 31 as a result of the relocation to the city from a location outside the 32 state; the cost incurred in the purchase of office furniture and 33 fixtures required as a result of the relocation to the city from a 34 location outside the state; and the cost of renovation of the premises 35 to be occupied as a result of the relocation; provided, however, that 36 such renovation costs shall be allowable only to the extent that they do 37 not exceed seventy-five cents per square foot of the total area utilized 38 by the taxpayer in the occupied premises. 39 (b) The credit allowed under this section for any taxable year shall 40 be deemed to be an overpayment of tax by the taxpayer to be credited or 41 refunded without interest in accordance with the provisions of section 42 11-677 of this chapter. 43 (c) Notwithstanding any other provision of this subdivision to the 44 contrary, in the case of a taxpayer that has received, in a taxable year 45 beginning before January first, two thousand fifteen, the credit set 46 forth in subdivision fourteen of section 11-604 of this chapter for an 47 eligible employment relocation, a credit shall be allowed to the taxpay- 48 er under this subdivision for any tax year beginning on or after January 49 first, two thousand fifteen, in the same amount and to the same extent 50 that a credit, or the unused portion thereof, would have been allowed 51 under subdivision fourteen of section 11-604 of this chapter, as in 52 effect on December thirty-first, two thousand fourteen, if such subdivi- 53 sion continued to apply to the taxpayer for such taxable year. 54 15. Intentionally omitted. 55 16. Intentionally omitted.

S. 8578 623

1 17. (a) In addition to any other credit allowed by this section, a 2 taxpayer that has obtained the certifications required by chapter six-B 3 of title twenty-two of the code of the preceding municipality shall be 4 allowed a credit against the tax imposed by this subchapter. The amount 5 of the credit shall be the amount determined by multiplying five hundred 6 dollars or, in the case of a taxpayer that has obtained pursuant to 7 chapter six-B of such title twenty-two a certification of eligibility 8 dated on or after July first, nineteen hundred ninety-five, one thousand 9 dollars or, in the case of an eligible business that has obtained pursu- 10 ant to chapter six-B of such title twenty-two a certification of eligi- 11 bility dated on or after July first, two thousand, for a relocation to 12 eligible premises located within a revitalization area defined in subdi- 13 vision (n) of section 22-621 of the code of the preceding municipality, 14 three thousand dollars, by the number of eligible aggregate employment 15 shares maintained by the taxpayer during the taxable year with respect 16 to particular premises to which the taxpayer has relocated; provided, 17 however, with respect to a relocation for which no application for a 18 certificate of eligibility is submitted prior to July first, two thou- 19 sand three, to eligible premises that are not within a revitalization 20 area, if the date of such relocation as determined pursuant to subdivi- 21 sion (j) of section 22-621 of the code of the preceding municipality is 22 before July first, nineteen hundred ninety-five, the amount to be multi- 23 plied by the number of eligible aggregate employment shares shall be 24 five hundred dollars, and with respect to a relocation for which no 25 application for a certificate of eligibility is submitted prior to July 26 first, two thousand three, to eligible premises that are within a revi- 27 talization area, if the date of such relocation as determined pursuant 28 to subdivision (j) of such section is before July first, nineteen 29 hundred ninety-five, the amount to be multiplied by the number of eligi- 30 ble aggregate employment shares shall be five hundred dollars, and if 31 the date of such relocation as determined pursuant to subdivision (j) of 32 such section is on or after July first, nineteen hundred ninety-five, 33 and before July first, two thousand, one thousand dollars; provided, 34 however, that no credit shall be allowed for the relocation of any 35 retail activity or hotel services; provided, further, that no credit 36 shall be allowed under this subdivision to any taxpayer that has elected 37 pursuant to subdivision (d) of section 22-622 of the code of the preced- 38 ing municipality to take such credit against a gross receipts tax 39 imposed by chapter eleven of this title; and provided that in the case 40 of an eligible business that has obtained pursuant to chapter six-B of 41 such title twenty-two certifications of eligibility for more than one 42 relocation, the portion of the total amount of eligible aggregate 43 employment shares to be multiplied by the dollar amount specified in 44 this subdivision for each such certification of a relocation shall be 45 the number of total attributed eligible aggregate employment shares 46 determined with respect to such relocation pursuant to subdivision (o) 47 of section 22-621 of the code of the preceding municipality. For 48 purposes of this subdivision, the terms "eligible aggregate employment 49 shares," "relocate," "retail activity" and "hotel services" shall have 50 the meanings ascribed by section 22-621 of the code of the preceding 51 municipality. 52 (b) The credit allowed under this subdivision with respect to eligible 53 aggregate employment shares maintained with respect to particular prem- 54 ises to which the taxpayer has relocated shall be allowed for the first 55 taxable year during which such eligible aggregate employment shares are 56 maintained with respect to such premises and for any of the twelve

S. 8578 624

1 succeeding taxable years during which eligible aggregate employment 2 shares are maintained with respect to such premises; provided that the 3 credit allowed for the twelfth succeeding taxable year shall be calcu- 4 lated by multiplying the number of eligible aggregate employment shares 5 maintained with respect to such premises in the twelfth succeeding taxa- 6 ble year by the lesser of one and a fraction the numerator of which is 7 such number of days in the taxable year of relocation less the number of 8 days the eligible business maintained employment shares in the eligible 9 premises in the taxable year of relocation and the denominator of which 10 is the number of days in such twelfth succeeding taxable year during 11 which such eligible aggregate employment shares are maintained with 12 respect to such premises. Except as provided in paragraph (d) of this 13 subdivision, if the amount of the credit allowable under this subdivi- 14 sion for any taxable year exceeds the tax imposed for such year, the 15 excess may be carried over, in order, to the five immediately succeeding 16 taxable years and, to the extent not previously deductible, may be 17 deducted from the taxpayer's tax for such years. 18 (c) The credit allowable under this subdivision shall be deducted 19 after the credit allowed by subdivision eighteen of this section, but 20 prior to the deduction of any other credit allowed by this section. 21 (d) In the case of a taxpayer that has obtained a certification of 22 eligibility pursuant to chapter six-B of title twenty-two of the code of 23 the preceding municipality dated on or after July first, two thousand 24 for a relocation to eligible premises located within the revitalization 25 area defined in subdivision (n) of section 22-621 of the code of the 26 preceding municipality, the credits allowed under this subdivision, or 27 in the case of a taxpayer that has relocated more than once, the portion 28 of such credits attributed to such certification of eligibility pursuant 29 to paragraph (a) of this subdivision, against the tax imposed by this 30 chapter for the taxable year of such relocation and for the four taxable 31 years immediately succeeding the taxable year of such relocation, shall 32 be deemed to be overpayments of tax by the taxpayer to be credited or 33 refunded, without interest, in accordance with the provisions of section 34 11-677 of this chapter. For such taxable years, such credits or portions 35 thereof may not be carried over to any succeeding taxable year; 36 provided, however, that this paragraph shall not apply to any relocation 37 for which an application for a certification of eligibility was not 38 submitted prior to July first, two thousand three, unless the date of 39 such relocation is on or after July first, two thousand. 40 (e) Notwithstanding any other provision of this subdivision to the 41 contrary, in the case of a taxpayer that has obtained, pursuant to chap- 42 ter six-B of title twenty-two of the code of the preceding municipality, 43 a certification of eligibility and has received, in a taxable year 44 beginning before January first, two thousand fifteen, the credit set 45 forth in subdivision seventeen of section 11-604 of this chapter or 46 section 11-643.7 of this chapter for the relocation of an eligible busi- 47 ness, a credit shall be allowed under this subdivision to the taxpayer 48 for any taxable year beginning on or after January first, two thousand 49 fifteen in the same amount and to the same extent that a credit would 50 have been allowed under subdivision seventeen of section 11-604 of this 51 chapter or section 11-643.7 of this chapter, as in effect on December 52 thirty-first, two thousand fourteen, if such subdivision continued to 53 apply to the taxpayer for such taxable year. 54 17-a. Intentionally omitted. 55 17-b. (a) In addition to any other credit allowed by this section, an 56 eligible business that first enters into a binding contract on or after

S. 8578 625

1 July first, two thousand five to purchase or lease eligible premises to 2 which it relocates shall be allowed a one-time credit against the tax 3 imposed by this subchapter to be credited or refunded in the manner 4 hereinafter provided in this subdivision. The amount of such credit 5 shall be one thousand dollars per full-time employee; provided, however, 6 that the amount of such credit shall not exceed the lesser of actual 7 relocation costs or one hundred thousand dollars. 8 (b) When used in this subdivision, the following terms shall have the 9 following meanings: 10 (1) "Eligible business" means any business subject to tax under this 11 subchapter that (i) has been conducting substantial business operations 12 and engaging primarily in industrial and manufacturing activities at one 13 or more locations within the city of New York or outside the state of 14 New York continuously during the twenty-four consecutive full months 15 immediately preceding relocation, (ii) has leased the premises from 16 which it relocates continuously during the twenty-four consecutive full 17 months immediately preceding relocation, (iii) first enters into a bind- 18 ing contract on or after July first, two thousand five to purchase or 19 lease eligible premises to which such business will relocate, and (iv) 20 will be engaged primarily in industrial and manufacturing activities at 21 such eligible premises. 22 (2) "Eligible premises" means premises located entirely within an 23 industrial business zone. For any eligible business, an industrial busi- 24 ness zone tax credit shall not be granted with respect to more than one 25 eligible premises. 26 (3) "Full-time employee" means (i) one person gainfully employed in an 27 eligible premises by an eligible business where the number of hours 28 required to be worked by such person is not less than thirty-five hours 29 per week; or (ii) two persons gainfully employed in an eligible premises 30 by an eligible business where the number of hours required to be worked 31 by each such person is more than fifteen hours per week but less than 32 thirty-five hours per week. 33 (4) "Industrial business zone" means an area within the city of New 34 York established pursuant to section 22-626 of the code of the preceding 35 municipality. 36 (5) "Industrial business zone tax credit" means a credit, as provided 37 for in this subdivision, against a tax imposed under this subchapter. 38 (6) "Industrial and manufacturing activities" means activities involv- 39 ing the assembly of goods to create a different article, or the process- 40 ing, fabrication, or packaging of goods. Industrial and manufacturing 41 activities shall not include waste management or utility services. 42 (7) "Relocation" means the physical relocation of furniture, fixtures, 43 equipment, machinery and supplies directly to an eligible premises, from 44 one or more locations of an eligible business, including at least one 45 location at which such business conducts substantial business operations 46 and engages primarily in industrial and manufacturing activities. For 47 purposes of this subdivision, the date of relocation shall be (i) the 48 date of the completion of the relocation to the eligible premises or 49 (ii) ninety days from the commencement of the relocation to the eligible 50 premises, whichever is earlier. 51 (8) "Relocation costs" means costs incurred in the relocation of such 52 furniture, fixtures, equipment, machinery and supplies, including, but 53 not limited to, the cost of dismantling and reassembling equipment and 54 the cost of floor preparation necessary for the reassembly of the equip- 55 ment. Relocation costs shall include only such costs that are incurred 56 during the ninety-day period immediately following the commencement of

S. 8578 626

1 the relocation to an eligible premises. Relocation costs shall not 2 include costs for structural or capital improvements or items purchased 3 in connection with the relocation. 4 (c) The credit allowed under this subdivision for any taxable year 5 shall be deemed to be an overpayment of tax by the taxpayer to be cred- 6 ited or refunded without interest, in accordance with the provisions of 7 section 11-677 of this chapter. 8 (d) The number of full-time employees for the purposes of calculating 9 an industrial business tax credit shall be the average number of full- 10 time employees, calculated on a weekly basis, employed in the eligible 11 premises by the eligible business in the fifty-two week period imme- 12 diately following the earlier of (1) the date of the completion of the 13 relocation to eligible premises or (2) ninety days from the commencement 14 of the relocation to the eligible premises. 15 (e) The credit allowed under this subdivision must be taken by the 16 taxpayer in the taxable year in which such twelve month period selected 17 by the taxpayer ends. 18 (f) For the purposes of calculating entire net income in the taxable 19 year that an industrial business tax credit is allowed, a taxpayer must 20 add back the amount of the credit allowed under this subdivision, to the 21 extent of any relocation costs deducted in the current taxable year or a 22 prior taxable year in calculating federal taxable income. 23 (g) The credit allowed under this subdivision shall not be granted for 24 an eligible business for more than one relocation, provided, however, an 25 industrial business tax credit shall not be granted if the eligible 26 business receives benefits pursuant to chapter six-B or six-C of title 27 twenty-two of the code of the preceding municipality, through a grant 28 program administered by the business relocation assistance corporation, 29 or through the New York city printers relocation fund grant. 30 (h) The commissioner of finance is authorized to promulgate rules and 31 regulations and to prescribe forms necessary to effectuate the purposes 32 of this subdivision. 33 18. (a) If a corporation is a partner in an unincorporated business 34 taxable under chapter five of this title, and is required to include in 35 entire net income its distributive share of income, gain, loss and 36 deductions of, or guaranteed payments from, such unincorporated busi- 37 ness, such corporation shall be allowed a credit against the tax imposed 38 by this subchapter equal to the lesser of the amounts determined in 39 subparagraphs one and two of this paragraph: 40 (1) The amount determined in this subparagraph is the product of (i) 41 the sum of (A) the tax imposed by chapter five of this title on the 42 unincorporated business for its taxable year ending within or with the 43 taxable year of the corporation and paid by the unincorporated business 44 and (B) the amount of any credit or credits taken by the unincorporated 45 business under section 11-503 of this title, except the credit allowed 46 by subdivision (b) of section 11-503 of this title, for its taxable year 47 ending within or with the taxable year of the corporation, to the extent 48 that such credits do not reduce such unincorporated business's tax below 49 zero, and (ii) a fraction, the numerator of which is the net total of 50 the corporation's distributive share of income, gain, loss and 51 deductions of, and guaranteed payments from, the unincorporated business 52 for such taxable year, and the denominator of which is the sum, for such 53 taxable year, of the net total distributive shares of income, gain, loss 54 and deductions of, and guaranteed payments to, all partners in the unin- 55 corporated business for whom or which such net total, as separately 56 determined for each partner, is greater than zero.

S. 8578 627

1 (2) The amount determined in this subparagraph is the product of (i) 2 the excess of (A) the tax computed under clause (i) of subparagraph one 3 of paragraph (e) of subdivision one of this section, without allowance 4 of any credits allowed by this section, over (B) the tax so computed, 5 determined as if the corporation had no such distributive share or guar- 6 anteed payments with respect to the unincorporated business, and (ii) a 7 fraction, the numerator of which is four and the denominator of which is 8 eight and eighty-five one-hundredths, except that in the case of a 9 financial corporation as defined in clause (i) of subparagraph one of 10 paragraph (e) of subdivision one of this section, such denominator is 11 nine, and in the case of a taxpayer that is subject to paragraph (j) or 12 (k) of subdivision one of this section, such denominator shall be the 13 rate of tax as determined by such paragraph (j) or (k) for the taxable 14 year; provided that the amounts computed in subclauses (A) and (B) of 15 clause (i) of this subparagraph shall be computed with the following 16 modifications: 17 (A) such amounts shall be computed without taking into account any 18 carryforward or carryback by the partner of a net operating loss or a 19 prior net operation loss conversion subtraction; 20 (B) if, prior to taking into account any distributive share or guaran- 21 teed payments from any unincorporated business or any net operating loss 22 carryforward or carryback, the entire net income of the partner is less 23 than zero, such entire net income shall be treated as zero; and 24 (C) if such partner's net total distributive share of income, gain, 25 loss and deductions of, and guaranteed payments from, any unincorporated 26 business is less than zero, such net total shall be treated as zero. The 27 amount determined in this subparagraph shall not be less than zero. 28 (b) (1) Notwithstanding anything to the contrary in paragraph (a) of 29 this subdivision, in the case of a corporation that, before the applica- 30 tion of this subdivision or any other credit allowed by this section, is 31 liable for the tax on business income under clause (i) of subparagraph 32 one of paragraph (e) of subdivision one of this section, the credit or 33 the sum of the credits that may be taken by such corporation for a taxa- 34 ble year under this subdivision with respect to an unincorporated busi- 35 ness or unincorporated businesses in which it is a partner shall not 36 exceed the tax so computed, without allowance of any credits allowed by 37 this section, multiplied by a fraction the numerator of which is four 38 and the denominator of which is eight and eighty-five one-hundredths, 39 except that in the case of a financial corporation as defined in clause 40 (i) of subparagraph one of paragraph (e) of subdivision one of this 41 section, such denominator is nine, and in the case of a taxpayer that is 42 subject to paragraph (j) or (k) of subdivision one of this section, such 43 denominator shall be the rate of tax as determined by such paragraph (j) 44 or (k) for the taxable year. If the credit allowed under this subdivi- 45 sion or the sum of such credits exceeds the product of such tax and such 46 fraction, the amount of the excess may be carried forward, in order, to 47 each of the seven immediately succeeding taxable years and, to the 48 extent not previously taken, shall be allowed as a credit in each of 49 such years. In applying such provisions, the credit determined for the 50 taxable year under paragraph (a) of this subdivision shall be taken 51 before taking any credit carryforward pursuant to this paragraph and the 52 credit carryforward attributable to the earliest taxable year shall be 53 taken before taking a credit carryforward attributable to a subsequent 54 taxable year. 55 (2) Intentionally omitted.

S. 8578 628

1 (2-a) Notwithstanding any other provision of this subdivision to the 2 contrary, in the case of a taxpayer that has received, in a taxable year 3 beginning before January first, two thousand fifteen, the credit set 4 forth in subdivision eighteen of section 11-604 of this chapter or in 5 section 11-643.8 of this chapter for a tax paid under chapter five of 6 this title in a taxable year beginning before January first, two thou- 7 sand fifteen, the taxpayer may carry forward the unused portion of such 8 credit under this subdivision to any taxable year beginning on or after 9 January first, two thousand fifteen in the same amount and to the same 10 extent, including the same limitations, that the credit, or the unused 11 portion thereof, would have been allowed to be carried forward under 12 subparagraph one of paragraph (b) of subdivision eighteen of section 13 11-604 of this chapter or paragraph one of subdivision (b) of section 14 11-643.8 of this chapter, as in effect on December thirty-first, two 15 thousand fourteen, if such subdivision continued to apply to the taxpay- 16 er for such taxable year. 17 (3) No credit allowed under this subdivision may be taken in a taxable 18 year by a taxpayer that, in the absence of such credit, would be liable 19 for the tax computed on the basis of business capital under clause (ii) 20 of subparagraph one of paragraph (e) of subdivision one of this section 21 or the fixed-dollar minimum tax under clause (iv) of subparagraph one of 22 paragraph (e) of subdivision one of this section. 23 (c) For corporations that file a report on a combined basis pursuant 24 to section 11-654.3 of this subchapter, the credit allowed by this 25 subdivision shall be computed as if the combined group were the partner 26 in each unincorporated business from which any of the members of such 27 group had a distributive share or guaranteed payments, provided, howev- 28 er, if more than one member of the combined group is a partner in the 29 same unincorporated business, for purposes of the calculation required 30 in subparagraph one of paragraph (a) of this subdivision, the numerator 31 of the fraction described in clause (ii) of such subparagraph one shall 32 be the sum of the net total distributive shares of income, gain, loss 33 and deductions of, and guaranteed payments from, the unincorporated 34 business of all of the partners of the unincorporated business within 35 the combined group for which such net total, as separately determined 36 for each partner, is greater than zero, and the denominator of such 37 fraction shall be the sum of the net total distributive shares of 38 income, gain, loss and deductions of, and guaranteed payments from, the 39 unincorporated business of all partners in the unincorporated business 40 for whom or which such net total, as separately determined for each 41 partner, is greater than zero. 42 (d) Notwithstanding any other provision of this subchapter, the credit 43 allowable under this subdivision shall be taken prior to the taking of 44 any other credit allowed by this section. Notwithstanding any other 45 provision of this subchapter, the application of this subdivision shall 46 not change the basis on which the taxpayer's tax is computed under para- 47 graph (e) of subdivision one of this section. 48 19. Lower Manhattan relocation and employment assistance credit. (a) 49 In addition to any other credit allowed by this section, a taxpayer that 50 has obtained the certifications required by chapter six-C of title twen- 51 ty-two of the code of the preceding municipality shall be allowed a 52 credit against the tax imposed by this subchapter. The amount of the 53 credit shall be the amount determined by multiplying three thousand 54 dollars by the number of eligible aggregate employment shares maintained 55 by the taxpayer during the taxable year with respect to eligible prem- 56 ises to which the taxpayer has relocated; provided, however, that no

S. 8578 629

1 credit shall be allowed for the relocation of any retail activity or 2 hotel services; provided, further, that no credit shall be allowed under 3 this subdivision to any taxpayer that has elected pursuant to subdivi- 4 sion (d) of section 22-624 of the code of the preceding municipality to 5 take such credit against a gross receipts tax imposed under chapter 6 eleven of this title. For purposes of this subdivision, the terms 7 "eligible aggregate employment shares," "eligible premises," "relocate," 8 "retail activity" and "hotel services" shall have the meanings ascribed 9 by section 22-623 of the code of the preceding municipality. 10 (b) The credit allowed under this subdivision with respect to eligible 11 aggregate employment shares maintained with respect to eligible premises 12 to which the taxpayer has relocated shall be allowed for the taxable 13 year of the relocation and for any of the twelve succeeding taxable 14 years during which eligible aggregate employment shares are maintained 15 with respect to eligible premises; provided that the credit allowed for 16 the twelfth succeeding taxable year shall be calculated by multiplying 17 the number of eligible aggregate employment shares maintained with 18 respect to eligible premises in the twelfth succeeding taxable year by 19 the lesser of one and a fraction the numerator of which is such number 20 of days in the taxable year of relocation less the number of days the 21 taxpayer maintained employment shares in eligible premises in the taxa- 22 ble year of relocation and the denominator of which is the number of 23 days in such twelfth taxable year during which such eligible aggregate 24 employment shares are maintained with respect to such premises. 25 (c) Except as provided in paragraph (d) of this subdivision, if the 26 amount of the credit allowable under this subdivision for any taxable 27 year exceeds the tax imposed for such year, the excess may be carried 28 over, in order, to the five immediately succeeding taxable years and, to 29 the extent not previously deductible, may be deducted from the taxpay- 30 er's tax for such years. 31 (d) The credits allowed under this subdivision, against the tax 32 imposed by this chapter for the taxable year of the relocation and for 33 the four taxable years immediately succeeding the taxable year of such 34 relocation, shall be deemed to be overpayments of tax by the taxpayer to 35 be credited or refunded, without interest, in accordance with the 36 provisions of section 11-677 of this chapter. For such taxable years, 37 such credits or portions thereof may not be carried over to any succeed- 38 ing taxable year. 39 (e) The credit allowable under this subdivision shall be deducted 40 after the credits allowed by subdivisions seventeen and eighteen of this 41 section, but prior to the deduction of any other credit allowed by this 42 section. 43 (f) Notwithstanding any other provision of this subdivision to the 44 contrary, in the case of a taxpayer that has obtained, pursuant to chap- 45 ter six-C of title twenty-two of the code of the preceding municipality, 46 a certification of eligibility and has received, in a taxable year 47 beginning before January first, two thousand fifteen, the credit set 48 forth in subdivision nineteen of section 11-604 of this chapter or 49 section 11-643.9 of this chapter for the relocation of an eligible busi- 50 ness, a credit shall be allowed under this subdivision to the taxpayer 51 for any taxable year beginning on or after January first, two thousand 52 fifteen in the same amount and to the same extent that a credit would 53 have been allowed under subdivision nineteen of section 11-604 of this 54 chapter or section 11-643.9 of this chapter, as in effect on December 55 thirty-first, two thousand fourteen, if such subdivision continued to 56 apply to the taxpayer for such taxable year.

S. 8578 630

1 20. Intentionally omitted. 2 21. Biotechnology credit. (a) (1) A taxpayer that is a qualified 3 emerging technology company, engages in biotechnologies, and meets the 4 eligibility requirements of this subdivision, shall be allowed a credit 5 against the tax imposed by this subchapter. The amount of credit shall 6 be equal to the sum of the amounts specified in subparagraphs three, 7 four and five of this paragraph, subject to the limitations in subpara- 8 graphs six and seven of this paragraph, paragraph (b) of this subdivi- 9 sion, and paragraph three of subdivision (d) of section twelve hundred 10 one-a of the tax law. For the purposes of this subdivision, "qualified 11 emerging technology company" shall mean a company located in the city: 12 (i) whose primary products or services are classified as emerging tech- 13 nologies and whose total annual product sales are ten million dollars or 14 less; or 15 (ii) a company that has research and development activities in the 16 city and whose ratio of research and development funds to net sales 17 equals or exceeds the average ratio for all surveyed companies classi- 18 fied as determined by the National Science Foundation in the most recent 19 published results from its Survey of Industry Research and Development, 20 or any comparable successor survey as determined by the department of 21 finance, and whose total annual product sales are ten million dollars or 22 less. For the purposes of this subdivision, the definition of research 23 and development funds shall be the same as that used by the National 24 Science Foundation in the aforementioned survey. For the purposes of 25 this subdivision, "biotechnologies" shall mean the technologies involv- 26 ing the scientific manipulation of living organisms, especially at the 27 molecular and/or the sub-molecular genetic level, to produce products 28 conducive to improving the lives and health of plants, animals, and 29 humans; and the associated scientific research, pharmacological, mechan- 30 ical, and computational applications and services connected with these 31 improvements. Activities included with such applications and services 32 shall include, but not be limited to, alternative mRNA splicing, DNA 33 sequence amplification, antigenetic switching bioaugmentation, bioen- 34 richment, bioremediation, chromosome walking, cytogenetic engineering, 35 DNA diagnosis, fingerprinting, and sequencing, electroporation, gene 36 translocation, genetic mapping, site-directed mutagenesis, bio-transduc- 37 tion, bio-mechanical and bio-electrical engineering, and bio-informat- 38 ics. 39 (2) An eligible taxpayer shall (i) have no more than one hundred full- 40 time employees, of which at least seventy-five percent are employed in 41 the city, (ii) have a ratio of research and development funds to net 42 sales, as referred to in section thirty-one hundred two-e of the public 43 authorities law, which equals or exceeds six percent during the calendar 44 year ending with or within the taxable year for which the credit is 45 claimed, and (iii) have gross revenues, along with the gross revenues of 46 its "affiliates" and "related members" not exceeding twenty million 47 dollars for the calendar year immediately preceding the calendar year 48 ending with or within the taxable year for which the credit is claimed. 49 For the purposes of this subdivision, "affiliates" shall mean those 50 corporations that are members of the same affiliated group, as defined 51 in section fifteen hundred four of the internal revenue code, as the 52 taxpayer. For the purposes of this subdivision, the term "related 53 members" shall mean a person, corporation, or other entity, including an 54 entity that is treated as a partnership or other pass-through vehicle 55 for purposes of federal taxation, whether such person, corporation or 56 entity is a taxpayer or not, where one such person, corporation or enti-

S. 8578 631

1 ty, or set of related persons, corporations or entities, directly or 2 indirectly owns or controls a controlling interest in another entity. 3 Such entity or entities may include all taxpayers under chapters five, 4 eleven and seventeen of this title, and this subchapter and subchapters 5 two and three of this chapter. A controlling interest shall mean, in the 6 case of a corporation, either thirty percent or more of the total 7 combined voting power of all classes of stock of such corporation, or 8 thirty percent or more of the capital, profits or beneficial interest in 9 such voting stock of such corporation; and in the case of a partnership, 10 association, trust or other entity, thirty percent or more of the capi- 11 tal, profits or beneficial interest in such partnership, association, 12 trust or other entity. 13 (3) An eligible taxpayer shall be allowed a credit for eighteen per 14 centum of the cost or other basis for federal income tax purposes of 15 research and development property that is acquired by the taxpayer by 16 purchase as defined in subsection (d) of section one hundred seventy- 17 nine of the internal revenue code and placed in service during the 18 calendar year that ends with or within the taxable year for which the 19 credit is claimed. Provided, however, for the purposes of this paragraph 20 only, an eligible taxpayer shall be allowed a credit for such percentage 21 of the (i) cost or other basis for federal income tax purposes for prop- 22 erty used in the testing or inspection of materials and products, (ii) 23 the costs or expenses associated with quality control of the research 24 and development, (iii) fees for use of sophisticated technology facili- 25 ties and processes, and (iv) fees for the production or eventual commer- 26 cial distribution of materials and products resulting from the activ- 27 ities of an eligible taxpayer as long as such activities fall under 28 activities relating to biotechnologies. The costs, expenses and other 29 amounts for which a credit is allowed and claimed under this paragraph 30 shall not be used in the calculation of any other credit allowed under 31 this subchapter. For the purposes of this subdivision, "research and 32 development property" shall mean property that is used for purposes of 33 research and development in the experimental or laboratory sense. Such 34 purposes shall not be deemed to include the ordinary testing or 35 inspection of materials or products for quality control, efficiency 36 surveys, management studies, consumer surveys, advertising, promotions, 37 or research in connection with literary, historical or similar projects. 38 (4) An eligible taxpayer shall be allowed a credit for nine per centum 39 of qualified research expenses paid or incurred by the taxpayer in the 40 calendar year that ends with or within the taxable year for which the 41 credit is claimed. For the purposes of this subdivision, "qualified 42 research expenses" shall mean expenses associated with in-house research 43 and processes, and costs associated with the dissemination of the 44 results of the products that directly result from such research and 45 development activities; provided, however, that such costs shall not 46 include advertising or promotion through media. In addition, costs asso- 47 ciated with the preparation of patent applications, patent application 48 filing fees, patent research fees, patent examinations fees, patent post 49 allowance fees, patent maintenance fees, and grant application expenses 50 and fees shall qualify as qualified research expenses. In no case shall 51 the credit allowed under this subparagraph apply to expenses for liti- 52 gation or the challenge of another entity's intellectual property 53 rights, or for contract expenses involving outside paid consultants. 54 (5) An eligible taxpayer shall be allowed a credit for qualified high- 55 technology training expenditures as described in this subparagraph paid

S. 8578 632

1 or incurred by the taxpayer during the calendar year that ends with or 2 within the taxable year for which the credit is claimed. 3 (i) The amount of credit shall be one hundred percent of the training 4 expenses described in clause (iii) of this subparagraph, subject to a 5 limitation of no more than four thousand dollars per employee per calen- 6 dar year for such training expenses. 7 (ii) Qualified high-technology training shall include a course or 8 courses taken and satisfactorily completed by an employee of the taxpay- 9 er at an accredited, degree granting post-secondary college or universi- 10 ty in the city that (A) directly relates to biotechnology activities, 11 and (B) is intended to upgrade, retrain or improve the productivity or 12 theoretical awareness of the employee. Such course or courses may 13 include, but are not limited to, instruction or research relating to 14 techniques, meta, macro, or micro-theoretical or practical knowledge 15 bases or frontiers, or ethical concerns related to such activities. Such 16 course or courses shall not include classes in the disciplines of 17 management, accounting or the law or any class designed to fulfill the 18 discipline specific requirements of a degree program at the associate, 19 baccalaureate, graduate or professional level of these disciplines. 20 Satisfactory completion of a course or courses shall mean the earning 21 and granting of credit or equivalent unit, with the attainment of a 22 grade of "B" or higher in a graduate level course or courses, a grade of 23 "C" or higher in an undergraduate level course or courses, or a similar 24 measure of competency for a course that is not measured according to a 25 standard grade formula. 26 (iii) Qualified high-technology training expenditures shall include 27 expenses for tuition and mandatory fees, software required by the insti- 28 tution, fees for textbooks or other literature required by the institu- 29 tion offering the course or courses, minus applicable scholarships and 30 tuition or fee waivers not granted by the taxpayer or any affiliates of 31 the taxpayer, that are paid or reimbursed by the taxpayer. Qualified 32 high-technology expenditures do not include room and board, computer 33 hardware or software not specifically assigned for such course or cours- 34 es, late-charges, fines or membership dues and similar expenses. Such 35 qualified expenditures shall not be eligible for the credit provided by 36 this section unless the employee for whom the expenditures are disbursed 37 is continuously employed by the taxpayer in a full-time, full-year posi- 38 tion primarily located at a qualified site during the period of such 39 coursework and lasting through at least one hundred eighty days after 40 the satisfactory completion of the qualifying course-work. Qualified 41 high-technology training expenditures shall not include expenses for 42 in-house or shared training outside of a city higher education institu- 43 tion or the use of consultants outside of credit granting courses, 44 whether such consultants function inside of such higher education insti- 45 tution or not. 46 (iv) If a taxpayer relocates from an academic business incubator 47 facility partnered with an accredited post-secondary education institu- 48 tion located within the city, which provides space and business support 49 services to taxpayers, to another site, the credit provided in this 50 subdivision shall be allowed for all expenditures referenced in clause 51 (iii) of this subparagraph paid or incurred in the two preceding calen- 52 dar years that the taxpayer was located in such an incubator facility 53 for employees of the taxpayer who also relocate from said incubator 54 facility to such city site and are employed and primarily located by the 55 taxpayer in the city. Such expenditures in the two preceding years shall 56 be added to the amounts otherwise qualifying for the credit provided by

S. 8578 633

1 this subdivision that were paid or incurred in the calendar year that 2 the taxpayer relocates from such a facility. Such expenditures shall 3 include expenses paid for an eligible employee who is a full-time, full- 4 year employee of said taxpayer during the calendar year that the taxpay- 5 er relocated from an incubator facility notwithstanding (A) that such 6 employee was employed full or part-time as an officer, staff-person or 7 paid intern of the taxpayer when such taxpayer was located at such incu- 8 bator facility or (B) that such employee was not continuously employed 9 when such taxpayer was located at the incubator facility during the one 10 hundred eighty day period referred to in clause (iii) of this subpara- 11 graph, provided such employee received wages or equivalent income for at 12 least seven hundred fifty hours during any twenty-four month period when 13 the taxpayer was located at the incubator facility. Such expenditures 14 shall include payments made to such employee after the taxpayer has 15 relocated from the incubator facility for qualified expenditures if such 16 payments are made to reimburse an employee for expenditures paid by the 17 employee during such two preceding years. The credit provided under 18 this paragraph shall be allowed in any taxable year that the taxpayer 19 qualifies as an eligible taxpayer. 20 (v) For purposes of this subdivision the term "academic year" shall 21 mean the annual period of sessions of a post-secondary college or 22 university. 23 (vi) For the purposes of this subdivision the term "academic incubator 24 facility" shall mean a facility providing low-cost space, technical 25 assistance, support services and educational opportunities, including 26 but not limited to central services provided by the manager of the 27 facility to the tenants of the facility, to an entity located in the 28 city. Such entity's primary activity must be in biotechnologies, and 29 such entity must be in the formative stage of development. The academic 30 incubator facility and the entity must act in partnership with an 31 accredited post-secondary college or university located in the city. An 32 academic incubator facility's mission shall be to promote job creation, 33 entrepreneurship, technology transfer, and provide support services to 34 incubator tenants, including, but not limited to, business planning, 35 management assistance, financial-packaging, linkages to financing 36 services, and coordinating with other sources of assistance. 37 (6) An eligible taxpayer may claim credits under this subdivision for 38 three consecutive years. In no case shall the credit allowed by this 39 subdivision to a taxpayer exceed two hundred fifty thousand dollars per 40 calendar year for eligible expenditures made during such calendar year. 41 (7) The credit allowed under this subdivision for any taxable year 42 shall not reduce the tax due for such year to less than the amount 43 prescribed in clause (iv) of subparagraph one of paragraph (e) of subdi- 44 vision one of this section. Provided, however, if the amount of credit 45 allowed under this subdivision for any taxable year reduces the tax to 46 such amount, any amount of credit not deductible in such taxable year 47 shall be treated as an overpayment of tax to be credited or refunded in 48 accordance with the provisions of section 11-677 of this chapter; 49 provided, however, that notwithstanding the provisions of section 11-679 50 of this chapter, no interest shall be paid thereon. 51 (8) The credit allowed under this subdivision shall only be allowed 52 for taxable years beginning before January first, two thousand nineteen. 53 (b) (1) The percentage of the credit allowed to a taxpayer under this 54 subdivision in any calendar year shall be: 55 (i) If the average number of individuals employed full time by a 56 taxpayer in the city during the calendar year that ends with or within

S. 8578 634

1 the taxable year for which the credit is claimed is at least one hundred 2 five percent of the taxpayer's base year employment, one hundred 3 percent, except that in no case shall the credit allowed under this 4 clause exceed two hundred fifty thousand dollars per calendar year. 5 Provided, however, the increase in base year employment shall not apply 6 to a taxpayer allowed a credit under this subdivision that was, (A) 7 located outside of the city, (B) not doing business, or (C) did not have 8 any employees, in the year preceding the first year that the credit is 9 claimed. Any such taxpayer shall be eligible for one hundred percent of 10 the credit for the first calendar year that ends with or within the 11 taxable year for which the credit is claimed, provided that such taxpay- 12 er locates in the city, begins doing business in the city or hires 13 employees in the city during such calendar year and is otherwise eligi- 14 ble for the credit pursuant to the provisions of this subdivision. 15 (ii) If the average number of individuals employed full time by a 16 taxpayer in the city during the calendar year that ends with or within 17 the taxable year for which the credit is claimed is less than one 18 hundred five percent of the taxpayer's base year employment, fifty 19 percent, except that in no case shall the credit allowed under this 20 clause exceed one hundred twenty-five thousand dollars per calendar 21 year. In the case of an entity located in the city receiving space and 22 business support services by an academic incubator facility, if the 23 average number of individuals employed full time by such entity in the 24 city during the calendar year in which the credit allowed under this 25 subdivision is claimed is less than one hundred five percent of the 26 taxpayer's base year employment, the credit shall be zero. 27 (2) For the purposes of this subdivision, "base year employment" means 28 the average number of individuals employed full-time by the taxpayer in 29 the city in the year preceding the first calendar year that ends with or 30 within the taxable year for which the credit is claimed. 31 (3) For the purposes of this subdivision, average number of individ- 32 uals employed full-time shall be computed by adding the number of such 33 individuals employed by the taxpayer at the end of each quarter during 34 each calendar year or other applicable period and dividing the sum so 35 obtained by the number of such quarters occurring within such calendar 36 year or other applicable period. 37 (4) Notwithstanding anything contained in this section to the contra- 38 ry, the credit provided by this subdivision shall be allowed against the 39 taxes authorized by this chapter for the taxable year after reduction by 40 all other credits permitted by this chapter. 41 (c) Notwithstanding any other provision of this subdivision to the 42 contrary, in the case of a taxpayer that has received, in a taxable year 43 beginning before January first, two thousand fifteen, the credit set 44 forth in subdivision twenty-one of section 11-604 of this chapter for an 45 eligible acquisition of property and/or expense paid or incurred, a 46 credit shall be allowed to the taxpayer under this subdivision for any 47 tax year beginning on or after January first, two thousand fifteen in 48 the same amount and to the same extent that a credit would have been 49 allowed under subdivision twenty-one of section 11-604 of this chapter, 50 as in effect on December thirty-first, two thousand fourteen, if such 51 subdivision continued to apply to the taxpayer for such taxable year. 52 22. Beer production credit. (a) A taxpayer subject to tax under this 53 subchapter, that is registered as a distributor under article eighteen 54 of the tax law, and that produces sixty million or fewer gallons of beer 55 in this state in the taxable year, shall be allowed a credit against the 56 tax imposed by this subchapter in the amount specified in paragraph (b)

S. 8578 635

1 of this subdivision. Provided, however, that no credit shall be allowed 2 for any beer produced in excess of fifteen million five hundred thousand 3 gallons in the taxable year. Notwithstanding anything in this title to 4 the contrary, if a partnership is allowed a credit under subdivision (p) 5 of section 11-503 of this title, a taxpayer that is a partner in such 6 partnership shall not be allowed a credit under this subdivision for any 7 taxable year that includes the last day of the taxable year for which 8 the partnership is allowed such credit. 9 (b) The amount of the credit per taxpayer per taxable year for each 10 gallon of beer produced in the city of New York on or after January 11 first, two thousand seventeen shall be determined as follows: 12 (1) for the first five hundred thousand gallons of beer produced in 13 the city of New York in the taxable year, the credit shall equal twelve 14 cents per gallon; and 15 (2) for each gallon of beer produced in the city of New York in the 16 taxable year in excess of five hundred thousand gallons, the credit 17 shall equal three and eighty-six one-hundredths cents per gallon. In no 18 event shall the credit allowed under this subdivision for any taxable 19 year reduce the tax due for such year to less than the amount prescribed 20 in subparagraph one of paragraph (e) of subdivision one of this section. 21 However, if the amount of credit allowed under this subdivision for any 22 taxable year reduces the tax to such amount, any amount of credit thus 23 not deductible in such taxable year shall be treated as an overpayment 24 of tax to be credited or refunded in accordance with the provisions of 25 section 11-677 of this chapter; provided, however, that notwithstanding 26 the provisions of section 11-679 of this chapter, no interest shall be 27 paid thereon. 28 23. Credit for the provision of child care. In addition to any other 29 credit allowed under this section, a taxpayer whose application for a 30 credit authorized by section 11-144 of this title has been approved by 31 the department of finance shall be allowed a credit against the tax 32 imposed by this chapter. The amount of the credit shall be determined as 33 provided in such section. To the extent the amount of the credit allowed 34 by this subdivision exceeds the amount of tax due pursuant to this 35 subchapter, as calculated without such credit, such excess amount shall 36 be treated as an overpayment of tax to be credited or refunded in 37 accordance with the provisions of section 11-677 of this chapter, 38 provided, however, that notwithstanding the requirements of section 39 11-679 of this chapter to the contrary, no interest shall be paid there- 40 on. 41 § 11-654.1 Net operating loss. 1. In computing the business income 42 subject to tax, taxpayers shall be allowed both a prior net operating 43 loss conversion subtraction under subdivision two of this section and a 44 net operating loss deduction under subdivision three of this section. 45 The prior net operating loss conversion subtraction computed under 46 subdivision two of this section shall be applied against business income 47 before the net operating loss deduction computed under subdivision three 48 of this section. 49 2. Prior net operating loss conversion subtraction. (a) Definitions. 50 (1) "Base year" means the last taxable year beginning on or after Janu- 51 ary first, two thousand fourteen and before January first, two thousand 52 fifteen. 53 (2) "Unabsorbed net operating loss" means the unabsorbed portion of 54 net operating loss as calculated under paragraph (f) of subdivision 55 eight of section 11-602 of this chapter or subdivision (k-1) of section 56 11-641 of this chapter, as such sections were in effect on December

S. 8578 636

1 thirty-first, two thousand fourteen, that was not deductible in previous 2 taxable years and was eligible for carryover on the last day of the base 3 year subject to the limitations for deduction under such sections, 4 including any net operating loss sustained by the taxpayer during the 5 base year. 6 (3) "Base year BAP" means the taxpayer's business allocation percent- 7 age as calculated under paragraph (a) of subdivision three of section 8 11-604 of this chapter for the base year, or the taxpayer's allocation 9 percentage as calculated under section 11-642 of this chapter for 10 purposes of calculating entire net income for the base year, as such 11 sections were in effect on December thirty-first, two thousand fourteen. 12 (4) "Base year tax rate" means the taxpayer's tax rate for the base 13 year as applied to entire net income and calculated under subdivision 14 one of section 11-604 of this chapter or subdivision (a) of section 15 11-643.5 of this chapter, as such provisions were in effect on December 16 thirty-first, two thousand fourteen. 17 (b) The prior net operating loss conversion subtraction shall be 18 calculated as follows: 19 (1) The taxpayer shall first calculate the tax value of its unabsorbed 20 net operating loss for the base year. The value is equal to the product 21 of (i) the amount of the taxpayer's unabsorbed net operating loss, (ii) 22 the taxpayer's base year BAP, and (iii) the taxpayer's base year tax 23 rate. 24 (2) The product determined under subparagraph one of this paragraph 25 shall then be divided by eight and eighty-five one-hundredths per centum 26 or, in the case of a financial corporation, as defined in clause (i) of 27 subparagraph one of paragraph (e) of subdivision one of section 11-654 28 of this subchapter, the product determined under subparagraph one of 29 this paragraph shall then be divided by nine per centum. This result 30 shall equal the taxpayer's prior net operating loss conversion 31 subtraction pool. 32 (3) The taxpayer's prior net operating loss conversion subtraction for 33 the taxable year shall equal one-tenth of its prior net operating loss 34 conversion subtraction pool, plus any amount of unused prior net operat- 35 ing loss conversion subtraction from preceding taxable years. 36 (4) In lieu of the prior net operating loss conversion subtraction 37 described in subparagraph three of this paragraph, if the taxpayer so 38 elects, the taxpayer's prior net operating loss conversion subtraction 39 for its taxable years beginning on or after January first, two thousand 40 fifteen and before January first, two thousand seventeen shall equal, in 41 each year, not more than one-half of its prior net operating loss 42 conversion subtraction pool until the pool is exhausted. If the pool is 43 not exhausted at the end of such time period, the remainder of the pool 44 shall be forfeited. The taxpayer shall make such election, which shall 45 be revocable, on its first return for the tax year beginning on or after 46 January first, two thousand fifteen and before January first, two thou- 47 sand sixteen by the due date for such return, determined with regard to 48 extensions. 49 (c) (1) Where a taxpayer was properly included or required to be 50 included in a combined report for the base year pursuant to section 51 11-605 of this chapter or a combined return for the base year pursuant 52 to section 11-646 of this chapter, as such sections were in effect on 53 December thirty-first, two thousand fourteen, and the members of the 54 combined group for the base year are the same as the members of the 55 combined group for the taxable year immediately succeeding the base 56 year, the combined group shall calculate its prior net operating loss

S. 8578 637

1 conversion subtraction pool using the combined group's total unabsorbed 2 net operating loss, base year BAP, and base year tax rate. 3 (2) If a combined group includes additional members in the taxable 4 year immediately succeeding the base year that were not included in the 5 combined group during the base year, each base year combined group and 6 each taxpayer that filed separately for the base year but is included in 7 the combined group in the taxable year succeeding the base year shall 8 calculate its prior net operating loss conversion subtraction pool, and 9 the sum of the pools shall be the combined prior net operating loss 10 conversion subtraction pool of the combined group. 11 (3) If a taxpayer was properly included in a combined report for the 12 base year and files a separate report for a subsequent taxable year, 13 then the amount of remaining prior net operating loss conversion 14 subtraction allowed to the taxpayer filing such separate report shall be 15 proportionate to the amount that such taxpayer contributed to the prior 16 net operating loss conversion subtraction pool on a combined basis, and 17 the remaining prior net operating loss conversion subtraction allowed to 18 the remaining members of the combined group shall be reduced according- 19 ly. 20 (4) If a taxpayer filed a separate report for the base year and is 21 properly included in a combined report for a subsequent taxable year, 22 then the prior net operating loss conversion subtraction pool of the 23 combined group shall be increased by the amount of the remaining prior 24 net operating loss conversion subtraction allowed to the taxpayer at the 25 time the taxpayer is properly included in the combined group. 26 (d) The prior net operating loss conversion subtraction may be used to 27 reduce the taxpayer's tax on allocated business income to the higher of 28 the tax on business capital under clause (ii) of subparagraph one of 29 paragraph (e) of subdivision one of section 11-654 of this subchapter or 30 the fixed dollar minimum under clause (iv) of subparagraph one of para- 31 graph (e) of subdivision one of section 11-654 of this subchapter. 32 Unless the taxpayer has made the election provided for in subparagraph 33 four of paragraph (b) of this subdivision, any amount of unused prior 34 net operating loss conversion subtraction shall be carried forward to a 35 subsequent tax year or subsequent tax years until the prior net operat- 36 ing loss conversion subtraction pool is exhausted, but for no longer 37 than twenty taxable years or the taxable year beginning on or after 38 January first, two thousand thirty-five but before January first, two 39 thousand thirty-six, whichever comes first. Such amount carried forward 40 shall not be subject to the one-tenth limitation for the subsequent tax 41 year or years under subparagraph three of paragraph (b) of this subdivi- 42 sion. However, if the taxpayer elects to compute its prior net operat- 43 ing loss conversion subtraction pursuant to subparagraph four of para- 44 graph (b) of this subdivision, the taxpayer shall not carry forward any 45 unused amount of such prior net operating loss conversion subtraction to 46 any tax year beginning on or after January first, two thousand seven- 47 teen. 48 3. In computing business income, a net operating loss deduction shall 49 be allowed. A net operating loss deduction shall be the amount of net 50 operating loss or losses from one or more taxable years that are carried 51 forward or carried back to a particular taxable year. A net operating 52 loss shall be the amount of a business loss incurred in a particular tax 53 year multiplied by the business allocation percentage for that year as 54 determined under subdivision three of section 11-654 of this subchapter. 55 The maximum net operating loss deduction that is allowed in a taxable 56 year shall be the amount that reduces the taxpayer's tax on allocated

S. 8578 638

1 business income to the higher of the tax on business capital under 2 clause (ii) of subparagraph one of paragraph (e) of subdivision one of 3 section 11-654 of this subchapter or the fixed dollar minimum amount 4 under clause (iv) of subparagraph one of paragraph (e) of subdivision 5 one of section 11-654 of this subchapter. Such net operating loss 6 deduction and net operating loss shall be determined in accordance with 7 the following: 8 (a) Such net operating loss deduction shall not be limited to the 9 amount allowed under section one hundred seventy-two of the internal 10 revenue code or the amount that would have been allowed if the taxpayer 11 did not have an election under subchapter S of chapter one of the inter- 12 nal revenue code in effect for the applicable tax year. 13 (b) Such net operating loss deduction shall not include any net oper- 14 ating loss incurred during any taxable year beginning prior to January 15 first, two thousand fifteen, or during any taxable year in which the 16 taxpayer was not subject to the tax imposed by this subchapter. 17 (c) A taxpayer that files as part of a federal consolidated return but 18 on a separate basis for purposes of this subchapter shall compute its 19 deduction and loss as if it were filing on a separate basis for federal 20 income tax purposes. 21 (d) A net operating loss may be carried back three taxable years 22 preceding the taxable year of the loss except that no loss may be 23 carried back to a taxable year beginning before January first, two thou- 24 sand fifteen. The loss first shall be carried to the earliest of the 25 three taxable years preceding the taxable year of the loss. If it is not 26 entirely used in that year, it shall be carried to the second taxable 27 year preceding the taxable year of the loss, and any remaining amount 28 shall be carried to the taxable year immediately preceding the taxable 29 year of the loss. Any unused amount of loss then remaining may be 30 carried forward for as many as twenty taxable years following the taxa- 31 ble year of the loss. Losses carried forward are carried forward first 32 to the taxable year immediately following the taxable year of the loss, 33 then to the second taxable year following the taxable year of the loss, 34 and then to the next immediately subsequent taxable year or years until 35 the loss is used up or the twentieth taxable year following the taxable 36 year of the loss, whichever comes first. 37 (e) Such net operating loss deduction shall not include any net oper- 38 ating loss incurred during any taxable year commencing after January 39 first, two thousand fifteen if the taxpayer was subject to tax under 40 subchapter two or three of this chapter in that year; provided, however, 41 any year commencing after January first, two thousand fifteen that the 42 taxpayer was subject to tax under subchapter two or three of this chap- 43 ter in that year must be treated as a taxable year for purposes of 44 determining the number of taxable years to which a net operating loss 45 may be carried forward. 46 (f) Where there are two or more allocated net operating losses, or 47 portions thereof, carried back or carried forward to be deducted in one 48 particular tax year from allocated business income, the earliest allo- 49 cated loss incurred must be applied first. 50 (g) A taxpayer may elect to waive the entire carryback period with 51 respect to a net operating loss. Such election must be made on the 52 taxpayer's original timely filed return, determined with regard to 53 extensions, for the taxable year of the net operating loss for which the 54 election is to be in effect. Once an election is made for a taxable 55 year, it shall be irrevocable for that taxable year. A separate election

S. 8578 639

1 must be made for each taxable year of the loss. This election applies to 2 all members of a combined group. 3 § 11-654.2 Receipts allocation. 1. The percentage of receipts of the 4 taxpayer to be allocated to the city for purposes of subparagraph two of 5 paragraph (a) of subdivision three of section 11-654 of this subchapter 6 shall be equal to the receipts fraction determined pursuant to this 7 section. The receipts fraction is a fraction, determined by including 8 only those receipts, net income, net gains, and other items described in 9 this section that are included in the computation of the taxpayer's 10 business income, determined without regard to the modification provided 11 in subparagraph fourteen of paragraph (a) of subdivision eight of 12 section 11-652 of this subchapter, for the taxable year. The numerator 13 of the receipts fraction shall be equal to the sum of all the amounts 14 required to be included in the numerator pursuant to the provisions of 15 this section and the denominator of the receipts fraction shall be equal 16 to the sum of all the amounts required to be included in the denominator 17 pursuant to the provisions of this section. 18 2. (a) Receipts from sales of tangible personal property where ship- 19 ments are made to points within the city or the destination of the prop- 20 erty is a point within the city shall be included in the numerator of 21 the receipts fraction. Receipts from sales of tangible personal property 22 where shipments are made to points within and without the city or the 23 destination is within and without the city shall be included in the 24 denominator of the receipts fraction. 25 (b) Receipts from sales of electricity delivered to points within the 26 city shall be included in the numerator of the receipts fraction. 27 Receipts from sales of electricity delivered to points within and with- 28 out the city shall be included in the denominator of the receipts frac- 29 tion. 30 (c) Receipts from sales of tangible personal property and electricity 31 that are traded as commodities as the term "commodity" is defined in 32 section four hundred seventy-five of the internal revenue code, shall be 33 included in the receipts fraction in accordance with clause (ix) of 34 subparagraph two of paragraph (a) of subdivision five of this section. 35 (d) Net gains, not less than zero, from the sales of real property 36 located within the city shall be included in the numerator of the 37 receipts fraction. Net gains, not less than zero, from the sales of real 38 property located within and without the city shall be included in the 39 denominator of the receipts fraction. 40 3. (a) Receipts from rentals of real and tangible personal property 41 located within the city shall be included in the numerator of the 42 receipts fraction. Receipts from rentals of real and tangible personal 43 property located within and without the city shall be included in the 44 denominator of the receipts fraction. 45 (b) Receipts of royalties from the use of patents, copyrights, trade- 46 marks, and similar intangible personal property within the city shall be 47 included in the numerator of the receipts fraction. Receipts of royal- 48 ties from the use of patents, copyrights, trademarks, and similar intan- 49 gible personal property within and without the city shall be included in 50 the denominator of the receipts fraction. A patent, copyright, trade- 51 mark, or similar intangible personal property is used within the city to 52 the extent that the activities thereunder are carried on within the 53 city. 54 (c) Receipts from the sales of rights for closed-circuit and cable 55 television transmissions of an event, other than events occurring on a 56 regularly scheduled basis, taking place within the city as a result of

S. 8578 640

1 the rendition of services by employees of the corporation, as athletes, 2 entertainers or performing artists, shall be included in the numerator 3 of the receipts fraction to the extent that such receipts are attribut- 4 able to such transmissions received or exhibited within the city. 5 Receipts from all sales of rights for closed-circuit and cable tele- 6 vision transmissions of an event, other than events occurring on a regu- 7 larly scheduled basis, shall be included in the denominator of the 8 receipts fraction. 9 4. (a) For purposes of determining the receipts fraction under this 10 section, the term "digital product" means any property or service, or 11 combination thereof, of whatever nature delivered to the purchaser 12 through the use of wire, cable, fiber-optic, laser, microwave, radio 13 wave, satellite or similar successor media, or any combination thereof. 14 Digital product includes, but is not limited to, an audio work, audi- 15 ovisual work, visual work, book or literary work, graphic work, game, 16 information or entertainment service, storage of digital products and 17 computer software by whatever means delivered. The term "delivered to" 18 includes furnished or provided to or accessed by. A digital product 19 shall not include legal, medical, accounting, architectural, research, 20 analytical, engineering or consulting services provided by the taxpayer. 21 (b) Receipts from the sale of, license to use, or granting of remote 22 access to digital products within the city, determined according to the 23 hierarchy of methods set forth in subparagraphs one through four of 24 paragraph (c) of this subdivision, shall be included in the numerator of 25 the receipts fraction. Receipts from the sale of, license to use, or 26 granting of remote access to digital products within and without the 27 city shall be included in the denominator of the receipts fraction. The 28 taxpayer must exercise due diligence under each method described in 29 paragraph (c) of this subdivision before rejecting it and proceeding to 30 the next method in the hierarchy, and must base its determination on 31 information known to the taxpayer or information that would be known to 32 the taxpayer upon reasonable inquiry. If the receipt for a digital prod- 33 uct is comprised of a combination of property and services, it cannot be 34 divided into separate components and shall be considered to be one 35 receipt regardless of whether it is separately stated for billing 36 purposes. The entire receipt must be allocated by this hierarchy. 37 (c) The hierarchy of sourcing methods is as follows: (1) the custom- 38 er's primary use location of the digital product; (2) the location where 39 the digital product is received by the customer, or is received by a 40 person designated for receipt by the customer; (3) the receipts fraction 41 determined pursuant to this subdivision for the preceding taxable year 42 for such digital product; or (4) the receipts fraction in the current 43 taxable year for those digital products that can be sourced using the 44 hierarchy of sourcing methods in subparagraphs one and two of this para- 45 graph. 46 5. (a) A financial instrument is a "nonqualified financial instrument" 47 if it is not a qualified financial instrument. A qualified financial 48 instrument means a financial instrument that is of a type described in 49 any of clauses (i), (ii), (iii), (iv), (vii), (viii) or (ix) of subpara- 50 graph two of this paragraph and that has been marked to market in the 51 taxable year by the taxpayer under section four hundred seventy-five or 52 section one thousand two hundred fifty-six of the internal revenue code. 53 Further, if the taxpayer has in the taxable year marked to market a 54 financial instrument of the type described in any of clauses (i), (ii), 55 (iii), (iv), (vii), (viii) or (ix) of subparagraph two of this para- 56 graph, then any financial instrument within that type described in the

S. 8578 641

1 above specified clause or clauses that has not been marked to market by 2 the taxpayer under section four hundred seventy-five or section one 3 thousand two hundred fifty-six of the internal revenue code is a quali- 4 fied financial instrument in the taxable year, provided, however, (i) a 5 loan secured by real property shall not be a qualified financial instru- 6 ment, (ii) if the only loans that are marked to market by the taxpayer 7 under section four hundred seventy-five or section one thousand two 8 hundred fifty-six of the internal revenue code are loans secured by real 9 property, then no loans shall be qualified financial instruments, (iii) 10 stock that is investment capital as defined in paragraph (a) of subdivi- 11 sion four of section 11-652 of this subchapter shall not be a qualified 12 financial instrument, and (iv) stock that generates other exempt income 13 as defined in subdivision five-a of section 11-652 of this subchapter 14 and that is not marked to market under section four hundred seventy-five 15 or section one thousand two hundred fifty-six of the internal revenue 16 code shall not constitute a qualified financial instrument with respect 17 to the income from that stock that is described in such subdivision 18 five-a. If a corporation is included in a combined report, the defi- 19 nition of qualified financial instrument shall be determined on a 20 combined basis. In the case of RIC or a REIT that is not a captive RIC 21 or a captive REIT, a qualified financial instrument means a financial 22 instrument that is of a type described in any of clauses (i), (ii), 23 (iii), (iv), (vii), (viii) or (ix) of subparagraph two of this para- 24 graph, other than (i) a loan secured by real property, (ii) stock that 25 is investment capital as defined in paragraph (a) of subdivision four of 26 section 11-652 of this subchapter, and (iii) stock that generates other 27 exempt income as defined in subdivision five-a of section 11-652 of this 28 subchapter with respect to the income from that stock that is described 29 in such subdivision five-a. 30 (1) In determining the inclusion of receipts and net gains from quali- 31 fied financial instruments in the receipts fraction, taxpayers may elect 32 to use the fixed percentage method described in this subparagraph for 33 qualified financial instruments. The election is irrevocable, applies to 34 all qualified financial instruments, and must be made on an annual basis 35 on the taxpayer's original, timely filed return, determined with regard 36 to extensions. If the taxpayer elects the fixed percentage method, then 37 all income, gain or loss, including marked to market net gains as 38 defined in clause (x) of subparagraph two of this paragraph, from quali- 39 fied financial instruments constitute business income, gain or loss. If 40 the taxpayer does not elect to use the fixed percentage method, then 41 receipts and net gains are included in the receipts fraction in accord- 42 ance with the customer sourcing method described in subparagraph two of 43 this paragraph. Under the fixed percentage method, eight percent of all 44 net income, not less than zero, from qualified financial instruments 45 shall be included in the numerator of the receipts fraction. All net 46 income, not less than zero, from qualified financial instruments shall 47 be included in the denominator of the receipts fraction. 48 (2) Receipts and net gains from qualified financial instruments, in 49 cases where the taxpayer did not elect to use the fixed percentage meth- 50 od described in subparagraph one of this paragraph, and from nonquali- 51 fied financial instruments shall be included in the receipts fraction in 52 accordance with this subparagraph. For purposes of this paragraph, an 53 individual is deemed to be located within the city if his or her billing 54 address is within the city. A business entity is deemed to be located 55 within the city if its commercial domicile is located within the city.

S. 8578 642

1 (i)(A) Receipts constituting interest from loans secured by real prop- 2 erty located within the city shall be included in the numerator of the 3 receipts fraction. Receipts constituting interest from loans secured by 4 real property located within and without the city shall be included in 5 the denominator of the receipts fraction. 6 (B) Receipts constituting interest from loans not secured by real 7 property shall be included in the numerator of the receipts fraction if 8 the borrower is located within the city. Receipts constituting interest 9 from loans not secured by real property, whether the borrower is located 10 within or without the city, shall be included in the denominator of the 11 receipts fraction. 12 (C) Net gains, not less than zero, from sales of loans secured by real 13 property shall be included in the numerator of the receipts fraction as 14 provided in this subclause. The amount of net gains from the sales of 15 loans secured by real property included in the numerator of the receipts 16 fraction shall be determined by multiplying the net gains by a fraction, 17 the numerator of which shall be the amount of gross proceeds from sales 18 of loans secured by real property located within the city and the denom- 19 inator of which shall be the gross proceeds from sales of loans secured 20 by real property located within and without the city. Gross proceeds 21 shall be determined after the deduction of any cost incurred to acquire 22 the loans but shall not be less than zero. Net gains, not less than 23 zero, from sales of loans secured by real property located within and 24 without the city shall be included in the denominator of the receipts 25 fraction. 26 (D) Net gains, not less than zero, from sales of loans not secured by 27 real property shall be included in the numerator of the receipts frac- 28 tion as provided in this subclause. The amount of net gains from the 29 sales of loans not secured by real property included in the numerator of 30 the receipts fraction shall be determined by multiplying the net gains 31 by a fraction, the numerator of which shall be the amount of gross 32 proceeds from sales of loans not secured by real property to purchasers 33 located within the city and the denominator of which shall be the amount 34 of gross proceeds from sales of loans not secured by real property to 35 purchasers located within and without the city. Gross proceeds shall be 36 determined after the deduction of any cost incurred to acquire the loans 37 but shall not be less than zero. Net gains, not less than zero, from 38 sales of loans not secured by real property shall be included in the 39 denominator of the receipts fraction. 40 (E) For purposes of this subdivision, a loan is secured by real prop- 41 erty if fifty percent or more of the value of the collateral used to 42 secure the loan, when valued at fair market value as of the time the 43 loan was entered into, consists of real property. 44 (ii) Federal, state, and municipal debt. Receipts constituting inter- 45 est and net gains from sales of debt instruments issued by the United 46 States, any state, or political subdivision of a state shall not be 47 included in the numerator of the receipts fraction. Receipts constitut- 48 ing interest and net gains, not less than zero, from sales of debt 49 instruments issued by the United States and the state of New York or its 50 political subdivisions, including the city, shall be included in the 51 denominator of the receipts fraction. Fifty percent of the receipts 52 constituting interest and net gains, not less than zero, from sales of 53 debt instruments issued by other states or their political subdivisions 54 shall be included in the denominator of the receipts fraction. 55 (iii) Asset backed securities and other government agency debt. Eight 56 percent of the interest income from asset backed securities or other

S. 8578 643

1 securities issued by government agencies, including but not limited to 2 securities issued by the government national mortgage association 3 (GNMA), the federal national mortgage association (FNMA), the federal 4 home loan mortgage corporation (FHLMC), or the small business adminis- 5 tration, or eight percent of the interest income from asset backed secu- 6 rities issued by other entities shall be included in the numerator of 7 the receipts fraction. Eight percent of the net gains, not less than 8 zero, from (A) sales of asset backed securities or other securities 9 issued by government agencies, including but not limited to securities 10 issued by GNMA, FNMA, FHLMC, or the small business administration, or 11 (B) sales of other asset backed securities that are sold through a 12 registered securities broker or dealer or through a licensed exchange, 13 shall be included in the numerator of the receipts fraction. The amount 14 of net gains, not less than zero, from sales of other asset backed secu- 15 rities not referenced in subclause (A) or (B) of this clause included in 16 the numerator of the receipts fraction shall be determined by multiply- 17 ing such net gains by a fraction, the numerator of which shall be the 18 amount of gross proceeds from such sales to purchasers located in the 19 city and the denominator of which shall be the amount of gross proceeds 20 from such sales to purchasers located within and without the city. 21 Receipts constituting interest income from asset backed securities and 22 other securities referenced in this clause and net gains, not less than 23 zero, from sales of asset backed securities and other securities refer- 24 enced in this clause shall be included in the denominator of the 25 receipts fraction. Gross proceeds shall be determined after the 26 deduction of any cost to acquire the securities but shall not be less 27 than zero. 28 (iv) Receipts constituting interest from corporate bonds shall be 29 included in the numerator of the receipts fraction if the commercial 30 domicile of the issuing corporation is within the city. Eight percent of 31 the net gains, not less than zero, from sales of corporate bonds sold 32 through a registered securities broker or dealer or through a licensed 33 exchange shall be included in the numerator of the receipts fraction. 34 The amount of net gains, not less than zero, from other sales of corpo- 35 rate bonds included in the numerator of the receipts fraction shall be 36 determined by multiplying such net gains by a fraction, the numerator of 37 which is the amount of gross proceeds from such sales to purchasers 38 located within the city and the denominator of which is the amount of 39 gross proceeds from sales to purchasers located within and without the 40 city. Receipts constituting interest from corporate bonds, whether the 41 issuing corporation's commercial domicile is within or without the city, 42 and net gains, not less than zero, from sales of corporate bonds to 43 purchasers within and without the city shall be included in the denomi- 44 nator of the receipts fraction. Gross proceeds shall be determined after 45 the deduction of any cost to acquire the bonds but shall not be less 46 than zero. 47 (v) Eight percent of net interest income, not less than zero, from 48 reverse repurchase agreements and securities borrowing agreements shall 49 be included in the numerator of the receipts fraction. Net interest 50 income, not less than zero, from reverse repurchase agreements and secu- 51 rities borrowing agreements shall be included in the denominator of the 52 receipts fraction. Net interest income from reverse repurchase agree- 53 ments and securities borrowing agreements shall be determined for 54 purposes of this subdivision after the deduction of the interest expense 55 from the taxpayer's repurchase agreements and securities lending agree- 56 ments but shall not be less than zero. For this calculation, the amount

S. 8578 644

1 of such interest expense shall be the interest expense associated with 2 the sum of the value of the taxpayer's repurchase agreements where it is 3 the seller/borrower plus the value of the taxpayer's securities lending 4 agreements where it is the securities lender, provided such sum is 5 limited to the sum of the value of the taxpayer's reverse repurchase 6 agreements where it is the purchaser/lender plus the value of the 7 taxpayer's securities lending agreements where it is the securities 8 borrower. 9 (vi) Eight percent of the net interest, not less than zero, from 10 federal funds shall be included in the numerator of the receipts frac- 11 tion. The net interest, not less than zero, from federal funds shall be 12 included in the denominator of the receipts fraction. Net interest from 13 federal funds shall be determined after deduction of interest expense 14 from federal funds. 15 (vii) Dividends from stock, net gains, not less than zero, from sales 16 of stock and net gains, not less than zero, from sales of partnership 17 interests shall not be included in either the numerator or denominator 18 of the receipts fraction unless the commissioner of finance determines 19 pursuant to subdivision eleven of this section that inclusion of such 20 dividends and net gains, not less than zero, is necessary to properly 21 reflect the business income or capital of the taxpayer. 22 (viii)(A) Receipts constituting interest from other financial instru- 23 ments shall be included in the numerator of the receipts fraction if the 24 payor is located within the city. Receipts constituting interest from 25 other financial instruments, whether the payor is within or without the 26 city, shall be included in the denominator of the receipts fraction. 27 (B) Net gains, not less than zero, from sales of other financial 28 instruments and other income, not less than zero, from other financial 29 instruments where the purchaser or payor is located within the city 30 shall be included in the numerator of the receipts fraction, provided 31 that, if the purchaser or payor is a registered securities broker or 32 dealer or the transaction is made through a licensed exchange, then 33 eight percent of the net gains, not less than zero, or other income, not 34 less than zero, shall be included in the numerator of the receipts frac- 35 tion. Net gains, not less than zero, from sales of other financial 36 instruments and other income, not less than zero, from other financial 37 instruments shall be included in the denominator of the receipts frac- 38 tion. 39 (ix) Net income, not less than zero, from sales of physical commod- 40 ities shall be included in the numerator of the receipts fraction as 41 provided in this clause. The amount of net income from sales of physical 42 commodities included in the numerator of the receipts fraction shall be 43 determined by multiplying the net income from sales of physical commod- 44 ities by a fraction, the numerator of which shall be the amount of 45 receipts from sales of physical commodities actually delivered to points 46 within the city or, if there is no actual delivery of the physical 47 commodity, sold to purchasers located within the city, and the denomina- 48 tor of which shall be the amount of receipts from sales of physical 49 commodities actually delivered to points within and without the city or, 50 if there is no actual delivery of the physical commodity, sold to 51 purchasers located within and without the city. Net income, not less 52 than zero, from sales of physical commodities shall be included in the 53 denominator of the receipts fraction. Net income, not less than zero, 54 from sales of physical commodities shall be determined after the 55 deduction of the cost to acquire or produce the physical commodities.

S. 8578 645

1 (x)(A) For purposes of this subdivision, "marked to market" means that 2 a financial instrument is, under section four hundred seventy-five or 3 section twelve hundred fifty-six of the internal revenue code, treated 4 by the taxpayer as sold for its fair market value on the last business 5 day of the taxpayer's taxable year. "Marked to market gain or loss" 6 means the gain or loss recognized by the taxpayer under section four 7 hundred seventy-five or section twelve hundred fifty-six of the internal 8 revenue code because the financial instrument is treated as sold for its 9 fair market value on the last business day of the taxpayer's taxable 10 year. 11 (B) The amount of marked to market net gains, not less than zero, from 12 each type of financial instrument that is marked to market included in 13 the numerator of the receipts fraction shall be determined by multiply- 14 ing the marked to market net gains, not less than zero, from such type 15 of financial instrument by a fraction, the numerator of which shall be 16 the numerator of the receipts fraction for net gains from that type of 17 financial instrument determined under the applicable clause of this 18 subparagraph and the denominator of which shall be the denominator of 19 the receipts fraction for net gains from that type of financial instru- 20 ment determined under the applicable clause of this subparagraph. Marked 21 to market net gains, not less than zero, from financial instruments for 22 which the numerator of the receipts fraction for net gains is determined 23 under this subparagraph shall be included in the denominator of the 24 receipts fraction. 25 (C) If the type of financial instrument that is marked to market is 26 not otherwise sourced by the taxpayer under this subparagraph, or if the 27 taxpayer has a net loss from the sales of that type of financial instru- 28 ment under the applicable clause of this subparagraph, the amount of 29 marked to market net gains, not less than zero, from that type of finan- 30 cial instrument included in the numerator of the receipts fraction shall 31 be determined by multiplying the marked to market net gains, but not 32 less than zero, from that type of financial instrument by a fraction, 33 the numerator of which shall be the sum of the amount of receipts 34 included in the numerator of the receipts fraction under clauses (i) 35 through (ix) of this subparagraph and subclause (B) of this clause, and 36 the denominator of which shall be the sum of the amount of receipts 37 included in the denominator of the receipts fraction under clauses (i) 38 through (ix) of this subparagraph and subclause (B) of this clause. 39 Marked to market net gains, not less than zero, for which the amount to 40 be included in the numerator of the receipts fraction is determined 41 under this subparagraph shall be included in the denominator of the 42 receipts fraction. 43 (b) Receipts of a registered securities broker or dealer from securi- 44 ties or commodities broker or dealer activities described in this para- 45 graph shall be deemed to be generated within the city as described in 46 subparagraphs one through eight of this paragraph. Receipts from such 47 activities generated within the city shall be included in the numerator 48 of the receipts fraction. Receipts from such activities generated within 49 and without the city shall be included in the denominator of the 50 receipts fraction. For the purposes of this paragraph, the term "securi- 51 ties" shall have the same meaning as in paragraph two of subsection (c) 52 of section four hundred seventy-five of the internal revenue code and 53 the term "commodities" shall have the same meaning as in paragraph two 54 of subsection (e) of section four hundred seventy-five of the internal 55 revenue code.

S. 8578 646

1 (1) Receipts constituting brokerage commissions derived from the 2 execution of securities or commodities purchase or sales orders for the 3 accounts of customers shall be deemed to be generated within the city if 4 the mailing address in the records of the taxpayer of the customer who 5 is responsible for paying such commissions is within the city. 6 (2) Receipts constituting margin interest earned on behalf of broker- 7 age accounts shall be deemed to be generated within the city if the 8 mailing address in the records of the taxpayer of the customer who is 9 responsible for paying such margin interest is within the city. 10 (3) (i) Receipts constituting fees earned by the taxpayer for advisory 11 services to a customer in connection with the underwriting of securities 12 for such customer, such customer being the entity that is contemplating 13 issuing or is issuing securities, or fees earned by the taxpayer for 14 managing an underwriting shall be deemed to be generated within the city 15 if the mailing address in the records of the taxpayer of such customer 16 who is responsible for paying such fees is within the city. 17 (ii) Receipts constituting the primary spread of selling concession 18 from underwritten securities shall be deemed to be generated within the 19 city if the customer is located within the city. 20 (iii) The term "primary spread" means the difference between the price 21 paid by the taxpayer to the issuer of the securities being marketed and 22 the price received from the subsequent sale of the underwritten securi- 23 ties at the initial public offering price, less any selling concession 24 and any fees paid to the taxpayer for advisory services or any manager's 25 fees, if such fees are not paid by the customer to the taxpayer sepa- 26 rately. The term "public offering price" means the price agreed upon by 27 the taxpayer and the issuer at which the securities are to be offered to 28 the public. The term "selling concession" means the amount paid to the 29 taxpayer for participating in the underwriting of a security where the 30 taxpayer is not the lead underwriter. 31 (4) Receipts constituting account maintenance fees shall be deemed to 32 be generated within the city if the mailing address in the records of 33 the taxpayer of the customer who is responsible for paying such account 34 maintenance fees is within the city. 35 (5) Receipts constituting fees for management or advisory services, 36 including fees for advisory services in relation to merger or acquisi- 37 tion activities, but excluding fees paid for services described in para- 38 graph (d) of this subdivision, shall be deemed to be generated within 39 the city if the mailing address in the records of the taxpayer of the 40 customer who is responsible for paying such fees is within the city. 41 (6) Receipts constituting interest earned by the taxpayer on loans and 42 advances made by the taxpayer to a corporation affiliated with the 43 taxpayer but with which the taxpayer is not permitted or required to 44 file a combined report pursuant to section 11-654.3 of this subchapter 45 shall be deemed to arise from services performed at the principal place 46 of business of such affiliated corporation. 47 (7) If the taxpayer receives any of the receipts enumerated in subpar- 48 agraphs one through four of this paragraph as a result of a securities 49 correspondent relationship such taxpayer has with another broker or 50 dealer with the taxpayer acting in this relationship as the clearing 51 firm, such receipts shall be deemed to be generated within the city to 52 the extent set forth in each of such subparagraphs. The amount of such 53 receipts shall exclude the amount the taxpayer is required to pay to the 54 correspondent firm for such correspondent relationship. If the taxpayer 55 receives any of the receipts enumerated in subparagraphs one through 56 four of this paragraph as a result of a securities correspondent

S. 8578 647

1 relationship such taxpayer has with another broker or dealer with the 2 taxpayer acting in this relationship as the introducing firm, such 3 receipts shall be deemed to be generated within the city to the extent 4 set forth in each of such subparagraphs. 5 (8) If, for the purposes of subparagraph one, subparagraph two, clause 6 (i) of subparagraph three, subparagraph four, or subparagraph five of 7 this paragraph, the taxpayer is unable from its records to determine the 8 mailing address of the customer, eight percent of the receipts shall be 9 included in the numerator of the receipts fraction. 10 (c) Receipts relating to the bank, credit, travel, and entertainment 11 card activities described in this paragraph shall be deemed to be gener- 12 ated within the city as described in subparagraphs one through four of 13 this paragraph. Receipts from such activities generated within the city 14 shall be included in the numerator of the receipts fraction. Receipts 15 from such activities generated within and without the city shall be 16 included in the denominator of the receipts fraction. 17 (1) Receipts constituting interest, and fees and penalties in the 18 nature of interest, from bank, credit, travel and entertainment card 19 receivables shall be deemed to be generated within the city if the mail- 20 ing address of the card holder in the records of the taxpayer is within 21 the city; 22 (2) Receipts from service charges and fees from such cards shall be 23 deemed to be generated within the city if the mailing address of the 24 card holder in the records of the taxpayer is within the city; 25 (3) Receipts from merchant discounts shall be deemed to be generated 26 within the city if the merchant is located within the city. In the case 27 of a merchant with locations both within and without the city, only 28 receipts from merchant discounts attributable to sales made from 29 locations within the city are allocated to the city. It shall be 30 presumed that the location of the merchant is the address of the 31 merchant shown on the invoice submitted by the merchant to the taxpayer; 32 and 33 (4) Receipts from credit card authorization processing, and clearing 34 and settlement processing received by a credit card processor shall be 35 deemed to be generated within the city if the location where the credit 36 card processor's customer accesses the credit card processor's network 37 is located within the city. The amount of all other receipts received by 38 a credit card processor not specifically addressed in subdivisions one 39 through nine or subdivision twelve of this section deemed to be gener- 40 ated within the city shall be determined by multiplying the total amount 41 of such other receipts by the average of (i) eight percent and (ii) the 42 percent of Staten Island access points. The percent of Staten Island 43 access points shall be the number of locations in Staten Island from 44 which the credit card processor's customers access the credit card 45 processor's network divided by the total number of locations in the 46 United States where the credit card processor's customers access the 47 credit card processor's network. 48 (d) Receipts received from an investment company arising from the sale 49 of management, administration or distribution services to such invest- 50 ment company shall be included in the denominator of the receipts frac- 51 tion. The portion of such receipts included in the numerator of the 52 receipts fraction, such portion referred to herein as the Staten Island 53 portion, shall be determined as provided in this paragraph. 54 (1) The Staten Island portion shall be the product of the total of 55 such receipts from the sale of such services and a fraction. The numera- 56 tor of that fraction shall be the sum of the monthly percentages, as

S. 8578 648

1 defined hereinafter, determined for each month of the investment compa- 2 ny's taxable year for federal income tax purposes which taxable year 3 ends within the taxable year of the taxpayer, but excluding any month 4 during which the investment company had no outstanding shares. The 5 monthly percentage for each such month shall be determined by dividing 6 the number of shares in the investment company that are owned on the 7 last day of the month by shareholders that are located in the city by 8 the total number of shares in the investment company outstanding on that 9 date. The denominator of the fraction shall be the number of such month- 10 ly percentages. 11 (2)(i) For purposes of this paragraph, an individual, estate or trust 12 shall be deemed to be located within the city if his, her or its mailing 13 address in the records of the investment company is located within the 14 city. A business entity is deemed to be located within the city if its 15 commercial domicile is located within the city. 16 (ii) For purposes of this paragraph, the term "investment company" 17 means a regulated investment company, as defined in section eight 18 hundred fifty-one of the internal revenue code, and a partnership to 19 which subsection (a) of section seven thousand seven hundred four of the 20 internal revenue code applies, by virtue of paragraph three of 21 subsection (c) of section seven thousand seven hundred four of such 22 code, and that meets the requirements of subsection (b) of section eight 23 hundred fifty-one of such code. The provisions of this subparagraph 24 shall be applied to the taxable year for federal income tax purposes of 25 the business entity that is asserted to constitute an investment company 26 that ends within the taxable year of the taxpayer. 27 (iii) For purposes of this paragraph, the term "receipts received from 28 an investment company" includes amounts received directly from an 29 investment company as well as amounts received from the shareholders in 30 such investment company, in their capacity as such. 31 (iv) For purposes of this paragraph, the term "management services" 32 means the rendering of investment advice to an investment company, 33 making determinations as to when sales and purchases of securities are 34 to be made on behalf of an investment company, or the selling or 35 purchasing of securities constituting assets of an investment company, 36 and related activities, but only where such activity or activities are 37 performed pursuant to a contract with the investment company entered 38 into pursuant to subsection (a) of section fifteen of the federal 39 investment company act of nineteen hundred forty, as amended. 40 (v) For purposes of this paragraph, the term "distribution services" 41 means the services of advertising, servicing investor accounts, includ- 42 ing redemptions, marketing shares or selling shares of an investment 43 company, but, in the case of advertising, servicing investor accounts, 44 including redemptions, or marketing shares, only where such service is 45 performed by a person who is, or was, in the case of a closed end compa- 46 ny, also engaged in the service of selling such shares. In the case of 47 an open end company, such service of selling shares must be performed 48 pursuant to a contract entered into pursuant to subsection (b) of 49 section fifteen of the federal investment company act of nineteen 50 hundred forty, as amended. 51 (vi) For purposes of this paragraph, the term "administration 52 services" includes clerical, accounting, bookkeeping, data processing, 53 internal auditing, legal and tax services performed for an investment 54 company but only if the provider of such service or services during the 55 taxable year in which such service or services are sold also sells

S. 8578 649

1 management or distribution services, as defined in subparagraph (v) of 2 this paragraph, to such investment company. 3 (e) For purposes of this subdivision, a taxpayer shall use the follow- 4 ing hierarchy to determine the commercial domicile of a business entity, 5 based on the information known to the taxpayer or information that would 6 be known upon reasonable inquiry: (1) the seat of management and control 7 of the business entity; and (2) the billing address of the business 8 entity in the taxpayer's records. The taxpayer must exercise due dili- 9 gence before rejecting the first method in this hierarchy and proceeding 10 to the next method. 11 (f) For purposes of this subdivision, the term "registered securities 12 broker or dealer" means a broker or dealer registered as such by the 13 securities and exchange commission or a broker or dealer registered as 14 such by the commodities futures trading commission, and shall include an 15 OTC derivatives dealer as defined under regulations of the securities 16 and exchange commission at title 17, part 240, section 3b-12 of the code 17 of federal regulations (17 CFR 240.3b-12). 18 5-a. Notwithstanding any other provision of this section, net global 19 intangible low-taxed income shall be included in the receipts fraction 20 as provided in this subdivision. Receipts constituting net global intan- 21 gible low-taxed income shall not be included in the numerator of the 22 receipts fraction. Receipts constituting net global intangible low-taxed 23 income shall be included in the denominator of the receipts fraction. 24 For purposes of this subdivision, the term "net global intangible low- 25 taxed income" means the amount required to be included in the taxpayer's 26 federal gross income pursuant to subsection (a) of section nine hundred 27 fifty-one-D of the internal revenue code less the amount of the 28 deduction allowed under clause (i) of subparagraph (B) of paragraph one 29 of subdivision (a) of section two hundred fifty of such code. 30 6. Receipts from the conduct of a railroad business, including surface 31 railroad, whether or not operated by steam, subway railroad, elevated 32 railroad, palace car or sleeping car business, or a trucking business 33 shall be included in the numerator of the receipts fraction as follows. 34 The amount of receipts from the conduct of a railroad business or a 35 trucking business included in the numerator of the receipts fraction 36 shall be determined by multiplying the amount of receipts from such 37 business by a fraction, the numerator of which shall be the miles in 38 such business within the city during the period covered by the taxpay- 39 er's report and the denominator of which shall be the miles in such 40 business within and without the city during such period. Receipts from 41 the conduct of the railroad business or a trucking business shall be 42 included in the denominator of the receipts fraction. 43 7. (a) Receipts of a taxpayer acting as principal from the activity of 44 air freight forwarding and like indirect air carrier receipts arising 45 from such activity shall be included in the numerator of the receipts 46 fraction as follows: one hundred percent of such receipts if both the 47 pickup and delivery associated with such receipts are made within the 48 city and fifty percent of such receipts if either the pickup or delivery 49 associated with such receipts is made within this city. Such receipts, 50 whether the pickup or delivery associated with the receipts is within or 51 without the city, shall be included in the denominator of the receipts 52 fraction. 53 (b)(1)(i) The portion of receipts of a taxpayer from aviation 54 services, other than services described in paragraph (a) of this subdi- 55 vision, but including the receipts of a qualified air freight forwarder, 56 to be included in the numerator of the receipts fraction shall be deter-

S. 8578 650

1 mined by multiplying its receipts from such aviation services by a 2 percentage which is equal to the arithmetic average of the following 3 three percentages: 4 (A) the percentage determined by dividing the aircraft arrivals and 5 departures within the city by the taxpayer during the period covered by 6 its report by the total aircraft arrivals and departures within and 7 without the city during such period; provided, however, arrivals and 8 departures solely for maintenance or repair, refueling, where no debar- 9 kation or embarkation of traffic occurs, arrivals and departures of 10 ferry and personnel training flights or arrivals and departures in the 11 event of emergency situations shall not be included in computing such 12 arrival and departure percentage; provided, further, the commissioner of 13 finance may also exempt from such percentage aircraft arrivals and 14 departures of all non-revenue flights including flights involving the 15 transportation of officers or employees receiving air transportation to 16 perform maintenance or repair services or where such officers or employ- 17 ees are transported in conjunction with an emergency situation or the 18 investigation of an air disaster, other than on a scheduled flight; 19 provided, however, that arrivals and departures of flights transporting 20 officers and employees receiving air transportation for purposes other 21 than specified above, without regard to remuneration, shall be included 22 in computing such arrival and departure percentage; 23 (B) the percentage determined by dividing the revenue tons handled by 24 the taxpayer at airports within the city during such period by the total 25 revenue tons handled by it at airports within and without the city 26 during such period; and 27 (C) the percentage determined by dividing the taxpayer's originating 28 revenue within the city for such period by its total originating revenue 29 within and without the city for such period. 30 (ii) As used herein the term "aircraft arrivals and departures" means 31 the number of landings and takeoffs of the aircraft of the taxpayer and 32 the number of air pickups and deliveries by the aircraft of such taxpay- 33 er; the term "originating revenue" means revenue to the taxpayer from 34 the transportation of revenue passengers and revenue property first 35 received by the taxpayer either as originating or connecting traffic at 36 airports; and the term "revenue tons handled by the taxpayer at 37 airports" means the weight in tons of revenue passengers, at two hundred 38 pounds per passenger, and revenue cargo first received either as origi- 39 nating or connecting traffic or finally discharged by the taxpayer at 40 airports. 41 (2) All such receipts of a taxpayer from aviation services described 42 in this paragraph shall be included in the denominator of the receipts 43 fraction. 44 (3) A corporation is a qualified air freight forwarder with respect to 45 another corporation: 46 (i) if it owns or controls either directly or indirectly all of the 47 capital stock of such other corporation, or if all of its capital stock 48 is owned or controlled either directly or indirectly by such other 49 corporation, or if all of the capital stock of both corporations is 50 owned or controlled either directly or indirectly by the same interests; 51 (ii) if it is principally engaged in the business of air freight 52 forwarding; and 53 (iii) if its air freight forwarding business is carried on principally 54 with the airline or airlines operated by such other corporation. 55 8. (a) The amount of receipts from sales of advertising in newspapers 56 or periodicals included in the numerator of the receipts fraction shall

S. 8578 651

1 be determined by multiplying the total of such receipts by a fraction, 2 the numerator of which shall be the number of newspapers and periodicals 3 delivered to points within the city and the denominator of which shall 4 be the number of newspapers and periodicals delivered to points within 5 and without the city. The total of such receipts from sales of advertis- 6 ing in newspapers or periodicals shall be included in the denominator of 7 the receipts fraction. 8 (b) The amount of receipts from sales of advertising on television or 9 radio included in the numerator of the receipts fraction shall be deter- 10 mined by multiplying the total of such receipts by a fraction, the 11 numerator of which shall be the number of viewers or listeners within 12 the city and the denominator of which shall be the number of viewers or 13 listeners within and without the city. The total of such receipts from 14 sales of advertising on television or radio shall be included in the 15 denominator of the receipts fraction. 16 (c) The amount of receipts from sales of advertising not described in 17 paragraph (a) or (b) of this subdivision that is furnished, provided or 18 delivered to, or accessed by the viewer or listener through the use of 19 wire, cable, fiber-optic, laser, microwave, radio wave, satellite or 20 similar successor media or any combination thereof, included in the 21 numerator of the receipts fraction shall be determined by multiplying 22 the total of such receipts by a fraction, the numerator of which shall 23 be the number of viewers or listeners within the city and the denomina- 24 tor of which shall be the number of viewers or listeners within and 25 without the city. The total of such receipts from sales of advertising 26 described in this paragraph shall be included in the denominator of the 27 receipts fraction. 28 9. Receipts from the transportation or transmission of gas through 29 pipes shall be included in the numerator of the receipts fraction as 30 follows. The amount of receipts from the transportation or transmission 31 of gas through pipes included in the numerator of the receipts fraction 32 shall be determined by multiplying the total amount of such receipts by 33 a fraction, the numerator of which shall be the taxpayer's transporta- 34 tion units within the city and the denominator of which shall be the 35 taxpayer's transportation units within and without the city. A transpor- 36 tation unit is the transportation of one cubic foot of gas over a 37 distance of one mile. The total amount of receipts from the transporta- 38 tion or transmission of gas through pipes shall be included in the 39 denominator of the receipts fraction. 40 10. (a) Receipts from services not addressed in subdivisions one 41 through nine or subdivision twelve of this section and other business 42 receipts not addressed in such subdivisions shall be included in the 43 numerator of the receipts fraction if the location of the customer is 44 within the city. Such receipts from customers within and without the 45 city shall be included in the denominator of the receipts fraction. 46 Whether the receipts are included in the numerator of the receipts frac- 47 tion shall be determined according to the hierarchy of methods set forth 48 in paragraph (b) of this subdivision. The taxpayer must exercise due 49 diligence under each method described in such paragraph before rejecting 50 it and proceeding to the next method in the hierarchy, and must base its 51 determination on information known to the taxpayer or information that 52 would be known to the taxpayer upon reasonable inquiry. 53 (b) The hierarchy of methods is as follows: (1) the benefit is 54 received in the city; (2) delivery destination; (3) the receipts frac- 55 tion for such receipts within the city determined pursuant to this 56 subdivision for the preceding taxable year; or (4) the receipts fraction

S. 8578 652

1 in the current taxable year determined pursuant to this subdivision for 2 those receipts that can be sourced using the hierarchy of sourcing meth- 3 ods in subparagraphs one and two of this paragraph. 4 11. If it shall appear that the receipts fraction determined pursuant 5 to this section does not result in a proper reflection of the taxpayer's 6 business income or capital within the city, the commissioner of finance 7 is authorized in his or her discretion to adjust it, or the taxpayer may 8 request that the commissioner of finance adjust it, by (a) excluding one 9 or more items in such determination, (b) including one or more other 10 items in such determination, or (c) any other similar or different meth- 11 od calculated to effect a fair and proper allocation of the business 12 income and capital reasonably attributed to the city. The party seeking 13 the adjustment shall bear the burden of proof to demonstrate that the 14 receipts fraction determined pursuant to this section does not result in 15 a proper reflection of the taxpayer's business income or capital within 16 the city and that the proposed adjustment is appropriate. 17 12. Receipts from the operation of vessels shall be included in the 18 numerator of the receipts fraction as follows. The amount of receipts 19 from the operation of vessels included in the numerator of the receipts 20 fraction shall be determined by multiplying the amount of such receipts 21 by a fraction, the numerator of which shall be the aggregate number of 22 working days of the vessels owned or leased by the taxpayer in territo- 23 rial waters of the city during the period covered by the taxpayer's 24 report and the denominator of which shall be the aggregate number of 25 working days of all vessels owned or leased by the taxpayer during such 26 period. Receipts from the operation of vessels shall be included in the 27 denominator of the receipts fraction. 28 § 11-654.3 Combined reports. 1. (a) The tax on a combined report shall 29 be the highest of (1) the combined business income multiplied by the tax 30 rate specified in clause (i) of subparagraph one of paragraph (e) of 31 subdivision one of section 11-654 of this subchapter; (2) the combined 32 capital multiplied by the tax rate specified in clause (ii) of subpara- 33 graph one of paragraph (e) of subdivision one of section 11-654 of this 34 subchapter, but not exceeding the limitation provided for in such clause 35 (ii); or (3) the fixed dollar minimum that is attributable to the desig- 36 nated agent of the combined group. In addition, the tax on a combined 37 report shall include the fixed dollar minimum tax specified in clause 38 (iv) of subparagraph one of paragraph (e) of subdivision one of section 39 11-654 of this subchapter for each member of the combined group, other 40 than the designated agent, that is a taxpayer. 41 (b) The combined business income base is the amount of the combined 42 business income of the combined group that is allocated to the city, 43 reduced by any prior net operating loss conversion subtraction and any 44 net operating loss deduction for the combined group. The combined capi- 45 tal base is the amount of the combined capital of the combined group 46 that is allocated to the city. 47 2. (a) Except as provided in paragraph (c) of this subdivision, any 48 taxpayer (1) which owns or controls either directly or indirectly more 49 than fifty percent of the voting power of the capital stock of one or 50 more other corporations, or (2) more than fifty percent of the voting 51 power of the capital stock of which is owned or controlled either 52 directly or indirectly by one or more other corporations, or (3) more 53 than fifty percent of the voting power of the capital stock of which and 54 the capital stock of one or more other corporations, is owned or 55 controlled, directly or indirectly, by the same interests, and (4) that 56 is engaged in a unitary business with those corporations, hereinafter

S. 8578 653

1 referred to as "related corporations", shall make a combined report with 2 those other corporations. 3 (b) A corporation required to make a combined report within the mean- 4 ing of this section shall also include (1) a captive REIT and a captive 5 RIC; (2) a combinable captive insurance company; and (3) an alien corpo- 6 ration that satisfies the conditions in paragraph (a) of this subdivi- 7 sion if (i) under any provision of the internal revenue code, that 8 corporation is treated as a "domestic corporation" as defined in section 9 seven thousand seven hundred one of the internal revenue code, or (ii) 10 it has effectively connected income for the taxable year pursuant to 11 clause (iii) of the opening paragraph of subdivision eight of section 12 11-652 of this subchapter. 13 (c) A corporation required or permitted to make a combined report 14 under this section does not include (1) a corporation that is taxable 15 under a tax imposed by subchapter two or three of this chapter or chap- 16 ter eleven of this title, except for a vendor of utility services that 17 is taxable under both chapter eleven of this title and this subchapter, 18 or would be taxable under a tax imposed by subchapter two or three of 19 this chapter or chapter eleven of this title, except for a vendor of 20 utility services that is taxable under both chapter eleven of this title 21 and this subchapter, or would have been taxable as an insurance corpo- 22 ration under the former part IV, title R, chapter forty-six of the 23 administrative code as in effect on June thirtieth, nineteen hundred 24 seventy-four; (2) a REIT that is not a captive REIT, and a RIC that is 25 not a captive RIC; or (3) an alien corporation that under any provision 26 of the internal revenue code is not treated as a "domestic corporation" 27 as defined in section seven thousand seven hundred one of such code and 28 has no effectively connected income for the taxable year pursuant to 29 clause (iii) of the opening paragraph of subdivision eight of section 30 11-652 of this subchapter. If a corporation is subject to tax under this 31 subchapter solely as a result of its ownership of a limited partner 32 interest in a limited partnership that is doing business, employing 33 capital, owning or leasing property, or maintaining an office in this 34 city, and none of the corporation's related corporations are subject to 35 tax under this subchapter, such corporation shall not be required or 36 permitted to file a combined report under this section with such related 37 corporations. 38 (d) A combined report shall be filed by the designated agent of the 39 combined group as determined under subdivision seven of this section. 40 3. (a) Subject to the provisions of paragraph (c) of subdivision two 41 of this section, a taxpayer may elect to treat as its combined group all 42 corporations that meet the ownership requirements described in paragraph 43 (a) of subdivision two of this section, such corporations collectively 44 referred to in this subdivision as the "commonly owned group". If that 45 election is made, the commonly owned group shall calculate the combined 46 business income, combined business capital, and fixed dollar minimum 47 amount of all members of the group in accordance with paragraph four of 48 this subdivision, whether or not that business income or business capi- 49 tal is from a single unitary business. 50 (b) The election under this subdivision shall be made on an original, 51 timely filed return, determined with regard to extensions, of the 52 combined group. Any corporation entering a commonly owned group subse- 53 quent to the year of election shall be included in the combined group 54 and is considered to have waived any objection to its inclusion in the 55 combined group.

S. 8578 654

1 (c) The election shall be irrevocable, and binding for and applicable 2 to the taxable year for which it is made and for the next six taxable 3 years. The election will automatically be renewed for another seven 4 taxable years after it has been in effect for seven taxable years unless 5 it is affirmatively revoked. The revocation shall be made on an 6 original, timely filed return, determined with regard to extensions, for 7 the first taxable year after the completion of a seven year period for 8 which an election under this subdivision was in place. In the case of a 9 revocation, a new election under this subdivision shall not be permitted 10 in any of the immediately following three taxable years. In determining 11 the seven and three year periods described in this paragraph, short 12 taxable years shall not be considered or counted. 13 4. (a) In computing the tax bases for a combined report, the combined 14 group shall generally be treated as a single corporation, except as 15 otherwise provided, and subject to any regulations or guidance issued by 16 the commissioner of finance or the department of finance. 17 (b)(1) In computing combined business income, all intercorporate divi- 18 dends shall be eliminated, and all other intercorporate transactions 19 shall be deferred in a manner similar to the United States treasury 20 department regulations relating to intercompany transactions under 21 section fifteen hundred two of the internal revenue code. 22 (2) In computing combined capital, all intercorporate stockholdings, 23 intercorporate bills, intercorporate notes receivable and payable, 24 intercorporate accounts receivable and payable, and other intercorporate 25 indebtedness, shall be eliminated. 26 (c) Qualification for credits, including any limitations thereon, 27 shall be determined separately for each of the members of the combined 28 group, and shall not be determined on a combined group basis, except as 29 otherwise provided. However, the credits shall be applied against the 30 combined tax of the group. To the extent that a provision of section 31 11-654 of this subchapter, or any other applicable section of this 32 subchapter, limits a credit to the fixed dollar minimum amount 33 prescribed in clause (iv) of subparagraph one of paragraph (e) of subdi- 34 vision one of section 11-654 of this subchapter, such fixed dollar mini- 35 mum amount shall be the fixed dollar minimum amount that is attributable 36 to the designated agent of the combined group. 37 (d)(1) A net operating loss deduction is allowed in computing the 38 combined business income base. Such deduction may reduce the tax on the 39 combined business income base to the higher of the tax on the combined 40 capital or the fixed dollar minimum amount that is attributable to the 41 designated agent of the combined group. A combined net operating loss 42 deduction is equal to the amount of combined net operating loss or loss- 43 es from one or more taxable years that are carried forward or carried 44 back to a particular taxable year. A combined net operating loss is the 45 combined business loss incurred in a particular taxable year multiplied 46 by the combined business allocation percentage for that year determined 47 as provided in subdivision five of this section. 48 (2) The combined net operating loss deduction and combined net operat- 49 ing loss are also subject to the provisions contained in paragraphs (a) 50 through (g) of subdivision three of section 11-654.1 of this subchapter. 51 (3) In the case of a corporation that files a combined report, either 52 in the year the net operating loss is incurred or in the year in which a 53 deduction is claimed on account of the loss, the combined net operating 54 loss deduction is determined as if the combined group is a single corpo- 55 ration and, to the extent possible and not otherwise inconsistent with 56 this subdivision, is subject to the same limitations that would apply

S. 8578 655

1 for federal income tax purposes under the internal revenue code and the 2 code of federal regulations as if such corporation had filed for such 3 taxable year a consolidated federal income tax return with the same 4 corporations included in the combined report. If a corporation files a 5 combined report, regardless of whether it filed a separate return or 6 consolidated return for federal income tax purposes, the net operating 7 loss and net operating loss deduction for the combined group must be 8 computed as if the corporation had filed a consolidated return for the 9 same corporations for federal income tax purposes. 10 (4) In general, any net operating loss carryover from a year in which 11 a combined report was filed shall be based on the combined net operating 12 loss of the group of corporations filing such report. The portion of the 13 combined loss attributable to any member of the group that files a sepa- 14 rate report for a succeeding taxable year will be an amount bearing the 15 same relation to the combined loss as the net operating loss of such 16 corporation bears to the total net operating loss of all members of the 17 group having such losses to the extent that they are taken into account 18 in computing the combined net operating loss. 19 (d-1) A prior net operating loss conversion subtraction is allowed in 20 computing the combined business income base, as provided in subdivisions 21 one and two of section 11-654.1 of this subchapter. Such subtraction may 22 reduce the tax on combined business income to the higher of the tax on 23 combined capital or the fixed dollar minimum amount that is attributable 24 to the designated agent of the combined group. 25 (e)(i) Any election made pursuant to paragraph (b) of subdivision 26 five, paragraphs (b) and (c) of subdivision five-a of section 11-652 of 27 this subchapter, and paragraph (g) of subdivision three of section 28 11-654.1 of this subchapter shall apply to all members of the combined 29 group. 30 (ii) The determination of whether or not the limitation on investment 31 income provided in subparagraph (iii) of paragraph (a) of subdivision 32 five of section 11-652 of this subchapter to the combined group shall be 33 based on the investment income of the combined group, determined without 34 regard to interest expenses attributable to investment capital or 35 investment income, and the entire net income of the combined group. 36 (f)(1) In the case of a captive REIT or captive RIC required under 37 this section to be included in a combined report, entire net income 38 shall be computed as required under subdivision seven, in the case of a 39 captive REIT, or subdivision eight, in the case of a captive RIC, of 40 section 11-653 of this subchapter. However, the deduction under the 41 internal revenue code for dividends paid by the captive REIT or captive 42 RIC to any member of the affiliated group that includes the corporation 43 that directly or indirectly owns over fifty percent of the voting stock 44 of the captive REIT or captive RIC shall not be allowed. For purposes of 45 this subparagraph, the term "affiliated group" means "affiliated group" 46 as defined in section fifteen hundred four of the internal revenue code, 47 but without regard to the exceptions provided for in subsection (b) of 48 that section. 49 (2) In the case of a combinable captive insurance company required 50 under this section to be included in a combined report, entire net 51 income shall be computed as required by subdivision eight of section 52 11-652 of this subchapter. 53 (g) If more than one member of a combined group is eligible for any of 54 the modifications described in paragraphs (q), (r) or (s) of subdivision 55 eight of section 11-652 of this subchapter, all such members must 56 utilize the same modification.

S. 8578 656

1 5. (a) In determining the business allocation percentage for a 2 combined report, the receipts, net income, net gains and other items of 3 each member of the combined group, whether or not they are a taxpayer, 4 are included and intercorporate receipts, income and gains are elimi- 5 nated. Receipts, net income, net gains and other items are sourced, and 6 the amounts allowed in the receipts fraction are determined, as provided 7 in section 11-654.2 of this subchapter. 8 (b) An election made to allocate income and gains from qualifying 9 financial instruments pursuant to subparagraph one of paragraph (a) of 10 subdivision five of section 11-654.2 of this subchapter shall apply to 11 all members of the combined group. 12 6. Every member of the combined group that is subject to tax under 13 this article shall be jointly and severally liable for the tax due 14 pursuant to a combined report. 15 7. Each combined group shall appoint a designated agent for the 16 combined group, which shall be a taxpayer. Only the designated agent may 17 act on behalf of the members of the combined group for matters relating 18 to the combined report. 19 § 11-655 Reports. 1. Every corporation having an officer, agent or 20 representative within the city, shall annually on or before March 21 fifteenth for taxable years beginning before January first, two thousand 22 sixteen, and annually on or before April fifteenth for taxable years 23 beginning on or after January first, two thousand sixteen, transmit to 24 the commissioner of finance a report in a form prescribed by the commis- 25 sioner of finance, setting forth such information as the commissioner of 26 finance may prescribe, except that a corporation that reports on the 27 basis of a fiscal year shall transmit such report, for taxable years 28 beginning before January first, two thousand sixteen, within two and 29 one-half months after the close of its fiscal year, and, for taxable 30 years beginning after January first, two thousand sixteen, within three 31 and one-half months after the close of its fiscal year. Every taxpayer 32 that ceases to do business in the city or to be subject to the tax 33 imposed by this subchapter shall transmit to the commissioner of finance 34 a report on the date of such cessation or at such other time as the 35 commissioner of finance may require covering each year or period for 36 which no report was theretofore filed. Every taxpayer shall also trans- 37 mit such other reports and such facts and information as the commission- 38 er of finance may require in the administration of this subchapter. The 39 commissioner of finance may grant a reasonable extension of time for 40 filing reports whenever good cause exists. 41 An automatic extension of six months for the filing of its annual 42 report shall be allowed any taxpayer if, within the time prescribed by 43 the opening paragraph of this subdivision, whichever is applicable, such 44 taxpayer files with the commissioner of finance an application for 45 extension in such form as the commissioner of finance may prescribe by 46 regulation and pays on or before the date of such filing the amount 47 properly estimated as its tax. 48 2. Every report shall have annexed thereto a certification by the 49 president, vice-president, treasurer, assistant treasurer, chief 50 accounting officer or another officer of the taxpayer duly authorized so 51 to act to the effect that the statements contained therein are true. In 52 the case of an association, within the meaning of paragraph three of 53 section (a) of section seventy-seven hundred one of the internal revenue 54 code, a publicly-traded partnership treated as a corporation for 55 purposes of the internal revenue code pursuant to section seventy-seven 56 hundred four thereof and any business conducted by a trustee or trustees

S. 8578 657

1 wherein interest or ownership is evidenced by certificates or other 2 written instruments, such certification shall be made by any person duly 3 authorized so to act on behalf of such association, publicly-traded 4 partnership or business. The fact that an individual's name is signed on 5 a certification of the report shall be prima facie evidence that such 6 individual is authorized to sign and certify the report on behalf of the 7 corporation. Blank forms of reports shall be furnished by the commis- 8 sioner of finance, on application, but failure to secure such a blank 9 shall not release any corporation from the obligation of making any 10 report required by this subchapter. 11 2-a. The commissioner of finance may prescribe regulations and 12 instructions requiring returns of information to be made and filed in 13 conjunction with the reports required to be filed pursuant to this 14 section, relating to payments made to shareholders owning, directly or 15 indirectly, individually or in the aggregate, more than fifty percent of 16 the issued capital stock of the taxpayer, where such payments are treat- 17 ed as payments of interest in the computation of entire net income 18 reported on such reports. 19 3. If the amount of taxable income or other basis of tax for any year 20 of any taxpayer as returned to the United States treasury department or 21 the New York state commissioner of taxation and finance is changed or 22 corrected by the commissioner of internal revenue or other officer of 23 the United States or the New York state commissioner of taxation and 24 finance or other competent authority, or where a renegotiation of a 25 contract or subcontract with the United States or the state of New York 26 results in a change in taxable income or other basis of tax, or where a 27 recovery of a war loss results in a computation or recomputation of any 28 tax imposed by the United States or the state of New York, or if a 29 taxpayer, pursuant to subsection (d) of section sixty-two hundred thir- 30 teen of the internal revenue code, executes a notice of waiver of the 31 restrictions provided in subsection (a) of said section, or if a taxpay- 32 er, pursuant to subsection (f) of section one thousand eighty-one of the 33 tax law, executes a notice of waiver of the restrictions provided in 34 subsection (c) of said section, such taxpayer shall report such changed 35 or corrected taxable income or other basis of tax, or the results of 36 such renegotiation, or such computation, or recomputation, or such 37 execution of such notice of waiver and the changes or corrections of the 38 taxpayer's federal or New York state taxable income or other basis of 39 tax on which it is based, within ninety days, or one hundred twenty 40 days, in the case of a taxpayer making a combined report under this 41 subchapter for such year, after such execution or the final determi- 42 nation of such change or correction or renegotiation, or such computa- 43 tion, or recomputation, or as required by the commissioner of finance, 44 and shall concede the accuracy of such determination or state wherein it 45 is erroneous. The allowance of a tentative carryback adjustment based 46 upon a net operating loss carryback or net capital loss carryback pursu- 47 ant to section sixty-four hundred eleven of the internal revenue code 48 shall be treated as a final determination for purposes of this subdivi- 49 sion. Any taxpayer filing an amended return with such department shall 50 also file within ninety days, or one hundred twenty days, in the case of 51 a taxpayer making a combined report under this subchapter for such year, 52 thereafter an amended report with the commissioner of finance. 53 4. The provisions of section 11-654.3 of this subchapter shall apply 54 to combined reports. 55 5. In case it shall appear to the commissioner of finance that any 56 agreement, understanding or arrangement exists between the taxpayer and

S. 8578 658

1 any other corporation or any person or firm, whereby the activity, busi- 2 ness, income or capital of the taxpayer within the city is improperly or 3 inaccurately reflected, the commissioner of finance is authorized and 4 empowered, in its discretion and in such manner as it may determine, to 5 adjust items of income, deductions and capital, and to eliminate assets 6 in computing any allocation percentage provided only that any income 7 directly traceable thereto be also excluded from entire net income, so 8 as equitably to determine the tax. Where (a) any taxpayer conducts its 9 activity or business under any agreement, arrangement or understanding 10 in such manner as either directly or indirectly to benefit its members 11 or stockholders, or any of them, or any person or persons directly or 12 indirectly interested in such activity or business, by entering into any 13 transaction at more or less than a fair price which, but for such agree- 14 ment, arrangement or understanding, might have been paid or received 15 therefor, or (b) any taxpayer, a substantial portion of whose capital 16 stock is owned either directly or indirectly by another corporation, 17 enters into any transaction with such other corporation on such terms as 18 to create an improper loss or net income, the commissioner of finance 19 may include in the entire net income of the taxpayer the fair profits, 20 which, but for such agreement, arrangement or understanding, the taxpay- 21 er might have derived from such transaction. Where any taxpayer owns, 22 directly or indirectly, more than fifty percent of the capital stock of 23 another corporation subject to tax under section fifteen hundred two-a 24 of the tax law and fifty percent or less of whose gross receipts for the 25 taxable year consist of premiums, the commissioner of finance may 26 include in the entire net income of the taxpayer, as a deemed distrib- 27 ution, the amount of the net income of the other corporation that is in 28 excess of its net premium income. 29 6. An action may be brought at any time by the corporation counsel at 30 the instance of the commissioner of finance to compel the filing of 31 reports due under this subchapter. 32 7. Reports shall be preserved for five years, and thereafter until the 33 commissioner of finance orders them to be destroyed. 34 8. Where the New York state commissioner of taxation and finance 35 changes or corrects a taxpayer's sales and compensating use tax liabil- 36 ity with respect to the purchase or use of items for which a sales or 37 compensating use tax credit against the tax imposed by this subchapter 38 was claimed, the taxpayer shall report such change or correction to the 39 commissioner of finance within ninety days of the final determination of 40 such change or correction, or as required by the commissioner of 41 finance, and shall concede the accuracy of such determination or state 42 wherein it is erroneous. Any taxpayer filing an amended return or report 43 relating to the purchase or use of such items shall also file within 44 ninety days thereafter a copy of such amended return or report with the 45 commissioner of finance. 46 § 11-656 Payment and lien of tax. 1. To the extent the tax imposed by 47 section 11-653 of this subchapter shall not have been previously paid 48 pursuant to section 11-658 of this subchapter: 49 (a) such tax, or the balance thereof, shall be payable to the commis- 50 sioner of finance in full at the time the report is required to be 51 filed; and 52 (b) such tax, or the balance thereof, imposed on any taxpayer which 53 ceases to do business in the city or to be subject to the tax imposed by 54 this subchapter shall be payable to the commissioner of finance at the 55 time the report is required to be filed; all other taxes of any such 56 taxpayer, which pursuant to the this subdivision would otherwise be

S. 8578 659

1 payable subsequent to the time such report is required to be filed, 2 shall nevertheless be payable at such time. If the taxpayer, within the 3 time prescribed by section 11-655 of this subchapter, shall have applied 4 for an automatic extension of time to file its annual report and shall 5 have paid to the commissioner of finance on or before the date such 6 application is filed an amount properly estimated as provided by said 7 section, the only amount payable in addition to the tax shall be inter- 8 est at the underpayment rate set by the commissioner of finance pursuant 9 to section 11-687 of this chapter, or, if no rate is set, at the rate of 10 seven and one-half percent per annum upon the amount by which the tax, 11 or the portion thereof payable on or before the date the report was 12 required to be filed, exceeds the amount so paid, provided that: 13 (1) an amount so paid shall be deemed properly estimated if it is 14 either: (i) not less than ninety percent of the tax as finally deter- 15 mined, or (ii) not less than the tax shown on the taxpayer's report for 16 the preceding taxable year, if such preceding year was a taxable year of 17 twelve months; and 18 (2) the time when a report is required to be filed shall be determined 19 without regard to any extension of time for filing such report. 20 2. The commissioner of finance may grant a reasonable extension of 21 time for payment of any tax imposed by this subchapter under such condi- 22 tions as the commissioner of finance deems just and proper. 23 3. Intentionally omitted. 24 § 11-657 Declaration of estimated tax. 1. Every taxpayer subject to 25 the tax imposed by section 11-653 of this subchapter shall make a decla- 26 ration of its estimated tax for the current privilege period, containing 27 such information as the commissioner of finance may prescribe by regu- 28 lations or instructions, if such estimated tax can reasonably be 29 expected to exceed one thousand dollars. 30 2. The term "estimated tax" means the amount which a taxpayer esti- 31 mates to be the tax imposed by section 11-653 of this subchapter for the 32 current privilege period, less the amount which it estimates to be the 33 sum of any credits allowable against the tax. 34 3. In the case of a taxpayer which reports on the basis of a calendar 35 year, a declaration of estimated tax shall be filed on or before June 36 fifteenth of the current privilege period, except that if the require- 37 ments of subdivision one of this section are first met: 38 (a) after May thirty-first and before September first of such current 39 privilege period, the declaration shall be filed on or before September 40 fifteenth; or 41 (b) after August thirty-first and before December first of such 42 current privilege period, the declaration shall be filed on or before 43 December fifteenth. 44 4. A taxpayer may amend a declaration under regulations of the commis- 45 sioner of finance. 46 5. If, on or before February fifteenth of the succeeding year in the 47 case of a taxpayer which reports on the basis of a calendar year, a 48 taxpayer files its report for the year for which the declaration is 49 required, and pays therewith the balance, if any, of the full amount of 50 the tax shown to be due on the report: 51 (a) such report shall be considered as its declaration if no declara- 52 tion is required to be filed during the calendar or fiscal year for 53 which the tax was imposed, but is otherwise required to be filed on or 54 before December fifteenth pursuant to subdivision three of this section; 55 and

S. 8578 660

1 (b) such report shall be considered as the amendment permitted by 2 subdivision four of this section to be filed on or before December 3 fifteenth if the tax shown on the report is greater than the estimated 4 tax shown on a declaration previously made. 5 6. This section shall apply to privilege periods of twelve months 6 other than a calendar year by the substitution of the months of such 7 fiscal year for the corresponding months specified in this section. 8 7. If the privilege period for which a tax is imposed by section 9 11-653 of this subchapter is less than twelve months, every taxpayer 10 required to make a declaration of estimated tax for such privilege peri- 11 od shall make such a declaration in accordance with regulations of the 12 commissioner of finance. 13 8. The commissioner of finance may grant a reasonable extension of 14 time, not to exceed three months, for the filing of any declaration 15 required pursuant to this section, on such terms and conditions as it 16 may require. 17 § 11-658 Payments on account of estimated tax. 1. For taxable years 18 beginning before January first, two thousand sixteen, every taxpayer 19 subject to the tax imposed by section 11-653 of this subchapter shall 20 pay with the report required to be filed for the preceding privilege 21 period, if any, or with an application for extension of the time and 22 filing such report, an amount equal to twenty-five per centum of the 23 preceding year's tax if such preceding year's tax exceeded one thousand 24 dollars. For taxable years beginning on or after January first, two 25 thousand sixteen, every taxpayer subject to the tax imposed by section 26 11-653 of this subchapter shall pay on or before the fifteenth day of 27 March next succeeding the close of each such calendar year, or, in the 28 case of a taxpayer that reports on the basis of a fiscal year, within 29 two and one-half months after the close of each such fiscal year an 30 amount equal to twenty-five per centum of the second preceding year's 31 tax if the second preceding year's tax exceeded one thousand dollars. 32 2. The estimated tax with respect to which a declaration for such 33 privilege period is required shall be paid, in the case of a taxpayer 34 which reports on the basis of a calendar year, as follows: 35 (a) If the declaration is filed on or before June fifteenth, the esti- 36 mated tax shown thereon, after applying thereto the amount, if any, paid 37 during the same privilege period pursuant to subdivision one of this 38 section, shall be paid in three equal installments. One of such install- 39 ments shall be paid at the time of the filing of the declaration, one 40 shall be paid on the following September fifteenth, and one on the 41 following December fifteenth. 42 (b) If the declaration is filed after June fifteenth and not after 43 September fifteenth of such privilege period, and is not required to be 44 filed on or before June fifteenth of such period, the estimated tax 45 shown on such declaration, after applying thereto the amount, if any, 46 paid during the same privilege period pursuant to subdivision one of 47 this section, shall be paid in two equal installments. One of such 48 installments shall be paid at the time of the filing of the declaration 49 and one shall be paid on the following December fifteenth. 50 (c) If the declaration is filed after September fifteenth of such 51 privilege period, and is not required to be filed on or before September 52 fifteenth of such privilege period, the estimated tax shown on such 53 declaration, after applying thereto the amount, if any, paid in respect 54 to such privilege period pursuant to subdivision one of this section, 55 shall be paid in full at the time of the filing of the declaration.

S. 8578 661

1 (d) If the declaration is filed after the time prescribed therefor, or 2 after the expiration of any extension of time therefor, paragraphs (b) 3 and (c) of this subdivision shall not apply, and there shall be paid at 4 the time of such filing all installments of estimated tax payable at or 5 before such time, and the remaining installments shall be paid at the 6 times at which, and in the amounts in which, they would have been paya- 7 ble if the declaration had been filed when due. 8 3. If any amendment of a declaration is filed, the remaining install- 9 ments, if any, shall be ratably increased or decreased, as the case may 10 be, to reflect any increase or decrease in the estimated tax by reason 11 of such amendment, and if any amendment is made after September 12 fifteenth of the privilege period, any increase in the estimated tax by 13 reason thereof shall be paid at the time of making such amendment. 14 4. Any amount paid shall be applied after payment as a first install- 15 ment against the estimated tax of the taxpayer for the current privilege 16 period shown on the declaration required to be filed pursuant to section 17 11-657 of this subchapter or, if no declaration of estimated tax is 18 required to be filed by the taxpayer pursuant to such section, any such 19 amount shall be considered a payment on account of the tax shown on the 20 report required to be filed by the taxpayer for such privilege period. 21 5. Notwithstanding the provisions of section 11-679 of this chapter or 22 of section three-a of the general municipal law, if an amount paid 23 pursuant to subdivision one of this section exceeds the tax shown on the 24 report required to be filed by the taxpayer for the privilege period 25 during which the amount was paid, interest shall be allowed and paid on 26 the amount by which the amount so paid pursuant to such subdivision 27 exceeds such tax, at the overpayment rate set by the commissioner of 28 finance pursuant to section 11-687 of this chapter, or, if no rate is 29 set, at the rate of four percent per annum from the date of payment of 30 the amount so paid pursuant to such subdivision to the fifteenth day of 31 the third month following the close of the privilege period, provided, 32 however, that no interest shall be allowed or paid under this subdivi- 33 sion if the amount thereof is less than one dollar or if such interest 34 becomes payable solely because of a carryback of a net operating loss in 35 a subsequent privilege period. 36 6. As used in this section, "the preceding year's tax" means the tax 37 imposed upon the taxpayer by section 11-653 of this subchapter for the 38 preceding calendar or fiscal year, or, for purposes of computing the 39 first installment of estimated tax when either the mandatory first 40 installment is paid pursuant to subdivision one of this section or an 41 application has been filed for extension of the time for filing the 42 report required to be filed for such preceding calendar or fiscal year, 43 the amount properly estimated pursuant to section 11-657 of this 44 subchapter as the tax imposed upon the taxpayer for such calendar or 45 fiscal year. As used in this section, "the second preceding year's tax" 46 means the tax imposed upon the taxpayer by section 11-653 of this 47 subchapter for the second preceding calendar of fiscal year. 48 7. This section shall apply to a privilege period of less than twelve 49 months in accordance with regulations of the commissioner of finance. 50 8. The provisions of this section shall apply to privilege periods of 51 twelve months other than a calendar year by the substitution of the 52 months of such fiscal year for the corresponding months specified in 53 such provisions. 54 9. The commissioner of finance may grant a reasonable extension of 55 time, not to exceed six months, for payment of any installment of esti- 56 mated tax required pursuant to this section, on such terms and condi-

S. 8578 662

1 tions as the commissioner of finance may require including the furnish- 2 ing of a bond or other security by the taxpayer in an amount not 3 exceeding twice the amount for which any extension of time for payment 4 is granted, provided, however, that interest at the underpayment rate 5 set by the commissioner of finance pursuant to section 11-687 of this 6 subchapter, or, if no rate is set, at the rate of seven and one-half 7 percent per annum for the period of the extension shall be charged and 8 collected on the amount for which any extension of time for payment is 9 granted under this subdivision. 10 10. A taxpayer may elect to pay any installment of estimated tax prior 11 to the date prescribed in this section for payment thereof. 12 11. Intentionally omitted. 13 § 11-659 Collection of taxes. Every foreign corporation, other than a 14 moneyed corporation, subject to the provisions of this subchapter, 15 except a corporation having authority to do business by virtue of 16 section thirteen hundred five of the business corporation law, shall 17 file in the department of state a certificate of designation in its 18 corporate name, signed and acknowledged by its president or a vice-pre- 19 sident or its secretary or treasurer, under its corporate seal, desig- 20 nating the secretary of state as its agent upon whom process in any 21 action provided for by this subchapter may be served within this state, 22 and setting forth an address to which the secretary of state shall mail 23 a copy of any such process against the corporation which may be served 24 upon the secretary of state. In case any such corporation shall have 25 failed to file such certificate of designation, it shall be deemed to 26 have designated the secretary of state as its agent upon whom such proc- 27 ess against it may be served; and until a certificate of designation 28 shall have been filed the corporation shall be deemed to have directed 29 the secretary of state to mail copies of process served upon him or her 30 to the corporation at its last known office address within or without 31 the state. When a certificate of designation has been filed by such 32 corporation the secretary of state shall mail copies of process there- 33 after served upon the secretary of state to the address set forth in 34 such certificate. Any such corporation, from time to time, may change 35 the address to which the secretary of state is directed to mail copies 36 of process, by filing a certificate to that effect executed, signed and 37 acknowledged in like manner as a certificate of designation as herein 38 provided. Service of process upon any such corporation or upon any 39 corporation having a certificate of authority under section eight 40 hundred five of the limited liability company law or having authority to 41 do business by virtue of section thirteen hundred five of the business 42 corporation law, in any action commenced at any time pursuant to the 43 provisions of this subchapter, may be made by either: (a) personally 44 delivering to and leaving with the secretary of state, a deputy secre- 45 tary of state or with any person authorized by the secretary of state to 46 receive such service duplicate copies thereof at the office of the 47 department of state in the city of Albany, in which event the secretary 48 of state shall forthwith send by registered mail, return receipt 49 requested, one of such copies to the corporation at the address desig- 50 nated by it or at its last known office address within or without the 51 state, or (b) personally delivering to and leaving with the secretary of 52 state, a deputy secretary of state or with any person authorized by the 53 secretary of state to receive such service, a copy thereof at the office 54 of the department of state in the city of Albany and by delivering a 55 copy thereof to, and leaving such copy with, the president, vice-presi- 56 dent, secretary, assistant secretary, treasurer, assistant treasurer, or

S. 8578 663

1 cashier of such corporation, or the officer performing corresponding 2 functions under another name, or a director or managing agent of such 3 corporation, personally without the state. Proof of such personal 4 service without the state shall be filed with the clerk of the court in 5 which the action is pending within thirty days after such service, and 6 such service shall be complete ten days after proof thereof is filed. 7 § 11-660 Limitations of time. The provisions of the civil practice law 8 and rules relative to the limitation of time enforcing a civil remedy 9 shall not apply to any proceeding or action taken to levy, appraise, 10 assess, determine or enforce the collection of any tax or penalty 11 prescribed by this subchapter, provided, however, that as to real estate 12 in the hands of persons who are owners thereof who would be purchasers 13 in good faith but for such tax or penalty and as to the lien on real 14 estate of mortgages held by persons who would be holders thereof in good 15 faith but for such tax or penalty, all such taxes and penalties shall 16 cease to be a lien on such real estate as against such purchasers or 17 holders after the expiration of ten years from the date such taxes 18 became due and payable. The limitations herein provided for shall not 19 apply to any transfer from a corporation to a person or corporation with 20 intent to avoid payment of any taxes, or where with like intent the 21 transfer is made to a grantee corporation, or any subsequent grantee 22 corporation, controlled by such grantor or which has any community of 23 interest with it, either through stock ownership or otherwise.

24 SUBCHAPTER 4 25 TRANSPORTATION CORPORATION TAX

26 § 11-662 Tax on transportation corporations and associations. 1. 27 The term "corporation" as used in this subchapter shall include any 28 business conducted by a trustee or trustees wherein interest or owner- 29 ship is evidenced by certificates or other written instruments. 30 2. For the privilege of doing business or holding property in the 31 city every corporation, joint-stock company or association formed for or 32 principally engaged in the conduct of aviation, steamboat, ferry, except 33 a ferry company operating between the city of Staten Island and any of 34 the boroughs of the city of New York under a lease granted by the city 35 of New York, or navigation business, or formed for or principally 36 engaged in the conduct of two or more of such businesses, except a 37 corporation, joint-stock company or association subject to taxation 38 under chapter eleven of this title, shall pay, in advance, an annual tax 39 to be computed upon the basis of the amount of its capital stock within 40 the city during the preceding year, and upon each dollar of such amount. 41 3. The measure of the amount of capital stock in the city, except as 42 hereinafter provided, shall be such a portion of the issued capital 43 stock as the gross assets, exclusive of obligations issued by the United 44 States and cash on hand and on deposit, employed in any business within 45 the city, bear to the gross assets, exclusive of obligations issued by 46 the United States and cash on hand and on deposit, wherever employed in 47 business. Provided, however, that in the case of a corporation taxable 48 hereunder only for the privilege of holding property, the measure shall 49 be such a portion of the issued capital stock as the gross assets, 50 exclusive of obligations issued by the United States and cash on hand 51 and on deposit, located within the city, bear to the gross assets, 52 exclusive of obligations issued by the United States and cash on hand 53 and on deposit, wherever located. The capital of a corporation invested 54 in the stock of another corporation shall be deemed to be assets located

S. 8578 664

1 where the assets of the issuing corporation, other than patents, copy- 2 rights, trademarks, contracts and good will, are located. 3 4. Every corporation, joint-stock company or association subject to 4 taxation under this section shall, in any event, pay annually, for taxa- 5 ble years ending on or before December thirty-first, nineteen hundred 6 seventy-four, a minimum tax of not less than ten dollars nor less than 7 one mill, and for taxable years beginning on or after January first, 8 nineteen hundred seventy-five, a minimum tax of not less than fifteen 9 dollars nor less than one and one-half mills, on each dollar of such a 10 portion of the net value of its issued capital stock, which net value 11 for the purposes of this section shall be deemed to be not less than 12 five dollars per share, as may be determined upon such of the bases 13 herein provided for the measurement thereof as is applicable. The term 14 "net value" as used in this section shall be construed to mean not less 15 than the difference between a corporation's assets and liabilities, and 16 not less than the average price at which such stock sold during the year 17 covered by the report which forms the basis for the tax. But if the 18 dividends paid on the par value of any kind of capital stock during any 19 year ending with the thirty-first day of December amounts to six or more 20 than six per centum, the tax upon such kind of capital stock shall be at 21 the rate of one-quarter of a mill for taxable years ending on or before 22 December thirty-first, nineteen hundred seventy-four, and at the rate of 23 four-tenths of a mill for taxable years beginning on or after January 24 first, nineteen hundred seventy-five for each one per centum of divi- 25 dends paid and shall be computed upon the par value of such capital 26 stock, unless such a tax be less than the minimum tax hereinbefore 27 provided in this section and the commissioner of finance shall, for such 28 purpose, make a fair and equitable apportionment of the assets of the 29 corporation, joint-stock company or association, between or among the 30 different kinds of stock. 31 5. If such corporation, joint-stock company or association shall have 32 more than one kind of capital stock, and upon one of such kinds of stock 33 a dividend or dividends amounting to six or more than six per centum 34 upon the par value thereof, has been paid, and upon the other no divi- 35 dend has been paid, or the dividend or dividends paid thereon amount to 36 less than six per centum upon the par value thereof, then the tax shall 37 be fixed upon each kind as hereinbefore provided. 38 6. The dividend rate for a corporation having stock without nominal or 39 par value shall be determined by dividing the amount paid as a dividend 40 or dividends during the year by the amount paid in on such stock and, if 41 the rate is six per centum or more, then for taxable years ending on or 42 before December thirty-first, nineteen hundred seventy-four, the rate of 43 one-quarter of a mill for each one per centum of dividends shall be 44 applied to the amount paid in on such stock, and for taxable years 45 beginning on or after January first, nineteen hundred seventy-five, the 46 rate of four-tenths of a mill for each one per centum of dividends shall 47 be applied to the amount paid in on such stock, unless such tax be less 48 than the minimum tax hereinbefore in this section provided for. Any 49 consideration given by a corporation for the purchase of its own stock 50 in excess of the consideration received by it for the issuance of such 51 stock shall for the purposes of this section, be considered as a divi- 52 dend. 53 7. The owning or holding in the city by any corporation of property, 54 other than property exclusively in interstate or foreign commerce, shall 55 constitute carrying on business within the city within the intent of 56 this section, except that a corporation having no property in the city

S. 8578 665

1 other than a bank balance or stocks or bonds, or one or more of such 2 kinds of property, either held for safe keeping or pledged as collateral 3 security shall not be taxable under this section, and further provided 4 that any corporation having only office furniture or fixtures, a bank 5 balance, and stocks or bonds pledged as collateral security or merely 6 deposited for safe keeping, shall not be taxable under this section. 7 8. The measure of the amount of capital stock in the city of an 8 aviation corporation shall be a portion of the issued capital stock 9 determined by applying thereto the arithmetical average of the following 10 three ratios: (a) the ratio which the aircraft arrivals and departures 11 within the city scheduled by any such corporation during the preceding 12 calendar year bear to the total aircraft arrivals and departures within 13 and without the city scheduled by it during the same period, provided 14 that in the case of non-scheduled operations all arrivals and departures 15 shall be substituted for scheduled arrivals and departures; (b) the 16 ratio which the revenue tons handled by such corporation at airports 17 within the city during the preceding calendar year bear to the total 18 revenue tons handled by it at airports within and without the city 19 during the same period; and (c) the ratio which such corporation's orig- 20 inating revenue within the city for the preceding calendar years bears 21 to its total originating revenue within and without the city for the 22 same period. As used in this section, the term "aircraft arrivals and 23 departures" means the number of scheduled landings and takeoffs of the 24 aircraft of an aviation corporation, and the number of scheduled air 25 pickups and deliveries by the aircraft of such corporation, and in the 26 case of non-scheduled operations shall include all landings and 27 takeoffs, pickups and deliveries; the term "originating revenue" means 28 revenue to any such corporation from the transportation of revenue 29 passengers and revenue property first received by such corporation 30 either as originating or connecting traffic at airports; and the term 31 "revenue tons handled" by any such corporation at an airport means the 32 weight in tons of revenue passengers, at two hundred pounds per passen- 33 ger, and revenue cargo first received either as originating or connect- 34 ing traffic or finally discharged by such corporation at such airport. 35 9. The measure of the capital stock in the city of a corporation 36 engaged in the operation of vessels in foreign commerce shall be such 37 portion of the issued capital stock as the aggregate number of working 38 days in territorial waters of the city of all such vessels bears to the 39 aggregate number of working days of all such vessels. The dividend rate 40 for such a corporation shall be determined by dividing the amount paid 41 as a dividend or dividends on all classes of stock during the year by 42 the amount of paid-in capital and, if the rate is six per centum or 43 more, then for taxable years ending on or before December thirty-first, 44 nineteen hundred seventy-four, the rate of one-quarter of a mill for 45 each one per centum of dividends shall be applied to the amount of such 46 paid-in capital, and for taxable years beginning on or after January 47 first, nineteen hundred seventy-five, the rate of four-tenths of a mill 48 for each one per centum of dividends shall be applied to the amount of 49 such paid-in capital. 50 § 11-663 Additional tax on transportation corporations and associ- 51 ations. Every corporation, joint-stock company or association formed 52 for or principally engaged in the conduct of aviation, steamboat, ferry, 53 except a ferry company operating between the city of Staten Island and 54 any of the boroughs of the city of New York under a lease granted by the 55 city of New York, or navigation business or formed for or principally 56 engaged in the conduct of two or more of such businesses, except a

S. 8578 666

1 corporation, joint-stock company or association subject to taxation 2 under chapter eleven of this title, shall pay for the privilege of 3 carrying on its business in the city, a tax which shall be equal to 4 five-tenths of one per centum for taxable years ending on or before 5 December thirty-first, nineteen hundred seventy-four, and seventy-five 6 hundredths of one per centum for taxable years beginning on or after 7 January first, nineteen hundred seventy-five upon its gross earnings 8 from all sources within the city, excluding earnings derived from busi- 9 ness of a character other than wholly intra-city. Provided, however, 10 gross earnings from transportation business both originating and termi- 11 nating within the city and traversing both the city and any other city, 12 any state or states or any country shall be subject to the tax imposed 13 by this section and such earnings shall be allocated to the city in the 14 same ratio that the mileage within the city bears to the total mileage 15 of such business. 16 § 11-664 Receivers, etc., conducting corporate business. Any receiv- 17 er, liquidator, referee, trustee, assignee, or other fiduciary or offi- 18 cer or agent appointed by any court, who conducts the business of any 19 corporation, joint-stock company or association shall be subject to the 20 tax or taxes imposed by this subchapter in the same manner and to the 21 same extent as if the business were conducted by the agents or officers 22 of such corporation, joint-stock company or association. A dissolved 23 corporation, joint-stock company or association which continues to 24 conduct business shall also be subjected to the tax imposed by this 25 subchapter. 26 § 11-665 Service of process; limitation of time. 1. Every foreign 27 corporation, other than a moneyed corporation, subject to the provisions 28 of this subchapter, except a corporation having authority to do business 29 by virtue of section thirteen hundred five of the business corporation 30 law, shall file in the department of state a certificate of designation 31 in its corporate name, signed and acknowledged by its president or vice- 32 president or its secretary or treasurer, under its corporate seal, 33 designating the secretary of state as its agent upon whom process in any 34 action provided for by this subchapter or subchapter five of this chap- 35 ter may be served within this state, and setting forth an address to 36 which the secretary of state shall mail a copy of any such process 37 against the corporation which may be served upon the secretary of state. 38 In case any such corporation shall have failed to file such certificate 39 of designation, it shall be deemed to have designated the secretary of 40 state as its agent upon whom such process against it may be served; and 41 until a certificate of designation shall have been filed the corporation 42 shall be deemed to have directed the secretary of state to mail copies 43 of process served upon the secretary of state to the corporation at its 44 last known office address within or without the state. When a certif- 45 icate of designation has been filed by such corporation the secretary of 46 state shall mail copies of process thereafter served upon the secretary 47 of state to the address set forth in such certificate. Any such corpo- 48 ration, from time to time, may change the address to which the secretary 49 of state is directed to mail copies of process, by filing a certificate 50 to that effect executed, signed and acknowledged in like manner as a 51 certificate of designation as herein provided. Service of process upon 52 any such corporation or upon any corporation having authority to do 53 business by virtue of section thirteen hundred five of the business 54 corporation law, in any action commenced at any time pursuant to the 55 provisions of this subchapter or subchapter five of this chapter may be 56 made by either: (1) personally delivering to and leaving with the secre-

S. 8578 667

1 tary of state, a deputy secretary of state or with any person authorized 2 by the secretary of state to receive such service duplicate copies ther- 3 eof at the office of the department of state in the city of Albany, in 4 which event the secretary of state shall forthwith send by registered 5 mail, return receipt requested, one of such copies to the corporation at 6 the address designated by it or at its last known office address within 7 or without the state, or (2) personally delivering to and leaving with 8 the secretary of state, a deputy secretary of state or with any person 9 authorized by the secretary of state to receive such service, a copy 10 thereof at the office of the department of state in the city of Albany 11 and by delivering a copy hereof to, and leaving such copy with, the 12 president, vice-president, secretary, assistant secretary, treasurer, 13 assistant treasurer, or cashier of such corporation, or the officer 14 performing corresponding functions under another name, or a director or 15 managing agent of such corporation, personally without the state. Proof 16 of such personal service without the state shall be filed with the clerk 17 of the court in which the action is pending within thirty days after 18 such service, and such service shall be complete ten days after proof 19 thereof is filed. 20 2. The provisions of the civil practice law and rules relative to the 21 limitation of time of enforcing a civil remedy shall not apply to any 22 proceeding or action taken to levy, appraise, assess, determine or 23 enforce the collection of any tax or penalty prescribed by this subchap- 24 ter or subchapter five of this chapter, provided, however, that as to 25 real estate in the hands of persons who are owners thereof who would be 26 purchasers in good faith but for such tax or penalty and as to the lien 27 on real estate of mortgages held by persons who would be holders thereof 28 in good faith but for such tax or penalty, all such taxes and penalties 29 shall cease to be a lien on such real estate as against such purchasers 30 or holders after the expiration of ten years from the date such taxes 31 become due and payable. The limitations provided for in this subdivi- 32 sion shall not apply to any transfer from a corporation to a person or 33 corporation with intent to avoid payment of any taxes, or where with 34 like intent the transfer is made to a grantee corporation, or any subse- 35 quent grantee corporation controlled by such grantor or which has any 36 community of interest with it, either through stock ownership or other- 37 wise. 38 § 11-666 Exemption of corporations owned by a municipality. The 39 provisions of this subchapter shall not apply to any corporation all of 40 the capital stock of which is owned by a municipal corporation of this 41 state. 42 § 11-667 Reports of corporations. Corporations liable to pay a tax 43 under this subchapter shall report as follows: 44 1. Every corporation, association or joint-stock company liable to pay 45 a tax under section 11-662 of this subchapter shall, on or before March 46 first in each year, make a written report to the commissioner of finance 47 of its condition at the close of its business on the preceding December 48 thirty-first, stating the amount of its authorized capital stock, the 49 amount of stock paid-in, the date and rate per centum of each dividend 50 paid by it during the year ending with such day, the entire amount of 51 the capital of such corporation, and the capital employed by it in the 52 city during such year. 53 2. Every corporation, joint-stock company or association liable to pay 54 an additional tax under section 11-663 of this subchapter shall also, on 55 or before February fifteenth, May fifteenth, August fifteenth and Novem- 56 ber fifteenth in each year, make a written report to the commissioner of

S. 8578 668

1 finance of the amount of its gross earnings subject to the tax imposed 2 by said section for the quarter year ended on the last day of the second 3 month preceding that in which the report is required to be filed. Any 4 such corporation, joint-stock company or association which ceases to be 5 subject to the tax imposed by section 11-663 of this subchapter by 6 reason of a liquidation, dissolution, merger or consolidation with any 7 other corporation, or any other cause, shall, on the date of such cessa- 8 tion or at such other time as the commissioner of finance may require, 9 make a written report to the commissioner of finance of the amount of 10 its gross earnings subject to the tax imposed by section 11-663 of this 11 subchapter for any period for which no report was therefor filed. 12 3. The commissioner of finance may for good cause shown extend the 13 time within which any corporation is required to report by this subchap- 14 ter. 15 4. Every report required by this subchapter shall have annexed thereto 16 a certification by the president, vice-president, treasurer, assistant 17 treasurer, or chief accounting officer or any other officer of the 18 corporation, association or joint-stock company duly authorized so to 19 act, or of the person or one of the persons, or the members of the part- 20 nership making the same, to the effect that the statements contained 21 therein are true. The fact that an individual's name is signed on a 22 certification attached to a corporate report shall be prima facie 23 evidence that such individual is authorized to certify the report on 24 behalf of the corporation. Such reports shall contain any other data, 25 information or matter which the commissioner of finance may require to 26 be included therein, and it may prescribe the form in which such reports 27 shall be made. When so prescribed such forms shall be used in making 28 the report. The commissioner of finance may require at any time a 29 further or supplemental report under this subchapter which shall contain 30 information and data upon such matters as the commissioner of finance 31 may specify. Reports shall be preserved for five years, and thereafter 32 until the commissioner of finance orders them to be destroyed. 33 § 11-668 Payment of tax and penalties. 1. The taxes imposed by 34 sections 11-662 and 11-663 of this subchapter shall be due and payable 35 at the time of the filing of the report required by section 11-667 of 36 this subchapter or, in case such a report is not filed when due, on the 37 last day specified for the filing thereof, except that the tax upon 38 dividends imposed by section 11-663 of this subchapter shall be due and 39 payable at the time of filing the report for the period ending June 40 thirtieth, or, in case such report is not filed when due, on the last 41 day specified for the filing thereof. 42 2. Where an application for consent to dissolution, as provided by 43 section one thousand four of the business corporation law, is filed with 44 the commissioner of finance prior to the commencement of any tax year or 45 period by a corporation subject to tax under this subchapter, such 46 corporation shall not be liable for any tax imposed by this subchapter 47 for such following year or period, except as may be otherwise provided 48 in section 11-664 of this subchapter, provided that the certificate of 49 dissolution for such corporation is duly filed in the office of the 50 secretary of state within twenty days after the filing of such applica- 51 tion. 52 3. Notwithstanding any other provision of this subchapter, the commis- 53 sioner of finance may grant a reasonable extension of time for payment 54 of any tax imposed by this subchapter under such conditions as the 55 commissioner deems just and proper.

S. 8578 669

1 § 11-669 Taxable years to which taxes apply. The taxes imposed by 2 this subchapter are imposed for each taxable year or period beginning 3 with taxable years or periods ending in or with the calendar year nine- 4 teen hundred sixty-six, provided, however, no tax shall be imposed 5 pursuant to this subchapter for any taxable year or period ending after 6 December thirty-first, nineteen hundred eighty-eight. 7 § 11-670 First reports for payments for nineteen hundred sixty-six. 8 If any report under this subchapter is due prior to September eleventh, 9 nineteen hundred sixty-six, such report and the payments therewith shall 10 be filed and paid by such date.

11 SUBCHAPTER 5 12 CORPORATE TAX PROCEDURE AND ADMINISTRATION

13 § 11-671 Application of subchapter. 1. General. The provisions of 14 this subchapter shall apply to the administration of and the procedures 15 with respect to the taxes imposed by subchapters two, three, three-A and 16 four of this chapter. 17 2. Definitions. As used in this subchapter: (a) the term "named 18 subchapters" means subchapters two, three, three-A and four of this 19 chapter; 20 (b) The term "return" means a report or return of tax, but does not 21 include a declaration of estimated tax; 22 (c) The term "corporation" includes a corporation, association, joint- 23 stock company or other entity subject to tax under any of the named 24 subchapters; and 25 (d) The term "person" includes a corporation, association, company, 26 partnership, estate, trust, liquidator, fiduciary or other entity or 27 individual liable for the tax imposed by any of the named subchapters or 28 under a duty to perform an act under any of the named subchapters. Upon 29 notice to the commissioner of finance that any person is acting for any 30 corporation in a fiduciary capacity, such fiduciary shall assume the 31 powers, rights, duties and privileges of such corporation in respect of 32 a tax imposed by any of the named subchapters, except as otherwise 33 specifically provided and except that the tax shall be collected from 34 the estate or other assets of such corporation in the hands of such 35 fiduciary, until notice is given that the fiduciary capacity has termi- 36 nated. 37 § 11-672 Notice of deficiency. 1. General. If upon examination of a 38 taxpayer's return, the commissioner of finance determines that there is 39 a deficiency of tax, the commissioner may mail a notice of deficiency to 40 the taxpayer. If a taxpayer fails to file a tax return, the commissioner 41 of finance is authorized to estimate the taxpayer's city tax liability 42 from any information in the commissioner's possession, and to mail a 43 notice of deficiency to the taxpayer. A notice of deficiency shall be 44 mailed by certified or registered mail to the taxpayer, at its last 45 known address in or out of the city. If the taxpayer has terminated its 46 existence, a notice of deficiency may be mailed to its last known 47 address in or out of the city, and such notice shall be sufficient for 48 purposes of this subchapter. If the commissioner of finance has received 49 notice that a person is acting for the taxpayer in a fiduciary capacity, 50 a copy of such notice shall also be mailed to the fiduciary named in 51 such notice. 52 2. Notice of deficiency as assessment. After ninety days from the 53 mailing of a notice of deficiency or, if the commissioner of finance has 54 established a conciliation procedure pursuant to section 11-124 of this

S. 8578 670

1 title and the taxpayer has requested a conciliation conference in 2 accordance therewith, after ninety days from the mailing of the concil- 3 iation decision or the date of the commissioner's confirmation of the 4 discontinuance of the conciliation proceeding, such notice shall be an 5 assessment of the amount of tax specified therein, together with the 6 interest, additions to tax and penalties stated in such notice, except 7 only for any such tax or other amounts as to which the taxpayer has 8 within such ninety day period filed with the tax appeals tribunal a 9 petition under section 11-680 of this subchapter. If the notice of defi- 10 ciency or conciliation decision is addressed to a taxpayer whose last 11 known address is outside of the United States, such period shall be one 12 hundred fifty days instead of ninety days. 13 3. Restrictions on assessment and levy. No assessment of a deficiency 14 in tax and no levy or proceeding in court for its collection shall be 15 made, begun or prosecuted, except as otherwise provided in section 16 11-685 of this subchapter, until a notice of deficiency has been mailed 17 to the taxpayer, nor until the expiration of the time for filing a peti- 18 tion with the tax appeals tribunal contesting such notice, nor, if a 19 petition with respect to the taxable year has been both served on the 20 commissioner of finance and filed with the tax appeals tribunal, until 21 the decision of the tax appeals tribunal has become final. For excep- 22 tion in the case of judicial review of the decision of the tax appeals 23 tribunal, see subdivision three of section 11-681 of this subchapter. 24 4. Exceptions for mathematical errors. If a mathematical error appears 25 on a return, including an overstatement of the amount paid as estimated 26 tax, the commissioner of finance shall notify the taxpayer that an 27 amount of tax in excess of that shown upon the return is due, and that 28 such excess has been assessed. Such notice shall not be considered as a 29 notice of deficiency for the purposes of this section, subdivision six 30 of section 11-678, limiting credits or refunds after petition to the tax 31 appeals tribunal, or subdivision two of section 11-680 of this subchap- 32 ter, authorizing the filing of a petition with the tax appeals tribunal 33 based on a notice of deficiency, nor shall such assessment or collection 34 be prohibited by the provisions of subdivision three of this section. 35 5. Exception where federal or New York state change or correction is 36 not reported. 37 (a) If the taxpayer fails to comply with subchapter two, three or 38 three-A of this chapter in not reporting a change or correction or rene- 39 gotiation, or computation or recomputation of tax, increasing or 40 decreasing its federal or New York state taxable income, alternative 41 minimum taxable income or other basis of tax as reported on its federal 42 or New York state income tax return or in not reporting a change or 43 correction or renegotiation, or computation or recomputation of tax, 44 which is treated in the same manner as if it were a deficiency for 45 federal or New York state income tax purposes or in not filing an 46 amended return or in not reporting the execution of a notice of waiver 47 executed pursuant to subsection (d) of section six thousand two hundred 48 thirteen of the internal revenue code or pursuant to subdivision (f) of 49 section one thousand eighty-one of the tax law, instead of the mode and 50 time of assessment provided for in subdivision two of this section, the 51 commissioner of finance may assess a deficiency based upon such 52 increased or decreased federal or New York state taxable income, alter- 53 native minimum taxable income or other basis of tax by mailing to the 54 taxpayer a notice of additional tax due specifying the amount of the 55 deficiency, and such deficiency, together with the interest, additions 56 to tax and penalties stated in such notice, shall be deemed assessed on

S. 8578 671

1 the date such notice is mailed unless within thirty days after the mail- 2 ing of such notice a report of the federal or New York state change or 3 correction or renegotiation, or computation or recomputation of tax, or 4 an amended return, where such return was required by subchapter two or 5 three of this chapter, is filed accompanied by a statement showing wher- 6 ein such federal or New York state determination and such notice of 7 additional tax due are erroneous. 8 (b) Such notice shall not be considered as a notice of deficiency for 9 the purposes of this section, subdivision six of section 11-678, limit- 10 ing credits or refunds after petition to the tax appeals tribunal, or 11 subdivision two of section 11-680 of this subchapter, authorizing the 12 filing of a petition with the tax appeals tribunal based on a notice of 13 deficiency, nor shall such assessment or the collection thereof be 14 prohibited by the provisions of subdivision three of this section. 15 (c) If the taxpayer has terminated its existence, a notice of addi- 16 tional tax due may be mailed to the taxpayer's last known address in or 17 out of the city, and such notice shall be sufficient for purposes of 18 this subchapter. If the commissioner of finance has received notice that 19 a person is acting for the taxpayer in a fiduciary capacity, a copy of 20 such notice shall also be mailed to the fiduciary named in such notice. 21 6. Waiver of restrictions. The taxpayer shall at any time, whether or 22 not a notice of deficiency has been issued, have the right to waive the 23 restrictions on assessment and collection of the whole or any part of 24 the deficiency by a signed notice in writing filed with the commissioner 25 of finance. 26 7. Two or more corporations. In case of a combined return under 27 subchapter two or three-A or a consolidated return under subchapter 28 three of two or more corporations, the commissioner of finance may 29 determine a deficiency of tax under subchapter two, three or three-A of 30 this chapter with respect to the entire tax due upon such return against 31 any taxpayer included therein. In the case of a taxpayer which might 32 have been included in such a return under subchapter two, three or 33 three-A of this chapter when the tax was originally reported, the 34 commissioner of finance may determine a deficiency of tax under subchap- 35 ter two, three or three-A of this chapter against such taxpayer and 36 against any other taxpayers which might have been included in such a 37 return. 38 8. Deficiency defined. For the purposes of this subchapter, a defi- 39 ciency means the amount of the tax imposed by the named subchapters, or 40 any of them, less: (a) the amount shown as the tax upon the taxpayer's 41 return, whether the return was made or the tax computed by it or by the 42 commissioner of finance, and less (b) the amounts previously assessed, 43 or collected without assessment, as a deficiency and plus (c) the amount 44 of any rebates. For the purpose or this definition, the tax imposed by 45 subchapter two, three or three-A of this chapter and the tax shown on 46 the return shall both be determined without regard to any payment of 47 estimated tax; and a rebate means so much of an abatement, credit, 48 refund or other repayment, whether or not erroneous, as was made on the 49 ground that the amounts entering into the definition of a deficiency 50 showed a balance in favor of the taxpayer. 51 9. Exception where change or correction of sales and compensating use 52 tax liability is not reported. 53 (a) If a taxpayer fails to comply with subchapter two or three-A of 54 this chapter in not reporting a change or correction of its sales and 55 compensating use tax liability or in not filing a copy of an amended 56 return or report relating to its sales and compensating use tax liabil-

S. 8578 672

1 ity, instead of the mode and time of assessment provided for in subdivi- 2 sion two of this section, the commissioner of finance may assess a defi- 3 ciency based upon such changed or corrected sales and compensating use 4 tax liability, as same relates to credits claimed under subchapter two 5 or three-A of this chapter, by mailing to the taxpayer a notice of addi- 6 tional tax due specifying the amount of the deficiency, and such defi- 7 ciency, together with the interest, additions to tax and penalties stat- 8 ed in such notice, shall be deemed assessed on the date such notice is 9 mailed unless within thirty days after the mailing of such notice a 10 report of the state change or correction or a copy of an amended return 11 or report, where such copy was required by subchapter two or three-A, is 12 filed accompanied by a statement showing wherein such state determi- 13 nation and such notice of additional tax due are erroneous. 14 (b) Such notice shall not be considered as a notice of deficiency for 15 the purposes of this section, subdivision six of section 11-678, limit- 16 ing credits or refunds after petition to the tax appeals tribunal, or 17 subdivision two of section 11-680, authorizing the filing of a petition 18 with the tax appeals tribunal based on a notice of deficiency, nor shall 19 such assessment or the collection thereof be prohibited by the 20 provisions of subdivision three of this section. 21 (c) If the taxpayer has terminated its existence, a notice of addi- 22 tional tax due may be mailed to its last known address in or out of the 23 city, and such notice shall be sufficient for purposes of this subchap- 24 ter. If the commissioner of finance has received notice that a person is 25 acting for the taxpayer in a fiduciary capacity, a copy of such notice 26 shall also be mailed to the fiduciary named in such notice. 27 § 11-673 Assessment. 1. Assessment date. The amount of tax which a 28 return shows to be due, or the amount of tax which a return would have 29 shown to be due but for a mathematical error, shall be deemed to be 30 assessed on the date of filing of the return, including any amended 31 return showing an increase of tax. If a notice of deficiency has been 32 mailed, the amount of the deficiency shall be deemed to be assessed on 33 the date specified in subdivision two of section 11-672 of this subchap- 34 ter if no petition is both served on the commissioner of finance and 35 filed with the tax appeals tribunal, or if a petition is so served and 36 filed, then upon the date when a decision of the tax appeals tribunal 37 establishing the amount of the deficiency becomes final. If a report or 38 an amended return filed pursuant to subchapter two, three or three-A of 39 this chapter concedes the accuracy of a federal or New York state 40 adjustment or change or correction or renegotiation or computation or 41 recomputation of tax, any deficiency in tax under subchapter two, three 42 or three-A of this chapter resulting therefrom shall be deemed to be 43 assessed on the date of filing such report or amended return, and such 44 assessment shall be timely notwithstanding section 11-674 of this 45 subchapter. 46 If a report filed pursuant to subchapter two of this chapter concedes 47 the accuracy of a state change or correction of sales and compensating 48 use tax liability, any deficiency in tax under subchapter two or three-A 49 of this chapter resulting therefrom shall be deemed assessed on the date 50 of filing such report, and such assessment shall be timely notwithstand- 51 ing section 11-674 of this subchapter. 52 If a notice of additional tax due, as prescribed in subdivision five 53 of section 11-672 of this subchapter, has been mailed, the amount of the 54 deficiency shall be deemed to be assessed on the date specified in such 55 subdivision unless within thirty days after the mailing of such notice a 56 report of the federal or New York state adjustment or change or

S. 8578 673

1 correction or renegotiation or computation or recomputation of tax, or 2 an amended return, where such return was required by subchapter two, 3 three or three-A of this chapter, is filed accompanied by a statement 4 showing wherein such federal or New York state determination and such 5 notice of additional tax due are erroneous. 6 If a notice of additional tax due, as prescribed in subdivision nine 7 of section 11-672 of this subchapter, has been mailed, the amount of the 8 deficiency shall be deemed to be assessed on the date specified in such 9 subdivision unless within thirty days after the mailing of such notice a 10 report of the state change or correction, or a copy of an amended return 11 or report, where such copy was required by subchapter two or three-A of 12 this chapter, is filed accompanied by a statement showing wherein such 13 state determination and such notice of additional tax due are erroneous. 14 Any amount paid as a tax or in respect of a tax, other than amounts 15 paid as estimated tax, shall be deemed to be assessed upon the date of 16 receipt of payment notwithstanding any other provisions. 17 2. Other assessment powers. If the mode or time for the assessment of 18 any tax under the named subchapters, including interest, additions to 19 tax and assessable penalties, is not otherwise provided for, the commis- 20 sioner of finance may establish the same by regulations. 21 3. Estimated tax. No unpaid amount of estimated tax under subchapter 22 two, three or three-A of this chapter shall be assessed. 23 4. Supplemental assessment. The commissioner of finance may, at any 24 time within the period described for assessment, make a supplemental 25 assessment, subject to the provisions of section 11-672 of this subchap- 26 ter where applicable, whenever it is ascertained that any assessment is 27 imperfect or incomplete in any material respect. 28 5. Cross reference. For assessment in case of jeopardy, see section 29 11-685 of this subchapter. 30 § 11-674 Limitations on assessment. 1. General. Except as otherwise 31 provided in this section, any tax under the named subchapters shall be 32 assessed within three years after the return was filed, whether or not 33 such return was filed on or after the date prescribed. 34 2. Time return deemed filed. For the purposes of this section, a 35 return of tax filed before the last day prescribed by law or by regu- 36 lations promulgated pursuant to law for the filing thereof shall be 37 deemed to be filed on such last day. 38 3. Exceptions. 39 (a) Assessment at any time. The tax may be assessed at any time if: 40 (1) no return is filed, 41 (2) a false or fraudulent return is filed with intent to evade tax, 42 (3) in the case of the tax imposed under subchapter two, three or 43 three-A of this chapter, the taxpayer fails to file a report or amended 44 return required thereunder, in respect of an increase or decrease in 45 federal or New York state taxable income, alternative minimum taxable 46 income or other basis of tax or federal or New York state tax, or in 47 respect of a change or correction or renegotiation or in respect of the 48 execution of a notice of waiver report of which is required thereunder, 49 or computation or recomputation of tax, which is treated in the same 50 manner as if it were a deficiency for federal or New York state income 51 tax purposes, or 52 (4) in the case of the tax imposed under subchapter two or three-A of 53 this chapter, the taxpayer fails to file a report or amended return or 54 report required thereunder, in respect of a change or correction of 55 sales and compensating use tax liability, relating to the purchase or

S. 8578 674

1 use of items for which a sales or compensating use tax credit against 2 the tax imposed by subchapter two or three-A was claimed. 3 (b) Extension by agreement. Where, before the expiration of the time 4 prescribed in this section for the assessment of tax, both the commis- 5 sioner of finance and the taxpayer have consented in writing to its 6 assessment after such time, the tax may be assessed at any time prior to 7 the expiration of the period agreed upon. The period so agreed upon may 8 be extended by subsequent agreements in writing made before the expira- 9 tion of the period previously agreed upon. 10 (c) Report of federal or New York state change or correction. In the 11 case of the tax imposed under subchapter two, three or three-A of this 12 chapter, if the taxpayer files a report or amended return required ther- 13 eunder, in respect of an increase or decrease in federal or New York 14 state taxable income, alternative minimum taxable income or other basis 15 of tax or federal or New York state tax, or in respect of a change or 16 correction or renegotiation, or in respect of the execution of a notice 17 of waiver report of which is required thereunder, or computation or 18 recomputation of tax, which is treated in the same manner as if it were 19 a deficiency for federal or New York state income tax purposes, the 20 assessment, if not deemed to have been made upon the filing of the 21 report or amended return may be made at any time within two years after 22 such report or amended return was filed. The amount of such assessment 23 of tax shall not exceed the amount of the increase in city tax attribut- 24 able to such federal or New York state change or correction or renegoti- 25 ation, or computation or recomputation of tax. The provisions of this 26 paragraph shall not affect the time within which or the amount for which 27 an assessment may otherwise be made. 28 (d) Deficiency attributable to net operating loss carryback. If a 29 deficiency of tax under subchapter two or three-A of this chapter is 30 attributable to the application to taxpayer of a net operating loss 31 carryback or a capital loss carryback, it may be assessed at any time 32 that a deficiency for the taxable year of the loss may be assessed. 33 (e) Recovery of erroneous refund. An erroneous refund shall be 34 considered an underpayment of tax on the date made, and an assessment of 35 a deficiency arising out of an erroneous refund may be made at any time 36 within two years from the making of the refund, except that the assess- 37 ment may be made within five years from the making of the refund if it 38 appears that any part of the refund was induced by fraud or misrepresen- 39 tation of a material fact. 40 (f) Request for prompt assessment. The tax shall be assessed within 41 eighteen months after written request therefor, made after the return is 42 filed, by the taxpayer or by a fiduciary representing the taxpayer, but 43 not more than three years after the return was filed, except as other- 44 wise provided in this subdivision and subdivision four of this section. 45 This subdivision shall not apply unless: 46 (1) (A) such written request notifies the commissioner of finance that 47 the taxpayer contemplates dissolution at or before the expiration of 48 such eighteen-month period, (B) the dissolution is in good faith begun 49 before the expiration of such eighteen-month period, (C) the dissolution 50 is completed; 51 (2) (A) such written request notifies the commissioner of finance that 52 a dissolution has in good faith been begun, and (B) the dissolution is 53 completed; or 54 (3) a dissolution has been completed at the time such written request 55 is made.

S. 8578 675

1 (g) Change of the allocation of taxpayer's income or capital. (1) 2 With regard to taxable years beginning before January first, two thou- 3 sand fifteen, no change of the allocation of income or capital upon 4 which the taxpayer's return, or any additional assessment, was based 5 shall be made where an assessment of tax is made during the additional 6 period of limitation under subparagraph three or four of paragraph (a) 7 of this subdivision, or under paragraph (c), (d) or (i) of this subdivi- 8 sion; and where any such assessment has been made, or where a notice of 9 deficiency has been mailed to the taxpayer on the basis of any such 10 proposed assessment, no change of the allocation of income or capital 11 shall be made in a proceeding on the taxpayer's claim for refund of such 12 assessment or on the taxpayer's petition for redetermination of such 13 deficiency. 14 (2) With regard to taxable years beginning on or after January first, 15 two thousand fifteen, no change of the allocation of income or capital 16 upon which the taxpayer's return, or any additional assessment, was 17 based shall be made where an assessment of tax is made during the addi- 18 tional period of limitation under subparagraph three or four of para- 19 graph (a) or under paragraph (c), (d) or (i) of this subdivision, except 20 to the extent such assessment is based on an increase or decrease in New 21 York state taxable income or other basis of tax or New York state tax, 22 or based on a change, correction or renegotiation of tax, or based on 23 the execution of a notice of waiver report which is required there- 24 under, or computation or recomputation of tax, which is treated in the 25 same manner as if it were a deficiency for New York state income tax 26 purposes; and where any such assessment has been made, or where a notice 27 of deficiency has been mailed to the taxpayer on the basis of any such 28 proposed assessment, no change of the allocation of income or capital 29 shall be made in a proceeding on the taxpayer's claim for refund of 30 such assessment or on the taxpayer's petition for redetermination of 31 such deficiency, except to the extent such assessment is based on an 32 increase or decrease in New York state taxable income or other basis of 33 tax or New York state tax, or based on a change or correction or renego- 34 tiation of tax, or based on the execution of a notice of waiver report 35 which is required thereunder, or computation or recomputation of tax, 36 which is treated in the same manner as if it were an overpayment for New 37 York state income tax purposes. 38 (h) Report concerning waste treatment facility. Under the circum- 39 stances described in subparagraph three of paragraph (g) of subdivision 40 eight of section 11-602 of this chapter or in subparagraph three of 41 paragraph (g) of subdivision eight of section 11-652 of this chapter, 42 the tax may be assessed within three years after the filing of the 43 report containing the information required by such paragraph. 44 (i) Report of changed or corrected sales and compensating use tax 45 liability. In the case of a tax imposed under subchapter two or three-A 46 of this chapter, if the taxpayer files a report or amended return or 47 report required thereunder, in respect of a change or correction of 48 sales and compensating use tax liability, the assessment, if not deemed 49 to have been made upon the filing of the report, may be made at any time 50 within two years after such report or amended return or report was 51 filed. The amount of such assessment of tax shall not exceed the amount 52 of the increase in city tax attributable to such state change or 53 correction. The provisions of this paragraph shall not affect the time 54 within which or the amount for which an assessment may otherwise be 55 made.

S. 8578 676

1 4. Omission of income on return. The tax may be assessed at any time 2 within six years after the return was filed if a taxpayer omits from 3 gross income required to be reported on a return under any of the named 4 subchapters an amount properly includable therein which is in excess of 5 twenty-five per centum of the amount of gross income stated in the 6 return. 7 For the purposes of this subdivision: 8 (a) the term "gross income" means gross income for federal income tax 9 purposes as reportable on a return under subchapter two or three-A of 10 this chapter and "gross earnings", "gross income," "gross operating 11 income" and "gross direct premiums less return premiums," as those terms 12 are used in whichever of the named subchapters is applicable; 13 (b) there shall not be taken into account any amount which is omitted 14 in the return if such amount is disclosed in the return, or in a state- 15 ment attached to the return, in a manner adequate to apprise the commis- 16 sioner of finance of the nature and amount of such item. 17 5. Suspension of running of period of limitations. The running of the 18 period of limitations on assessment or collection of tax or other 19 amount, or of a tranferee's liability, shall, after the mailing of a 20 notice of deficiency, be suspended for the period during which the 21 commissioner of finance is prohibited under subdivision three of section 22 11-672 of this subchapter from making the assessment or from collecting 23 by levy. 24 § 11-675 Interest on underpayment. 1. General. If any amount of tax 25 is not paid on or before the last date prescribed in whichever of the 26 named subchapters is applicable for payment, interest on such amount at 27 the underpayment rate set by the commissioner of finance pursuant to 28 section 11-687 of this subchapter, or, if no rate is set, at the rate of 29 seven and one-half percent per annum shall be paid for the period from 30 such last date to the date paid, whether or not any extension of time 31 for payment was granted. Interest under this subdivision shall not be 32 paid if the amount thereof is less than one dollar. 33 2. Exception as to estimated tax. This section shall not apply to any 34 failure to pay estimated tax under subchapter two, three or three-A of 35 this chapter. 36 3. Exception for mathematical error. No interest shall be imposed on 37 any underpayment of tax due solely to mathematical error if the taxpayer 38 files a return within the time prescribed in whichever of the named 39 subchapters is applicable, including any extension of time, and pays the 40 amount of underpayment within three months after the due date of such 41 return, as it may be extended. 42 4. Suspension of interest on deficiencies. If a waiver of 43 restrictions on assessment of a deficiency has been filed by the taxpay- 44 er, and if notice and demand by the commissioner of finance for payment 45 of such deficiency is not made within thirty days after the filing of 46 such waiver, interest shall not be imposed on such deficiency for the 47 period beginning immediately after such thirtieth day and ending with 48 the date of notice and demand. 49 5. Tax reduced by carryback. If the amount of tax under subchapter 50 two or three-A for any taxable year is reduced by reason of a carryback 51 of a net operating loss or a capital loss, such reduction in tax shall 52 not affect the computation of interest under this section for the period 53 ending with the filing date for the taxable year in which the net oper- 54 ating loss or capital loss arises. Such filing date shall be determined 55 without regard to extensions of time to file.

S. 8578 677

1 6. Interest treated as tax. Interest under this section shall be paid 2 upon notice and demand and shall be assessed, collected and paid in the 3 same manner as the taxes under the named subchapters. Any reference in 4 this subchapter to the tax imposed by the named subchapters, or any of 5 them, shall be deemed also to refer to interest imposed by this section 6 on such tax. 7 7. Interest on penalties or addition to tax. Interest shall be 8 imposed under subdivision one in respect to any assessable penalty or 9 addition to tax only if such assessable penalty or addition to tax is 10 not paid within ten days from the date of the notice and demand therefor 11 under subdivision two of section 11-683 of this subchapter in such case 12 interest shall be imposed only for the period from such date of the 13 notice and demand to the date of payment. 14 8. Payment within ten days after notice and demand. If notice and 15 demand is made for payment of any amount under subdivision two of 16 section 11-683 of this subchapter, and if such amount is paid within ten 17 days after the date of such notice and demand, interest under this 18 section on the amount so paid shall not be imposed for the period after 19 the date of such notice and demand. 20 9. Limitation on assessment and collection. Interest prescribed under 21 this section may be assessed and collected at any time during the period 22 within which the tax or other amount to which such interest relates may 23 be assessed and collected respectively. 24 10. Interest on erroneous refund. Any portion of tax or other amount 25 which has been erroneously refunded, and which is recoverable by the 26 commissioner of finance, shall bear interest at the underpayment rate 27 set by the commissioner of finance pursuant to section 11-687 of this 28 subchapter, or, if no rate is set, at the rate of seven and one-half 29 percent per annum from the date of the payment of the refund, but only 30 if it appears that any part of the refund was induced by fraud or a 31 misrepresentation of a material fact. 32 11. Satisfaction by credits. If any portion of a tax is satisfied by 33 credit of an overpayment, then no interest shall be imposed under this 34 section on the portion of the tax so satisfied for any period during 35 which, if the credit had not been made, interest would have been allow- 36 able with respect to such overpayment. 37 § 11-676 Additions to tax and civil penalties. 1. (a) Failure to file 38 return. (A) In case of failure to file a return under the named 39 subchapters on or before the prescribed date, determined with regard to 40 any extension of time for filing, unless it is shown that such failure 41 is due to reasonable cause and not due to willful neglect, there shall 42 be added to the amount required to be shown as tax on such return five 43 percent of the amount of such tax if the failure is for not more than 44 one month, with an additional five percent for each additional month or 45 fraction thereof during which such failure continues, not exceeding 46 twenty-five percent in the aggregate. 47 (B) In the case of a failure to file a return of tax within sixty days 48 of the date prescribed for filing of such return, determined with regard 49 to any extension of time for filing, unless it is shown that such fail- 50 ure is due to reasonable cause and not due to willful neglect, the addi- 51 tion to tax under subparagraph (A) of this paragraph shall not be less 52 than the lesser of one hundred dollars or one hundred percent of the 53 amount required to be shown as tax on such return. 54 (C) For purposes of this paragraph, the amount of tax required to be 55 shown on the return shall be reduced by the amount of any part of the 56 tax which is paid on or before the date prescribed for payment of the

S. 8578 678

1 tax and by the amount of any credit against the tax which may be claimed 2 upon the return. 3 (b) Failure to pay tax shown on return. In case of failure to pay the 4 amounts shown as tax on any return required to be filed under the named 5 subchapters on or before the prescribed date, determined with regard to 6 any extension of time for payment, unless it is shown that such failure 7 is due to reasonable cause and not due to willful neglect, there shall 8 be added to the amount shown as tax on such return one-half of one 9 percent of the amount of such tax if the failure is not for more than 10 one month, with an additional one-half of one percent for each addi- 11 tional month or fraction thereof during which such failure continues, 12 not exceeding twenty-five percent in the aggregate. For the purpose of 13 computing the addition for any month the amount of tax shown on the 14 return shall be reduced by the amount of any part of the tax which is 15 paid on or before the beginning of such month and by the amount of any 16 credit against the tax which may be claimed upon the return. If the 17 amount of tax required to be shown on a return is less than the amount 18 shown as tax on such return, this paragraph shall be applied by substi- 19 tuting such lower amount. 20 (c) Failure to pay tax required to be shown on return. In case of 21 failure to pay any amount in respect of any tax required to be shown on 22 a return required to be filed under the named subchapters which is not 23 so shown, including an assessment made pursuant to subdivision one of 24 section 11-673 of this subchapter, within ten days of the date of a 25 notice and demand therefor, unless it is shown that such failure is due 26 to reasonable cause and not due to willful neglect, there shall be added 27 to the amount of tax stated in such notice and demand one-half of one 28 percent of such tax if the failure is not for more than one month, with 29 an additional one-half of one percent for each additional month or frac- 30 tion thereof during which such failure continues, not exceeding twenty- 31 five percent in the aggregate. For the purpose of computing the addition 32 for any month, the amount of tax stated in the notice and demand shall 33 be reduced by the amount of any part of the tax which is paid before the 34 beginning of such month. 35 (d) Limitations on additions. 36 (A) With respect to any return, the amount of the addition under para- 37 graph (a) of this subdivision shall be reduced by the amount of the 38 addition under paragraph (b) of this subdivision for any month to which 39 an addition applies under both paragraphs (a) and (b). In any case 40 described in subparagraph (B) of paragraph (a) of this subdivision, the 41 amount of the addition under such paragraph (a) shall not be reduced 42 below the amount provided in such subparagraph. 43 (B) With respect to any return, the maximum amount of the addition 44 permitted under paragraph (c) of this subdivision shall be reduced by 45 the amount of the addition under paragraph (a) of this subdivision, 46 determined without regard to subparagraph (B) of such paragraph (a), 47 which is attributable to the tax for which the notice and demand is made 48 and which is not paid within ten days of such notice and demand. 49 2. Deficiency due to negligence. (a) If any part of a deficiency is 50 due to negligence or intentional disregard of this subchapter or any of 51 the named subchapters or rules or regulations thereunder, but without 52 intent to defraud, there shall be added to the tax an amount equal to 53 five percent of the deficiency. 54 (b) There shall be added to the tax, in addition to the amount deter- 55 mined under paragraph (a) of this subdivision, an amount equal to fifty 56 percent of the interest payable under subdivision one of section 11-675

S. 8578 679

1 with respect to the portion of the deficiency described in such para- 2 graph (a) which is attributable to the negligence or intentional disre- 3 gard referred to in such paragraph (a), for the period beginning on the 4 last date prescribed by law for payment of such deficiency, determined 5 without regard to any extension, and ending on the date of the assess- 6 ment of the tax, or, if earlier, the date of the payment of the tax. 7 (c) If any payment is shown on a return made by a payor with respect 8 to dividends, patronage dividends and interest under subsection (a) of 9 section six thousand forty-two, subsection (a) of section six thousand 10 forty-four or subsection (a) of section six thousand forty-nine of the 11 internal revenue code of nineteen hundred fifty-four, respectively, and 12 the payee fails to include any portion of such payment in gross income, 13 as that term is defined in paragraph (a) of subdivision four of section 14 11-674, any portion of an underpayment attributable to such failure 15 shall be treated, for purposes of this subdivision, as due to negligence 16 in the absence of clear and convincing evidence to the contrary. If any 17 addition to tax is imposed under this subdivision by reason of the 18 preceding sentence, the amount of the addition to tax imposed by para- 19 graph (a) of this subdivision shall be five percent of the portion of 20 the underpayment which is attributable to the failure described in this 21 paragraph. 22 3. Failure to file declaration or underpayment of estimated tax. If 23 any taxpayer fails to file a declaration of estimated tax under subchap- 24 ter two, three or three-A of this chapter, or fails to pay all or any 25 part of an amount which is applied as an installment against such esti- 26 mated tax, it shall be deemed to have made an underpayment of estimated 27 tax. There shall be added to the tax for the taxable year an amount at 28 the underpayment rate set by the commissioner of finance pursuant to 29 section 11-687 of this subchapter, or, if no rate is set, at the rate of 30 seven and one-half percent per annum upon the amount of the underpayment 31 for the period of the underpayment but not beyond the fifteenth day of 32 the fourth month following the close of the taxable year. Provided, 33 however, that, for taxable years beginning on or after January first, 34 two thousand seventeen and before January first, two thousand eighteen, 35 no amount shall be added to the tax with respect to the portion of such 36 tax related to the amount of any interest deductions directly or indi- 37 rectly attributable to the amount included in exempt CFC income pursuant 38 to subparagraph (ii) of paragraph (b) of subdivision five-a of section 39 11-652 of this chapter or the forty percent reduction of such exempt CFC 40 income in lieu of interest attribution if the election described in 41 paragraph (b) of subdivision five-a of such section is made. The amount 42 of the underpayment shall be, with respect to any installment of esti- 43 mated tax computed on the basis of either the preceding year's tax or 44 the second preceding year's tax, the excess of the amount required to be 45 paid over the amount, if any, paid on or before the last day prescribed 46 for such payment or, with respect to any other installment of estimated 47 tax, the excess of the amount of the installment which would be required 48 to be paid if the estimated tax were equal to ninety percent of the tax 49 shown on the return for the taxable year, or if no return was filed, 50 ninety percent of the tax for such year, over the amount, if any, of the 51 installment paid on or before the last day prescribed for such payment. 52 In any case in which there would be no underpayment if "eighty percent" 53 were substituted for "ninety percent" each place it appears in this 54 subdivision, the addition to the tax shall be equal to seventy-five 55 percent of the amount otherwise determined. No underpayment shall be

S. 8578 680

1 deemed to exist with respect to a declaration or installment otherwise 2 due on or after the termination of existence of the taxpayer. 3 4. Exception to addition for underpayment of estimated tax. The addi- 4 tion to tax under subdivision three of this section with respect to any 5 underpayment of any amount which is applied as an installment against 6 estimated tax under subchapter two, three or three-A of this chapter 7 shall not be imposed if the total amount of all payments of estimated 8 tax made on or before the last date prescribed for the payment of any 9 such amount equals or exceeds the amount which would have been required 10 to be paid on or before such date if the estimated tax were whichever of 11 the following is the least: 12 (a) The tax shown on the return of the taxpayer for the preceding 13 taxable year, if a return showing a liability for tax was filed by the 14 taxpayer for the preceding taxable year and such preceding year was a 15 taxable year of twelve months, or 16 (b) An amount equal to the tax computed at the rates applicable to the 17 taxable year, but otherwise on the basis of the facts shown on the 18 return of the taxpayer for, and the law applicable to, the preceding 19 taxable year, or 20 (c) (i) An amount equal to ninety per centum of the tax for the taxa- 21 ble year computed by placing on an annualized basis the taxable income: 22 (1) for the first three months or the first five months of the taxable 23 year, in the case of the installment required to be paid in the sixth 24 month, 25 (2) for the first six months or the first eight months of the taxable 26 year, in the case of the installment required to be paid in the ninth 27 month, and 28 (3) for the first nine months or the first eleven months of the taxa- 29 ble year, in the case of the installment required to be paid in the 30 twelfth month. 31 (ii) For purposes of subparagraph (i) of this paragraph the taxable 32 income shall be placed on an annualized basis by: 33 (1) multiplying it by twelve, or, in the case of a taxable year of 34 less than twelve months, the number of months in the taxable year, and 35 (2) dividing the resulting amount by the number of months in the taxa- 36 ble year, three, five, six, eight, nine or eleven, as the case may be, 37 referred to in subparagraph (i) of this paragraph, or 38 (d) (i) If the base period percentage for any six consecutive months 39 of the taxable year equals or exceeds seventy percent, an amount equal 40 to ninety percent of the tax determined in the following manner: 41 (A) take the taxable income for all months during the taxable year 42 preceding the filing month, 43 (B) divide such amount by the base period percentage for all months 44 during the taxable year preceding the filing month, 45 (C) determine the tax on the amount determined under clause (B) of 46 this subparagraph, and 47 (D) multiply the tax determined under clause (C) of this subparagraph 48 by the base period percentage for the filing month and all months during 49 the taxable year preceding the filing month. 50 (ii) For purposes of subparagraph (i) of this paragraph: 51 (A) the base period percentage for any period of months shall be the 52 average percent which the taxable income for the corresponding months in 53 each of the three preceding taxable years bears to the taxable income 54 for the three preceding taxable years. The commissioner of finance may 55 by regulations provide for the determination of the base period percent-

S. 8578 681

1 age in the case of reorganizations, new corporations, and other similar 2 circumstances, and 3 (B) the term "filing month" means the month in which the installment 4 is required to be paid. 5 5. (a) Except as provided in paragraph (b) of this subdivision, para- 6 graphs (a) and (b) of subdivision four of this section shall not apply 7 in the case of any corporation, or any predecessor corporation, which 8 had entire net income, or the portion thereof allocated within the city, 9 of one million dollars or more for any taxable year during the three 10 taxable years immediately preceding the taxable year involved. 11 (b) The amount treated as the estimated tax under paragraphs (a) and 12 (b) of subdivision four of this section shall in no event be less than 13 seventy-five percent of the tax shown on the return for the taxable year 14 beginning in nineteen hundred eighty-three or, if no return was filed, 15 seventy-five percent of the tax for such year. 16 6. Deficiency due to fraud. (a) If any part of a deficiency is due to 17 fraud, there shall be added to the tax an amount equal to two times the 18 deficiency. 19 (b) The addition to tax under this subdivision shall be in lieu of any 20 other addition to tax imposed by subdivision one or two of this section. 21 7. Additional penalty. Any person who with fraudulent intent shall 22 fail to pay under the named subchapters any tax, or to make, render, 23 sign or certify any return or declaration of estimated tax, or to supply 24 any information within the time required by or under any of the named 25 subchapters, shall be liable to penalty of not more than one thousand 26 dollars, in addition to any other amounts required under this subchapter 27 to be imposed, assessed and collected by the commissioner of finance. 28 The commissioner of finance shall have the power, in his or her 29 discretion, to waive, reduce or compromise any penalty under this subdi- 30 vision. 31 8. Additions treated as tax. The additions to tax and penalties 32 provided by this section shall be paid upon notice and demand and shall 33 be assessed, collected and paid in the same manner as taxes, and any 34 reference in this subchapter to tax imposed by any of the named subchap- 35 ters shall be deemed also to refer to the additions to tax and penalties 36 provided by this section. For purposes of section 11-672 of this 37 subchapter, this subdivision shall not apply to: 38 (a) any addition to tax under subdivision one of this section except 39 as to that portion attributable to a deficiency; 40 (b) any addition to tax under subdivision three or fourteen of this 41 section; and 42 (c) any additional penalties under subdivisions seven and twelve of 43 this section. 44 9. Determination of deficiency. For purposes of subdivisions two and 45 six of this section the amount shown as the tax by the taxpayer upon its 46 return shall be taken into account in determining the amount of the 47 deficiency only if such return was filed on or before the last day 48 prescribed for the filing of such return, determined with regard to any 49 extension of time for such filing. 50 10. Person defined. For purposes of subdivisions seven and twelve of 51 this section, the term "person" includes an individual, corporation or 52 partnership or an officer or employee of any corporation, including a 53 dissolved corporation, or a member or employee of any partnership, who 54 as such officer, employee, or member is under a duty to perform the act 55 in respect of which the violation occurs.

S. 8578 682

1 11. Substantial understatement of liability. If there is a substantial 2 understatement of tax for any taxable year, there shall be added to the 3 tax an amount equal to ten percent of the amount of any underpayment 4 attributable to such understatement. For purposes of this subdivision, 5 there is a substantial understatement of tax for any taxable year if the 6 amount of the understatement for the taxable year exceeds the greater of 7 ten percent of the tax required to be shown on the return for the taxa- 8 ble year or five thousand dollars. For purposes of this subdivision, the 9 term "understatement" means the excess of the amount of the tax required 10 to be shown on the return for the taxable year, over the amount of the 11 tax imposed which is shown on the return, reduced by any rebate, within 12 the meaning of subdivision eight of section 11-672 of this subchapter. 13 The amount of such understatement shall be reduced by that portion of 14 the understatement which is attributable to the tax treatment of any 15 item by the taxpayer if there is or was substantial authority for such 16 treatment, or any item with respect to which the relevant facts affect- 17 ing the item's tax treatment are adequately disclosed in the return or 18 in a statement attached to the return. The commissioner of finance may 19 waive all or any part of the addition to tax provided by this subdivi- 20 sion on a showing by the taxpayer that there was reasonable cause for 21 the understatement, or part thereof, and that the taxpayer acted in good 22 faith. 23 12. Aiding or assisting in the giving of fraudulent returns, reports, 24 statements or other documents. (a) Any person who, with the intent that 25 tax be evaded, shall, for a fee or other compensation or as an incident 26 to the performance of other services for which such person receives 27 compensation, aid or assist in, or procure, counsel, or advise the prep- 28 aration or presentation under, or in connection with any matter arising 29 under this chapter of any return, report, declaration, statement or 30 other document which is fraudulent or false as to any material matter, 31 or supply any false or fraudulent information, whether or not such 32 falsity or fraud is with the knowledge or consent of the person author- 33 ized or required to present such return, report, declaration, statement 34 or other document shall pay a penalty not exceeding ten thousand 35 dollars. 36 (b) For purposes of paragraph (a) of this subdivision, the term 37 "procures" includes ordering, or otherwise causing, a subordinate to do 38 an act, and knowing of, and not attempting to prevent, participation by 39 a subordinate in an act. The term "subordinate" means any other person, 40 whether or not a director, officer, employee, or agent of the taxpayer 41 involved, over whose activities the person has direction, supervision, 42 or control. 43 (c) For purposes of paragraph (a) of this subdivision, a person 44 furnishing typing, reproducing, or other mechanical assistance with 45 respect to a document shall not be treated as having aided or assisted 46 in the preparation of such document by reason of such assistance. 47 (d) The penalty imposed by this subdivision shall be in addition to 48 any other penalty provided by law. 49 13. Failure to file report of information relating to certain interest 50 payments. In case of failure to file the report of information required 51 under either subdivision two-a of section 11-605 of this chapter or 52 subdivision two-a of section 11-655 of this chapter, unless it is shown 53 that such failure is due to reasonable cause and not due to willful 54 neglect, there shall be added to the tax a penalty of five hundred 55 dollars.

S. 8578 683

1 14. Failure to include on return information relating to issuer's 2 allocation percentage. Where a return is filed but does not contain (1) 3 the information necessary to compute the taxpayer's issuer's allocation 4 percentage, as defined in subparagraph one of paragraph (b) of subdivi- 5 sion three of section 11-604 of this chapter, where the same is called 6 for on the return, or, (2) the taxpayer's issuer's allocation percent- 7 age, where the same is called for on the return but where all of the 8 information necessary for the computation of such percentage is not 9 called for on the return, then unless it is shown that such failure is 10 due to reasonable cause and not due to willful neglect there shall be 11 added to the tax a penalty of five hundred dollars. 12 15. False or fraudulent document penalty. Any taxpayer that submits a 13 false or fraudulent document to the department shall be subject to a 14 penalty of one hundred dollars per document submitted, or five hundred 15 dollars per tax return submitted. Such penalty shall be in addition to 16 any other penalty or addition provided by law. 17 § 11-677 Overpayment. 1. General. The commissioner of finance, 18 within the applicable period of limitations, may credit an overpayment 19 of tax and interest on such overpayment against any liability in respect 20 of any tax imposed by this title on the taxpayer who made the overpay- 21 ment, and the balance shall be refunded out of the proceeds of the tax. 22 Such credit of an overpayment shall be applied before such overpay- 23 ment, or any portion thereof, is paid to the state commissioner of taxa- 24 tion and finance pursuant to section one hundred seventy-one-m of the 25 tax law. 26 2. Credits against estimated tax. The commissioner of finance may 27 prescribe regulations providing for the crediting against the estimated 28 tax under subchapter two, three or three-A of this chapter for any taxa- 29 ble year of the amount determined to be an overpayment of tax under any 30 such subchapter for a preceding taxable year. If any overpayment of tax 31 is so claimed as a credit against estimated tax for the succeeding taxa- 32 ble year, such amount shall be considered as a payment of the tax under 33 subchapter two, three or three-A of this chapter for the succeeding 34 taxable year, whether or not claimed as a credit in the declaration of 35 estimated tax for such succeeding taxable year, and no claim for credit 36 or refund of such overpayment shall be allowed for the taxable year for 37 which the overpayment arises. 38 3. Rule where no tax liability. If there is no tax liability for a 39 period in respect of which an amount is paid as tax, such amount shall 40 be considered an overpayment. 41 4. Assessment and collection after limitation period. If any amount 42 of tax is assessed or collected after the expiration of the period of 43 limitations properly applicable thereto, such amount shall be considered 44 an overpayment. 45 5. Assignment of overpayment. A credit for an overpayment of tax 46 under any of the named subchapters may be assigned by the taxpayer to a 47 corporation liable to pay taxes under any of the named subchapters, and 48 the assignee of the whole or any part of such credit, on filing such 49 assignment with the commissioner of finance, shall thereupon be entitled 50 to credit upon the books of the commissioner of finance for the amount 51 thereof on its current account for taxes, in the same manner and to the 52 same effect as though the credit had originally been allowed in its 53 favor. 54 6. Notwithstanding article fifty-two of the civil practice law and 55 rules or any other provision of law to the contrary, the procedures for 56 the enforcement of money judgments shall not apply to the department of

S. 8578 684

1 finance, or to any officer or employee of such department, as a garnish- 2 ee, with respect to any amount of money to be refunded or credited to a 3 taxpayer under this chapter. 4 § 11-678 Limitations on credit or refund. 1. General. Claim for 5 credit or refund of an overpayment of tax under any of the named 6 subchapters shall be filed by the taxpayer within three years from the 7 time the return was filed or two years from the time the tax was paid, 8 whichever of such periods expires the later, or if no return was filed 9 within two years from the time the tax was paid. If the claim is filed 10 within the three year period, the amount of the credit or refund shall 11 not exceed the portion of the tax paid within the three years immediate- 12 ly preceding the filing of the claim plus the period of any extension of 13 time for filing the return. If the claim is not filed within the three 14 year period, but is filed within the two year period, the amount of the 15 credit or refund shall not exceed the portion of the tax paid during the 16 two years immediately preceding the filing of the claim. Except as 17 otherwise provided in this section, if no claim is filed, the amount of 18 a credit or refund shall not exceed the amount which would be allowable 19 if a claim had been filed on the date the credit or refund is allowed. 20 For special restriction in a proceeding on a claim for refund of tax 21 paid pursuant to an assessment made as a result of: (a) a net operating 22 loss carryback, or (b) an increase or decrease in federal or New York 23 state taxable income or other basis of tax or federal or New York state 24 tax, or (c) a federal or New York state change or correction or renego- 25 tiation, or computation or recomputation of tax, which is treated in the 26 same manner as if it were a deficiency for federal or New York state 27 income tax purposes, see paragraph (g) of subdivision three of section 28 11-674 of this subchapter. 29 2. Extension of time by agreement. If any agreement under the 30 provisions of paragraph (b) of subdivision three of section 11-674 of 31 this subchapter, extending the period of assessment of tax, is made 32 within the period prescribed in subdivision one of this section for the 33 filing of a claim for credit or refund, the period for filing a claim 34 for credit or refund, or for making credit or refund if no claim is 35 filed, shall not expire prior to six months after the expiration of the 36 period within which an assessment may be made pursuant to the agreement 37 or any extension thereof. The amount of such credit or refund shall not 38 exceed the portion of the tax paid after the execution of the agreement 39 and before the filing of the claim or the making of the credit or 40 refund, as the case may be, plus the portion of the tax paid within the 41 period which would be applicable under subdivision one if a claim had 42 been filed on the date the agreement was executed. 43 3. Notice of change or correction of federal or New York state income 44 or other basis of tax. If a taxpayer is required by subchapter two, 45 three or three-A of this chapter to file a report or amended return in 46 respect of (a) a decrease or increase in federal or New York state taxa- 47 ble income, alternative minimum taxable income or other basis of tax or 48 federal or New York state tax, (b) a federal or New York state change or 49 correction or renegotiation, or computation or recomputation of tax, 50 which is treated in the same manner as if it were an overpayment for 51 federal or New York state income tax purposes, claim for credit or 52 refund of any resulting overpayment of tax shall be filed by the taxpay- 53 er within two years from the time such report or amended return was 54 required to be filed with the commissioner of finance. If the report or 55 amended return required by subchapter two, three or three-A of this 56 chapter is not filed within the ninety day period therein specified, no

S. 8578 685

1 interest shall be payable on any claim for credit or refund of the over- 2 payment attributable to the federal or New York state change or 3 correction. The amount of such credit or refund: (c) shall, (i) for 4 taxable years beginning before January first, two thousand fifteen, be 5 computed without change of the allocation of income or capital upon 6 which the taxpayer's return, or any additional assessment, was based, 7 and, (ii) for taxable years beginning on or after January first, two 8 thousand fifteen, be computed without change of the allocation of 9 income or capital upon which the taxpayer's return, or any additional 10 assessment, was based to the extent that the claim for refund arises 11 from a decrease or increase in federal taxable income or other basis 12 of tax or federal tax, or from a federal change, correction, renegoti- 13 ation, computation or recomputation of tax, which is treated in the 14 same manner as if it were an overpayment for federal income tax 15 purposes, and (d) shall not exceed the amount of the reduction in tax 16 attributable to such decrease or increase in federal or New York state 17 taxable income, alternative minimum taxable income or other basis of tax 18 or federal or New York state tax or to such federal or New York state 19 change or correction or renegotiation, or computation or recomputation 20 of tax. 21 This subdivision shall not affect the time within which or the amount 22 for which a claim for credit or refund may be filed apart from this 23 subdivision. 24 4. Overpayment attributable to net operating loss carryback or capital 25 loss carryback. A claim for credit or refund of so much of an overpay- 26 ment under subchapter two or three-A of this chapter as is attributable 27 to the application to the taxpayer of a net operating loss carryback or 28 a capital loss carryback shall be filed within three years from the time 29 the return was due, including extensions thereof, for the taxable year 30 of the loss, or within the period prescribed in subdivision two of this 31 section in respect of such taxable year, or within the period prescribed 32 in subdivision three of this section, where applicable, in respect to 33 the taxable year to which the net operating loss or capital loss is 34 carried back, whichever expires the latest. Where such claim for credit 35 or refund is filed after the expiration of the period prescribed in 36 subdivision one or in subdivision two of this section where applicable, 37 in respect to the taxable year to which the net operating loss is 38 carried back, the amount of such credit or refund shall be computed 39 without change of the allocation of income or capital upon which the 40 taxpayer's return, or any additional assessment, was based. 41 5. Failure to file claim within prescribed period. No credit or 42 refund shall be allowed or made, except as provided in subdivision six 43 of this section or subdivision four of section 11-681 of this subchap- 44 ter, after the expiration of the applicable period of limitation speci- 45 fied in this subchapter, unless a claim for credit or refund is filed by 46 the taxpayer within such period. Any later credit shall be void and 47 any later refund erroneous. No period of limitations specified in any 48 other law shall apply to the recovery by a taxpayer of moneys paid in 49 respect of taxes under the named subchapters. 50 6. Effect of a petition to tax appeals tribunal. If a notice of defi- 51 ciency for a taxable year has been mailed to the taxpayer under section 52 11-672 of this subchapter and if the taxpayer files a timely petition 53 with the tax appeals tribunal under section 11-680 of this subchapter, 54 the tax appeals tribunal may determine that the taxpayer has made an 55 overpayment for such year, whether or not it also determines a deficien- 56 cy for such year. No separate claim for credit or refund for such year

S. 8578 686

1 shall be filed, and no credit or refund for such year shall be allowed 2 or made, except: 3 (a) as to overpayment determined by a decision of the tax appeals 4 tribunal which has become final; and 5 (b) as to any amount collected in excess of an amount computed in 6 accordance with the decision of the tax appeals tribunal which has 7 become final; and 8 (c) as to any amount collected after the period of limitation upon the 9 making of levy for collection has expired; and 10 (d) as to any amount claimed as a result of a change or correction 11 described in subdivision three of this section. 12 7. Limit on amount of credit or refund. The amount of overpayment 13 determined under subdivision six of this section shall, when the deci- 14 sion of the tax appeals tribunal has become final, be credited or 15 refunded in accordance with subdivision one of section 11-677 of this 16 subchapter and shall not exceed the amount of tax which the tax appeals 17 tribunal determines as part of its decision was paid: 18 (a) after the mailing of the notice of deficiency, or 19 (b) within the period which would be applicable under subdivision one, 20 two or three of this section, if on the date of the mailing of the 21 notice of deficiency a claim had been filed, whether or not filed, stat- 22 ing the ground upon which the tax appeals tribunal finds that there is 23 an overpayment. 24 For special restriction on credit or refund in a proceeding on a peti- 25 tion for redetermination of a deficiency where the notice of deficiency 26 is issued as a result of (i) a net operating loss carryback, or (ii) an 27 increase or decrease in federal or New York state taxable income or 28 other basis of tax or federal or New York state tax, or (iii) a federal 29 or New York state change or correction or renegotiation, or computation 30 or recomputation of tax, which is treated in the same manner as if it 31 were a deficiency for federal or New York state income tax purposes, see 32 paragraph (g) of subdivision three of section 11-674 of this subchapter. 33 8. Early return. For purposes of this section, any return filed 34 before the last day prescribed for the filing thereof shall be consid- 35 ered as filed on such last day, determined without regard to any exten- 36 sion of time granted the taxpayer. 37 9. Prepaid tax. For purposes of this section, any tax paid by the 38 taxpayer before the last day prescribed for its payment, including any 39 amount paid by the taxpayer as estimated tax for a taxable year, shall 40 be deemed to have been paid by it on the fifteenth day of the third 41 month following the close of the taxable year the income of which is the 42 basis for tax under subchapter two, three or three-A of this chapter, or 43 on the last day prescribed in part one of subchapter three or subchapter 44 four of this chapter for the filing of a final return for such taxable 45 year, or portion thereof, determined in all cases without regard to any 46 extension of time granted the taxpayer. 47 10. Cross reference. For provision barring refund of overpayment 48 credited against tax of a succeeding year, see subdivision two of 49 section 11-677 of this subchapter. 50 11. Notice of change or correction of sales and compensating use tax 51 liability. (a) If a taxpayer is required by subchapter two or three-A of 52 this chapter to file a report or amended return in respect of a change 53 or correction of its sales and compensating use tax liability, claim for 54 credit or refund of any resulting overpayment of tax shall be filed by 55 the taxpayer within two years from the time such report or amended 56 return was required to be filed with the commissioner of finance. The

S. 8578 687

1 amount of such credit or refund shall be computed without change of the 2 allocation of income or capital upon which the taxpayer's return, or any 3 additional assessment, was based, and shall not exceed the amount of the 4 reduction in tax attributable to such change or correction of sales and 5 compensating use tax liability. 6 (b) This subdivision shall not affect the time within which or the 7 amount for which a claim for credit or refund may be filed apart from 8 this subdivision. 9 § 11-679 Interest on overpayment. 1. General. Notwithstanding the 10 provisions of section three-a of the general municipal law, interest 11 shall be allowed and paid as follows at the overpayment rate set by the 12 commissioner of finance pursuant to section 11-687 of this subchapter, 13 or, if no rate is set, at the rate of six percent per annum upon any 14 overpayment in respect to the tax imposed by any of the named subchap- 15 ters: 16 (a) from the date of the overpayment to the due date of an amount 17 against which a credit is taken; 18 (b) from the date of the overpayment to a date, to be determined by 19 the commissioner of finance, preceding the date of a refund check by not 20 more than thirty days, whether or not such refund check is accepted by 21 the taxpayer after tender of such check to the taxpayer. The acceptance 22 of such check shall be without prejudice to any right of the taxpayer to 23 claim any additional overpayment and interest thereon. 24 (c) Late and amended returns and claims for credit or refund. 25 Notwithstanding paragraph (a) or (b) of this subdivision, in the case of 26 an overpayment claimed on a return of tax which is filed after the last 27 date prescribed for filing such return, determined with regard to exten- 28 sions, or claimed on an amended return of tax or claimed on a claim for 29 credit or refund, no interest shall be allowed or paid for any day 30 before the date on which such return or claim is filed. 31 (d) Interest on certain refunds. To the extent provided for in regu- 32 lations promulgated by the commissioner of finance, if an item of 33 income, gain, loss, deduction or credit is changed from the taxable year 34 or period in which it is reported to the taxable year or period in which 35 it belongs and the change results in an underpayment in a taxable year 36 or period and an overpayment in some other taxable year or period, the 37 provisions of paragraph (c) of this subdivision with respect to an over- 38 payment shall not be applicable to the extent that the limitation in 39 such paragraph on the right to interest would result in a taxpayer not 40 being allowed interest for a length of time with respect to an overpay- 41 ment while being required to pay interest on an equivalent amount of the 42 related underpayment. However, this paragraph shall be not construed as 43 limiting or mitigating the effect of any statute of limitations or any 44 other provision of law relating to the authority of such commissioner to 45 issue a notice of deficiency or to allow a credit or refund of an over- 46 payment. 47 (e) Amounts of less than one dollar. No interest shall be allowed or 48 paid if the amount thereof is less than one dollar. 49 2. Advance payment of tax and estimated tax. The provisions of subdi- 50 visions eight and nine of section 11-678 of this subchapter applicable 51 in determining the date of payment of tax for purposes of determining 52 the period of limitations on credit or refund, shall be applicable in 53 determining the date of payment for purposes of this section. 54 3. Tax refund within three months of claim for overpayment. If any 55 overpayment of tax imposed by any of the named subchapters is credited 56 or refunded within three months after the last date prescribed, or

S. 8578 688

1 permitted by extension of time, for filing the return of such tax on 2 which such overpayment was claimed or within three months after such 3 return was filed, whichever is later, or within three months after an 4 amended return was filed claiming such overpayment or within three 5 months after a claim for credit or refund was filed on which such over- 6 payment was claimed, no interest shall be allowed under this section on 7 any such overpayment. For purposes of this subdivision, any amended 8 return or claim for credit or refund filed before the last day 9 prescribed, or permitted by extension of time, for the filing of the 10 return of tax for such year or period shall be considered as filed on 11 such last day. 12 4. Refund of tax caused by carryback. For purposes of this section, 13 if any overpayment of tax imposed by subchapter two or three-A of this 14 chapter results from a carryback of a net operating loss or a net capi- 15 tal loss, such overpayment shall be deemed not to have been made prior 16 to the filing date for the taxable year in which such net operating loss 17 or net capital loss arises. Such filing date shall be determined without 18 regard to extensions of time to file. For purposes of subdivision three 19 of this section any overpayment described herein shall be treated as an 20 overpayment for the loss year and such subdivision shall be applied with 21 respect to such overpayment by treating the return for the loss year as 22 not filed before claim for such overpayment is filed. The term "loss 23 year" means the taxable year in which such loss arises. 24 5. No interest until return in processible form. 25 (a) For purposes of subdivisions one and three of this section, a 26 return shall not be treated as filed until it is filed in processible 27 form. 28 (b) For purposes of paragraph (a) of this subdivision, a return is in 29 a processible form if: 30 (A) such return is filed on a permitted form, and 31 (B) such return contains: 32 (i) the taxpayer's name; address, and identifying number and the 33 required signatures, and 34 (ii) sufficient required information, whether on the return or on 35 required attachments, to permit the mathematical verification of tax 36 liability shown on the return. 37 6. Cross reference. For provision with respect to interest after 38 failure to file a report of federal or New York state change or 39 correction or amended return under subchapter two, three or three-A, see 40 subdivision three of section 11-678 of this subchapter. 41 § 11-680 Petition to tax appeals tribunal. 1. General. The form of a 42 petition to the tax appeals tribunal, and further proceedings before the 43 tax appeals tribunal in any case initiated by the filing of a petition, 44 shall be governed by such rules as the tax appeals tribunal shall 45 prescribe. No petition shall be denied in whole or in part without 46 opportunity for a hearing on reasonable prior notice. Such hearing and 47 any appeal to the tribunal sitting en banc from the decision rendered in 48 such hearing shall be conducted in the manner and subject to the 49 requirements prescribed by the tax appeals tribunal pursuant to sections 50 one hundred sixty-eight through one hundred seventy-two of the charter 51 of the preceding municipality as it existed January first, nineteen 52 hundred ninety-four. A decision of the tax appeals tribunal shall be 53 rendered, and notice thereof shall be given, in the manner provided by 54 section one hundred seventy-one of the charter of the preceding munici- 55 pality as it existed January first, nineteen hundred ninety-four.

S. 8578 689

1 2. Petition for redetermination of a deficiency. Within ninety days, 2 or one hundred fifty days if the notice is addressed to a taxpayer whose 3 last known address is outside of the United States, after the mailing of 4 the notice of deficiency authorized by section 11-672 of this subchap- 5 ter, or if the commissioner of finance has established a conciliation 6 procedure pursuant to section 11-124 of this title and the taxpayer has 7 requested a conciliation conference in accordance therewith, after nine- 8 ty days from the mailing of the conciliation decision or the date of the 9 commissioner's confirmation of the discontinuance of the conciliation 10 proceeding, the taxpayer may file a petition with the tax appeals tribu- 11 nal for redetermination of the deficiency. Such petition may also assert 12 a claim for refund for the same taxable year or years, subject to the 13 limitations of subdivision seven of section 11-678 of this subchapter. 14 For special restriction where the notice of deficiency relates to a 15 proposed assessment made as a result of: (a) a net operating loss carry- 16 back or a capital loss carryback, (b) an increase or decrease in federal 17 or New York state taxable income or other basis of tax or federal or New 18 York state tax, or (c) a federal or New York state change or correction 19 or renegotiation, or computation or recomputation of tax, which is 20 treated in the same manner as if it were a deficiency for federal or New 21 York state income tax purposes, see paragraph (g) of subdivision three 22 of section 11-674 of this subchapter. 23 3. Petition for refund. A taxpayer may file a petition with the tax 24 appeals tribunal for the amounts asserted in a claim for refund if: 25 (a) the taxpayer has filed a timely claim for refund with the commis- 26 sioner of finance, 27 (b) the taxpayer has not previously filed with the tax appeals tribu- 28 nal a timely petition under subdivision two of this section for the same 29 taxable year unless the petition under this subdivision relates to a 30 separate claim for credit or refund properly filed under subdivision six 31 of section 11-678 of this subchapter, and 32 (c) either: (1) six months have expired since the claim was filed, or 33 (2) the commissioner of finance has mailed to the taxpayer, by regis- 34 tered or certified mail, a notice of disallowance of such claim in whole 35 or in part. 36 No petition under this subdivision shall be filed more than two years 37 after the date of mailing of a notice of disallowance, unless prior to 38 the expiration of such two year period it has been extended by written 39 agreement between the taxpayer and the commissioner of finance. If a 40 taxpayer files a written waiver of the requirement that the taxpayer be 41 mailed a notice of disallowance, the two year period prescribed by this 42 subdivision for filing a petition for refund shall begin on the date 43 such waiver is filed. 44 (d) If the commissioner of finance has established a conciliation 45 procedure pursuant to section 11-124 of this title, a taxpayer which is 46 eligible to file a petition for refund with the tax appeals tribunal 47 pursuant to this subdivision may request a conciliation conference prior 48 to filing such petition, provided the request is made within the time 49 prescribed for filing the petition. Notwithstanding anything in this 50 subdivision to the contrary, if the taxpayer has requested a concil- 51 iation conference in accordance with the procedure established pursuant 52 to section 11-124 of this title, a petition for refund may be filed no 53 later than ninety days from the mailing of the conciliation decision or 54 the date of the commissioner's confirmation of the discontinuance of the 55 conciliation proceeding. 56 4. Assertion of deficiency after filing petition.

S. 8578 690

1 (a) Petition for redetermination of deficiency. If a taxpayer files 2 with the tax appeals tribunal a petition for redetermination of a defi- 3 ciency, the tax appeals tribunal shall have power to determine a greater 4 deficiency than asserted in the notice of deficiency and to determine if 5 there should be assessed any addition to tax or penalty provided in 6 section 11-676 of this subchapter, if claim therefor is asserted at or 7 before the hearing under rules of the tax appeals tribunal. 8 (b) Petition for refund. If the taxpayer files with the tax appeals 9 tribunal a petition for credit or refund for a taxable year, the tax 10 appeals tribunal may: 11 (1) determine a deficiency for such year as to any amount of deficien- 12 cy asserted at or before the hearing under rules of the tax appeals 13 tribunal and within the period in which an assessment would be timely 14 under section 11-674 of this subchapter, or 15 (2) deny so much of the amount for which credit or refund is sought in 16 the petition, as is offset by other issues pertaining to the same taxa- 17 ble year which are asserted at or before the hearing under rules of the 18 tax appeals tribunal. 19 (c) Opportunity to respond. A taxpayer shall be given a reasonable 20 opportunity to respond to any matters asserted by the commissioner of 21 finance under this subdivision. 22 (d) Restriction on further notices of deficiency. If the taxpayer 23 files a petition with the tax appeals tribunal under this section, no 24 notice of deficiency under section 11-672 of this subchapter may there- 25 after be issued by the commissioner of finance for the same taxable 26 year, except in case of fraud or with respect to an increase or decrease 27 in federal or New York state taxable income, alternative minimum taxable 28 income or other basis of tax or federal or New York state tax or a 29 federal or New York state change or correction or renegotiation, or 30 computation or recomputation of tax, which is treated in the same manner 31 as if it were a deficiency for federal or New York state income tax 32 purposes, required to be reported under subchapter two, three or three-A 33 of this chapter or with respect to a state change or correction of sales 34 and compensating use tax liability required to be reported under 35 subchapter two or three-A of this chapter. 36 5. Burden of proof. In any case before the tax appeals tribunal under 37 this subchapter, the burden of proof shall be upon the petitioner except 38 for the following issues, as to which the burden of proof shall be upon 39 the commissioner of finance: 40 (a) whether the petitioner has been guilty of fraud with intent to 41 evade tax; 42 (b) whether the petitioner is liable as the transferee of property of 43 a taxpayer, but not to show that the taxpayer was liable for the tax; 44 (c) whether the petitioner is liable for any increase in a deficiency 45 where such increase is asserted initially after a notice of deficiency 46 was mailed and a petition under this section filed, unless such increase 47 in deficiency is the result of an increase or decrease in federal or New 48 York state taxable income, alternative minimum taxable income or other 49 basis of tax or federal or New York state tax or a federal or New York 50 state change or correction or renegotiation, or computation or recompu- 51 tation of tax, which is treated in the same manner as if it were a defi- 52 ciency for federal or New York state income tax purposes, required to be 53 reported under subchapter two, three or three-A of this chapter, and of 54 which increase, decrease, change or correction or renegotiation, or 55 computation or recomputation, the commissioner of finance had no notice 56 at the time he or she mailed the notice of deficiency or unless such

S. 8578 691

1 increase in deficiency is the result of a change or correction of sales 2 and compensating use tax liability required to be reported under 3 subchapter two or three-A of this chapter, and of which change or 4 correction the commissioner of finance had no notice at the time he or 5 she mailed the notice of deficiency; and 6 (d) whether any person is liable for a penalty under subdivision 7 twelve of section 11-676 of this subchapter. 8 6. Evidence of related federal or state determination. Evidence of a 9 federal or state determination relating to issues raised in a case 10 before the tax appeals tribunal under this section shall be admissible, 11 under rules established by the tax appeals tribunal. 12 7. Jurisdiction over other years. The tax appeals tribunal shall 13 consider such facts with relation to the taxes for other years as may be 14 necessary correctly to determine the tax for the taxable year, but in so 15 doing shall have no jurisdiction to determine whether or not the tax for 16 any other year has been overpaid or underpaid. 17 § 11-681 Review of tax appeals tribunal's decision. 1. General. A 18 decision of the tax appeals tribunal sitting en banc shall be subject to 19 judicial review at the instance of any taxpayer affected thereby in the 20 manner provided by law for the review of a final decision or action of 21 administrative agencies of the city. An application by a taxpayer for 22 such review must be made within four months after notice of the decision 23 is sent by certified mail, return receipt requested, to the taxpayer and 24 the commissioner of finance. 25 2. Judicial review exclusive remedy. The review of a decision of the 26 tax appeals tribunal provided by this section shall be the exclusive 27 remedy available to any taxpayer for the judicial determination of the 28 liability of the taxpayer for the taxes imposed by the named subchap- 29 ters. 30 3. Assessment pending review; review bond. Irrespective of any 31 restrictions on the assessment and collection of deficiencies, the 32 commissioner of finance may assess a deficiency determined by the tax 33 appeals tribunal in a decision rendered pursuant to section one hundred 34 seventy-one of the charter of the preceding municipality as it existed 35 January first, nineteen hundred ninety-four after the expiration of the 36 period specified in subdivision one, notwithstanding that an application 37 for judicial review in respect of such deficiency has been duly made by 38 the taxpayer unless the taxpayer, at or before the time the taxpayer's 39 application for review is made, has paid the deficiency, has deposited 40 with the commissioner of finance the amount of the deficiency, or has 41 filed with the commissioner of finance a bond, which may be a jeopardy 42 bond under subdivision eight of section 11-685 of this subchapter, in 43 the amount of the portion of the deficiency, including interest and 44 other amounts, in respect of which the application for review is made 45 and all costs and charges which may accrue against the taxpayer in the 46 prosecution of the proceeding, including costs of all appeals, and with 47 surety approved by a justice of the supreme court of the state, condi- 48 tioned upon the payment of the deficiency, including interest and other 49 amounts, as finally determined and such costs and charges. If, as a 50 result of a waiver of the restrictions on the assessment and collection 51 of a deficiency, any part of the amount determined by the tax appeals 52 tribunal is paid after the filing of the review bond, such bond shall, 53 at the request of the taxpayer, be proportionately reduced. 54 4. Credit, refund or abatement after review. If the amount of a defi- 55 ciency determined by the tax appeals tribunal is disallowed in whole or 56 in part by the court of review, the amount so disallowed shall be cred-

S. 8578 692

1 ited or refunded to the taxpayer, without the making of claim therefor, 2 or, if payment has not been made, shall be abated. 3 5. Date of finality of tax appeals tribunal decision. A decision of 4 the tax appeals tribunal shall become final upon the expiration of the 5 period specified in subdivision one of this section for making an appli- 6 cation for review, if no such application has been duly made within such 7 time, or if such application has been duly made, upon expiration of the 8 time for all further judicial review, or upon the rendering by the tax 9 appeals tribunal of a decision in accordance with the mandate of the 10 court on review provided, however, for the purpose of making an applica- 11 tion for review, the decision of the tax appeals tribunal shall be 12 deemed final on the date the notice of decision is sent by certified 13 mail to the taxpayer and the commissioner of finance. 14 § 11-682 Mailing rules; holidays; miscellaneous. 1. Timely mailing. 15 (a) If any return, declaration of estimated tax, claim, statement, 16 notice, petition, or other document required to be filed, or any payment 17 required to be made, within a prescribed period or on or before a 18 prescribed date under authority of any provision of this subchapter or 19 of the named subchapters is, after such period or such date, delivered 20 by United States mail to the commissioner of finance, tax appeals tribu- 21 nal, bureau, office, officer or person with which or with whom such 22 document is required to be filed, or to which or to whom such payment is 23 required to be made, the date of the United States postmark stamped on 24 the envelope shall be deemed to be the date of delivery. This subdivi- 25 sion shall apply only if the postmark date falls within the prescribed 26 period or on or before the prescribed date for the filing of such docu- 27 ment, or for making the payment, including any extension granted for 28 such filing or payment, and only if such document or payment was depos- 29 ited in the mail, postage prepaid, properly addressed to the commission- 30 er of finance, tax appeals tribunal, bureau, office, officer or person 31 with which or with whom the document is required to be filed or to which 32 or to whom such payment is required to be made. If any document is sent 33 by United States registered mail, such registration shall be prima facie 34 evidence that such document was delivered to the commissioner of 35 finance, tax appeals tribunal, bureau, office, officer or person to 36 which or to whom addressed. To the extent that the commissioner of 37 finance or, where relevant, the tax appeals tribunal shall prescribe by 38 regulation, certified mail may be used in lieu of registered mail under 39 this subdivision. Except as provided in paragraph (b) of this subdivi- 40 sion, this subdivision shall apply in the case of postmarks not made by 41 the United States postal service only if and to the extent provided by 42 regulations of the commissioner of finance or, where relevant, the tax 43 appeals tribunal. 44 (b) (i) Any reference in paragraph (a) of this subdivision to the 45 United States mail shall be treated as including a reference to any 46 delivery service designated by the secretary of the treasury of the 47 United States pursuant to section seventy-five hundred two of the inter- 48 nal revenue code and any reference in paragraph (a) of this subdivision 49 to a United States postmark shall be treated as including a reference to 50 any date recorded or marked in the manner described in section seventy- 51 five hundred two of the internal revenue code by a designated delivery 52 service. If the commissioner of finance finds that any delivery service 53 designated by such secretary is inadequate for the needs of the city, 54 the commissioner may withdraw such designation for purposes of this 55 title. The commissioner may also designate additional delivery services 56 meeting the criteria of section seventy-five hundred two of the internal

S. 8578 693

1 revenue code for purposes of this title, or may withdraw any such desig- 2 nation if the commissioner of finance finds that a delivery service so 3 designated is inadequate for the needs of the city. Any reference in 4 paragraph (a) of this subdivision to the United States mail shall be 5 treated as including a reference to any delivery service designated by 6 the commissioner of finance and any reference in paragraph (a) of this 7 subdivision to a United States postmark shall be treated as including a 8 reference to any date recorded or marked in the manner described in 9 section seventy-five hundred two of the internal revenue code by a 10 delivery service designated by the commissioner of finance, provided, 11 however, any withdrawal of designation or additional designation by the 12 commissioner of finance shall not be effective for purposes of service 13 upon the tax appeals tribunal, unless and until such withdrawal of 14 designation or additional designation is ratified by the president of 15 the tax appeals tribunal. 16 (ii) Any equivalent of registered or certified mail designated by the 17 United States secretary of the treasury, or as may be designated by the 18 commissioner of finance pursuant to the same criteria used by such 19 secretary for such designations pursuant to section seventy-five hundred 20 two of the internal revenue code, shall be included within the meaning 21 of registered or certified mail as used in paragraph (a) of this subdi- 22 vision. If the commissioner of finance finds that any equivalent of 23 registered or certified mail designated by such secretary or the commis- 24 sioner of finance is inadequate for the needs of the city, the commis- 25 sioner of finance may withdraw such designation for purposes of this 26 title, provided, however, any withdrawal of designation or additional 27 designation by the commissioner of finance shall not be effective for 28 purposes of service upon the tax appeals tribunal, unless and until such 29 withdrawal of designation or additional designation is ratified by the 30 president of the tax appeals tribunal. 31 2. Last known address. For purposes of this subchapter, a taxpayer's 32 last known address shall be the address given in the last return filed 33 by it, unless subsequently to the filing of such return the taxpayer 34 shall have notified the commissioner of finance of a change of address. 35 3. Last day a Saturday, Sunday or legal holiday. When the last day 36 prescribed under authority of this subchapter or the named subchapters, 37 including any extension of time, for performing any act falls on a 38 Saturday, Sunday, or legal holiday in the state, the performance of such 39 act shall be considered timely if it is performed on the next succeeding 40 day which is not a Saturday, Sunday or legal holiday. 41 4. Certificate; unfiled return. For purposes of this subchapter and 42 sections one hundred sixty-eight through one hundred seventy-two of the 43 charter of the preceding municipality as it existed January first, nine- 44 teen hundred ninety-four, the certificate of the commissioner of finance 45 to the effect that a tax has not been paid, that a return or declaration 46 of estimated tax has not been filed, or that information has not been 47 supplied, as required by or under the provisions of this chapter, shall 48 be prima facie evidence that such tax has not been paid, that such 49 return or declaration has not been filed, or that such information has 50 not been supplied. 51 § 11-683 Collection, levy and liens. 1. Collection procedures. The 52 taxes imposed by the named subchapters shall be collected by the commis- 53 sioner of finance, and he or she may establish the mode or time for the 54 collection of any amount due him or her thereunder if not otherwise 55 specified. The commissioner of finance shall, upon request, give a 56 receipt for any sum collected thereunder. The commissioner of finance

S. 8578 694

1 may authorize banks or trust companies which are depositaries or finan- 2 cial agents of the city to receive and give a receipt for any tax 3 imposed under the named subchapters in such manner, at such times, and 4 under such conditions as the commissioner of finance may prescribe; and 5 the commissioner of finance shall prescribe the manner, times and condi- 6 tions under which the receipt of such tax by such banks and trust compa- 7 nies is to be treated as payment of such tax to the commissioner of 8 finance. 9 2. Notice and demand for tax. The commissioner of finance shall as 10 soon as practicable give notice to each taxpayer liable for any amount 11 of tax, addition to tax, penalty or interest, which has been assessed 12 but remains unpaid, stating the amount and demanding payment thereof. 13 Such notice shall be left at the principal office of the taxpayer in the 14 city or shall be sent by mail to such taxpayer's last known address. 15 Except where the commissioner of finance determines that collection 16 would be jeopardized by delay, if any tax is assessed prior to the last 17 date, including any date fixed by extension, prescribed for payment of 18 such tax, payment of such tax shall not be demanded until after such 19 date. 20 3. Issuance of warrant after notice and demand. If any corporation or 21 other person liable under the named subchapters for the payment of any 22 tax, addition to tax, penalty or interest neglects or refuses to pay the 23 same within ten days after notice and demand therefor is given to such 24 corporation or other person under subdivision two of this section, the 25 commissioner of finance may within six years after the date of such 26 assessment issue a warrant directed to the sheriff of any county of the 27 state, or to any officer or employee of the department of finance, 28 commanding him or her to levy upon and sell the real and personal prop- 29 erty of such corporation or other person for the payment of the amount 30 assessed, with the cost of executing the warrant, and to return such 31 warrant to the commissioner of finance, and pay to the commissioner the 32 money collected by virtue thereof within sixty days after the receipt of 33 the warrant. If the commissioner of finance finds that the collection 34 of the tax or other amount is in jeopardy, notice and demand for immedi- 35 ate payment of such tax may be made by the commissioner of finance and 36 upon failure or refusal to pay such tax or other amount the commissioner 37 of finance may issue a warrant without regard to the ten-day period 38 provided in this subdivision. 39 4. Copy of warrant to be filed and lien to be created. Any sheriff or 40 officer or employee who receives a warrant under subdivision three of 41 this section shall within five days thereafter file a copy with the 42 clerk of the appropriate county. The clerk shall thereupon enter in the 43 judgment docket, in the column for judgment debtors, the name of the 44 taxpayer mentioned in the warrant, and in appropriate columns the tax or 45 other amounts for which the warrant is issued and the date when such 46 copy is filed; and such amount shall thereupon be a binding lien upon 47 the real, personal and other property of the taxpayer. 48 5. Judgment. When a warrant has been filed with the county clerk the 49 commissioner of finance shall, on behalf of the city, be deemed to have 50 obtained judgment against the taxpayer for the tax or other amounts. 51 6. Execution. The sheriff or officer or employee shall thereupon 52 proceed upon the judgment in all respects, with like effect, and in the 53 same manner prescribed by law in respect to executions issued against 54 property upon judgments of a court of record, and a sheriff shall be 55 entitled to the same fees for his or her services in executing the 56 warrant, to be collected in the same manner. An officer or employee of

S. 8578 695

1 the department of finance may proceed in any county or counties of this 2 state and shall have all the powers of execution conferred by law upon 3 sheriffs, but shall be entitled to no fee or compensation in excess of 4 actual expenses paid in connection with the execution of the warrant. 5 7. Foreign corporations. Where a notice and demand under subdivision 6 two of this section shall have been given to a foreign corporation or 7 other person who is not then a resident, and it appears to the commis- 8 sioner of finance that it is not practicable to find in the state prop- 9 erty of such foreign corporation or nonresident person sufficient to pay 10 the entire balance of tax or other amount owing by such foreign corpo- 11 ration or nonresidential person, the commissioner of finance may, in 12 accordance with subdivision three of this section, issue a warrant 13 directed to an officer or employee of the department of finance, a copy 14 of which warrant shall be mailed by certified or registered mail to such 15 foreign corporation or nonresident person at its last known address, 16 subject to the rules of mailing provided in subdivision one of section 17 11-672 of this subchapter. Such warrant shall command the officer or 18 employee to proceed in Richmond county, and he or she shall, within five 19 days after receipt of the warrant, file the warrant and obtain a judg- 20 ment in accordance with this section. Thereupon the commissioner of 21 finance may authorize the institution of any action or proceeding to 22 collect or enforce the judgment in any place and by any procedure that a 23 civil judgment of the supreme court of the state of New York could be 24 collected or enforced. The commissioner of finance may also, in his or 25 her discretion, designate agents or retain counsel for the purpose of 26 collecting, outside the state, any unpaid taxes, additions to tax, 27 penalties or interest which have been assessed under this subchapter or 28 under any of the named subchapters, against foreign corporations or 29 other non-resident persons, may fix the compensation of such agents and 30 counsel to be paid out of money appropriated or otherwise lawfully 31 available for payment thereof, and may require of them bonds or other 32 security for the faithful performance of their duties, in such form and 33 in such amount as the commissioner of finance shall deem proper and 34 sufficient. 35 8. Action by city for recovery of taxes. Action may be brought by the 36 corporation counsel of the city at the instance of the commissioner of 37 finance to recover the amount of any unpaid taxes, additions to tax, 38 penalties or interest which have been assessed under this subchapter or 39 under the named subchapters within six years prior to the date the 40 action is commenced. 41 9. Release of lien. The commissioner of finance, if he or she finds 42 that the interests of the city will not thereby be jeopardized, and upon 43 such conditions as it may require, may release any property from the 44 lien of any warrant filed under subdivision four or seven of this 45 section for unpaid taxes, additions to tax, penalties and interest filed 46 pursuant to this section, and such release or vacating of the warrant 47 may be recorded in the office of any recording officer in which such 48 warrant has been filed. The clerk shall thereupon cancel and discharge 49 as of the original date of docketing the vacated warrant. 50 10. Lien from due date of return. (a) In addition to any other lien 51 provided for in this section, each tax imposed by the named subchapters 52 shall become a lien on the date on which the return is required to be 53 filed, without regard to any extension of time for filing such return, 54 except that such tax shall become a lien not later than the date the 55 taxpayer ceases to be subject to the tax imposed by any of the named 56 subchapters, or to do business in this state in a corporate or organized

S. 8578 696

1 capacity. Each such tax shall be a lien and binding upon the real and 2 personal property of the taxpayer, or of a transferee liable to pay the 3 same, until the same is paid in full, except that no lien for any addi- 4 tional tax assessed pursuant to this subchapter shall be enforceable 5 against property which prior to the issuance to the taxpayer of a notice 6 of deficiency under section 11-672 of this subchapter had been trans- 7 ferred in good faith to a bona fide transferee for value. But the lien 8 of each such tax shall be subject to the lien of any mortgage indebt- 9 edness existing against real property previous to the time when the tax 10 became a lien and where such mortgage indebtedness has been incurred in 11 good faith and was not given, directly or indirectly, to any officer or 12 stockholder of the corporation owning such real property, whether as a 13 purchase money mortgage or otherwise, and shall also be subject to the 14 lien of local taxes and assessments, without regard to when the lien for 15 such taxes and assessments may have accrued. If the return is filed and 16 the tax shown on the report to be due is paid on or before the date on 17 which the report is required to be filed, without regard to any exten- 18 sions of time for filing such report, the lien shall not be enforceable 19 against the interest of any purchaser or mortgagee in property which is 20 thereafter, but prior to the issuance to the taxpayer of a notice of 21 deficiency under section 11-672 of this subchapter transferred to a bona 22 fide purchaser for value, or mortgaged where the mortgage indebtedness 23 is incurred in good faith and the mortgage is not given, directly or 24 indirectly, to any officer or stockholder of the corporation. In any 25 action to foreclose any such mortgage, or to foreclose the lien of local 26 taxes or assessments, to which the people of the state, or the city 27 shall have been made a party defendant by reason of the existence of a 28 lien for any such tax, or if no such tax was due or was a lien at the 29 time of the commencement of such action and the filing of the notice of 30 pendency thereof but such a tax becomes due or becomes a lien subsequent 31 to the time of the commencement of such action and the filing of the 32 notice of pendency thereof, such real property shall be sold and 33 conveyed in such action free from any such tax lien, and any such tax 34 lien may become a lien on any surplus moneys which may result from such 35 sale, to be determined in the proceedings for the distribution of such 36 surplus moneys. Where title to real property passes from an individual, 37 or from a corporation owing no tax, to another corporation which is in 38 default for such tax, the lien herein provided shall not be enforceable 39 except as to any equity after the prior mortgage or purchase money mort- 40 gage encumbrance. 41 (b) The commissioner of finance may, upon application made to the 42 commissioner and the payment of a fee of twenty-five dollars, release 43 any real property from the lien under this subdivision, provided payment 44 be made to the commissioner of finance of such a sum as the commissioner 45 of finance shall deem adequate consideration for such release, or depos- 46 it be made of such security or such bond be filed as the commissioner of 47 finance shall deem proper to secure payment of any such tax. The appli- 48 cation for such release shall contain an accurate description of the 49 property to be released together with such information as the commis- 50 sioner of finance may require. Such release may be recorded in any 51 office in which conveyances of real estate are entitled to be recorded. 52 (c) All taxes, additions to tax, penalties and interest which have 53 become a lien under this subdivision shall cease to be a lien after the 54 expiration of twenty years from the date they become due and payable, 55 except that taxes, additions to tax, penalties and interest which have 56 become a lien under this subdivision (1) as to real estate in the hands

S. 8578 697

1 of persons who are owners thereof who would be purchasers in good faith 2 but for such taxes, additions to tax, penalties or interest and (2) as 3 to the lien on real estate of mortgages held by persons who would be 4 holders thereof in good faith but for such taxes, additions to tax, 5 penalties or interest, as against such purchasers or holders, shall 6 cease to be a lien after the expiration of ten years from the date they 7 become due and payable. The limitations herein provided for shall not 8 apply to any transfer from a corporation to a person or corporation with 9 intent to avoid payment of any taxes, or where with like intent the 10 transfer is made to a grantee corporation, or any subsequent grantee 11 corporation, controlled by such grantor or which has any community of 12 interest with it, either through stock ownership or otherwise. 13 § 11-684 Transferees. 1. General. The liability, at law or in equi- 14 ty, of a transferee of property of a taxpayer for any tax, additions to 15 tax, penalty or interest due the commissioner of finance under this 16 subchapter or under the named subchapters, shall be assessed, paid, and 17 collected in the same manner and subject to the same provisions and 18 limitations as in the case of the tax to which the liability relates, 19 except that the period of limitations for assessment against the trans- 20 feree shall be extended by one year for each successive transfer, in 21 order, from the original taxpayer to the transferee involved, but not by 22 more than three years in the aggregate. The term transferee includes, 23 in case of successive transfers, donee, heir, legatee, devisee, distri- 24 butee, and successor by merger, consolidation or other reorganization. 25 2. Exceptions. 26 (a) If before the expiration of the period of limitations for assess- 27 ment of liability of the transferee, a claim has been filed by the 28 commissioner of finance in any court against the original taxpayer or 29 the last preceding transferee based upon the liability of the original 30 taxpayer, then the period of limitation for assessment of liability of 31 the transferee shall in no event expire prior to one year after such 32 claim has been finally allowed, disallowed or otherwise disposed of. 33 (b) If, before the expiration of the time prescribed in subdivision 34 one or paragraph (a) of this subdivision for the assessment of the 35 liability, the commissioner of finance and the transferee have both 36 consented in writing to its assessment after such time, the liability 37 may be assessed at any time prior to the expiration of the period agreed 38 upon. The period so agreed upon may be extended by subsequent agree- 39 ments in writing made before the expiration of the period previously 40 agreed upon. For the purpose of determining the period of limitation on 41 credit or refund to the transferee or overpayments of tax made by such 42 transferee or overpayments of tax made by the transferor as to which the 43 transferee is legally entitled to credit or refund, such agreement and 44 any extension thereof shall be deemed an agreement and extension thereof 45 referred to in subdivision two of section 11-678 of this subchapter. If 46 the agreement is executed after the expiration of the period of limita- 47 tion for assessment against the original taxpayer, then in applying the 48 limitations under subdivision two of section 11-678 of this subchapter 49 on the amount of the credit or refund, the period specified in subdivi- 50 sion one of section 11-678 of this subchapter shall be increased by the 51 period from the date of such expiration to the date of the agreement. 52 3. Period for assessment against certain transferors. For purposes of 53 this section, if any person is deceased or is a corporation which has 54 terminated its existence, the period of limitation for assessment 55 against such person or corporation shall be the period that would be in 56 effect had death or termination of existence not occurred.

S. 8578 698

1 4. Evidence. The commissioner of finance shall use his or her powers 2 to make available to the transferee evidence necessary to enable the 3 transferee to determine the liability of the original taxpayer and of 4 any preceding transferees, but without undue hardship to the original 5 taxpayer or preceding transferee. See subdivision five of section 6 11-680 of this subchapter for rule as to burden of proof. 7 § 11-685 Jeopardy assessments. 1. Authority for making. If the commis- 8 sioner of finance believes that the assessment or collection of a defi- 9 ciency will be jeopardized by delay, the commissioner shall, notwith- 10 standing the provisions of section 11-672 of this subchapter immediately 11 assess such deficiency, together with all interest, penalties and addi- 12 tions to tax provided for by law, and notice and demand shall be made by 13 the commissioner of finance for the payment thereof. 14 2. Notice of deficiency. If the jeopardy assessment is made before any 15 notice in respect of the tax to which the jeopardy assessment relates 16 has been mailed under section 11-672 of this subchapter, then the 17 commissioner of finance shall mail a notice under such section within 18 sixty days after the making of the assessment. 19 3. Amount assessable before decision of the tax appeals tribunal. The 20 jeopardy assessment may be made in respect of a deficiency greater or 21 less than that of which notice is mailed to the taxpayer and whether or 22 not the taxpayer has theretofore filed a petition with the tax appeals 23 tribunal. The commissioner of finance may, at any time before tax 24 appeals tribunal renders its decision, abate such assessment, or any 25 unpaid portion thereof, to the extent that the commissioner believes the 26 assessment to be excessive in amount. The tax appeals tribunal may in 27 its decision redetermine the entire amount of the deficiency and of all 28 amounts assessed at the same time in connection therewith. 29 4. Amounts assessable after decision of the tax appeals tribunal. If 30 the jeopardy assessment is made after the decision of the tax appeals 31 tribunal is rendered, such assessment may be made only in respect of the 32 deficiency determined by the tax appeals tribunal in its decision. 33 5. Expiration of right to assess. A jeopardy assessment may not be 34 made after the decision of the tax appeals tribunal has become final or 35 after the taxpayer has made an application for review of the decision of 36 the tax appeals tribunal. 37 6. Collection of unpaid amounts. When a petition has been filed with 38 the tax appeals tribunal and when the amount which should have been 39 assessed has been determined by a decision of the tax appeals tribunal 40 which has become final, then any unpaid portion, the collection of which 41 has been stayed by bond, shall be collected as part of the tax upon 42 notice and demand from the commissioner of finance, and any remaining 43 portion of the assessment shall be abated. If the amount already 44 collected exceeds the amount determined as the amount which should have 45 been assessed, such excess shall be credited or refunded to the taxpayer 46 as provided in section 11-677 of this subchapter without the filing of 47 claim therefor. If the amount determined as the amount which should 48 have been assessed is greater than the amount actually assessed, then 49 the difference shall be assessed and shall be collected as part of the 50 tax upon notice and demand from the tax appeals tribunal. 51 7. Abatement if jeopardy does not exist. The commissioner of finance 52 may abate the jeopardy assessment if the commissioner finds that jeopar- 53 dy does not exist. Such abatement may not be made after a decision of 54 the tax appeals tribunal in respect of the deficiency has been rendered 55 or, if no petition is filed with the tax appeals tribunal, after the 56 expiration of the period for filing such petition. The period of limita-

S. 8578 699

1 tion on the making of assessments and levy or a proceeding for 2 collection, in respect of any deficiency, shall be determined as if the 3 jeopardy assessment so abated had not been made, except that the running 4 of such period shall in any event be suspended for the period from the 5 date of such jeopardy assessment until the expiration of the tenth day 6 after the day on which such jeopardy assessment is abated. 7 8. Bond to stay collection. The collection of the whole or any amount 8 of any jeopardy assessment may be stayed by filing with the commissioner 9 of finance, within such time as may be fixed by regulation, a bond in an 10 amount equal to the amount as to which the stay is desired, conditioned 11 upon the payment of the amount, together with interest thereon, the 12 collection of which is stayed at the time of which, but for the making 13 of the jeopardy assessment, such amount would be due. Upon the filing 14 of the bond the collection of so much of the amount assessed as is 15 covered by the bond shall be stayed. The taxpayer shall have the right 16 to waive such stay at any time in respect of the whole or any part of 17 the amount covered by the bond, and if as a result of such waiver any 18 part of the amount covered by the bond is paid, then the bond shall at 19 the request of the taxpayer, be proportionately reduced. If any portion 20 of the jeopardy assessment is abated, or if a notice of deficiency under 21 section 11-672 of this subchapter is mailed to the taxpayer in a lesser 22 amount, the bond shall, at the request of the taxpayer, be proportion- 23 ately reduced. 24 9. Petition to tax appeals tribunal. If the bond is given before the 25 taxpayer has filed its petition under section 11-680 of this subchapter, 26 the bond shall contain a further condition that if a petition is not 27 filed within the period provided in such section, then the amount, the 28 collection of which is stayed by the bond, will be paid on notice and 29 demand at any time after the expiration of such period, together with 30 interest thereon from the date of the jeopardy notice and demand to the 31 date of notice and demand under this subdivision. The bond shall be 32 conditioned upon the payment of so much of such assessment, collection 33 of which is stayed by the bond, as is not abated by a decision of the 34 tax appeals tribunal which has become final. If the tax appeals tribunal 35 determines that the amount assessed is greater than the amount which 36 should have been assessed, then the bond shall, at the request of the 37 taxpayer, be proportionately reduced when the decision of the tax 38 appeals tribunal is rendered. 39 10. Stay of sale of seized property pending tax appeals tribunal's 40 decision. Where a jeopardy assessment is made, the property seized for 41 the collection of the tax shall not be sold: 42 (a) if subdivision two of this section is applicable, prior to the 43 issuance of the notice of deficiency and the expiration of the time 44 provided in section 11-680 of this subchapter for filing a petition with 45 the tax appeals tribunal, and 46 (b) if a petition is filed with the tax appeals tribunal, whether 47 before or after the making of such jeopardy assessment, prior to the 48 expiration of the period during which the assessment of the deficiency 49 would be prohibited if subdivision one of this section were not applica- 50 ble. 51 Such property may be sold if the taxpayer consents to the sale, or if 52 the commissioner of finance determines that the expenses of conservation 53 and maintenance will greatly reduce the net proceeds, or if the property 54 is perishable. 55 11. Interest. For the purpose of subdivision one of section 11-675 of 56 this subchapter, the last date prescribed for payment shall be deter-

S. 8578 700

1 mined without regard to any notice and demand for payment issued under 2 this section prior to the last date otherwise prescribed for such 3 payment. 4 12. Early termination of taxable year. If the commissioner of finance 5 finds that a taxpayer designs quickly to remove its property from this 6 state, or to conceal its property therein, or to do any other act tend- 7 ing to prejudice or to render wholly or partly ineffectual proceedings 8 to collect the tax for the current or the preceding taxable year unless 9 such proceedings be brought without delay, the commissioner of finance 10 shall declare the taxable period for such taxpayer immediately termi- 11 nated, and shall cause notice of such finding and declaration to be 12 given the taxpayer, together with a demand for immediate payment of the 13 tax for the taxable period so declared terminated and of the tax for the 14 preceding taxable year so much of such tax as is unpaid, whether or not 15 the time otherwise allowed by law for filing return and paying the tax 16 has expired; and such taxes shall thereupon become immediately due and 17 payable. In any proceeding brought to enforce payment of taxes made due 18 and payable by virtue of the provisions of this subdivision, the finding 19 of the commissioner of finance made as herein provided, whether made 20 after notice to the taxpayer or not, shall be for all purposes presump- 21 tive evidence of jeopardy. 22 13. Reopening of taxable period. Notwithstanding the termination of 23 the taxable period of the taxpayer by the commissioner of finance, as 24 provided in subdivision twelve of this section, the commissioner of 25 finance may reopen such taxable period each time the taxpayer is found 26 by the commissioner of finance to have received income, within the 27 current taxable year, since the termination of such period. A taxable 28 period so terminated by the commissioner of finance may be reopened by 29 the taxpayer if it files with the commissioner of finance a true and 30 accurate return under any of the named subchapters for such taxable 31 period, together with such other information as the commissioner of 32 finance may by regulations prescribe. 33 14. Furnishing of bond where taxable year is closed by the commission- 34 er of finance. Payment of taxes shall not be enforced by any proceedings 35 under the provisions of subdivision twelve of this section prior to the 36 expiration of the time otherwise allowed for paying such taxes if the 37 taxpayer furnishes, under regulations prescribed by the commissioner of 38 finance, a bond to insure the timely making of returns with respect to, 39 and payment of, such taxes or any taxes for prior years. 40 § 11-686 Criminal penalties; cross-reference. For criminal penalties, 41 see chapter forty of this title. 42 § 11-687 General powers of the commissioner of finance. 1. General. 43 The commissioner of finance shall administer and enforce the tax imposed 44 by the named subchapters and the commissioner is authorized to make such 45 rules and regulations, and to require such facts and information to be 46 reported, as the commissioner may deem necessary to enforce the 47 provisions of this subchapter and of the named subchapters; and the 48 commissioner may delegate the commissioner's powers and functions under 49 all subchapters of this chapter to one of the commissioner's deputies or 50 to any employee or employees of his or her department. 51 2. Examination of books and witnesses. The commissioner of finance, 52 for the purpose of ascertaining the correctness of any return, or for 53 the purpose of making an estimate of tax liability of any corporation, 54 shall have power to examine or to cause to have examined, by any agent 55 or representative designated by the commissioner for that purpose, any 56 books, papers, records or memoranda bearing upon the matters required to

S. 8578 701

1 be included in the return, and may require the attendance of the corpo- 2 ration rendering the return through any officer or employee of such 3 corporation, or the attendance of any other person having knowledge in 4 the premises, and may take testimony and require proof material for the 5 commissioner's information, with power to administer oaths to such 6 person or persons. 7 3. Abatement authority. The commissioner of finance, of the commis- 8 sioner's own motion, may abate any small unpaid balance of an assessment 9 of tax, or any liability in respect thereof, if the commissioner of 10 finance determines under uniform rules prescribed by the commissioner 11 that the administration and collection costs involved would not warrant 12 collection of the amount due. The commissioner may also abate, of his 13 or her own motion, the unpaid portion of the assessment of any tax or 14 any liability in respect thereof, which is excessive in amount, or is 15 assessed after the expiration of the period of limitation properly 16 applicable thereto, or is erroneously or illegally assessed. No claim 17 for abatement under this subdivision shall be filed by a taxpayer. 18 4. Special refund authority. Where no questions of fact or law are 19 involved and it appears from the records of the commissioner of finance 20 that any moneys have been erroneously or illegally collected from any 21 taxpayer or other person, or paid by such taxpayer or other person under 22 a mistake of facts, pursuant to the provisions of this subchapter or any 23 of the named subchapters, the commissioner of finance at anytime, with- 24 out regard to any period of limitations, shall have the power, upon 25 making a record of his or her reasons therefor in writing, to cause such 26 moneys so paid and being erroneously and illegally held to be refunded. 27 5. (a) Authority to set interest rates. The commissioner of finance 28 shall set the overpayment and underpayment rates of interest to be paid 29 pursuant to sections 11-606, 11-608, 11-645, 11-647, 11-656, 11-658, 30 11-675, 11-676, and 11-679 of this chapter, but if no such rate or rates 31 of interest are set, such overpayment rate shall be deemed to be set at 32 six percent per annum and such underpayment rate shall be deemed to be 33 set at seven and one-half percent per annum. Such overpayment and 34 underpayment rates shall be the rates prescribed in paragraph (b) of 35 this subdivision but the underpayment rate shall not be less than seven 36 and one-half percent per annum. Any such rates set by the commissioner 37 of finance shall apply to taxes, or any portion thereof, which remain or 38 become due or overpaid on or after the date on which such rates become 39 effective and shall apply only with respect to interest computed or 40 computable for periods or portions of periods occurring in the period 41 during which such rates are in effect. 42 (b) General rule. (A) Overpayment rate. The overpayment rate set under 43 this subdivision shall be the sum of (i) the federal short-term rate as 44 provided under paragraph (c) of this subdivision, plus (ii) two percent- 45 age points. 46 (B) Underpayment rate. The underpayment rate set under this subdivi- 47 sion shall be the sum of (i) the federal short-term rate as provided 48 under paragraph (c) of this subdivision, plus (ii) seven percentage 49 points. 50 (c) Federal short-term rate. For purposes of this subdivision: 51 (A) The federal short-term rate for any month shall be the federal 52 short-term rate determined by the United States secretary of the treas- 53 ury during such month in accordance with subsection (d) of section 54 twelve hundred seventy-four of the internal revenue code for use in 55 connection with section six thousand six hundred twenty-one of the 56 internal revenue code. Any such rate shall be rounded to the nearest

S. 8578 702

1 full percent, or, if a multiple of one-half of one percent, such rate 2 shall be increased to the next highest full percent. 3 (B) Period during which rate applies. 4 (i) In general. Except as provided in clause (ii) of this subpara- 5 graph, the federal short-term rate for the first month in each calendar 6 quarter shall apply during the first calendar quarter beginning after 7 such month. 8 (ii) Special rule for the month of September, nineteen hundred eight- 9 y-nine. The federal short-term rate for the month of April, nineteen 10 hundred eighty-nine shall apply with respect to setting the overpayment 11 and underpayment rates for the month of September, nineteen hundred 12 eighty-nine. 13 (d) Publication of interest rates. The commissioner of finance shall 14 cause to be published in the city record, and give other appropriate 15 general notice of, the interest rates to be set under this subdivision 16 no later than twenty days preceding the first day of the calendar quar- 17 ter during which such interest rates apply. The setting and publication 18 of such interest rates shall not be included within paragraph (a) of 19 subdivision five of section one thousand forty-one of the city charter 20 relating to the definition of a rule. 21 (e) Cross-reference. For provisions relating to the power of the 22 commissioner of finance to abate small amounts of interest, see subdivi- 23 sion three of this section. 24 6. In computing the amount of any interest required to be paid under 25 this subchapter or any of the named subchapters by the commissioner of 26 finance or by the taxpayer, or any other amount determined by reference 27 to such amount of interest, such interest and such amount shall be 28 compounded daily. The preceding sentence shall not apply for purposes of 29 computing the amount of any addition to tax for failure to pay estimated 30 tax under subdivision three of section 11-676 of this subchapter. 31 § 11-688 Secrecy required of official; penalty for violation. 1. 32 Except in accordance with proper judicial order or as otherwise provided 33 by law, it shall be unlawful for the commissioner of finance, the 34 department of finance of the city, any officer or employee of the 35 department of finance of the city, the tax appeals tribunal, any commis- 36 sioner or employee of such tribunal, any person who, pursuant to this 37 section, is permitted to inspect any report or return, or to whom any 38 information contained in any report or return is furnished, any person 39 engaged or retained by such department on an independent contract basis, 40 or any person who in any manner may acquire knowledge of the contents of 41 a report filed pursuant to this chapter, to divulge or make known in any 42 manner the amount of income or any particulars set forth or disclosed in 43 any report or return, under this chapter. The officers charged with the 44 custody of such reports and returns shall not be required to produce any 45 of them or evidence of anything contained in them in any action or 46 proceeding in any court, except on behalf of the city in an action or 47 proceeding involving the collection of a tax due under this chapter to 48 which the city is a party or a claimant, or on behalf of any party to 49 any action or proceeding under the provisions of this chapter when the 50 reports, returns or facts shown thereby are directly involved in such 51 action or proceeding, in any of which events the court may require the 52 production of, and may admit in evidence, so much of said reports or 53 returns or of facts shown thereby as are pertinent to the action or 54 proceeding, and no more. Nothing herein shall be construed to prohibit 55 the delivery to a taxpayer or its duly authorized representative of a 56 copy of any report filed by it, nor to prohibit the publication of

S. 8578 703

1 statistics so classified as to prevent the identification of particular 2 reports or returns and the items thereof, or the inspection by the 3 corporation counsel or other legal representatives of the city of the 4 report or return of any taxpayer which shall bring action to set aside 5 or review the tax based thereon, or against which an action or proceed- 6 ing under this chapter or under any local law of the city imposed as 7 authorized by the act authorizing the adoption of this chapter has been 8 recommended by the commissioner of finance or the corporation counsel or 9 has been instituted, or the inspection of the reports or returns of any 10 taxpayer by the duly designated officers or employees of the city for 11 purposes of an audit under this chapter or an audit authorized by the 12 act authorizing the adoption of this chapter; and nothing in this 13 subchapter or chapter eleven of this title shall be construed to prohib- 14 it the publication of the issuer's allocation percentage, as defined in 15 subparagraph one of paragraph (b) of subdivision three of section 11-604 16 of this chapter, of any corporation which may be required to be allo- 17 cated within the city for purposes of the tax imposed by any of the 18 named subchapters or chapter eleven of this title. 19 2. (a) Any officer or employee of the state or city who willfully 20 violates the provisions of subdivision one of this section shall be 21 dismissed from office and be incapable of holding any public office in 22 the city or this state for a period of five years thereafter. 23 (b) Cross-reference: For criminal penalties, see chapter forty of this 24 title. 25 3. Notwithstanding any provisions of this section, the commissioner of 26 finance may permit the secretary of the treasury of the United States or 27 his or her delegates, or the proper officer of this or any other state 28 charged with tax administration, or the authorized representative of 29 either such officer, to inspect the returns or reports filed under any 30 of the named subchapters, or may furnish to such officer or his or her 31 authorized representative an abstract of any such return or report or 32 supply information concerning an item contained in any such return or 33 report, or supply him or her with information concerning an item 34 contained in any such return or report, or disclosed by an investigation 35 of tax liability under any of the named subchapters, but such permission 36 shall be granted or such information furnished to such officer or his or 37 her representative only if the laws of the United States or of such 38 state, as the case may be, grant substantially similar privileges to the 39 commissioner of finance and such information is to be used for tax 40 purposes only; and provided further the commissioner of finance may 41 furnish to the secretary of the treasury of the United States or his or 42 her delegates or to the tax commission of the state of New York or its 43 delegates such returns or reports filed under any of the named subchap- 44 ters and other tax information, as he or she may consider proper, for 45 use in court actions or proceedings under the internal revenue code or 46 the tax law of the state of New York, whether civil or criminal, where a 47 written request therefor has been made to the commissioner of finance by 48 the secretary of the treasury or by such tax commission or by their 49 delegates, provided the laws of the United States or the laws of the 50 state of New York grant substantially similar powers to the secretary of 51 the treasury or his or her delegates or to such tax commission or its 52 delegates. Where the commissioner of finance has so authorized use of 53 returns, reports or other information in such actions or proceedings, 54 officers and employees of the department of finance may testify in such 55 actions or proceedings in respect to such returns, reports of other 56 information.

S. 8578 704

1 4. Notwithstanding the provisions of subdivision one of this section, 2 the commissioner of finance, in his or her discretion, may require or 3 permit any or all persons liable for any tax imposed by this chapter to 4 make payments on account of estimated tax and payment of any tax, penal- 5 ty or interest imposed by this chapter to banks, banking houses or trust 6 companies designated by the commissioner of finance and to file declara- 7 tions of estimated tax, applications for automatic extensions of time to 8 file reports, and reports with such banks, banking houses or trust 9 companies as agents of the commissioner of finance, in lieu of making 10 any such payment directly to the commissioner of finance. However, the 11 commissioner of finance shall designate only such banks, banking houses 12 or trust companies as are depositories or financial agents of the city. 13 5. This section shall be deemed a state statute for purposes of para- 14 graph (a) of subdivision two of section eighty-seven of the public offi- 15 cers law. 16 6. Notwithstanding anything in subdivision one of this section to the 17 contrary, if a taxpayer has petitioned the tax appeals tribunal for 18 administrative review as provided in section one hundred seventy of the 19 charter of the preceding municipality as it existed January first, nine- 20 teen hundred ninety-four, the commissioner of finance shall be author- 21 ized to present to the tribunal any report or return of such taxpayer, 22 or any information contained therein or relating thereto, which may be 23 material or relevant to the proceeding before the tribunal. The tax 24 appeals tribunal shall be authorized to publish a copy or a summary of 25 any decision rendered pursuant to section one hundred seventy-one of the 26 charter of the preceding municipality as it existed January first, nine- 27 teen hundred ninety-four. 28 7. Notwithstanding anything in subdivision one of this section, the 29 commissioner of finance may disclose to a taxpayer or a taxpayer's 30 related member, as defined in paragraph (n) of subdivision eight of 31 section 11-602, paragraph (n) of subdivision eight of section 11-652 or 32 paragraph one of subdivision (q) of section 11-641 of this chapter, 33 information relating to any royalty paid, incurred or received by such 34 taxpayer or related member to or from the other, including the treatment 35 of such payments by the taxpayer or the related member in any report or 36 return transmitted to the commissioner of finance under this title. 37 § 11-689 Disposition of revenues. All revenues resulting from the 38 imposition of the taxes under this chapter shall be paid into the treas- 39 ury of the city and shall be credited to and deposited in the general 40 fund of the city, but no part of such revenues may be expended unless 41 appropriated in the annual budget of the city. 42 § 11-690 Inconsistencies with other laws. If any provision of this 43 chapter is inconsistent with, in conflict with, or contrary to any other 44 provision of law, such provision of this chapter shall prevail over such 45 other provision and such other provision shall be deemed to have been 46 amended, superseded or repealed to the extent of such inconsistency, 47 conflict or contrariety.

48 CHAPTER 7 49 COMMERCIAL RENT OR OCCUPANCY TAX 50 § 11-701 Definitions. When used in this chapter the following terms 51 shall mean or include: 52 1. "Person." An individual, partnership, society, association, joint 53 stock company, corporation, estate, receiver, assignee, trustee or any 54 other person acting in a fiduciary capacity, whether appointed by a 55 court or otherwise, and any combination of individuals.

S. 8578 705

1 2. "Landlord." A person who grants the right to use or occupy premises 2 to any lessee, sublessee, licensee or concessionaire, whether or not 3 such person is the owner of the premises. 4 3. "Tenant." A person paying or required to pay rent for premises as a 5 lessee, sublessee, licensee or concessionaire. 6 4. "Premises." Any real property or part thereof, and any structure 7 thereon or space therein. 8 5. "Taxable premises." Any premises in the city occupied, used or 9 intended to be occupied or used for the purpose of carrying on or exer- 10 cising any trade, business, profession, vocation or commercial activity, 11 including any premises so used even though it is used solely for the 12 purpose of renting, or granting the right to occupy or use, the same 13 premises in whole or in part to tenants. 14 6. "Rent." The consideration paid or required to be paid by a tenant 15 for the use or occupancy of premises, valued in money, whether received 16 in money or otherwise, including all credits and property or services of 17 any kind and including any payment required to be made by a tenant on 18 behalf of his or her landlord for real estate taxes, water rents or 19 charges, sewer rents or any other expenses, including insurance, normal- 20 ly payable by a landlord who owns the realty other than expenses for the 21 improvement, repair or maintenance of the tenant's premises. 22 7. "Base rent." The rent paid for each taxable premises by a tenant to 23 his or her landlord for a period, less the amounts received by or due 24 such tenant for the same period from any tenant of any part of such 25 premises: 26 (i) as rent for premises which constitute taxable premises of such 27 tenant except where such tenant is exempt from tax thereon pursuant to 28 subdivision b or paragraph six of subdivision c of section 11-704 of 29 this chapter; provided, however, that for tax periods beginning on and 30 after June first, nineteen hundred eighty-five, rent received or due 31 from a tenant exempt from tax thereon pursuant to paragraph two of 32 subdivision b of section 11-704 of this chapter, as such paragraph two 33 was in effect immediately prior to its amendment by local law number 34 fifty-seven for the year nineteen hundred ninety-three, may be deducted 35 if such tenant occupies or uses the premises pursuant to a written 36 agreement made prior to June first, nineteen hundred eighty-four, the 37 terms and conditions of which have not been changed or amended; and 38 provided, further, that for tax periods beginning on and after June 39 first, nineteen hundred eighty-five, with respect to a tenant exempt 40 from tax pursuant to paragraph two of subdivision b of section 11-704 of 41 this chapter, as such paragraph two was in effect immediately prior to 42 its amendment by local law number fifty-seven for the year nineteen 43 hundred ninety-three, because of the reduction in base rent provided for 44 in subdivision h of section 11-704 of this chapter, rent received or due 45 from such tenant may be deducted if such tenant occupies or uses the 46 premises pursuant to a written agreement made prior to June first, nine- 47 teen hundred eighty-five, the terms and conditions of which have not 48 been changed or amended; and provided, further, that for tax periods 49 beginning on and after June first, nineteen hundred ninety-four, with 50 respect to a tenant exempt from tax pursuant to paragraph two of subdi- 51 vision b of section 11-704 of this chapter as a result of the amendment 52 of such paragraph two by local law number fifty-seven for the year nine- 53 teen hundred ninety-three, whether or not such exemption is due to the 54 reduction in base rent provided for in subdivision h of section 11-704 55 of this chapter, rent received or due from such tenant may be deducted 56 if such tenant occupies or uses the premises pursuant to a written

S. 8578 706

1 agreement made prior to June first, nineteen hundred ninety-three, the 2 terms and conditions of which have not been changed or amended; and 3 provided, further, that for tax periods beginning on and after July 4 twenty-ninth, nineteen hundred eighty-seven, with respect to a tenant 5 exempt from tax pursuant to paragraph two of subdivision b of section 6 11-704 of this chapter because of the reduction in base rent provided 7 for in subdivision f of section 11-704 of this chapter, rent received or 8 due from such tenant may be deducted; and provided, further, that, 9 notwithstanding anything in this paragraph to the contrary, for tax 10 periods beginning on and after June first, nineteen hundred ninety-five, 11 with respect to a tenant exempt from tax pursuant to paragraph two of 12 subdivision b of section 11-704 of this chapter, rents received or due 13 from such tenant may be deducted; 14 (ii) as rent for premises which do not constitute taxable premises and 15 which are used by such tenant as lodging or residential premises, 16 including such residential premises in hotels, apartment hotels or lodg- 17 ing houses as defined in former title V of chapter forty-six of the code 18 of the preceding municipality; 19 (iii) who is exempt from tax under subdivision a of section 11-704 of 20 this chapter; 21 (iv) as rent for premises which do not constitute taxable premises 22 where such rent is, or to the extent that such rent is, deductible from 23 the base rent of such tenant by reason of paragraph five of subdivision 24 c of section 11-704 of this chapter; and 25 (v) as rent for premises which do not constitute taxable premises, 26 pursuant to a common law relationship of landlord and tenant, notwith- 27 standing the definition given to those terms by paragraphs two and three 28 of this section, except where it is received as rent, whether or not 29 such landlord-tenant relationship exists, for premises which are occu- 30 pied as or constitute: 31 (a) a locker, safe deposit box or beach cabana; 32 (b) storage space in part of a warehouse or in part of any other 33 structure or area in which goods are stored; 34 (c) garage space or parking space in any part of a garage, of a park- 35 ing lot or of a parking area where the entire garage, entire parking lot 36 or entire parking area accommodates more than two motor vehicles; 37 (d) an occupancy of a type which customarily has not been the subject 38 of such a common law relationship of landlord and tenant. Nothing 39 contained in this chapter shall be construed to permit a tenant to 40 deduct the same rent from his or her base rent more than once. 41 8. "Premises used for railroad transportation purposes." The portion 42 of any premises of any person actually operating a railroad, used by 43 such person for normal or necessary railroad transportation purposes. 44 The words normal or necessary railroad transportation purposes, as used 45 in this definition, shall not include any activities which are normally 46 carried on by persons not engaged in furnishing railroad transportation 47 service such as the operation of retail stores, barber shops, restau- 48 rants, theatres, hotels, and newsstands; nor shall such words include 49 any activities which are not deemed transportation purposes under 50 sections four hundred eighty-nine-b and four hundred eighty-nine-m of 51 the real property tax law. 52 9. "Premises used for air transportation purposes." The portion of any 53 premises, located within an airport or within an air transportation 54 terminal shared by more than one air line, of any person actually oper- 55 ating an air line as a common carrier, used by such person for normal or 56 necessary air transportation purposes. The words normal or necessary air

S. 8578 707

1 transportation purposes, as used in this definition, shall not include 2 any activities which are normally carried on by persons not engaged in 3 furnishing air transportation service such as the operation of retail 4 stores, barber shops, restaurants, theatres, hotels and newsstands. 5 10. "Return." Any return filed or required to be filed as herein 6 provided other than an information return. 7 11. "Tax period." The period for which any return is required to be 8 filed under this chapter. 9 12. "Tax year." June first of any calendar year through May thirty- 10 first of the following calendar year. 11 13. "Day." A calendar day or any part thereof. 12 14. "City." The city of Staten Island. 13 15. "Commissioner of finance." The commissioner of finance of the 14 city. 15 16. "Comptroller." The comptroller of the city. 16 17. "Dramatic or musical arts performance." A performance or repe- 17 tition thereof in a theatre, opera house or concert hall of a live 18 dramatic performance, whether or not musical in part. The performance 19 encompassed by this definition shall include so-called legitimate thea- 20 tre plays, musical comedies and operettas. They shall not include 21 circuses, ice skating shows or aqua shows; they shall not include 22 performances of any kind in a roof garden, cabaret or other similar 23 place; and they shall not include radio or television performances, 24 whether or not such performances are prerecorded for later broadcast. 25 18. "Premises used for omnibus transportation purposes." The portion 26 of any premises located within a passenger terminal of any person actu- 27 ally operating an omnibus line or route as a common carrier, used by 28 such person for normal or necessary omnibus line or route transportation 29 purposes. The words normal or necessary omnibus line or route transpor- 30 tation purposes, as used in this definition, shall not include any 31 activities, which are normally carried on by persons not engaged in 32 furnishing omnibus line or route transportation services such as the 33 operation of retail stores, barber shops, restaurants, theatres, hotels 34 and newsstands. 35 19. "Tax appeals tribunal." The tax appeals tribunal established by 36 section one hundred sixty-eight of the charter of the preceding munici- 37 pality as it existed January first, nineteen hundred ninety-four. 38 20. "Premises used for retail sales purposes." Premises primarily used 39 for the selling or otherwise disposing or furnishing of tangible goods 40 directly to the ultimate user or consumer. 41 § 11-702 Imposition of tax. a. (1) For each tax year commencing on 42 or after June first, nineteen hundred sixty-three and ending on or 43 before May thirty-first, nineteen hundred seventy, every tenant shall 44 pay a tax of two and one-half per centum of his or her base rent for 45 such tax year where his or her base rent is not in excess of twenty-five 46 hundred dollars per year or where his or her base rent is for a period 47 of less than one year and would not exceed twenty-five hundred dollars 48 for a year if it were paid on an equivalent basis for an entire year or 49 a tax of five per centum of his or her base rent for such tax year where 50 his or her base rent is in excess of twenty-five hundred dollars per 51 year or where his or her base rent is for a period of less than one year 52 and would exceed twenty-five hundred dollars a year if it were paid on 53 an equivalent basis for an entire year. 54 (2) For each tax year commencing on or after, June first, nineteen 55 hundred seventy, every tenant shall pay a tax at the rates shown in the 56 following table:

S. 8578 708

1 When the annual rent is: But not more than: The rate shall be: 2 0..................... $2,499 2 1/2% of the rent 3 $ 2,500 or over....... $4,999 5% of the rent 4 $ 5,000 or over....... $7,999 6 1/4% of the rent 5 $ 8,000 or over....... $10,999 7% of the rent 6 $11,000 and over...... 7 1/2% of the rent 7 For tax years embraced within the period beginning after May thirty- 8 first, nineteen hundred seventy-seven and ending May thirty-first, nine- 9 teen hundred eighty, the tax shall be imposed at rates equal to ninety 10 percent of the rates shown in such table. 11 For tax years beginning after May thirty-first, nineteen hundred 12 eighty and ending May thirty-first, nineteen hundred eighty-one, the tax 13 shall be imposed at rates equal to eighty-five percent of the rates 14 shown in such table. 15 For tax years beginning after May thirty-first, nineteen hundred 16 eighty-one, the tax shall be imposed at rates equal to eighty percent of 17 the rates shown in such table. 18 Where the rent is for a period of less than one year, the rate shall 19 be determined by assuming that the rent is on an equivalent basis for 20 the entire year. 21 b. Nothing contained in this chapter shall be deemed to require 22 payment of a double or multiple tax pursuant to this chapter on any part 23 of any taxable premises. 24 c. Where a tenant pays an undivided rent for premises used both for 25 residential purposes and as taxable premises, the tax shall be applica- 26 ble to so much of the rent as is ascribable to the portion of such prem- 27 ises used as taxable premises. Where, however, the rent ascribable to 28 so much of such premises as is used as taxable premises does not exceed 29 fifty dollars a month, such rent shall be excluded from such tenant's 30 base rent. Nothing contained in this subdivision shall be construed as 31 indicating an intent to exclude any base rent from the tax imposed by 32 this chapter merely because it is paid as part of an undivided rent for 33 premises which are only partially used as taxable premises. 34 d. The tax imposed by this chapter shall be in addition to any and 35 all other taxes including the public housing tax imposed by chapter ten 36 of this title. 37 e. Nothing contained in this section shall be construed as permitting 38 base rent of a tenant for one taxable premises to be reduced by deduct- 39 ing rents received by him or her for another taxable premises of which 40 he or she is also a tenant. 41 § 11-703 Presumptions and burden of proof. a. For the purpose of 42 the proper administration of this chapter and to prevent evasion of the 43 tax hereby imposed it shall be presumed that all premises are taxable 44 premises and that all rent paid or required to be paid by a tenant is 45 base rent until the contrary is established, and the burden of proving 46 that such presumptive base rent or any portion thereof is not included 47 in the measure of the tax imposed by this chapter shall be on the 48 tenant. 49 b. Where a tenant uses premises both for residential purposes and as 50 taxable premises and the tenant pays an undivided rent for the premises 51 so used, it shall be conclusively presumed against such tenant that the 52 rent ascribable to so much of such premises as is used as taxable prem- 53 ises shall be the amount which such tenant deducts as rent for such 54 premises in determining the tenant's federal income tax, as reduced by 55 any disallowance of such deduction which is not being contested, which 56 is fairly attributable to the tax period or tax year.

S. 8578 709

1 § 11-704 Exemptions and deductions from base rent. a. The following 2 shall be exempt from the payment of the tax imposed by this chapter: 3 1. The state of New York, or any public corporation, including a 4 public corporation created pursuant to agreement or compact with another 5 state or the Dominion of Canada, improvement district or other political 6 subdivision of the state; 7 2. The United States of America, insofar as it is immune from taxa- 8 tion; 9 3. The United Nations or other world-wide international organizations 10 of which the United States of America is a member; 11 4. Any corporation, or association, or trust, or community chest, fund 12 or foundation, organized and operated exclusively for religious, chari- 13 table, or educational purposes, or for the prevention of cruelty to 14 children or animals, and no part of the net earnings of which inures to 15 the benefit of any private shareholder or individual and no substantial 16 part of the activities of which is carrying on propaganda, or otherwise 17 attempting to influence legislation; provided, however, that nothing in 18 this paragraph shall include an organization operated for the primary 19 purpose of carrying on a trade or business for profit, whether or not 20 all of its profits are payable to one or more organizations described in 21 this paragraph; 22 5. Any tenant who would be subject to taxes under this chapter aggre- 23 gating not more than one dollar for a tax year with respect to all taxa- 24 ble premises used by the tenant; and 25 6. Any tenant located in the "World Trade Center Area," as defined as 26 follows: the area in the borough of Manhattan bounded by Church Street 27 on the east starting at the intersection of Liberty Street and Church 28 Street; running northerly along the center line of Church Street to the 29 intersection of Church Street and Vesey Street; running westerly along 30 the center line of Vesey Street to the intersection of Vesey Street and 31 West Broadway; running northerly along the center line of West Broadway 32 to the intersection of West Broadway and Barclay Street; running wester- 33 ly along the center line of Barclay Street to the intersection of 34 Barclay Street and Washington Street; running southerly along the center 35 line of Washington Street to the intersection of Washington Street and 36 Vesey Street; running westerly along the center line of Vesey Street to 37 the intersection of Vesey Street and West Street; running southerly 38 along the center line of West Street to the intersection of West Street 39 and Liberty Street; running easterly along the center line of Liberty 40 Street to the intersection of Liberty Street and Washington Street; 41 running southerly along the center line of Washington Street to the 42 intersection of Washington Street and Albany Street; running easterly 43 along the center line of Albany Street to the intersection of Albany 44 Street and Greenwich Street; running northerly along the center line of 45 Greenwich Street to Liberty Street; and running easterly along the 46 center line of Liberty Street to the intersection of Liberty Street and 47 Church Street. 48 b. 1. A tenant who uses premises for no more than fourteen days in a 49 tax year whether or not consecutive, where his or her agreement with his 50 or her landlord does not require him or her to pay rent for a longer 51 period shall be exempt from the payment of the tax imposed by this chap- 52 ter in respect to the rent paid by him or her for such premises. 53 2. A tenant whose base rent, (i) for tax years beginning on or after 54 June first, nineteen hundred eighty-one and ending on or before May 55 thirty-first, nineteen hundred eighty-four, is not in excess of four 56 thousand nine hundred ninety-nine dollars per year, (ii) for the tax

S. 8578 710

1 year beginning June first, nineteen hundred eighty-four and ending May 2 thirty-first, nineteen hundred eighty-five, is not in excess of seven 3 thousand nine hundred ninety-nine dollars per year, (iii) for tax years 4 beginning on or after June first, nineteen hundred eighty-five and 5 ending on or before May thirty-first, nineteen hundred ninety-four, is 6 not in excess of ten thousand nine hundred ninety-nine dollars per year, 7 (iv) for the tax year beginning June first, nineteen hundred ninety-four 8 and ending May thirty-first, nineteen hundred ninety-five, is not in 9 excess of twenty thousand nine hundred ninety-nine dollars per year, (v) 10 for the tax year beginning June first, nineteen hundred ninety-five and 11 ending May thirty-first, nineteen hundred ninety-six, is not in excess 12 of thirty thousand nine hundred ninety-nine dollars per year, (vi) for 13 the tax year beginning June first, nineteen hundred ninety-six and 14 ending May thirty-first, nineteen hundred ninety-seven, is not in excess 15 of thirty-nine thousand nine hundred ninety-nine dollars per year, (vii) 16 for tax years beginning on or after June first, nineteen hundred nine- 17 ty-seven and ending on or before May thirty-first, two thousand, is not 18 in excess of ninety-nine thousand nine hundred ninety-nine dollars per 19 year, calculated without regard to any reduction in base rent allowed by 20 paragraph two of subdivision h of this section, (viii) for the period 21 beginning June first, two thousand and ending November thirtieth, two 22 thousand, is not in excess of ninety-nine thousand nine hundred ninety- 23 nine dollars per year, calculated without regard to any reduction in 24 base rent allowed by paragraph two of subdivision h of this section, 25 (ix) for the period beginning December first, two thousand and ending 26 May thirty-first, two thousand one, is not in excess of one hundred 27 forty-nine thousand nine hundred ninety-nine dollars per year, calcu- 28 lated without regard to any reduction in base rent allowed by paragraph 29 two of subdivision h of this section, and (x) for tax years beginning on 30 or after June first, two thousand one, is not in excess of two hundred 31 forty-nine thousand nine hundred ninety-nine dollars per year, calcu- 32 lated without regard to any reduction in base rent allowed by paragraph 33 two of subdivision h of this section, shall be exempt from the payment 34 of the tax imposed by this chapter with respect to such rent, provided, 35 however, that where the base rent of such tenant is for a period of less 36 than one year, such base rent shall, for purposes of this paragraph, be 37 determined as if it had been on an equivalent basis for the entire year; 38 and provided, further, that for purposes of subparagraphs (viii) and 39 (ix) of this paragraph, base rent for the period specified in each of 40 such subparagraphs shall be separately annualized as if it had been on 41 an equivalent basis for an entire year, irrespective of the actual base 42 rent for the tax year including the period specified in such subpara- 43 graph. Provided, however, (xi) a tenant whose base rent for the tax year 44 beginning June first, nineteen hundred eighty-four and ending May thir- 45 ty-first, nineteen hundred eighty-five, is at least eight thousand 46 dollars per year, but not in excess of ten thousand nine hundred nine- 47 ty-nine dollars per year, shall be exempt from the payment of the tax 48 imposed by this chapter with respect to such rent for the period begin- 49 ning December first, nineteen hundred eighty-four and ending May thir- 50 ty-first, nineteen hundred eighty-five, and (xii) a tenant whose base 51 rent for the tax year beginning June first, nineteen hundred ninety-five 52 and ending May thirty-first, nineteen hundred ninety-six, is at least 53 thirty-one thousand dollars per year, but not in excess of thirty-nine 54 thousand nine hundred ninety-nine dollars per year, shall be exempt from 55 the payment of the tax imposed by this chapter with respect to such rent

S. 8578 711

1 for the period beginning September first, nineteen hundred ninety-five 2 and ending May thirty-first, nineteen hundred ninety-six. 3 c. Base rent shall be reduced by the amount of the taxpayer's rent 4 for, or reasonably ascribable to, the taxpayer's own use of the prem- 5 ises: 6 1. As premises used for railroad transportation purposes. 7 2. As premises used for air transportation purposes. 8 3. As piers insofar as such premises are used in interstate or foreign 9 commerce. 10 4. Which are located in, upon, above or under any public street, high- 11 way or other public place, and which are defined as special franchise 12 property in the real property tax law. 13 5. Which are taxed pursuant to subchapter one of chapter twenty of 14 this title to the extent that such premises are subject to, and during 15 the period that they are subject to, such tax. 16 6. Which are taxed pursuant to subdivision b or c of section 11-1005 17 of this title. 18 7. Which are advertising signs, advertising space, vending machines or 19 newsstands within or attached to stations, platforms, stairways, 20 entranceways, passageways, mezzanines or tracks of a rapid transit 21 subway or elevated railroad operated by the New York city transit 22 authority when the rent of the tenant or of the tenant's landlord is 23 payable to such authority. 24 8. As premises used for omnibus transportation purposes. 25 9. As premises used for retail sales purposes where such premises are 26 located in the area in the borough of Manhattan bounded by Murray Street 27 on the north starting at the intersection of West Street and Murray 28 Street; running easterly along the center line of Murray Street, 29 connecting through City Hall Park with the center line of Frankfort 30 Street and running easterly along the center lines of Frankfort and 31 Dover Streets to the intersection of Dover Street and South Street; 32 running southerly along the center line of South Street to Peter Minuit 33 Plaza; connecting through Peter Minuit Plaza to the center line of State 34 Street and running northwesterly along the center line of State Street 35 to the intersection of State Street and Battery Place; running westerly 36 along the center line of Battery Place to the intersection of Battery 37 Place and West Street; and running northerly along the center line of 38 West Street to the intersection of West Street and Murray Street. Any 39 tax lot which is partly located inside such area shall be deemed to be 40 entirely located inside such area. 41 d. A tenant who uses taxable premises for renting to others for resi- 42 dential purposes to the extent of seventy-five per centum or more of the 43 rentable floor space shall be exempt from the tax imposed by this chap- 44 ter in respect to the rent paid for such premises from the time that 45 construction thereof commences, provided, however, that this paragraph 46 shall not be applicable to hotels, apartment hotels or lodging houses as 47 defined in former title V of chapter forty-six of the code of the 48 preceding municipality. 49 e. (1) A tenant who uses taxable premises for a dramatic or musical 50 arts performance for less than four weeks where there is no indication 51 prior to or at the time that such performance commences that the 52 performance is intended to continue for less than four weeks shall be 53 exempt from the tax imposed by this chapter with respect to the rent 54 paid for such taxable premises. 55 (2) (i) Notwithstanding any other provision of law to the contrary, a 56 tenant who uses taxable premises for the production and performance of a

S. 8578 712

1 theatrical work shall be exempt from the tax imposed by this chapter 2 with respect to the rent paid for such taxable premises for a period not 3 exceeding fifty-two weeks beginning on the date that the production of 4 such theatrical work commences, provided, however, that this subpara- 5 graph shall not apply to any theatrical work the production of which 6 commenced prior to June first, nineteen hundred ninety-five. 7 (ii) For purposes of this paragraph, the term "theatrical work" shall 8 mean a performance or repetition thereof in a theater of a live dramatic 9 performance, whether or not musical in part, that contains sustained 10 plots or recognizable thematic material, including so-called legitimate 11 theater plays or musicals, dramas, melodramas, comedies, compilations, 12 farces or reviews, provided that such performance is intended to be open 13 to the public for at least two weeks. The term "theatrical work" shall 14 not include performances of any kind in a roof garden, cabaret or simi- 15 lar place, circuses, ice skating shows, aqua shows, variety shows, magic 16 shows, animal acts, concerts, industrial shows or similar performances, 17 or radio or television performances, whether or not such performances 18 are pre-recorded for later broadcast. 19 f. 1. A tenant who is an eligible business and has obtained the 20 certifications required by paragraph four of this subdivision shall be 21 permitted to reduce his or her base rent for particular premises to 22 which he or she has relocated by an amount determined by multiplying 23 such base rent by a fraction the numerator of which is the number of 24 eligible aggregate employment shares maintained by such tenant with 25 respect to such premises in the tax year for which such tenant claims 26 the reduction and the denominator of which is a number equal to the 27 number of aggregate employment shares maintained by such tenant in such 28 premises in the tax year for which such tenant claims the reduction 29 allowed by this subdivision, provided, however, that such denominator 30 shall not exceed the highest number of aggregate employment shares main- 31 tained by such tenant in such premises in any of the tax years described 32 below which commence prior to or concurrently with the tax year for 33 which such tenant claims the reduction allowed by this subdivision: (i) 34 the tax year during which such tenant relocates to such particular prem- 35 ises; and (ii) each of the three tax years immediately succeeding the 36 tax year during which such tenant relocates to such premises. Base rent 37 for a particular premises may be reduced as provided in this subdivision 38 for the tax year during which the tenant relocates to such premises and 39 for any of the twelve immediately succeeding tax years during which the 40 tenant maintains eligible aggregate employment shares with respect to 41 such premises, provided, however, that there shall be no such reduction 42 with respect to base rent for any part of the tax year preceding the 43 date of relocation to such premises, and provided, further, however, in 44 the twelfth succeeding tax year there shall be a reduction only with 45 respect to base rent for the period, commencing on the first day of such 46 tax year, equal to the difference between the total number of days in 47 the tax year of relocation and the number of days in such tax year of 48 relocation commencing with and following the date of relocation, and 49 provided, further, that there shall be no such reduction with respect to 50 premises used for retail activity or hotel services. 51 2. (i) For purposes of this subdivision, the terms "eligible area," 52 "eligible aggregate employment shares," "relocate," "retail activity" 53 and "hotel services" shall have the meanings ascribed by section 22-621 54 of the code of the preceding municipality, provided that whenever the 55 term "taxable year " appears in such section 22-621, such term shall be 56 read as "tax year," as the term "tax year" is defined in subdivision

S. 8578 713

1 twelve of section 11-701 of this chapter except when the taxable year 2 referred to is the taxable year immediately preceding the taxable year 3 during which such tenant relocates. 4 (ii) For purposes of this subdivision, the term "eligible business" 5 shall have the meaning ascribed by section 22-621 of the code of the 6 preceding municipality, provided that such term shall in addition 7 include any person subject to a tax imposed under subchapter four of 8 chapter six of this title and any person who is an insurance corporation 9 as defined in section one thousand five hundred of the tax law, which: 10 (A) has been conducting substantial business operations at one or more 11 business locations outside the eligible area for the twenty-four consec- 12 utive months immediately preceding the taxable year during which such 13 eligible business relocates; and (B) on or after May twenty-seventh, 14 nineteen hundred eighty-seven relocates all or part of such business 15 operations; and (C) on or after May twenty-seventh, nineteen hundred 16 eighty-seven first enters into a lease for the premises to which it 17 relocates or a parcel on which will be constructed such premises. 18 3. The reduction allowed by this subdivision may be claimed on an 19 estimated basis on the returns filed for the tax periods ending on the 20 last days of August, November and February of each year if, and to the 21 extent, permitted by regulations promulgated by the commissioner of 22 finance. 23 4. No tenant shall be authorized to receive a reduction in base rent 24 subject to tax under the provisions of this subdivision, until the prem- 25 ises with respect to which it is claiming a reduction in base rent meet 26 the requirements in the definition of eligible premises and until it has 27 obtained a certification of eligibility from the mayor or an agency 28 designated by the mayor, and an annual certification from the mayor or 29 an agency designated by the mayor as to the number of eligible aggregate 30 employment shares maintained by such tenant which may qualify for 31 obtaining a base rent reduction for the tenant's tax year. Any written 32 documentation submitted to the mayor or such agency or agencies in order 33 to obtain any such certification shall be deemed a written instrument 34 for purposes of section 175.00 of the penal law. Application fees for 35 such certifications shall be determined by the mayor or such agency or 36 agencies. No certification of eligibility shall be issued to an eligible 37 business on or after July first, two thousand three unless such business 38 meets the requirements of either subparagraph (a) or (b) of this para- 39 graph: 40 (a) (1) prior to such date such business has purchased, leased or 41 entered into a contract to purchase or lease particular premises or a 42 parcel on which will be constructed such premises or already owned such 43 premises or parcel; 44 (2) prior to such date improvements have been commenced on such prem- 45 ises or parcel which improvements will meet the requirements of subdivi- 46 sion (e) of section 22-621 of the code of the preceding municipality 47 relating to expenditures for improvements; 48 (3) prior to such date such business submits a preliminary application 49 for a certification of eligibility to such mayor or such agency or agen- 50 cies with respect to a proposed relocation to such particular premises; 51 and 52 (4) such business relocates to such particular premises not later than 53 thirty-six months or, in a case in which the expenditures made for the 54 improvements specified in clause two of this subparagraph are in excess 55 of fifty million dollars within seventy-two months from the date of 56 submission of such preliminary application; or

S. 8578 714

1 (b) (1) not later than June thirtieth, two thousand ten, such business 2 has purchased, leased or entered into a contract to purchase or lease 3 particular premises wholly contained in a building in which at least an 4 aggregate of forty per centum or two hundred thousand square feet, 5 whichever is less, of the nonresidential floor area of such building has 6 been purchased or leased by a business or businesses which meet or will 7 meet the requirements of subparagraph (a) of this paragraph with respect 8 to such floor area and which are or will become certified as eligible to 9 receive a credit under section 22-622 of the code of the preceding muni- 10 cipality with respect to such floor area; 11 (2) not later than June thirtieth, two thousand ten, such business 12 submits a preliminary application for a certification of eligibility to 13 such mayor or such agency or agencies with respect to a proposed relo- 14 cation to such particular premises; and 15 (3) not later than June thirtieth, two thousand ten, such business 16 relocates to such particular premises. 17 Any tenant subject to a tax imposed under chapter five, or subchapter 18 two, three or three-A of chapter six, of this title obtaining a certif- 19 ication of eligibility pursuant to subdivision (b) of section 22-622 of 20 the code of the preceding municipality shall be deemed to have obtained 21 the certification of eligibility required by this paragraph. 22 g. Whenever the rent paid by a tenant for his or her occupancy of 23 taxable premises is measured in whole or in part by the gross receipts 24 from the tenant's sales within such place, the tenant's rent, to the 25 extent paid on the basis of such gross receipts, shall be deemed not to 26 exceed fifteen percent of such gross receipts. 27 h. (1) In the case of any taxable premises located in the borough of 28 Manhattan north of the center line of ninety-sixth street or in the 29 boroughs of the Bronx, Brooklyn, Queens and Staten Island, the base rent 30 for such premises shall be reduced by ten percent for the period begin- 31 ning on January first, nineteen hundred eighty-six and ending May thir- 32 ty-first, nineteen hundred eighty-seven, by twenty percent for the peri- 33 od beginning June first, nineteen hundred eighty-seven and ending May 34 thirty-first, nineteen hundred eighty-nine, and by thirty percent for 35 the period beginning June first, nineteen hundred eighty-nine and ending 36 August thirty-first, nineteen hundred ninety-five, such reduction to be 37 made after all other exemptions and deductions authorized by this chap- 38 ter have been taken. For periods beginning September first, nineteen 39 hundred ninety-five and thereafter, a tenant of taxable premises located 40 in that part of the city specified in this paragraph shall be exempt 41 from the payment of the tax imposed by this chapter with respect to the 42 rent for such taxable premises. 43 (2) In the case of any taxable premises located in the borough of 44 Manhattan south of the center line of ninety-sixth street, the base rent 45 for such premises shall be reduced by (i) fifteen percent for the period 46 beginning March first, nineteen hundred ninety-six and ending May thir- 47 ty-first, nineteen hundred ninety-six, (ii) twenty-five percent for the 48 period beginning June first, nineteen hundred ninety-six and ending 49 August thirty-first, nineteen hundred ninety-eight, and (iii) thirty- 50 five percent for periods beginning September first, nineteen hundred 51 ninety-eight and thereafter, such reduction to be made after all other 52 exemptions and deductions authorized by this chapter have been taken. 53 i. (1) (a) (i) For purposes of, and to the extent relevant to, this 54 subdivision, the following terms shall, except to the extent hereinafter 55 modified, have the definitions assigned to such terms in section four 56 hundred ninety-nine-a of the real property tax law, and such definitions

S. 8578 715

1 shall apply with the same force and effect as if they had been set forth 2 in full in this subdivision: "abatement zone," "aggregate floor area," 3 "applicant," "department of finance," "eligible building," "eligibility 4 period," "eligible premises," "expansion premises," "expansion tenant," 5 "governmental agency," "landlord," "lease commencement date," "mixed-use 6 building," "new tenant," "person," "relocation area," "renewal tenant," 7 "rent commencement date," "subtenant" and "tenant." 8 (ii) For purposes of this subdivision, the definitions assigned by 9 clause (i) of this subparagraph to the terms "eligible premises," 10 "expansion tenant," "landlord," "new tenant" and "renewal tenant" shall 11 be modified as follows: (A) whenever the term "eligible building" 12 appears in any of such definitions, such term, notwithstanding anything 13 to the contrary, shall be deemed to include an eligible government-owned 14 building and, for purposes of subparagraph (b-2) of paragraph two of 15 subdivision i of this section, a non-residential or mixed-use building 16 located south of the center line of Canal Street in the borough of 17 Manhattan, regardless of when it received its initial certificate of 18 occupancy or initial temporary certificate of occupancy and regardless 19 of when it was constructed and shall be deemed to include an eligible 20 government-owned building; and (B) a reference in any of such defi- 21 nitions to a lease which meets the eligibility requirements of section 22 four hundred ninety-nine-c of the real property tax law shall be deemed 23 to include, in the case of a lease of premises in an eligible govern- 24 ment-owned building, a lease which meets the eligibility requirements of 25 paragraph four of this subdivision. 26 (b) When used in this subdivision, the following terms shall mean or 27 include: (i) "Eligible government-owned building." A building that 28 would be an eligible building, as such term is defined in section four 29 hundred ninety-nine-a of the real property tax law, but for the fact 30 that it is owned by a governmental agency. 31 (ii) "Eligible taxable premises." Taxable premises that are eligible 32 premises or expansion premises. 33 (iii) "Eligible tenant." A tenant with respect to whose lease of 34 eligible taxable premises there has been issued a certificate of abate- 35 ment or a certificate of eligibility. 36 (iv) "Base year." The twelve-month period that commences on the rent 37 commencement date. 38 (v) "Base rent for the base year." The total base rent for eligible 39 taxable premises for the base year, determined without regard to the 40 special reduction allowed by this subdivision. 41 (vi) "Certificate of abatement." The certificate of abatement issued 42 pursuant to section four hundred ninety-nine-d of the real property tax 43 law. 44 (vii) "Certificate of eligibility." The certificate of eligibility 45 issued pursuant to paragraph five of this subdivision. 46 (2) (a) An eligible tenant of eligible taxable premises shall be 47 allowed a special reduction in determining the taxable base rent for 48 such eligible taxable premises. Such special reduction shall be allowed 49 with respect to the rent for such eligible taxable premises for a period 50 not exceeding sixty months or, with respect to a lease commencing on or 51 after April first, nineteen hundred ninety-seven with an initial lease 52 term of less than five years, but not less than three years, for a peri- 53 od not exceeding thirty-six months, commencing on the rent commencement 54 date applicable to such eligible taxable premises, provided, however, 55 that in no event shall any special reduction be allowed for any period 56 beginning after March thirty-first, two thousand thirty-four. For

S. 8578 716

1 purposes of applying such special reduction, the base rent for the base 2 year shall, where necessary to determine the amount of the special 3 reduction allowable with respect to any number of months falling within 4 a tax period, be prorated by dividing the base rent for the base year by 5 twelve and multiplying the result by such number of months. 6 (a-1) Notwithstanding paragraph one of this subdivision, for purposes 7 of, and to the extent relevant to, the special reduction allowed by this 8 subparagraph, the definitions set forth in section four hundred ninety- 9 nine-aa of the real property tax law shall apply with the same force and 10 effect as if they had been set forth in full in this subdivision, except 11 as such definitions are hereinafter modified. An eligible tenant of 12 eligible taxable premises shall be allowed a special reduction in deter- 13 mining the taxable base rent for such eligible taxable premises, 14 provided, however, that (i) such eligible taxable premises are eligible 15 premises as defined in paragraph (c) of subdivision ten of section four 16 hundred ninety-nine-aa of the real property tax law, (ii) such eligible 17 taxable premises are located in the special garment center district 18 identified in the abatement zone defined in paragraph (c) of subdivision 19 two of section four hundred ninety-nine-aa of the real property tax law, 20 (iii) the lease for such eligible taxable premises commences within the 21 eligibility period applicable to the abatement zone defined in paragraph 22 (c) of subdivision two of section four hundred ninety-nine-aa of the 23 real property tax law, (iv) the lease for such eligible taxable premises 24 has an initial lease term of at least three years and (v) such special 25 reduction is limited to the benefit period, as defined in subdivision 26 five of section four hundred ninety-nine-aa of the real property tax 27 law, applicable to a lease commencing on or after July first, two thou- 28 sand five for eligible premises located within the abatement zone 29 defined in paragraph (c) of subdivision two of section four hundred 30 ninety-nine-aa of the real property tax law. 31 (a-2) The amount of the special reduction allowed by subparagraph 32 (a-1) of this paragraph shall be determined as follows: (i) For the 33 base year the amount of such special reduction shall be equal to the 34 base rent for the base year. 35 (ii) For the first through ninth twelve-month periods following the 36 base year the amount of such special reduction shall be equal to the 37 lesser of (A) the base rent for each such twelve-month period or (B) the 38 base rent for the base year. 39 (a-3) When used in this subdivision, for purposes of the special 40 reduction allowed by subparagraph (a-1) of this paragraph, the following 41 terms shall mean or include: (i) "Eligible taxable premises." Taxable 42 premises that are eligible premises or expansion premises. 43 (ii) "Eligible tenant." A tenant with respect to whose lease of eligi- 44 ble taxable premises there has been issued a certificate of abatement. 45 (iii) "Base year." The twelve-month period that commences on the rent 46 commencement date. 47 (iv) "Base rent for the base year." The total base rent for eligible 48 taxable premises for the base year, determined without the special 49 reduction allowed by subparagraph (a-1) of this paragraph. 50 (v) "Certificate of abatement." The certificate of abatement issued 51 pursuant to section four hundred ninety-nine-dd of the real property tax 52 law. 53 (b) Except as provided in subparagraphs (b-1) and (b-2) of this para- 54 graph, the amount of the special reduction allowed by this subdivision 55 shall be determined as follows: (i) For the base year the amount of

S. 8578 717

1 such special reduction shall be equal to the base rent for the base 2 year. 3 (ii) For the first and second twelve-month periods following the base 4 year the amount of such special reduction shall be equal to the lesser 5 of (A) the base rent for each such twelve-month period or (B) the base 6 rent for the base year. 7 (iii) For the third twelve-month period following the base year the 8 amount of such special reduction shall be equal to two-thirds of the 9 lesser of (A) the base rent for such twelve-month period or (B) the base 10 rent for the base year. 11 (iv) For the fourth twelve-month period following the base year the 12 amount of such special reduction shall be equal to one-third of the 13 lesser of (A) the base rent for such twelve-month period or (B) the base 14 rent for the base year. 15 (b-1) The amount of the special reduction allowed by this subdivision 16 with respect to a lease commencing on or after April first, nineteen 17 hundred ninety-seven with an initial lease term of less than five years, 18 but not less than three years, shall be determined as follows: (i) For 19 the base year the amount of such special reduction shall be equal to the 20 base rent for the base year. 21 (ii) For the first twelve-month period following the base year the 22 amount of such special reduction shall be equal to two-thirds of the 23 lesser of (A) the base rent for such twelve-month period or (B) the base 24 rent for the base year. 25 (iii) For the second twelve-month period following the base year the 26 amount of such special reduction shall be equal to one-third of the 27 lesser of (A) the base rent for such twelve-month period or (B) the base 28 rent for the base year. 29 (b-2) The amount of the special reduction allowed by this subdivision 30 with respect to a lease other than a sublease commencing between July 31 first, two thousand five and June thirtieth, two thousand twenty-seven 32 with an initial or renewal lease term of at least five years shall be 33 determined as follows: (i) For the base year the amount of such special 34 reduction shall be equal to the base rent for the base year. 35 (ii) For the first, second, third and fourth twelve-month periods 36 following the base year the amount of such special reduction shall be 37 equal to the lesser of (A) the base rent for each such twelve-month 38 period or (B) the base rent for the base year. 39 (c) For purposes of determining (i) whether a tenant is, pursuant to 40 the provisions of paragraph two of subdivision b of this section, exempt 41 from payment of the tax imposed by this chapter with respect to the base 42 rent for eligible taxable premises or (ii) whether, and the extent to 43 which, a tenant is eligible for the credit allowed pursuant to the 44 provisions of section 11-704.3 of this chapter with respect to eligible 45 taxable premises, the term "base rent" as used in such provisions shall 46 be the base rent as determined prior to the allowance of any special 47 reduction allowed by this subdivision. 48 (d) Notwithstanding anything to the contrary, for purposes of this 49 subdivision, expansion premises shall be treated as separate and 50 distinct from any other premises of the expansion tenant in the same 51 eligible building. 52 (3) The special reduction allowed by this subdivision shall be allowed 53 commencing on the rent commencement date; however, if the date of the 54 certificate of abatement or certificate of eligibility is later than the 55 rent commencement date, the tenant shall not, in the first instance, 56 claim the special reduction on any return required to be filed for a tax

S. 8578 718

1 period ending prior to the date of such certificate of abatement or 2 certificate of eligibility. If the date of such certificate of abatement 3 or certificate of eligibility falls in a tax period subsequent to the 4 tax period in which the rent commencement date falls, but both such 5 dates fall within the same tax year, the special reduction that was not 6 claimed in the first instance for any period preceding the date of such 7 certificate of abatement or certificate of eligibility shall be 8 reflected in the final return for the tax year. If the date of the 9 certificate of abatement or certificate of eligibility falls in the tax 10 year following the tax year in which the rent commencement date falls, 11 an amended final return shall be filed for such earlier tax year in 12 which shall be reflected any special reduction allowable for such tax 13 year; in addition, the final return for such later tax year shall 14 reflect any special reduction that was not claimed in the first instance 15 for any period in such tax year preceding the date of the certificate of 16 abatement or certificate of eligibility. 17 (4) (a) With respect to premises located in an eligible government- 18 owned building, no special reduction shall be allowed under this subdi- 19 vision unless: (i) the landlord enters into a lease for eligible prem- 20 ises with a new tenant or a renewal tenant and: (A) the lease 21 commencement date is within the eligibility period; and (B) (I) if, by 22 the sixtieth day following the rent commencement date, such new or 23 renewal tenant employs fifty or fewer employees in the eligible prem- 24 ises, the initial lease term is for a period of at least five years, 25 provided, however, that with respect to a lease commencing on or after 26 July first, nineteen hundred ninety-six if, by the sixtieth day follow- 27 ing the rent commencement date, such new or renewal tenant employs one 28 hundred twenty-five or fewer employees in the eligible premises, the 29 initial lease term is for a period of at least five years, and provided, 30 further, that with respect to a lease commencing on or after April 31 first, nineteen hundred ninety-seven if, by the sixtieth day following 32 the rent commencement date, such new or renewal tenant employs one 33 hundred twenty-five or fewer employees in the eligible premises, the 34 initial lease term is for a period of at least three years, or (II) if, 35 by the sixtieth day following the rent commencement date, such new or 36 renewal tenant employs more than fifty employees in the eligible prem- 37 ises, the initial lease term is for a period of at least ten years, 38 provided, however, that with respect to a lease commencing on or after 39 July first, nineteen hundred ninety-six if, by the sixtieth day follow- 40 ing the rent commencement date, such new or renewal tenant employs more 41 than one hundred twenty-five employees in the eligible premises, the 42 initial lease term is for a period of at least ten years; or 43 (ii) the landlord enters into a lease with an expansion tenant for 44 expansion premises and: (A) the lease commencement date is within the 45 eligibility period; (B) if the expansion premises are located in the 46 eligible building previously occupied by such expansion tenant, the 47 lease term for the premises in the eligible building previously occupied 48 by such expansion tenant will expire no earlier than the expiration date 49 of the initial lease term for the expansion premises, provided that 50 where such expansion tenant occupies premises in the eligible building 51 under more than one lease, the provisions of this subclause shall be 52 applied with reference to the lease for the premises containing the 53 largest amount of square feet, provided, however, that this subclause 54 shall not apply to a lease commencing on or after July first, nineteen 55 hundred ninety-six; and (C) (I) if, by the sixtieth day following the 56 rent commencement date, such expansion tenant employs fifty or fewer

S. 8578 719

1 employees in the eligible building in which the expansion premises are 2 located, the initial lease term for the expansion premises is for a 3 period of at least five years, provided, however, that with respect to a 4 lease commencing on or after July first, nineteen hundred ninety-six if, 5 by the sixtieth day following the rent commencement date, such expansion 6 tenant employs one hundred twenty-five or fewer employees in the expan- 7 sion premises, the initial lease term for the expansion premises is for 8 a period of at least five years, and provided, further, that with 9 respect to a lease commencing on or after April first, nineteen hundred 10 ninety-seven if, by the sixtieth day following the rent commencement 11 date, such expansion tenant employs one hundred twenty-five or fewer 12 employees in the expansion premises, the initial lease term for the 13 expansion premises is for a period of at least three years, or (II) if, 14 by the sixtieth day following the rent commencement date, such expansion 15 tenant employs more than fifty employees in such eligible building, the 16 initial lease term for the expansion premises is for a period of at 17 least ten years, provided, however, that with respect to a lease 18 commencing on or after July first, nineteen hundred ninety-six if, by 19 the sixtieth day following the rent commencement date, such expansion 20 tenant employs more than one hundred twenty-five employees in the expan- 21 sion premises, the initial lease term for the expansion premises is for 22 a period of at least ten years. 23 (b) Notwithstanding anything in this subdivision to the contrary, with 24 respect to premises located in an eligible government-owned building, no 25 certificate of eligibility shall be issued and no special reduction 26 shall be allowed under this subdivision if: (i) the tenant has relo- 27 cated to such premises from any area in the borough of Manhattan north 28 of the center line of 96th street or from any portion of the boroughs of 29 the Bronx, Brooklyn, Queens, or Staten Island; or (ii) the lease for 30 such premises provides that during the initial lease term required under 31 subparagraph (a) of this paragraph either the landlord or the tenant may 32 terminate such lease prior to the expiration of such required initial 33 lease term, provided that such lease may provide that either the land- 34 lord or the tenant may terminate such lease if (A) the other party is in 35 default of any of such party's obligations under the lease, (B) the 36 eligible premises are damaged or destroyed by fire or other casualty, 37 (C) the eligible premises are rendered unusable for any reason not 38 attributable to any act or failure to act of either tenant or landlord 39 or (D) the eligible premises are acquired by eminent domain. 40 (c) For purposes of this paragraph, the expiration date of a lease 41 shall be determined by the expiration date set forth in such lease, 42 without giving effect to any rights of the landlord or the tenant to 43 terminate such lease prior to the expiration date set forth therein. 44 (5) (a) (i) With respect to premises located in an eligible govern- 45 ment-owned building, an application for a certificate of eligibility 46 entitling a tenant to claim the special reduction allowed by this subdi- 47 vision shall be filed by such tenant with the department of finance on 48 or after the date on which the lease for the eligible premises is 49 executed by the landlord and tenant but in no event more than one 50 hundred eighty days following the later of the rent commencement date or 51 the date that chapter four of the laws of nineteen hundred ninety-five 52 became a law, and no such certificate of eligibility shall be issued 53 unless such application is filed within such time. 54 (ii) Notwithstanding clause (i) of this subparagraph and any other 55 provision of law to the contrary, with respect to a lease commencing on 56 or after July first, nineteen hundred ninety-six in premises located in

S. 8578 720

1 an eligible government-owned building, an application for a certificate 2 of eligibility entitling a tenant to claim the special reduction allowed 3 by this subdivision shall be filed by such tenant with the department of 4 finance on or after the date on which the lease for the eligible prem- 5 ises is executed by the landlord and tenant but in no event more than 6 one hundred eighty days following the rent commencement date or sixty 7 days following the date that the chapter of the laws of nineteen hundred 8 ninety-seven that added this clause became a law, whichever is later, 9 and no such certificate of eligibility shall be issued unless such 10 application is filed within such time. 11 (iii) Notwithstanding any other provisions of law to the contrary, an 12 application for the special reduction allowed by subparagraph (b-2) of 13 paragraph two of this subdivision shall be considered timely filed if 14 filed by such tenant with the department of finance on or after the date 15 on which the lease for the eligible premises is executed by the landlord 16 and tenant but in no event more than one hundred eighty days following 17 the rent commencement date or by May thirtieth, two thousand fourteen, 18 whichever is later, and no such special reduction shall be permitted 19 unless such application is filed within such time. 20 (b) In addition to any other information required by the department of 21 finance, such application for a certificate of eligibility shall include 22 (i) an abstract of the lease for the eligible taxable premises, which 23 shall include the lease commencement date, the rent commencement date 24 and the expiration date of such lease, (ii) a statement as to the number 25 of persons employed by the tenant in the eligible taxable premises and, 26 where applicable, in the eligible building containing such premises, by 27 the sixtieth day following the rent commencement date, (iii) a statement 28 as to the location of all office or retail space in the city occupied by 29 the tenant prior to the execution of the lease for the eligible taxable 30 premises and the commencement and expiration dates of all leases for 31 such office or retail space located in the abatement zone. Such applica- 32 tion shall also state that the tenant agrees to comply with and be 33 subject to such rules as may be issued from time to time by the depart- 34 ment of finance. 35 (c) The department of finance shall issue a certificate of eligibility 36 upon determining that an application filed pursuant to this paragraph 37 meets the requirements set forth in this subdivision, provided, however, 38 that no such certificate of eligibility shall be issued if any payments 39 in lieu of taxes, water or sewer charges or other lienable charges are 40 due and owing with respect to such eligible government-owned building at 41 the time such application is pending, unless such payments in lieu of 42 taxes or charges are at such time being paid in timely installments 43 pursuant to a written agreement with the department of finance or other 44 appropriate agency. 45 (d) The burden of proof shall be on the tenant to show by clear and 46 convincing evidence that the requirements for granting a certificate of 47 eligibility have been satisfied. The department of finance shall have 48 the authority to require that statements in connection with applications 49 pursuant to this paragraph be made under oath. 50 (e) The department of finance may provide by rule for the payment by 51 tenants of premises in eligible government-owned buildings of reasonable 52 administrative charges or fees necessary to defray expenses in 53 connection with the determination of initial and continuing eligibility 54 for the special reduction allowed by this subdivision. 55 (6) (a) If an eligible tenant (i) sublets any portion of the eligible 56 taxable premises to any other person, or (ii) otherwise ceases to occupy

S. 8578 721

1 or use any portion of the premises as eligible taxable premises, such 2 tenant shall, immediately upon the occurrence of any such event, cease 3 to be eligible for the special reduction allowed by this subdivision 4 with respect to the portion of the premises which is sublet or which 5 ceases to be occupied or used by such tenant as eligible taxable prem- 6 ises, and for any period following the occurrence of any such event, the 7 special reduction otherwise allowed by this subdivision shall be reduced 8 by an amount determined by multiplying the amount of such special 9 reduction by the percentage of the premises which is sublet or which has 10 ceased to be occupied or used as eligible taxable premises. 11 Such tenant shall give written notice of the occurrence of any such 12 event to the department of finance within thirty days thereof. If the 13 tenant fails to give such notice, an assessment of any additional tax 14 that may become due as a result of the occurrence of any such event may 15 be made at any time, notwithstanding anything in section 11-717 of this 16 chapter to the contrary. 17 (b) Notwithstanding anything in this chapter to the contrary, a tenant 18 claiming the special reduction allowed by this subdivision shall file a 19 return for each tax period with respect to which such special reduction 20 is claimed. Each such return shall contain a certification by the 21 tenant, in such form as the department of finance may prescribe, to the 22 effect that such tenant meets all the requirements of this subdivision, 23 and no special reduction shall be allowed if such return does not 24 contain such certification by such tenant. 25 (c) If any special reduction allowed under this subdivision was 26 obtained by a tenant as a result of having made a false or misleading 27 statement as to a material fact or having omitted to state any material 28 fact necessary in order to make such statement not false or misleading, 29 no such special reduction shall be allowed and any additional tax that 30 becomes due as a result of such disallowance may be assessed at any 31 time, notwithstanding anything in section 11-717 of this chapter to the 32 contrary. In addition, the department of finance may declare any such 33 tenant to be ineligible to claim any special reduction under this subdi- 34 vision in the future with respect to the same or any other premises. 35 7. A determination by the department of finance pursuant to subdivi- 36 sion six of section four hundred ninety-nine-f of the real property tax 37 law to deny, terminate or revoke any abatement applied for or granted 38 pursuant to title four of article four of the real property tax law 39 based on the relationship between the landlord and the tenant shall not 40 be dispositive of whether such tenant is eligible for a special 41 reduction under this subdivision. The department of finance may deter- 42 mine that such tenant is eligible for a special reduction under this 43 subdivision and may issue a certificate of eligibility to such tenant in 44 accordance with the procedures and pursuant to the standards applicable 45 to a tenant of premises located in an eligible government-owned build- 46 ing, provided, however, that any application filed pursuant to paragraph 47 five of this subdivision by a tenant whose application for a certificate 48 of abatement pursuant to title four of article four of the real property 49 tax law was denied by the department of finance pursuant to subdivision 50 six of section four hundred ninety-nine-f of the real property tax law 51 based on the relationship between the landlord and the tenant, or by a 52 tenant whose application for a certificate of abatement pursuant to 53 title four of article four of the real property tax law was granted by 54 the department of finance, but whose abatement was terminated or revoked 55 by the department of finance pursuant to subdivision six of section four 56 hundred ninety-nine-f of the real property tax law based on the

S. 8578 722

1 relationship between the landlord and the tenant, may be deemed by the 2 department of finance to have been filed on the date the application for 3 such certificate of abatement was filed. This paragraph shall only apply 4 to leases commencing on or after April first, nineteen hundred ninety- 5 seven. 6 § 11-704.2 Special credit. A tenant whose base rent for the tax year 7 beginning June first, nineteen hundred ninety-three and ending May thir- 8 ty-first, nineteen hundred ninety-four is at least eleven thousand 9 dollars per year but not in excess of thirteen thousand nine hundred 10 ninety-nine dollars per year shall be allowed a credit against the tax 11 imposed by this chapter for such tax year, such credit shall be equal to 12 twenty-five percent of the tax imposed on such base rent for such tax 13 year. Where the base rent of a tenant is for a period of less than one 14 year, such base rent shall, for purposes of this section, be determined 15 as if it had been on an equivalent basis for the entire year. The credit 16 allowed under this section shall be deducted prior to the deduction of 17 any credit allowable under section 11-704.1 of this chapter. 18 § 11-704.3 Tax credit. (a) (1) For the period beginning September 19 first, nineteen hundred ninety-five and ending May thirty-first, nine- 20 teen hundred ninety-six, a credit shall be allowed against the tax 21 imposed by this chapter, such credit to be determined in accordance with 22 the following table:

23 If the tenant's annualized The credit shall be an amount equal 24 base rent for such period is: to the following percentage of the 25 tax imposed on such annualized base 26 rent for such period: 27 At least: But not over: 28 $40,000 $44,999 80% 29 $45,000 $49,999 60% 30 $50,000 $54,999 40% 31 $55,000 $59,999 20%

32 If the tenant's annualized base rent for such period is over fifty- 33 nine thousand nine hundred ninety-nine dollars, no credit shall be 34 allowed under this paragraph. 35 (2) For the tax year beginning June first, nineteen hundred ninety-six 36 and ending May thirty-first, nineteen hundred ninety-seven, a credit 37 shall be allowed against the tax imposed by this chapter, such credit to 38 be determined in accordance with the following table:

39 If the tenant's base rent is: The credit shall be an amount equal 40 to the following percentage of the 41 tax imposed on such base rent for 42 the tax year: 43 At least: But not over: 44 $40,000 $44,999 80% 45 $45,000 $49,999 60% 46 $50,000 $54,999 40% 47 $55,000 $59,999 20%

48 If the tenant's base rent is over fifty-nine thousand nine hundred 49 ninety-nine dollars, no credit shall be allowed under this paragraph. 50 (3) For each tax year beginning on or after June first, nineteen 51 hundred ninety-seven and ending on or before May thirty-first, two thou-

S. 8578 723

1 sand, a credit shall be allowed against the tax imposed by this chapter, 2 such credit to be determined in accordance with the following table:

3 If the tenant's base rent is: The credit shall be an amount equal 4 to the following percentage of the 5 tax imposed by this chapter for the 6 tax year: 7 At least: But not over: 8 $100,000 $109,999 80% 9 $110,000 $119,999 60% 10 $120,000 $129,999 40% 11 $130,000 $139,999 20%

12 If the tenant's base rent is over one hundred thirty-nine thousand 13 nine hundred ninety-nine dollars, no credit shall be allowed under this 14 paragraph. For purposes of this paragraph, 'base rent' shall be calcu- 15 lated without regard to any reduction in base rent allowed by paragraph 16 two of subdivision h of section 11-704 of this chapter. 17 (4) For the period beginning June first, two thousand and ending 18 November thirtieth, two thousand, a credit shall be allowed against the 19 tax imposed by this chapter, such credit to be determined in accordance 20 with the following table:

21 If the tenant's annualized The credit shall be an amount equal 22 base rent for such period is: to the following percentage of the 23 tax imposed on such annualized base 24 rent for such period: 25 At least: But not over: 26 $100,000 $109,999 80% 27 $110,000 $119,999 60% 28 $120,000 $129,999 40% 29 $130,000 $139,999 20%

30 If the tenant's annualized base rent for such period is over one 31 hundred thirty-nine thousand nine hundred ninety-nine dollars, no credit 32 shall be allowed under this paragraph. For purposes of this paragraph 33 'base rent' shall be calculated without regard to any reduction in base 34 rent allowed by paragraph two of subdivision h of section 11-704 of this 35 chapter. 36 (5) For the period beginning December first, two thousand and ending 37 May thirty-first, two thousand one, a credit shall be allowed against 38 the tax imposed by this chapter, such credit to be determined in accord- 39 ance with the following table:

40 If the tenant's annualized The credit shall be an amount equal 41 base rent for such period is: to the following percentage of the 42 tax imposed on such annualized base 43 rent for such period: 44 At least: But not over: 45 $150,000 $159,999 80% 46 $160,000 $169,999 60% 47 $170,000 $179,999 40% 48 $180,000 $189,999 20%

49 If the tenant's annualized base rent for such period is over one 50 hundred eighty-nine thousand nine hundred ninety-nine dollars, no credit

S. 8578 724

1 shall be allowed under this paragraph. For purposes of this paragraph, 2 'base rent' shall be calculated without regard to any reduction in base 3 rent allowed by paragraph two of subdivision h of section 11-704 of this 4 chapter. 5 (6) For each tax year beginning on or after June first, two thousand 6 one, a credit shall be allowed against the tax imposed by this chapter 7 as follows: a tenant whose base rent is at least two hundred and fifty 8 thousand dollars but not more than three hundred thousand dollars shall 9 be allowed a credit in an amount determined by multiplying three and 10 nine-tenths percent of base rent by a fraction the numerator of which is 11 three hundred thousand dollars minus the amount of base rent and the 12 denominator of which is fifty thousand dollars. If the tenant's base 13 rent is over three hundred thousand dollars, no credit shall be allowed 14 under this paragraph. For purposes of this paragraph, 'base rent' shall 15 be calculated without regard to any reduction in base rent allowed by 16 paragraph two of subdivision h of section 11-704 of this chapter. 17 (b) (1) Where the base rent of a tenant is for a period of less than 18 one year, such base rent shall, for purposes of this section, be deter- 19 mined as if it had been on an equivalent basis for the entire year. The 20 credits allowed under this section shall be deducted prior to the 21 deduction of any credit allowable under section 11-704.1 of this chap- 22 ter. 23 (2) For purposes of paragraphs four and five of subdivision (a) of 24 this section, base rent for the period specified in each of such para- 25 graphs shall be separately annualized as if it had been on an equivalent 26 basis for an entire year, irrespective of the actual base rent for the 27 tax year including the period specified in such paragraph. 28 § 11-704.4. Small business tax credit. a. As used in this section, the 29 following terms have the following meanings: 30 1. Income factor. The term "income factor" shall mean: 31 (i) for a tenant with total income of not more than five million 32 dollars, one; 33 (ii) for a tenant with total income of more than five million dollars 34 but not more than ten million dollars, a fraction the numerator of which 35 is ten million dollars minus the amount of total income and the denomi- 36 nator of which is five million dollars; and 37 (iii) for a tenant with total income of more than ten million dollars, 38 zero. 39 2. Rent factor. The term "rent factor" shall mean: 40 (i) for a tenant whose small business tax credit base rent is less 41 than five hundred thousand dollars, one; and 42 (ii) for a tenant whose small business tax credit base rent is at 43 least five hundred thousand dollars but not more than five hundred fifty 44 thousand dollars, a fraction the numerator of which is five hundred 45 fifty thousand dollars minus the amount of small business tax credit 46 base rent and the denominator of which is fifty thousand dollars. 47 3. Small business tax credit base rent. The term "small business tax 48 credit base rent" shall mean the base rent calculated without regard to 49 any reduction in base rent allowed by paragraph two of subdivision h of 50 section 11-704 of this chapter. 51 4. Total income. The term "total income" shall mean the amount 52 reported by a person, as defined by section seven thousand seven hundred 53 one of the internal revenue code, to the internal revenue service for 54 the purpose of the federal income tax in the tax year immediately 55 preceding the period for which the tenant is applying for the credit set 56 forth in subdivision b that is equal to the gross receipts or sales of

S. 8578 725

1 the person minus any returns and allowances, minus the cost of goods 2 sold plus the amount of any dividends, interest, gross rents, gross 3 royalties, capital gain net income, net gain or loss from the sale of 4 business property, net farm profit or loss, ordinary income or loss from 5 other partnerships, estates or trusts or other income or loss; except 6 that, if the tenant is a limited liability company or other business 7 entity that is not separate from its owner for federal income tax 8 purposes under section 301.7701-2(c)(2) of title 26 of the code of 9 federal regulations, total income as defined in this section shall mean 10 the total income of the person that reports the activities of the tenant 11 as its sole owner for federal income tax purposes. 12 b. Beginning on June first, two thousand eighteen and for each tax 13 year beginning thereafter, a credit shall be allowed against the tax 14 imposed by this chapter as follows: a tenant whose small business tax 15 credit base rent is at least two hundred fifty thousand dollars but not 16 more than five hundred fifty thousand dollars shall be allowed a credit 17 in the amount determined by multiplying the tax imposed on the tenant 18 pursuant to section 11-702 of this chapter minus any allowable credits 19 or exemptions set forth outside this section by the income factor and by 20 the rent factor. If the tenant's small business tax credit base rent is 21 over five hundred fifty thousand dollars, no credit shall be allowed 22 under this section. 23 c. The department of finance may promulgate any rules necessary to 24 implement the provisions of this section, including, but not limited to, 25 rules that prevent abuse of this section by related parties. 26 § 11-705 Returns. a. Every tenant subject to tax under this chapter 27 shall file with the commissioner of finance a return with respect to the 28 taxes payable for the three month periods ending on the last days of 29 August, November and February of each year and a final return with 30 respect to the taxes payable for the tax year ending on the last day of 31 May of each year. Such returns shall be filed within twenty days from 32 the expiration of the period covered thereby. A tenant who is exempt 33 from the tax by reason of paragraph two of subdivision b of section 34 11-704 of this chapter shall nevertheless be required to file a final 35 return, provided, however, that for tax years beginning on or after June 36 first, nineteen hundred ninety-five and ending on or before May thirty- 37 first, nineteen hundred ninety-seven, no such final return shall be 38 required from such exempt tenant with respect to taxable premises if (1) 39 the tenant's rent for such premises, determined without regard to any 40 deduction from or reduction in rent or base rent allowed by this chap- 41 ter, does not exceed fifteen thousand dollars for the tax year and (2) 42 in the case of a tenant who has more than one taxable premises, the 43 aggregate rents for all such premises, determined without regard to any 44 deduction from or reduction in rent or base rent allowed by this chap- 45 ter, do not exceed fifteen thousand dollars for the tax year. For tax 46 years beginning on June first, nineteen hundred ninety-seven and ending 47 on or before May thirty-first, two thousand one, no such final return 48 shall be required from such exempt tenant with respect to any taxable 49 premises if (1) the tenant's rent for such premises, determined without 50 regard to any deduction from or reduction in rent or base rent allowed 51 by this chapter, does not exceed seventy-five thousand dollars for the 52 tax year and (2) the amount of rent received or due from any subtenant 53 of such exempt tenant with respect to such premises does not exceed 54 seventy-five thousand dollars for the tax year. For tax years beginning 55 on or after June first, two thousand one, no such final return shall be 56 required from such exempt tenant with respect to any taxable premises if

S. 8578 726

1 (1) the tenant's rent for such premises, determined without regard to 2 any deduction from or reduction in rent or base rent allowed by this 3 chapter, does not exceed two hundred thousand dollars for the tax year 4 and (2) the amount of rent received or due from any subtenant of such 5 exempt tenant with respect to such premises does not exceed two hundred 6 thousand dollars for the tax year. Notwithstanding anything in this 7 subdivision to the contrary, for tax periods beginning on or after 8 September first, nineteen hundred ninety-five, no return shall be 9 required pursuant to this subdivision with respect to any taxable prem- 10 ises located in that part of the city specified in paragraph one of 11 subdivision h of section 11-704 of this chapter, and no such taxable 12 premises shall be taken into account for purposes of clause two of this 13 subparagraph. The commissioner of finance may permit or require returns, 14 including final returns, to be made for other periods and upon such 15 dates as the commissioner may specify and if he or she deems it neces- 16 sary, in order to insure the payment of the tax imposed by this chapter, 17 the commissioner may require such returns to be made for shorter periods 18 than those prescribed by this subdivision of this section, and upon such 19 dates as he or she may specify. 20 b. The commissioner of finance may by regulation require the filing 21 of information returns and supplemental information returns by landlords 22 and by tenants of taxable premises, whether or not they are required to 23 pay the tax imposed by this chapter, upon such dates or at such times as 24 the commissioner may specify if he or she deems the filing of such 25 information returns necessary for proper administration of this chapter. 26 c. The form of returns and information returns shall be prescribed by 27 the commissioner of finance and shall contain such information as the 28 commissioner may deem necessary for the proper administration of this 29 chapter. The commissioner of finance may require amended returns or 30 amended information returns to be filed within twenty days after notice 31 and to contain the information specified in the notice. 32 d. If a return or information return is not filed, or if a return of 33 any kind when filed is incorrect or insufficient on its face, the 34 commissioner of finance shall take the necessary steps to enforce the 35 filing of such a return or of a corrected return. 36 § 11-706 Payment of tax. a. The tax imposed by this chapter shall be 37 due and payable on or before the twentieth day of the calendar month 38 following the end of each tax period and shall be paid to the commis- 39 sioner of finance, as follows: The tax to be paid at such time shall be 40 based on the base rent for such tax period and the rate of tax shall be 41 the one which would be applicable if the base rent for such period were 42 the same for each tax period during the tax year, except that the 43 payment required to be made together with the final return or at the 44 time that the final return should be filed shall be the amount by which 45 the actual tax for the tax year exceeds the amounts previously paid for 46 the tax year. 47 b. Where the final return shows that the amount of tax paid for the 48 tax year exceeds the actual tax for such year, the commissioner of 49 finance shall make the appropriate refund as promptly as possible, 50 provided, however, that where the commissioner of finance has reason to 51 believe that the final return is inaccurate, the commissioner may with- 52 hold the refund in whole or in part. The making of a refund pursuant to 53 this subdivision shall not prevent the commissioner of finance from 54 making a determination that additional tax is due or from pursuing any 55 other method to recover the full amount of the actual tax due for the 56 tax year.

S. 8578 727

1 c. Where a tenant ceases to do business the tax, as measured by the 2 tenant's base rent for the prior part of the tax year, shall be due 3 immediately, and the tenant shall file a final return, but, should the 4 tenant continue to pay rent for the taxable premises, the tenant shall 5 file the normally required returns and a final return for the tax year, 6 provided, however, that any such tax payment shall be applied in 7 reduction of the tax payments required to be made with such returns or 8 with the final return for such tax year. 9 § 11-707 Records to be kept. Every landlord of taxable premises and 10 every tenant of taxable premises shall keep records of rent paid and 11 received by him or her in such form as the commissioner of finance may 12 by regulation require, all leases or agreements which fix the rents or 13 rights of tenants of taxable premises, and such other records, receipts 14 and other papers relevant to the ascertainment of the tax due under this 15 chapter as the commissioner of finance may by regulation require. Such 16 records shall be offered for inspection and examination at any time upon 17 demand by the commissioner of finance. Such records, unless the commis- 18 sioner of finance consents to a sooner destruction or requires that they 19 be kept for a longer time, shall be preserved for a period of three 20 years except that leases or agreements which fix the rents or rights of 21 a tenant shall be kept for a period of three years after the expiration 22 of the tenancy thereunder. 23 § 11-708 Determination of tax. If a return required by this chapter is 24 not filed, or if a return when filed is incorrect or insufficient, the 25 commissioner of finance shall determine the amount of tax due from such 26 information as may be obtainable and, if necessary, may estimate the tax 27 on the basis of external indices. Notice of such determination shall be 28 given to the person liable for the payment of the tax. Such determi- 29 nation shall finally and irrevocably fix the tax unless the person 30 against whom it is assessed, within ninety days after the giving of 31 notice of such determination or, if the commissioner of finance has 32 established a conciliation procedure pursuant to section 11-124 of this 33 title and the taxpayer has requested a conciliation conference in 34 accordance therewith, within ninety days from the mailing of a concil- 35 iation decision or the date of the commissioner's confirmation of the 36 discontinuance of the conciliation proceeding, both (1) serves a peti- 37 tion upon the commissioner of finance and (2) files a petition with the 38 tax appeals tribunal for a hearing, or unless the commissioner of 39 finance of the commissioner's own motion shall redetermine the same. 40 Such hearing and any appeal to the tax appeals tribunal sitting en banc 41 from the decision rendered in such hearing shall be conducted in the 42 manner and subject to the requirements prescribed by the tax appeals 43 tribunal pursuant to sections one hundred sixty-eight through one 44 hundred seventy-two of the charter of the preceding municipality as it 45 existed January first, nineteen hundred ninety-four. After such hearing 46 the tax appeals tribunal shall give notice of its decision to the person 47 against whom the tax is assessed and to the commissioner of finance. A 48 decision of the tax appeals tribunal sitting en banc shall be reviewable 49 for error, illegality or unconstitutionality or any other reason whatso- 50 ever by a proceeding under article seventy-eight of the civil practice 51 law and rules if application therefor is made to the supreme court by 52 the person against whom the tax was assessed within four months after 53 the giving of the notice of such tax appeals tribunal decision, 54 provided, however, that any such proceeding under article seventy-eight 55 of the civil practice law and rules shall not be instituted by a taxpay- 56 er unless: (a) the amount of any tax sought to be reviewed, with inter-

S. 8578 728

1 est and penalties thereon, if any, shall be first deposited and there is 2 filed an undertaking with the commissioner of finance, issued by a sure- 3 ty company authorized to transact business in this state and approved by 4 the superintendent of insurance of this state as to solvency and respon- 5 sibility, in such amount as a justice of the supreme court shall approve 6 to the effect that if such proceeding be dismissed or the tax confirmed 7 the taxpayer will pay all costs and charges which may accrue in the 8 prosecution of such proceeding or (b) at the option of the taxpayer such 9 undertaking may be in a sum sufficient to cover the taxes, interest and 10 penalties stated in such decision plus the costs and charges which may 11 accrue against it in the prosecution of the proceeding, in which event 12 the taxpayer shall not be required to pay such taxes, interest or penal- 13 ties as a condition precedent to the application. 14 § 11-709 Refunds. a. In the manner provided in this section the 15 commissioner of finance shall refund or credit, without interest, any 16 tax, penalty or interest erroneously, illegally or unconstitutionally 17 collected or paid, if written application to the commissioner of finance 18 for such refund shall be made within eighteen months from the date fixed 19 by this chapter for filing the return on which such payment was based or 20 within six months of the payment thereof, whichever of such periods 21 expire the later. Whenever a refund or credit is made or denied, the 22 commissioner of finance shall state his or her reason therefor and give 23 notice thereof to the taxpayer in writing. The commissioner of finance 24 may, in lieu of any refund required to be made, allow credit therefor on 25 payments due from the applicant. 26 b. Any determination of the commissioner of finance denying a refund 27 or credit pursuant to subdivision a of this section shall be final and 28 irrevocable unless the applicant for such refund or credit, within nine- 29 ty days from the mailing of notice of such determination, or, if the 30 commissioner of finance has established a conciliation procedure pursu- 31 ant to section 11-124 of this title and the applicant has requested a 32 conciliation conference in accordance therewith, within ninety days from 33 the mailing of a conciliation decision or the date of the commissioner's 34 confirmation of the discontinuance of the conciliation proceeding, both 35 (1) serves a petition upon the commissioner of finance and (2) files a 36 petition with the tax appeals tribunal for a hearing. Such petition for 37 a refund or credit, made as herein provided, shall be deemed an applica- 38 tion for a revision of any tax, penalty or interest complained of. Such 39 hearing of any appeal to the tax appeals tribunal sitting en banc from 40 the decision rendered in such hearing shall be conducted in the manner 41 and subject to the requirements prescribed by the tax appeals tribunal 42 pursuant to section one hundred sixty-eight through one hundred seven- 43 ty-two of the charter of the preceding municipality as it existed Janu- 44 ary first, nineteen hundred ninety-four. After such hearing, the tax 45 appeals tribunal shall give notice of its decision to the applicant and 46 to the commissioner of finance. The applicant shall be entitled to 47 institute a proceeding pursuant to article seventy-eight of the civil 48 practice law and rules to review a decision of the tax appeals tribunal 49 sitting en banc if application to the supreme court be made therefor 50 within four months after the giving of notice of such decision, and 51 provided, in the case of an application by a taxpayer, that a final 52 determination of tax due was not previously made. Such a proceeding 53 shall not be instituted by a taxpayer unless an undertaking shall first 54 be filed with the commissioner of finance, in such amount and with such 55 sureties as a justice of the supreme court shall approve, to the effect 56 that if such proceeding be dismissed or the tax confirmed, the taxpayer

S. 8578 729

1 will pay all costs and charges which may accrue in the prosecution of 2 the proceeding. 3 c. A person shall not be entitled to a revision, refund or credit 4 under this section of a tax, interest or penalty which had been deter- 5 mined to be due pursuant to the provisions of section 11-708 of this 6 chapter where such person has had a hearing or an opportunity for a 7 hearing, as provided in said section, or has failed to avail himself or 8 herself of the remedies therein provided. No refund or credit shall be 9 made of a tax, interest or penalty paid after a determination by the 10 commissioner of finance made pursuant to section 11-708 of this chapter 11 unless it be found that such determination was erroneous, illegal or 12 unconstitutional, or otherwise improper, by the tax appeals tribunal 13 after a hearing, or, if such tax appeals tribunal affirms in whole or in 14 part the determination of the commissioner of finance, in a proceeding 15 under article seventy-eight of the civil practice law and rules, pursu- 16 ant to the provisions of said section, in which event refund or credit 17 without interest shall be made of the tax, interest or penalty found to 18 have been overpaid. 19 § 11-710 Remedies exclusive. The remedies provided by this chapter 20 shall be the exclusive remedies available to any person for the review 21 of tax liability imposed by this chapter; and no determination or 22 proposed determination of tax or determination on any application for 23 refund by the commissioner of finance, nor any decision by the tax 24 appeals tribunal or any of its administrative law judges, shall be 25 enjoined or reviewed by an action for declaratory judgment, an action 26 for money had and received or by any action or proceeding other than, in 27 the case of a decision by the tax appeals tribunal sitting en banc, a 28 proceeding under article seventy-eight of the civil practice law and 29 rules; provided, however, that a taxpayer may proceed by declaratory 30 judgment if he or she institutes suit within thirty days after a defi- 31 ciency assessment is made and pays the amount of the deficiency assess- 32 ment to the commissioner of finance prior to the institution of such 33 suit and posts a bond for costs as provided in section 11-708 of this 34 chapter. 35 § 11-711 Reserves. In cases where the taxpayer has applied for a 36 refund and has instituted a proceeding under article seventy-eight of 37 the civil practice law and rules to review a determination adverse to 38 the taxpayer on his or her application for refund, the comptroller shall 39 set up appropriate reserves to meet any decision adverse to the city. 40 § 11-712 Proceedings to recover tax. a. Whenever any person shall 41 fail to pay any tax or penalty or interest imposed by this chapter as 42 herein provided, the corporation counsel shall, upon the request of the 43 commissioner of finance, bring or cause to be brought an action to 44 enforce payment of the same against the person liable for the same on 45 behalf of the city of Staten Island in any court of the state of New 46 York or of any other state or of the United States. If, however, the 47 commissioner of finance in his or her discretion believes that a 48 taxpayer subject to the provisions of this chapter is about to cease 49 business, leave the state or remove or dissipate the assets out of which 50 tax or penalties might be satisfied and that any such tax or penalty 51 will not be paid when due, he or she may declare such tax or penalty to 52 be immediately due and payable and may issue a warrant immediately. 53 b. As an additional or alternate remedy, the commissioner of finance 54 may issue a warrant, directed to the city sheriff commanding the sheriff 55 to levy upon and sell the real and personal property of such person 56 which may be found within the city, for the payment of the amount there-

S. 8578 730

1 of, with any penalties and interest, and the cost of executing the 2 warrant, and to return such warrant to the commissioner of finance and 3 to pay to the commissioner the money collected by virtue thereof within 4 sixty days after the receipt of such warrant. The city sheriff shall, 5 within five days after the receipt of the warrant, file with the county 6 clerk a copy thereof, and thereupon such clerk shall enter in the judg- 7 ment docket the name of the person mentioned in the warrant and the 8 amount of the tax, penalties and interest for which the warrant is 9 issued and the date when such copy is filed. Thereupon the amount of 10 such warrant so docketed shall become a lien upon the title to and 11 interest in real and personal property of the person against whom the 12 warrant is issued. The city sheriff shall then proceed upon the warrant 13 in the same manner and with like effect as that provided by law in 14 respect to executions issued against property upon judgments of a court 15 of record, and for services in executing the warrant the sheriff shall 16 be entitled to the same fees which the sheriff may collect in the same 17 manner. In the discretion of the commissioner of finance a warrant of 18 like terms, force and effect may be issued and directed to any officer 19 or employee of the department of finance, and in the execution thereof 20 such officer or employee shall have all the powers conferred by law upon 21 sheriffs, but he or she shall be entitled to no fee or compensation in 22 excess of the actual expenses paid in the performance of such duty. If 23 a warrant is returned not satisfied in full, the commissioner of finance 24 may from time to time issue new warrants and shall also have the same 25 remedies to enforce the amount due thereunder as if the city had recov- 26 ered judgment therefor and execution thereon had been returned unsatis- 27 fied. 28 c. Whenever there is made a sale, transfer or assignment in bulk of 29 any part or the whole of a stock of merchandise or of fixtures, or 30 merchandise and of fixtures pertaining to the conducting of the business 31 of the seller, transferor or assignor, otherwise than in the ordinary 32 course of trade and in the regular prosecution of said business, the 33 purchaser, transferee or assignee shall at least ten days before taking 34 possession of such merchandise, fixtures, or merchandise and fixtures, 35 or paying therefor, notify the commissioner of finance by registered 36 mail of the proposed sale and of the price, terms and conditions thereof 37 whether or not the seller, transferor or assignor, has represented to, 38 or informed the purchaser, transferee or assignee that it owes any tax 39 pursuant to this chapter and whether or not the purchaser, transferee or 40 assignee has knowledge that such taxes are owing, and whether any such 41 taxes are in fact owing. 42 Whenever the purchaser, transferee or assignee shall fail to give 43 notice to the commissioner of finance as required by the opening para- 44 graph of this subdivision, or whenever the commissioner of finance shall 45 inform the purchaser, transferee or assignee that a possible claim for 46 such tax or taxes exists, any sums of money, property or choses in 47 action, or other consideration, which the purchaser, transferee or 48 assignee is required to transfer over to the seller, transferor or 49 assignor shall be subject to a first priority right and lien for any 50 such taxes theretofore or thereafter determined to be due from the sell- 51 er, transferor or assignor to the city, and the purchaser, transferee or 52 assignee is forbidden to transfer to the seller, transferor or assignor 53 any such sums of money, property or choses in action to the extent of 54 the amount of the city's claim. For failure to comply with the 55 provisions of this subdivision, the purchaser, transferee or assignee, 56 in addition to being subject to the liabilities and remedies imposed

S. 8578 731

1 under the provisions of former section forty-four of the personal prop- 2 erty law, shall be personally liable for the payment to the city of any 3 such taxes theretofore or thereafter determined to be due to the city 4 from the seller, transferor or assignor, and such liability may be 5 assessed and enforced in the same manner as the liability for tax under 6 this chapter. 7 d. The commissioner of finance, if he or she finds that the interests 8 of the city will not thereby be jeopardized, and upon such conditions as 9 the commissioner of finance may require, may release any property from 10 the lien of any warrant or vacate such warrant for unpaid taxes, addi- 11 tions to tax, penalties and interest filed pursuant to subdivision b of 12 this section, and such release or vacating of the warrant may be 13 recorded in the office of any recording officer in which such warrant 14 has been filed. The clerk shall thereupon cancel and discharge as of the 15 original date of docketing the vacated warrant. 16 § 11-713 General powers of the commissioner of finance. In addition 17 to the powers granted to the commissioner of finance in this chapter, 18 the commissioner is hereby authorized and empowered: 19 1. To make, adopt and amend rules and regulations appropriate to the 20 carrying out of this chapter and the purposes thereof; 21 2. To extend, for cause shown, the time for filing any return for a 22 period not exceeding ninety days; and to compromise disputed claims in 23 connection with the taxes hereby imposed; 24 3. To request information from the tax commission of the state on New 25 York or the treasury department of the United States relative to any 26 person; and to afford information to such tax commission or such treas- 27 ury department relative to any person; 28 4. To delegate the commissioner's functions pursuant to this section 29 to a deputy commissioner of finance or other employee or employees of 30 the commissioner's department; 31 5. To assess, determine, revise and adjust the taxes imposed under 32 this chapter; 33 6. To require any tenant who uses premises for both residential 34 purposes and as taxable premises and who pays an undivided rent for the 35 entire premises so used to provide the commissioner with a signed and 36 notarized request to the United States director of internal revenue for 37 photostatic copies of the tenant's income tax return for any year when 38 the commissioner deems such income tax return necessary to determine the 39 rent ascribable to so much of such premises as is used as taxable prem- 40 ises; and, if the tenant refuses to provide the commissioner with such a 41 signed written request, to treat the rent for the entire premises as the 42 rent for so much as is used as taxable premises; 43 7. To prescribe methods for determining how much of any tenant's base 44 rent is ascribable to a use which results in a reduction of the base 45 rent or for determining any other division of rent or of use of premises 46 necessary for the determination of the base rent or the amount of base 47 rent subject to tax under this chapter; 48 8. To authorize banks or trust companies which are depositories or 49 financial agents of the city to receive and give a receipt for any tax 50 imposed under this chapter in such manner, at such times, and under such 51 conditions as the commissioner of finance may prescribe; and the commis- 52 sioner of finance shall prescribe the manner, times and conditions under 53 which the receipt of such tax by such banks and trust companies is to be 54 treated as payment of such tax to the commissioner of finance. 55 § 11-714 Administration of oaths and compelling testimony. a. The 56 commissioner of finance, the commissioner's employees duly designated

S. 8578 732

1 and authorized by the commissioner, the tax appeals tribunal and any of 2 its duly designated and authorized employees shall have power to admin- 3 ister oaths and take affidavits in relation to any matter or proceeding 4 in the exercise of their powers and duties under this chapter. The 5 commissioner of finance and the tax appeals tribunal shall have power to 6 subpoena and require the attendance of witnesses and the production of 7 books, papers and documents to secure information pertinent to the 8 performance of the duties of the commissioner or of the tax appeals 9 tribunal hereunder and of the enforcement of this chapter and to examine 10 them in relation thereto, and to issue commissions for the examination 11 of witnesses who are out of the state or unable to attend before the 12 commissioner or the tax appeals tribunal or excused from attendance. 13 b. A justice of the supreme court either in court or at chambers shall 14 have power summarily to enforce by proper proceedings the attendance and 15 testimony of witnesses and the production and examination of books, 16 papers and documents called for by the subpoena of the commissioner of 17 finance or the tax appeals tribunal under this chapter. 18 c. Cross-reference; criminal penalties. For failure to obey subpoenas 19 or for testifying falsely, see section 11-4007 of this title; for 20 supplying false or fraudulent information, see section 11-4002 of this 21 title. 22 d. The officers who serve the summons or subpoena of the commissioner 23 of finance or the tax appeals tribunal hereunder and witnesses attending 24 in response thereto shall be entitled to the same fees as are allowed to 25 officers and witnesses in civil cases in courts of record, except as 26 herein otherwise provided. Such officers shall be the city sheriff, and 27 the sheriff's duly appointed deputies or any officers or employees of 28 the department of finance or the tax appeals tribunal, designated to 29 serve such process. 30 § 11-715 Interest and penalties. (a) Interest on underpayment; quar- 31 terly return. If any amount of tax required to be paid together with a 32 return, other than the final return for a tax year, is not paid on or 33 before the last date prescribed for payment, without regard to any 34 extension of time granted for payment, interest on such amount at the 35 rate set by the commissioner of finance pursuant to subdivision (h) of 36 this section, or, if no rate is set, at the rate of seven and one-half 37 percent per annum, shall be paid for the period from such last date 38 until twenty days after the end of the tax year during which such 39 payments were due or until such prior time as the tax paid for the tax 40 year equals seventy-five percent of the full tax required to be paid for 41 the tax year. Such interest shall be paid with the final return for the 42 tax year to which it relates. In computing the amount of interest to be 43 paid, such interest shall be compounded daily. Interest under this 44 subdivision shall not be paid if the amount thereof is less than one 45 dollar. 46 (b) Interest on underpayment; final return. If any amount of tax 47 required to be paid together with the final return for a tax year is not 48 paid on or before the last date prescribed for payment, without regard 49 to any extension of time granted for payment, interest on such amount at 50 the rate set by the commissioner of finance pursuant to subdivision (h) 51 of this section, or, if no rate is set, at the rate of seven and one- 52 half percent per annum, shall be paid for the period from such last date 53 to the date of payment. In computing the amount of interest to be paid, 54 such interest shall be compounded daily. Interest under this subdivision 55 shall not be paid if the amount thereof is less than one dollar.

S. 8578 733

1 (c) (1) Failure to file final return. (A) In case of failure to file 2 a final return under this chapter on or before the prescribed date, 3 determined with regard to any extension of time for filing, unless it is 4 shown that such failure is due to reasonable cause and not due to will- 5 ful neglect, there shall be added to the amount required to be shown as 6 tax on such return five percent of the amount of such tax if the failure 7 is for not more than one month, with an additional five percent for each 8 additional month or fraction thereof during which such failure contin- 9 ues, not exceeding twenty-five percent in the aggregate, and, in addi- 10 tion thereto, where a tenant, with respect to any taxable premises, is 11 exempt from tax by reason of paragraph two of subdivision b of section 12 11-704 of this chapter, there shall be imposed a penalty of one hundred 13 dollars. 14 (B) In the case of a failure to file a return of tax within sixty days 15 of the date prescribed for filing of such return, determined with regard 16 to any extension of time for filing, unless it is shown that such fail- 17 ure is due to reasonable cause and not due to willful neglect, the addi- 18 tion to tax under subparagraph (A) of this paragraph shall not be less 19 than the lesser of one hundred dollars or one hundred percent of the 20 amount required to be shown as tax on such return. 21 (C) For purposes of this paragraph, the amount of tax required to be 22 shown on the return shall be reduced by the amount of any part of the 23 tax which is paid on or before the date prescribed for payment of the 24 tax and by the amount of any credit against the tax which may be claimed 25 upon the return. 26 (2) Failure to pay tax shown on final return. In case of failure to 27 pay the amount shown as tax on a final return required to be filed under 28 this chapter on or before the prescribed date, determined with regard to 29 any extension of time for payment, unless it is shown that such failure 30 is due to reasonable cause and not due to willful neglect, there shall 31 be added to the amount shown as tax on such return one-half of one 32 percent of the amount of such tax if the failure is not for more than 33 one month, with an additional one-half of one percent for each addi- 34 tional month or fraction thereof during which such failure continues, 35 not exceeding twenty-five percent in the aggregate. For the purpose of 36 computing the addition for any month the amount of tax shown on the 37 return shall be reduced by the amount of any part of the tax which is 38 paid on or before the beginning of such month and by the amount of any 39 credit against the tax which may be claimed upon the return. If the 40 amount of tax required to be shown on a return is less than the amount 41 shown as tax on such return, this paragraph shall be applied by substi- 42 tuting such lower amount. 43 (3) Failure to pay tax required to be shown on final return. In case 44 of failure to pay any amount in respect of any tax required to be shown 45 on a final return required to be filed under this chapter which is not 46 so shown, including a determination made pursuant to section 11-708 of 47 this chapter, within ten days of the date of a notice and demand there- 48 for, unless it is shown that such failure is due to reasonable cause and 49 not due to willful neglect, there shall be added to the amount of tax 50 stated in such notice and demand one-half of one percent of such tax if 51 the failure is not for more than one month, with an additional one-half 52 of one percent for each additional month or fraction thereof during 53 which such failure continues, not exceeding twenty-five percent in the 54 aggregate. For the purpose of computing the addition for any month, the 55 amount of tax stated in the notice and demand shall be reduced by the

S. 8578 734

1 amount of any part of the tax which is paid before the beginning of such 2 month. 3 (4) Limitations on additions. 4 (A) With respect to any final return, the amount of the addition under 5 paragraph one of this subdivision shall be reduced by the amount of the 6 addition under paragraph two of this subdivision for any month to which 7 an addition applies under both such paragraphs one and two. In any case 8 described in subparagraph (B) of paragraph one of this subdivision, the 9 amount of the addition under such paragraph one shall not be reduced 10 below the amount provided in such subparagraph. 11 (B) With respect to any final return, the maximum amount of the addi- 12 tion permitted under paragraph three of this subdivision shall be 13 reduced by the amount of the addition under paragraph one of this subdi- 14 vision, determined without regard to subparagraph (B) of such paragraph 15 one, which is attributable to the tax for which the notice and demand is 16 made and which is not paid within ten days of such notice and demand. 17 (d) Underpayment due to negligence. (1) If any part of an underpayment 18 of tax is due to negligence or intentional disregard of this chapter or 19 any rules or regulations hereunder, but without intent to defraud, there 20 shall be added to the tax a penalty equal to five percent of the under- 21 payment. 22 (2) There shall be added to the tax, in addition to the amount deter- 23 mined under paragraph one of this subdivision, an amount equal to fifty 24 percent of the interest payable under subdivision (b) of this section 25 with respect to the portion of the underpayment described in such para- 26 graph one which is attributable to the negligence or intentional disre- 27 gard referred to in such paragraph one, for the period beginning on the 28 last date prescribed by law for payment of such underpayment, determined 29 without regard to any extension, and ending on the date of the assess- 30 ment of the tax, or, if earlier, the date of the payment of the tax. 31 (e) Underpayment due to fraud. (1) If any part of an underpayment of 32 tax is due to fraud, there shall be added to the tax a penalty equal to 33 fifty percent of the underpayment. 34 (2) There shall be added to the tax, in addition to the penalty deter- 35 mined under paragraph one of this subdivision, an amount equal to fifty 36 percent of the interest payable under subdivision (b) of this section 37 with respect to the portion of the underpayment described in such para- 38 graph one which is attributable to fraud, for the period beginning on 39 the last date prescribed by law for payment of such underpayment, deter- 40 mined without regard to any extension, and ending on the date of the 41 assessment of the tax, or, if earlier, the date of the payment of the 42 tax. 43 (3) The penalty under this subdivision shall be in lieu of any other 44 addition to tax imposed by subdivision (c) or (d) of this section. 45 (f) Additional penalty. Any person who, with fraudulent intent, shall 46 fail to pay any tax imposed by this chapter, or to make, render, sign or 47 certify any return, or to supply any information within the time 48 required by or under this chapter, shall be liable for a penalty of not 49 more than one thousand dollars, in addition to any other amounts 50 required under this chapter to be imposed, assessed and collected by the 51 commissioner of finance. The commissioner of finance shall have the 52 power, in his or her discretion, to waive, reduce or compromise any 53 penalty under this subdivision. 54 (g) The interest and penalties imposed by this section shall be paid 55 and disposed of in the same manner as other revenues from this chapter.

S. 8578 735

1 Unpaid interest and penalties may be enforced in the same manner as the 2 tax imposed by this chapter. 3 (h) (1) Authority to set interest rates. The commissioner of finance 4 shall set the rate of interest to be paid pursuant to subdivisions (a) 5 and (b) of this section, but if no such rate of interest is set, such 6 rate shall be deemed to be set at seven and one-half percent per annum. 7 Such rate shall be the same for each subdivision and shall be the rate 8 prescribed in paragraph two of this subdivision but shall not be less 9 than seven and one-half percent per annum. Any such rate set by the 10 commissioner of finance shall apply to taxes, or any portion thereof, 11 which remain or become due on or after the date on which such rate 12 becomes effective and shall apply only with respect to interest computed 13 or computable for periods or portions of periods occurring in the period 14 in which such rate is in effect. 15 (2) General rule. The rate of interest set under this subdivision 16 shall be the sum of (i) the federal short-term rate as provided under 17 paragraph three of this subdivision, plus (ii) seven percentage points. 18 (3) Federal short-term rate. For purposes of this subdivision: 19 (A) The federal short-term rate for any month shall be the federal 20 short-term rate determined by the United States secretary of the treas- 21 ury during such month in accordance with subsection (d) of section 22 twelve hundred seventy-four of the internal revenue code for use in 23 connection with section six thousand six hundred twenty-one of the 24 internal revenue code. Any such rate shall be rounded to the nearest 25 full percent, or, if a multiple of one-half of one percent, such rate 26 shall be increased to the next highest full percent. 27 (B) Period during which rate applies. 28 (i) In general. Except as provided in clause (ii) of this subpara- 29 graph, the federal short-term rate for the first month in each calendar 30 quarter shall apply during the first calendar quarter beginning after 31 such month. 32 (ii) Special rule for the month of September, nineteen hundred eight- 33 y-nine. The federal short-term rate for the month of April, nineteen 34 hundred eighty-nine shall apply with respect to setting the rate of 35 interest for the month of September, nineteen hundred eighty-nine. 36 (4) Publication of interest rate. The commissioner of finance shall 37 cause to be published in the City Record, and give other appropriate 38 general notice of, the interest rate to be set under this subdivision no 39 later than twenty days preceding the first day of the calendar quarter 40 during which such interest rate applies. The setting and publication of 41 such interest rate shall not be included within paragraph (a) of subdi- 42 vision five of section one thousand forty-one of the city charter of the 43 preceding municipality as it existed January first, nineteen hundred 44 ninety-four relating to the definition of a rule. 45 (i) Miscellaneous. (1) The certificate of the commissioner of finance 46 to the effect that a tax has not been paid, that a return has not been 47 filed, or that information has not been supplied pursuant to the 48 provisions of this chapter shall be prima facie evidence thereof. 49 (2) Cross-reference: For criminal penalties, see chapter forty of 50 this title. 51 (j) Substantial understatement of liability. If there is a substan- 52 tial understatement of tax for any tax year, there shall be added to the 53 tax an amount equal to ten percent of the amount of any underpayment 54 attributable to such understatement. For purposes of this subdivision, 55 there is a substantial understatement of tax for any tax year if the 56 amount of the understatement for the tax year exceeds the greater of ten

S. 8578 736

1 percent of the tax required to be shown on the final return for the tax 2 year or five thousand dollars. For purposes of this subdivision, the 3 term "understatement" means the excess of the amount of the tax required 4 to be shown on the final return for the tax year, over the amount of the 5 tax imposed which is shown on the return, reduced by any rebate. The 6 amount of such understatement shall be reduced by that portion of the 7 understatement which is attributable to the tax treatment of any item by 8 the taxpayer if there is or was substantial authority for such treat- 9 ment, or any item with respect to which the relevant facts affecting the 10 item's tax treatment are adequately disclosed in the return or in a 11 statement attached to the return. The commissioner of finance may waive 12 all or any part of the addition to tax provided by this subdivision on a 13 showing by the taxpayer that there was reasonable cause for the under- 14 statement, or part thereof, and that the taxpayer acted in good faith. 15 (k) Aiding or assisting in the giving of fraudulent returns, reports, 16 statements or other documents. (1) Any person who, with the intent that 17 tax be evaded, shall, for a fee or other compensation or as an incident 18 to the performance of other services for which such person receives 19 compensation, aid or assist in, or procure, counsel, or advise the prep- 20 aration or presentation under, or in connection with any matter arising 21 under this chapter of any return, report, statement or other document 22 which is fraudulent or false as to any material matter, or supply any 23 false or fraudulent information, whether or not such falsity or fraud is 24 with the knowledge or consent of the person authorized or required to 25 present such return, report, statement or other document shall pay a 26 penalty not exceeding ten thousand dollars. 27 (2) For purposes of paragraph one of this subdivision, the term 28 "procures" includes ordering, or otherwise causing, a subordinate to do 29 an act, and knowing of, and not attempting to prevent, participation by 30 a subordinate in an act. The term "subordinate" means any other person, 31 whether or not a director, officer, employee, or agent of the taxpayer 32 involved, over whose activities the person has direction, supervision, 33 or control. 34 (3) For purposes of paragraph one of this subdivision, a person 35 furnishing typing, reproducing, or other mechanical assistance with 36 respect to a document shall not be treated as having aided or assisted 37 in the preparation of such document by reason of such assistance. 38 (4) The penalty imposed by this subdivision shall be in addition to 39 any other penalty provided by law. 40 § 11-716 Returns to be secret. a. Except in accordance with proper 41 judicial order or as otherwise provided by law, it shall be unlawful for 42 the commissioner of finance, the department of finance of the city, any 43 officer or employee of the department of finance of the city, any person 44 engaged or retained by such department on an independent contract basis, 45 the tax appeals tribunal, any commissioner or employee of such tribunal, 46 or any person who, pursuant to this section, is permitted to inspect any 47 return or to whom a copy, an abstract or a portion of any return is 48 furnished, or to whom any information contained in any return is 49 furnished, to divulge or make known in any manner any information relat- 50 ing to the business of a taxpayer contained in any return required under 51 this chapter. The officers charged with the custody of such returns 52 shall not be required to produce any of them or evidence of anything 53 contained in them in any action or proceeding in any court, except on 54 behalf of the commissioner of finance in an action or proceeding under 55 the provisions of this chapter, or on behalf of any party to any action 56 or proceeding under the provisions of this chapter when the returns or

S. 8578 737

1 facts shown thereby are directly involved in such action or proceeding, 2 in either of which events the courts may require the production of, and 3 may admit in evidence so much of said returns or of the facts shown 4 thereby, as are pertinent to the action or proceeding and no more. 5 Nothing in this subdivision shall be construed to prohibit the delivery 6 to a taxpayer or the taxpayer's duly authorized representative of a 7 certified copy of any return filed in connection with his or her tax; 8 nor to prohibit the delivery of such a certified copy of such return or 9 of any information contained in or relating thereto, to the United 10 States of America or any department thereof, the state of New York or 11 any department thereof, any agency or any department of the city of 12 Staten Island provided the same is requested for official business; nor 13 to prohibit the inspection for official business of such returns by the 14 corporation counsel or other legal representatives of the city or by the 15 district attorney of the county of Richmond; nor to prohibit the publi- 16 cation of statistics so classified as to prevent the identification of 17 particular returns or items thereof. 18 b. (1) Any officer or employee of the city who willfully violates the 19 provisions of subdivision a of this section shall be dismissed from 20 office and be incapable of holding any public office in this city for a 21 period of five years thereafter. 22 (2) Cross-reference: For criminal penalties, see chapter forty of this 23 title. 24 c. This section shall be deemed a state statute for purposes of para- 25 graph (a) of subdivision two of section eighty-seven of the public offi- 26 cers law. 27 d. Notwithstanding anything in subdivision a of this section to the 28 contrary, if a taxpayer has petitioned the tax appeals tribunal for 29 administrative review as provided in section one hundred seventy of the 30 charter of the preceding municipality as it existed January first, nine- 31 teen hundred ninety-four, the commissioner of finance shall be author- 32 ized to present to the tribunal any report or return of such taxpayer, 33 or any information contained therein or relating thereto, which may be 34 material or relevant to the proceeding before the tribunal. The tax 35 appeals tribunal shall be authorized to publish a copy or a summary of 36 any decision rendered pursuant to section one hundred seventy-one of the 37 charter of the preceding municipality as it existed January first, nine- 38 teen hundred ninety-four. 39 § 11-717 Notices and limitation of time. a. Any notice authorized or 40 required under the provisions of this chapter may be given to the person 41 for whom it is intended by mailing it in a postpaid envelope addressed 42 to such person at the address given in the last return filed by such 43 person pursuant to the provisions of this chapter or in any application 44 made by such person or if no return has been filed or application made, 45 then to such address as may be obtainable. The mailing of a notice as in 46 this paragraph provided for shall be presumptive evidence of the receipt 47 of the same by the person to whom addressed. Any period of time which is 48 determined according to the provisions of this chapter by the giving of 49 notice shall commence to run from the date of mailing of such notice as 50 in this subdivision provided. 51 b. The provisions of the civil practice law and rules or any other law 52 relative to limitations of time for the enforcement of a civil remedy 53 shall not apply to any proceeding or action taken by the city to levy, 54 appraise, assess, determine or enforce the collection of any tax or 55 penalty provided by this chapter. However, except in the case of a 56 wilfully false or fraudulent return with intent to evade the tax, no

S. 8578 738

1 assessment of additional tax shall be made after the expiration of more 2 than three years from the date of the final return for the tax year to 3 which the assessment relates; provided, however, that where no return 4 has been made as provided by law, the tax may be assessed at any time. 5 c. Where before the expiration of the period prescribed herein for the 6 assessment of an additional tax, a person has consented in writing that 7 such period be extended, the amount of such additional tax due may be 8 determined at any time within such extended period. The period so 9 extended may be further extended by subsequent consents in writing made 10 before the expiration of the extended period. 11 d. If any return, claim, statement, notice, application, or other 12 document required to be filed, or any payment required to be made, with- 13 in a prescribed period or on or before a prescribed date under authority 14 of any provision of this chapter is, after such period or such date, 15 delivered by United States mail to the commissioner of finance, the tax 16 appeals tribunal, bureau, office, officer or person with which or with 17 whom such document is required to be filed, or to which or to whom such 18 payment is required to be made, the date of the United States postmark 19 stamped on the envelope shall be deemed to be the date of delivery. This 20 subdivision shall apply only if the postmark date falls within the 21 prescribed period or on or before the prescribed date for the filing of 22 such document, or for making the payment, including any extension grant- 23 ed for such filing or payment, and only if such document or payment was 24 deposited in the mail, postage prepaid, properly addressed to the 25 commissioner of finance, the tax appeals tribunal, bureau, office, offi- 26 cer or person with which or with whom the document is required to be 27 filed or to which or to whom such payment is required to be made. If any 28 document is sent by United States registered mail, such registration 29 shall be prima facie evidence that such document was delivered to the 30 commissioner of finance, the tax appeals tribunal, bureau, office, offi- 31 cer or person to which or to whom addressed, and the date of registra- 32 tion shall be deemed the postmark date. The commissioner of finance or, 33 where relevant, the tax appeals tribunal is authorized to provide by 34 regulation the extent to which the provisions of this subdivision with 35 respect to prima facie evidence of delivery and the postmark date shall 36 apply to certified mail. Except as provided in subdivision f of this 37 section, this subdivision shall apply in the case of postmarks not made 38 by the United States postal service only if and to the extent provided 39 by regulation of the commissioner of finance or, where relevant, the tax 40 appeals tribunal. 41 e. When the last day prescribed under authority of this chapter, 42 including any extension of time, for performing any act falls on a 43 Saturday, Sunday or legal holiday in the state, the performance of such 44 act shall be considered timely if it is performed on the next succeeding 45 day which is not a Saturday, Sunday or legal holiday. 46 f. (1) Any reference in subdivision d of this section to the United 47 States mail shall be treated as including a reference to any delivery 48 service designated by the secretary of the treasury of the United States 49 pursuant to section seventy-five hundred two of the internal revenue 50 code and any reference in subdivision d of this section to a United 51 States postmark shall be treated as including a reference to any date 52 recorded or marked in the manner described in section seventy-five 53 hundred two of the internal revenue code by a designated delivery 54 service. If the commissioner of finance finds that any delivery service 55 designated by such secretary is inadequate for the needs of the city, 56 the commissioner of finance may withdraw such designation for purposes

S. 8578 739

1 of this title. The commissioner of finance may also designate additional 2 delivery services meeting the criteria of section seventy-five hundred 3 two of the internal revenue code for purposes of this title, or may 4 withdraw any such designation if the commissioner of finance finds that 5 a delivery service so designated is inadequate for the needs of the 6 city. Any reference in subdivision d of this section to the United 7 States mail shall be treated as including a reference to any delivery 8 service designated by the commissioner of finance and any reference in 9 subdivision d of this section to a United States postmark shall be 10 treated as including a reference to any date recorded or marked in the 11 manner described in section seventy-five hundred two of the internal 12 revenue code by a delivery service designated by the commissioner of 13 finance. Notwithstanding the foregoing, any withdrawal of designation or 14 additional designation by the commissioner of finance shall not be 15 effective for purposes of service upon the tax appeals tribunal, unless 16 and until such withdrawal of designation or additional designation is 17 ratified by the president of the tax appeals tribunal. 18 (2) Any equivalent of registered or certified mail designated by the 19 United States secretary of the treasury, or as may be designated by the 20 commissioner of finance pursuant to the same criteria used by such 21 secretary for such designations pursuant to section seventy-five hundred 22 two of the internal revenue code, shall be included within the meaning 23 of registered or certified mail as used in subdivision d of this 24 section. If the commissioner of finance finds that any equivalent of 25 registered or certified mail designated by such secretary or the commis- 26 sioner of finance is inadequate for the needs of the city, the commis- 27 sioner of finance may withdraw such designation for purposes of this 28 title. Notwithstanding the provisions of this paragraph, any withdrawal 29 of designation or additional designation by the commissioner of finance 30 shall not be effective for purposes of service upon the tax appeals 31 tribunal, unless and until such withdrawal of designation or additional 32 designation is ratified by the president of the tax appeals tribunal. 33 § 11-718 Construction and enforcement. This chapter shall be construed 34 in conformity with chapter two hundred fifty-seven of the laws of nine- 35 teen hundred sixty-three, pursuant to which it is enacted. 36 § 11-719 Annual report. a. No later than September first, two thousand 37 twenty-five, and every September first thereafter, the department of 38 finance shall submit to the mayor and speaker of the council, and make 39 publicly available online, a report on the commercial rent tax. Such 40 report shall include the following information for the prior commercial 41 rent tax period, on the condition that any category that only includes 42 one taxpayer shall not be reported for any tax period: 43 1. the distribution of taxable premises and taxpayers by base rent 44 range, including the number and zip codes of the taxable premises for 45 which the commercial rent tax was collected, the number of taxpayers who 46 paid the tax, the number of taxpayers who paid the tax on more than one 47 property and the total amount of commercial rent tax paid for the set of 48 taxable premises and taxpayers within each range; 49 2. the distribution of taxable premises and taxpayers by industry, 50 including the number and zip codes of the taxable premises for which the 51 commercial rent tax was collected, the number of taxpayers who paid the 52 tax, the number of taxpayers who paid the tax on more than one property 53 and the total amount of commercial rent tax paid for the set of taxable 54 premises and taxpayers within each industry; 55 3. the total amount of tax collected and the average tax liability per 56 premises for each of the prior ten tax years;

S. 8578 740

1 4. the total amount of tax collected and the average tax liability per 2 taxpayer for each of the prior ten tax years; 3 5. a comparison of the total commercial rent tax collected to the 4 average market value of commercial properties in the city of Staten 5 Island as determined by the department for each of the prior ten tax 6 years; 7 6. the number of taxable premises and the number of taxpayers by base 8 rent range and industry who received the credit set forth in section 9 11-704.4 of this chapter; and 10 7. any other information deemed relevant for inclusion by the depart- 11 ment. 12 b. For purposes of the report required by subdivision a of this 13 section, the base rent ranges shall be: 14 1. between $250,000 and $274,999; 15 2. between $275,000 and $299,999; 16 3. between $300,000 and $349,999; 17 4. between $350,000 and $399,999; 18 5. between $400,000 and $449,999; 19 6. between $450,000 and $499,999; 20 7. between $500,000 and $549,999; 21 8. between $550,000 and $599,999; 22 9. between $600,000 and $699,999; 23 10. between $700,000 and $799,999; 24 11. between $800,000 and $899,999; 25 12. between $900,000 and $999,999; 26 13. between $1,000,000 and $1,999,999; 27 14. between $2,000,000 and $2,999,999; 28 15. between $3,000,000 and $3,999,999; 29 16. between $4,000,000 and $4,999,999; 30 17. between $5,000,000 and $9,999,999; and 31 18. more than $10,000,000.

32 CHAPTER 8 33 TAX ON COMMERCIAL MOTOR VEHICLES AND MOTOR VEHICLES 34 FOR TRANSPORTATION OF PASSENGERS 35 § 11-801 Definitions. When used in this chapter, the following terms 36 shall mean or include: 37 1. "Person." An individual, partnership, corporation, joint-stock 38 company, society, association, receiver, lessee, trustee, estate, refer- 39 ee, assignee, or any other person acting in a fiduciary or represen- 40 tative capacity, whether appointed by a court or otherwise, and any 41 combination of individuals. 42 2. "Motor vehicle." Any vehicle operated upon a public highway or 43 public street propelled by any power other than muscular power. 44 3. "Commercial motor vehicle." (a) Each truck, tractor, trailer or 45 semi-trailer, and any other motor vehicle constructed or specially 46 equipped for the transportation of goods, wares and merchandise which is 47 commonly known as an auto truck or light delivery car; 48 (b) Any traction engine, road roller, tractor crane, truck crane, 49 power shovel, road building machine, snow plow, road sweeper, sand 50 spreader, well driller, or well servicing rig; and 51 (c) Any earth moving equipment as defined in the vehicle and traffic 52 law; provided that such motor vehicles are used principally in the city 53 or used principally in connection with a business carried on within the 54 city.

S. 8578 741

1 4. "Motor vehicle for transportation of passengers." (a) Any motor 2 vehicle licensed as a taxicab or as a coach, or any motor vehicle, not 3 so licensed, which carries passengers for compensation, including limou- 4 sine service, whether the compensation paid by or on behalf of the 5 passenger is based on mileage, trip, time consumed or any other basis; 6 and 7 (b) Any omnibus, except one operated pursuant to a franchise when, 8 under such franchise or under a contract, relating to transportation to 9 or from airports, with the port of New York authority, the holder of the 10 franchise pays to the city or to the port of New York authority a 11 percentage of its gross earnings or gross receipts or one used exclu- 12 sively in interstate commerce; provided such motor vehicles, as defined 13 in paragraph (a) or (b) of this subdivision, are used regularly, even 14 though not principally, in the city; and further provided that this 15 definition shall not be deemed to include any motor vehicle used princi- 16 pally for the transportation of children to and from schools and day 17 camps operated by non-profit agencies as defined in subdivision four of 18 section 11-803 of this chapter, any motor vehicle used exclusively for 19 transportation of persons in connection with funerals or any motor vehi- 20 cle for transportation of passengers where neither the owner of such 21 motor vehicle nor any person or business engaged in transporting passen- 22 gers by motor vehicle for-hire that is affiliated with such owner has a 23 place of business in such city, a telephone number in such city, or 24 solicits business or specifically advertises in such city. 25 5. "Owner." Any person owning a commercial motor vehicle or a motor 26 vehicle for the transportation of passengers and shall include a 27 purchaser under a reserve title contract, conditional sales agreement or 28 vendor's lien agreement. In addition, an owner shall be deemed to 29 include any lessee, licensee or bailee having the exclusive use of a 30 commercial motor vehicle or a vehicle for the transportation of passen- 31 gers, under a lease or otherwise, for a period of thirty days or more. 32 6. "Omnibus." Any motor vehicle for transportation of passengers for 33 hire having a seating capacity of more than seven persons. 34 7. "Use." Any use of a motor vehicle upon the public highways or 35 streets of the city. 36 8. "Maximum gross weight." The weight of the motor vehicle plus the 37 weight of the maximum load to be carried, if any, by such vehicle. 38 9. "Registered owner." The person who registers a motor vehicle as 39 owner thereof pursuant to the registration requirements of the vehicle 40 and traffic law of the state of New York. 41 10. "Registration fee." The full annual fee or charge prescribed in 42 the vehicle and traffic law of the state of New York for the registra- 43 tion of a motor vehicle. 44 11. "City." The city of Staten Island. 45 12. "Comptroller." The comptroller of the city. 46 13. "Commissioner of finance." The commissioner of finance of the 47 city. 48 14. "Tax year." June first of any calendar year through May thirty- 49 first of the following calendar year. 50 15. "Medallion taxicab." A motor vehicle for transportation of passen- 51 gers which is duly licensed as a taxicab by the taxi and limousine 52 commission and permitted to accept hails from passengers in the street. 53 16. "Tax appeals tribunal." The tax appeals tribunal established by 54 section one hundred sixty-eight of the charter of the preceding munici- 55 pality as it existed January first, nineteen hundred ninety-four.

S. 8578 742

1 17. "Commissioner of motor vehicles." The commissioner of motor vehi- 2 cles of the state of New York. 3 18. "Taxi and limousine commission." The New York city taxi and limou- 4 sine commission. 5 § 11-802 Imposition of tax. a. In addition to any and all other taxes, 6 including the compensating use tax, there is hereby imposed and there 7 shall be paid annually for each tax year beginning June first, nineteen 8 hundred sixty, a tax on the use in the city of motor vehicles to be paid 9 by the owners of such vehicles as follows: 10 1. (A) For tax years ending on or before May thirty-first, nineteen 11 hundred seventy-two, on commercial vehicles, twenty dollars for each 12 such vehicle having a maximum gross weight of five tons or less, and 13 thirty dollars for each such vehicle having a maximum gross weight of 14 more than five tons, provided, however, that for each such vehicle 15 having a registration fee prescribed in the vehicle and traffic law of 16 the state of New York which is less than twenty dollars, the tax shall 17 be an amount equal to such registration fee; 18 (B) For tax years beginning on and after June first, nineteen hundred 19 seventy-two but before June first, nineteen hundred ninety, on commer- 20 cial vehicles, forty dollars for each such vehicle having a maximum 21 gross weight of five tons or less, and sixty dollars for each such vehi- 22 cle having a maximum gross weight of more than five tons, provided, 23 however, that for each such vehicle having a registration fee prescribed 24 in the vehicle and traffic law of the state of New York which is less 25 than forty dollars, the tax shall be an amount equal to such registra- 26 tion fee. 27 (C) For tax years beginning on and after June first, nineteen hundred 28 ninety, on commercial vehicles, forty dollars for each such vehicle 29 having a maximum gross weight of ten thousand pounds or less, two 30 hundred dollars for each such vehicle having a maximum gross weight of 31 more than ten thousand pounds but not more than twelve thousand five 32 hundred pounds, two hundred seventy-five dollars for each such vehicle 33 having a maximum gross weight of more than twelve thousand five hundred 34 pounds but not more than fifteen thousand pounds and three hundred 35 dollars for each such vehicle having a maximum gross weight of more than 36 fifteen thousand pounds, provided, however, that for each such vehicle 37 having a registration fee prescribed in the vehicle and traffic law of 38 the state of New York which is less than forty dollars, the tax shall be 39 an amount equal to such registration fee. 40 2. (A) For tax years ending on or before May thirty-first, nineteen 41 hundred ninety, on motor vehicles for the transportation of passengers 42 other than medallion taxicabs, and for tax years ending on or before May 43 thirty-first, nineteen hundred eighty-nine, on medallion taxicabs, one 44 hundred dollars for each such vehicle. 45 (B) For the tax year beginning June first, nineteen hundred eighty- 46 nine and ending May thirty-first, nineteen hundred ninety, on medallion 47 taxicabs, five hundred dollars for each such vehicle. 48 (C) For tax years beginning on and after June first, nineteen hundred 49 ninety but before May thirty-first, two thousand nineteen, on medallion 50 taxicabs, one thousand dollars for each such vehicle, and on all other 51 motor vehicles for transportation of passengers, four hundred dollars 52 for each such vehicle. 53 (D) For tax years beginning on or after June first, two thousand nine- 54 teen, on all motor vehicles for transportation of passengers, including 55 medallion taxicabs, four hundred dollars for each such vehicle.

S. 8578 743

1 b. To the extent that the tax as imposed by subdivision a of this 2 section may be invalid solely because it is based on the use in the city 3 of the motor vehicles, the tax shall also be deemed to be based on the 4 privilege of using the public highways or streets of the city by such 5 motor vehicle. Under such circumstances the rate of tax shall be the 6 same and all other provisions of this chapter shall be equally applica- 7 ble. 8 c. If the first use of any motor vehicle subject to the tax imposed 9 under this chapter occurs on or after December first and before March 10 first in any tax year, the tax for that year shall be one-half of the 11 tax hereinabove provided; and, if the first such use occurs on or after 12 March first in any tax year, the tax for that tax year shall be one- 13 fourth of such tax. 14 d. In applying the tax on commercial motor vehicles with respect to 15 tractors, trailers and semi-trailers, the tax shall be measured by the 16 weight of the tractor plus the maximum gross weight of the trailer or 17 semi-trailer with the greatest such maximum gross weight to be drawn by 18 such tractor. No trailer or semi-trailer shall be subject to any sepa- 19 rate or additional tax under this chapter. 20 § 11-803 Exemptions. The provisions of this chapter shall not apply 21 to motor vehicles owned and operated, or leased for their exclusive use 22 by: 23 1. The state of New York, or any public corporation, including a 24 corporation created pursuant to agreement or compact with another state 25 or the Dominion of Canada, improvement district or other political 26 subdivision of the state; 27 2. The United States of America; 28 3. The United Nations or other world-wide international organizations 29 of which the United States of America is a member; 30 4. Any corporation, or association, or trust, or community chest, fund 31 or foundation, organized and operated exclusively for religious, chari- 32 table or educational purposes, or for the prevention of cruelty to chil- 33 dren or animals, and no part of the net earnings of which inures to the 34 benefit of any private shareholder or individual and no substantial part 35 of the activities of which is carrying on propaganda, or otherwise 36 attempting to influence legislation; provided, however, that nothing in 37 this subdivision shall include an organization operated for the primary 38 purpose of carrying on a trade or business for profit, whether or not 39 all of its profits are payable to one or more organizations described in 40 this subdivision; 41 5. Any foreign nation or representative of a foreign nation with 42 respect to motor vehicles for which they need not pay a registration fee 43 under the provisions of the vehicle and traffic law; 44 6. Dealers in new and used motor vehicles where the use of the motor 45 vehicle is confined solely to demonstrations to prospective customers or 46 to delivery by or to the dealer and the vehicle bears dealer's license 47 plates. 48 § 11-804 Presumption and burden of proof. For the purpose of the 49 proper administration of this chapter and to prevent evasion of the tax 50 hereby imposed, it shall be presumed that all motor vehicles used in the 51 city of the types described in paragraphs (a), (b) and (c) of subdivi- 52 sion three of section 11-801 of this chapter are used principally in the 53 city or used principally in connection with a business carried on within 54 the city and are subject to the tax until the contrary is established; 55 and it shall be presumed that all motor vehicles used in the city of the 56 types described in paragraphs (a) and (b) of subdivision four of section

S. 8578 744

1 11-801 of this chapter are used regularly, even though not principally 2 in the city and are subject to the tax until the contrary is estab- 3 lished. The burden of proving that a motor vehicle is not taxable under 4 this chapter shall be on the owner of the motor vehicle. 5 § 11-805 Records to be kept. Every owner of a motor vehicle subject 6 to tax under this chapter shall keep such records of his or her vehicles 7 and of their use in the city in such form as the commissioner of finance 8 may by regulation require. Such records shall be offered for inspection 9 and examination at any time upon demand by the commissioner of finance 10 or the commissioner's duly authorized agent or employee and shall be 11 preserved for a period of three years except that the commissioner of 12 finance may consent to their destruction within that period or may 13 require that they be kept longer. 14 § 11-806 Registration. a. By July thirteenth, nineteen hundred sixty 15 or, upon acquiring any motor vehicle subject to tax hereunder after such 16 date, within two days of such acquisition, every owner shall file with 17 the commissioner of finance a certificate of registration in such form 18 as prescribed by the commissioner of finance. 19 b. In order to determine whether motor vehicles are subject to the tax 20 under this chapter and to facilitate administration thereof an informa- 21 tion registration certificate in such form as is prescribed by the 22 commissioner of finance shall be filed with the commissioner of finance 23 by any person who owns or acquires: 24 1. A motor vehicle of a type described in paragraph (a), (b) or (c) of 25 subdivision three of section 11-801 of this chapter which is registered 26 in the city under the vehicle and traffic law or is used in the city in 27 connection with a business carried on within the city; or 28 2. A motor vehicle of the type described in paragraphs (a) and (b) of 29 subdivision four of section 11-801 of this chapter which is registered 30 in the city under the vehicle and traffic law or is used in the city. 31 Such an information registration certificate shall be filed by July 32 thirteenth, nineteen hundred sixty or, if a motor vehicle is acquired 33 after such date, within two days after such acquisition. An information 34 registration certificate, however, need not be filed with respect to any 35 motor vehicle for which a registration certificate has been filed pursu- 36 ant to subdivision a of this section. The commissioner of finance may, 37 by regulation, provide that information registration certificates need 38 not be filed with respect to a type of motor vehicle or with respect to 39 any general group within a type of motor vehicle. 40 § 11-807 Returns. a. On or before the twentieth day of June in each 41 year commencing with the year nineteen hundred sixty, every owner of a 42 motor vehicle subject to tax under this chapter shall file a return with 43 the commissioner of finance. A supplemental return shall also be filed 44 by every owner with regard to each motor vehicle subject to tax acquired 45 during any tax year at a time subsequent to the filing of the owner's 46 regular return. Such supplemental return shall be filed with the 47 commissioner of finance within a stated time, as fixed by regulation of 48 the commissioner of finance, after the acquisition of the motor vehicle. 49 An owner who acquires a motor vehicle subject to the tax after the 50 commencement of a tax year and who has not filed a return or supple- 51 mental return with respect to such motor vehicle shall file a return 52 with respect to it within two days after its acquisition by the owner. 53 b. The commissioner of finance, by regulation, may require that each 54 person required under this chapter to file an information registration 55 certificate file an information return with the commissioner of finance 56 annually or at such other times as the commissioner deems appropriate

S. 8578 745

1 for proper administration of this chapter. The commissioner of finance 2 may, by regulation, provide that information returns need not be filed 3 or that they be filed at different times with respect to a type of motor 4 vehicle or with respect to any general group within a type of motor 5 vehicle or with respect to any particular circumstances. 6 c. The commissioner of finance may permit or require returns, supple- 7 mental returns or information returns to be filed at times other than 8 those specified in the commissioner's regulations. If the commissioner 9 deems it necessary in order to insure payment of the tax imposed by this 10 chapter, the commissioner of finance may require any return, supple- 11 mental return or information return to be filed with him or her at a 12 time other than that fixed by such commissioner. 13 d. The form of returns, supplemental returns and information returns 14 shall be prescribed by the commissioner of finance and shall contain 15 such information as the commissioner may deem necessary for the proper 16 administration of this chapter. The commissioner of finance may require 17 amended returns, amended supplemental returns or amended information 18 returns to be filed within twenty days after notice and to contain the 19 information specified in the notice. 20 e. If a return, supplemental return or information return is not 21 filed, or if a return of any kind when filed is incorrect or insuffi- 22 cient on its face, the commissioner of finance shall take the necessary 23 steps to enforce the filing of such a return or of a corrected return. 24 § 11-808 Payment of tax. a. At the time of filing a return or supple- 25 mental return the owner shall pay to the commissioner of finance the tax 26 imposed by this chapter. Such tax shall be due and payable on the last 27 day on which such return or supplemental return is required to be filed, 28 regardless of whether such a return is filed or whether the return which 29 is filed correctly indicates the amount of tax due. 30 b. Where an owner of a motor vehicle subject to tax under this chapter 31 replaces it with another motor vehicle during a tax year, the owner 32 shall be entitled, upon approval by the commissioner of finance, to have 33 any tax paid with respect to the replaced vehicle credited toward the 34 tax payable with respect to the replacement vehicle for the balance of 35 such tax year, and the owner shall pay no additional tax for such tax 36 year with respect to it unless its nature or its maximum gross weight 37 requires the payment of a higher amount of tax than that paid with 38 respect to the replaced vehicle. A supplemental return, where required, 39 shall be filed with respect to a replacement vehicle irrespective of 40 whether additional tax is payable. Upon the grant of a waiver of tax by 41 the commissioner of finance a purchaser of a motor vehicle subject to 42 tax under this chapter who purchases it during a tax year from an owner 43 who has paid the tax shall not be required to pay the tax with respect 44 to such motor vehicle for the balance of such tax year if, and only if, 45 the owner obtains, and submits to the commissioner of finance together 46 with his or her return or supplemental return, a certificate or its 47 equivalent, as prescribed by the commissioner of finance, signed by the 48 prior owner to the effect that the prior owner has not had the tax paid 49 credited toward any replacement vehicle and will not seek to obtain such 50 a credit for any replacement vehicle purchased in the future. Nothing 51 contained in this subdivision shall be deemed to authorize a refund 52 merely because a motor vehicle with respect to which the tax has been 53 paid is sold or otherwise disposed of during the course of the tax year. 54 c. Notwithstanding any other provision of law to the contrary, the tax 55 imposed on medallion taxicabs pursuant to subparagraph (C) of paragraph 56 two of subdivision a of section 11-802 of this chapter shall be due and

S. 8578 746

1 payable in two equal installments, the first of which shall be due and 2 payable on or before the last day on which the return or supplemental 3 return for the tax year is required to be filed, and the second of which 4 shall be due and payable on or before the first day of December in such 5 tax year; provided, however, that if a medallion taxicab is acquired 6 subsequent to the first day of November in such tax year, the full 7 amount of the tax imposed for the tax year shall be due and payable on 8 or before the last day on which the supplemental return with respect to 9 such medallion taxicab is required to be filed. 10 d. Notwithstanding any other provision of law to the contrary, the tax 11 imposed on medallion taxicabs pursuant to subparagraph (B) of paragraph 12 two of subdivision a of section 11-802 of this chapter shall, to the 13 extent not previously paid, be due and payable on or before December 14 first, nineteen hundred eighty-nine; provided, however, that if the tax 15 imposed on a medallion taxicab would, but for the provisions of this 16 subdivision, be due and payable subsequent to December first, nineteen 17 hundred eighty-nine, the due date of such tax shall be determined with- 18 out regard to this subdivision; and provided, further, that nothing in 19 this subdivision shall be deemed to extend the date for payment of any 20 tax imposed by paragraph two of subdivision a of section 11-802 of this 21 chapter. 22 e. Notwithstanding any provision of this chapter or of chapter five of 23 title nineteen of the code of the preceding municipality to the contra- 24 ry, the taxi and limousine commission may require by rule the payment of 25 the tax imposed on medallion taxicabs pursuant to this chapter as a 26 condition precedent of the licensing or license renewal of such medal- 27 lion taxicabs, and the taxi and limousine commission shall have the 28 authority to deny the license or the renewal thereof for any medallion 29 taxicab that fails to pay such tax. 30 § 11-809 Stamps and other indicia of payment. a. The commissioner of 31 finance may, by regulation, provide that the payment of the tax imposed 32 by this chapter shall be evidenced by suitable stamps or other indicia 33 of payment in a form prescribed by the commissioner of finance and that 34 every owner shall affix such stamps or other indicia of payment in the 35 manner prescribed by regulation to each motor vehicle for which a tax 36 had been paid, or shall otherwise keep the indicia of payment with the 37 vehicle, readily available for inspection, in the manner prescribed by 38 regulation. The owner or driver of the vehicle, upon demand, shall 39 exhibit the indicia of payment to the commissioner of finance or the 40 commissioner's duly authorized agent or employee or to any police offi- 41 cer of this city or state. The commissioner of finance may, by regu- 42 lation, make similar provision for the use of stamps or other indicia 43 that no tax is payable with respect to particular motor vehicles. 44 b. An owner who sells a motor vehicle shall not transfer any stamp or 45 other indicia of payment to the purchaser except on a sale to a purchas- 46 er to whom the owner has properly given the certificate provided for in 47 section 11-808 of this chapter with regard to not obtaining a credit 48 toward any tax payable with respect to a replacement vehicle. The 49 commissioner of finance shall, by regulation, provide for the 50 destruction of the stamp or other indicia of payment or its return to 51 the commissioner of finance upon all sales except where transfer to the 52 purchaser is permitted and, where the motor vehicle sold has been 53 replaced, for the issuance of replacement stamps or indicia of payment. 54 § 11-809.1 Collection of tax by commissioner of motor vehicles. a. 55 Notwithstanding any provision of this chapter to the contrary, the tax 56 imposed by this chapter on any commercial motor vehicle with a maximum

S. 8578 747

1 gross weight of ten thousand pounds or less and on any motor vehicle for 2 transportation of passengers, other than a medallion taxicab, shall be 3 collected by the commissioner of motor vehicles, provided that any such 4 motor vehicle is registered or required to be registered pursuant to any 5 provision of section four hundred one of the vehicle and traffic law. 6 The owner of each such motor vehicle shall pay the tax due thereon to 7 the commissioner of motor vehicles on or before the date upon which such 8 owner registers or renews the registration of such motor vehicle or is 9 required to register or renew the registration thereof pursuant to 10 section four hundred one of the vehicle and traffic law. 11 b. Notwithstanding any provision of section four hundred of the vehi- 12 cle and traffic law to the contrary, payment of the tax with respect to 13 a motor vehicle described in subdivision a of this section shall be a 14 condition precedent to the registration or renewal thereof of such motor 15 vehicle and to the issuance of any certificate of registration and 16 plates or removable date tag in accordance with the vehicle and traffic 17 law and the rules and regulations promulgated thereunder, and no such 18 certificate of registration, plates or tag shall be issued unless such 19 tax has been paid. If the registration period applicable to any such 20 vehicle is a period of not less than two years, as a result of the 21 application of the provisions of paragraph c of subdivision five of 22 section four hundred one of the vehicle and traffic law, the tax 23 required to be paid pursuant to this section shall be the annual tax 24 specified in section 11-802 of this chapter multiplied by the number of 25 years in the registration period. The commissioner of motor vehicles, 26 upon payment of the tax pursuant to this section or upon the application 27 of any person exempt therefrom, shall furnish to each taxpayer paying 28 the tax a receipt for such tax and to each other taxpayer or exempt 29 person a statement, document or other form prescribed by the commission- 30 er of motor vehicles, showing that such tax has been paid or is not due 31 with respect to such motor vehicle. 32 c. Notwithstanding the definition of the term "tax year" contained in 33 subdivision fourteen of section 11-801 of this chapter, for purposes of 34 the taxes payable to the commissioner of motor vehicles pursuant to this 35 section, "tax year" shall mean the twelve-month registration period 36 applicable to the subject motor vehicle under the vehicle and traffic 37 law and, in the case of a registration period of at least two years, 38 shall mean each succeeding twelve-month period falling within such 39 registration period. 40 d. Where the tax imposed by this chapter has been paid to the commis- 41 sioner of finance with respect to a motor vehicle for a tax year 42 described in subdivision fourteen of section 11-801 of this chapter, and 43 subsequent thereto but within such tax year the same taxpayer pays a tax 44 to the commissioner of the motor vehicles with respect to such motor 45 vehicle pursuant to this section, such taxpayer shall be entitled to a 46 refund or credit from the commissioner of finance for the portion of the 47 tax paid to the commissioner of finance which is attributable to the 48 period beginning on the first day of the first tax year, as the term 49 "tax year" is defined in subdivision c of this section, for which the 50 tax is paid to the commissioner of motor vehicles and ending on the 51 following May thirty-first, provided, however, that no such refund or 52 credit shall be allowed if the amount thereof is less than five dollars. 53 Any refund or credit to which a taxpayer is entitled pursuant to this 54 subdivision shall be promptly refunded or credited, without interest, by 55 the commissioner of finance, and the commissioner of finance may promul- 56 gate such rules as he or she deems necessary to carry out the provisions

S. 8578 748

1 of this subdivision. Any amount for which the taxpayer is entitled to a 2 refund or credit pursuant to this subdivision may be allowed as a credit 3 against the tax payable to the commissioner of motor vehicles pursuant 4 to this section to the extent and in the manner provided for in the 5 agreement authorized by subdivision k of this section. 6 e. Whenever any fee or portion of a fee paid for the registration of a 7 motor vehicle under the provisions of the vehicle and traffic law is 8 refunded pursuant to the provisions of subdivision one or one-a of 9 section four hundred twenty-eight thereof, the amount of any tax paid to 10 the commissioner of motor vehicles pursuant to this section upon such 11 registration shall also be refunded by the commissioner of motor vehi- 12 cles, provided that where a fee is refunded pursuant to subdivision 13 one-a of such section four hundred twenty-eight, the amount of tax to be 14 refunded shall be limited to the tax paid for a tax year commencing 15 subsequent to the end of the first twelve-month period of such registra- 16 tion. 17 f. Where the annual registration period applicable to a particular 18 class of motor vehicle begins and ends on the same dates for all motor 19 vehicles within such class, the tax payable to the commissioner of motor 20 vehicles pursuant to this section with respect to a motor vehicle within 21 such class which is registered or required to be registered after the 22 commencement of such annual registration period shall be determined for 23 such period as follows: 24 1. If such motor vehicle is registered or required to be registered 25 before the first day of the seventh month of such period, the tax shall 26 be the amount specified in subdivision a of section 11-802 of this chap- 27 ter. 28 2. If such motor vehicle is registered or required to be registered on 29 or after the first day of the seventh month of such period but before 30 the first day of the tenth month of such period, the tax shall be one- 31 half of the amount specified in subdivision a of section 11-802 of this 32 chapter. 33 3. If such motor vehicle is registered or required to be registered on 34 or after the first day of the tenth month of such period, the tax shall 35 be one-fourth of the amount specified in subdivision a of section 11-802 36 of this chapter. 37 g. The provisions of subdivision b of section 11-808 of this chapter 38 shall apply to this section with such modifications or adaptations as 39 are necessary to carry out the purposes of this section and to ensure 40 collection of the appropriate annual tax specified in subdivision a of 41 section 11-802 of this chapter, and with due regard to the respective 42 responsibilities of the commissioner of finance and the commissioner of 43 motor vehicles under this section and to the definitions of "tax year" 44 contained in subdivision c of this section and subdivision fourteen of 45 section 11-801 of this chapter. The agreement between the commissioner 46 of finance and the commissioner of motor vehicles authorized by subdivi- 47 sion k of this section may contain such provisions concerning the divi- 48 sion of responsibility for collection of the taxes imposed by this chap- 49 ter and the granting of refunds or credits as are consistent with this 50 section and subdivision b of section 11-808 of this chapter, and the 51 commissioner of finance and the commissioner of motor vehicles may also 52 adopt such rules as they deem necessary for such purposes. 53 h. Notwithstanding any provision of section 11-807 of this chapter to 54 the contrary, at the time a tax is required to be paid to the commis- 55 sioner of motor vehicles pursuant to this section, the person required 56 to pay such tax shall file a return with the commissioner of motor vehi-

S. 8578 749

1 cles in such form and containing such information as he or she may 2 prescribe. The taxpayer's application for registration or the renewal 3 thereof shall constitute the return required under this subdivision 4 unless the commissioner of motor vehicles shall otherwise provide by 5 rule. A return filed pursuant to this subdivision with respect to a 6 motor vehicle for a tax year or years shall be in lieu of any return 7 otherwise required to be filed with respect thereto pursuant to section 8 11-807 of this chapter. 9 i. In any case in which the tax imposed by this chapter is required to 10 be paid to the commissioner of motor vehicles but is not so paid, the 11 commissioner of finance shall collect such tax and all of the provisions 12 of this chapter relating to collection of taxes by the commissioner of 13 finance shall apply with respect thereto. 14 j. Notwithstanding any provision of section four hundred of the vehi- 15 cle and traffic law to the contrary, in those cases in which the commis- 16 sioner of finance is responsible for collecting the tax imposed by this 17 chapter, the commissioner of motor vehicles shall not issue a certif- 18 icate of registration, plates or removable date tag for any motor vehi- 19 cle subject to such tax with respect to which the commissioner of 20 finance has notified the commissioner of motor vehicles that such tax 21 has not been paid, unless the registrant submits proof, in a form 22 approved by the commissioner of motor vehicles, that such tax has been 23 paid, or is not due, with respect to such motor vehicle. 24 k. The commissioner of finance is hereby authorized and empowered to 25 enter into an agreement with the commissioner of motor vehicles to 26 govern the collection of the taxes imposed by this chapter which are 27 required to be paid to the commissioner of motor vehicles pursuant to 28 this section. Such agreement shall provide for the exclusive method of 29 collection, custody and remittal to the commissioner of finance of the 30 proceeds of any such tax; for the payment by the city of the reasonable 31 expenses incurred by the department of motor vehicles in connection with 32 the collection of any such tax; for the commissioner of finance, or a 33 duly designated representative, upon his or her request, not more 34 frequently than once in each calendar year at a time agreed upon by the 35 state comptroller, to audit the accuracy of the payments, distributions 36 and remittances to the city; and for such other matters as may be neces- 37 sary and proper to effectuate the purposes of such agreement. Such 38 agreement shall have the force and effect of a rule or regulation of the 39 commissioner of motor vehicles and shall be filed and published in 40 accordance with any statutory requirements relating thereto. 41 l. The commissioner of motor vehicles shall promptly notify the corpo- 42 ration counsel of the city of any litigation instituted against such 43 commissioner which challenges the constitutionality or validity of any 44 provision of this chapter, or of the enabling act pursuant to which it 45 was adopted, or which attempts to limit or question the application of 46 either such law, and such notification shall include copies of the 47 papers served upon such commissioner. 48 m. The commissioner of motor vehicles shall begin to collect taxes in 49 accordance with the provisions of this section at such time as is speci- 50 fied in the agreement between the commissioner of motor vehicles and the 51 commissioner of finance provided for in subdivision k of this section. 52 n. In addition to any other powers granted to the commissioner of 53 motor vehicles in this chapter or any other law, he or she is hereby 54 authorized and empowered: 1. to adopt and amend rules appropriate to 55 the carrying out of his or her responsibilities under this chapter; 2. 56 to request information concerning motor vehicles and persons subject to

S. 8578 750

1 the provisions of this chapter from the department of motor vehicles of 2 any other state, the treasury department of the United States or the 3 appropriate officials of any city or county of the state of New York; 4 and to afford such information to such department of motor vehicles, 5 treasury department or officials of such city or county, any provision 6 of this chapter to the contrary notwithstanding; 3. to delegate his or 7 her functions under this section to a deputy commissioner in the depart- 8 ment of motor vehicles or any employee of such department or to any 9 county clerk or other officer who acts as the agent of such commissioner 10 in the registration of motor vehicles; 4. to require all persons owning 11 motor vehicles with respect to which the tax imposed by this chapter is 12 payable to the commissioner of motor vehicles to keep such records as he 13 or she may prescribe and to furnish such information upon his or her 14 request; and 5. to extend, for cause shown, the time for filing any 15 return required to be filed with the commissioner of motor vehicles for 16 a period not exceeding sixty days. 17 o. To the extent that any provision of this section is in conflict 18 with any other provision of this chapter, the provisions of this section 19 shall be controlling, but in all other respects such other provisions of 20 this chapter shall remain fully applicable with respect to the imposi- 21 tion, administration and collection of the taxes imposed by this chap- 22 ter. 23 § 11-809.2 Collection of tax by the taxi and limousine commission on 24 behalf of the commissioner of finance. a. Notwithstanding any provision 25 of this chapter to the contrary, the tax imposed by this chapter on any 26 designated licensed vehicle, as defined in this subdivision, shall be 27 collected by the taxi and limousine commission on behalf of the commis- 28 sioner of finance. Except as otherwise provided by subdivision m of this 29 section, the owner of each such designated licensed vehicle shall pay 30 the tax due thereon to the taxi and limousine commission on or before 31 the date upon which such owner licenses or renews the license of such 32 designated licensed vehicle or is required to license or renew the 33 license thereof pursuant to chapter five of title nineteen of the code 34 of the preceding municipality. For purposes of this section, the term 35 "designated licensed vehicle" shall mean a motor vehicle for the trans- 36 portation of passengers, other than a medallion taxicab, the tax on 37 which is not collected by the commissioner of motor vehicles pursuant to 38 section 11-809.1 of this chapter and which is licensed or required to be 39 licensed by the taxi and limousine commission pursuant to any provision 40 of chapter five of title nineteen of the code of the preceding munici- 41 pality. 42 b. Notwithstanding any provision of chapter five of title nineteen of 43 the code of the preceding municipality to the contrary, payment of the 44 tax with respect to a designated licensed vehicle shall be a condition 45 precedent to the licensing or license renewal of such designated 46 licensed vehicle with the taxi and limousine commission, and no such 47 license or renewal thereof shall be issued unless such tax has been 48 paid. Except as provided in subdivisions f and m of this section, if the 49 license period applicable to any such designated licensed vehicle is a 50 period of more than one year, the tax required to be paid pursuant to 51 this section shall be the annual tax specified in section 11-802 of this 52 chapter multiplied by the number of years in the license period. The 53 taxi and limousine commission, upon payment of the tax pursuant to this 54 section or upon the application of any person exempt therefrom, shall 55 furnish to each taxpayer paying the tax a receipt for such tax and to 56 each other taxpayer or exempt person a statement, document or other form

S. 8578 751

1 prescribed by the taxi and limousine commission, showing that such tax 2 has been paid or is not due with respect to such designated licensed 3 vehicle. 4 c. For purposes of this section, the term "tax period" shall mean the 5 license period applicable to the designated licensed vehicle under chap- 6 ter five of title nineteen of the code of the preceding municipality 7 and, in the case of a license period of other than one year, shall mean 8 the number of twelve-month periods and any period of less than twelve 9 months within such license period. The term "tax period" shall also 10 include any periods described in subparagraph (A) of paragraph one of 11 subdivision m of this section. 12 d. Except as provided in subdivision m of this section, where the tax 13 imposed by this chapter has been paid to the commissioner of finance 14 with respect to a motor vehicle for a tax year described in subdivision 15 fourteen of section 11-801 of this chapter, and subsequent thereto but 16 within such tax year the same taxpayer pays a tax to the taxi and limou- 17 sine commission with respect to such motor vehicle pursuant to this 18 section, such taxpayer shall be entitled to a refund or credit from the 19 commissioner of finance for the portion of the tax paid to the commis- 20 sioner of finance that is attributable to the period beginning on the 21 first day of the first tax period for which the tax is paid to the taxi 22 and limousine commission and ending on the following May thirty-first, 23 provided, however, that no such refund or credit shall be allowed if the 24 amount thereof is less than five dollars. Any refund or credit to which 25 a taxpayer is entitled pursuant to this subdivision shall be promptly 26 refunded or credited, without interest, by the commissioner of finance, 27 and the commissioner of finance may promulgate such rules as he or she 28 deems necessary to carry out the provisions of this subdivision. 29 e. If the license for the designated licensed vehicle is transferred, 30 surrendered or terminated for reasons other than revocation, and the 31 applicable license period under chapter five of title nineteen of the 32 code of the preceding municipality is for more than one year, and the 33 tax paid to the taxi and limousine commission was for a tax period of 34 more than twelve months, except as otherwise provided in the agreement 35 between the taxi and limousine commission and the commissioner of 36 finance authorized pursuant to subdivision k of this section, the 37 commissioner of finance shall refund the tax paid for any twelve-month 38 period commencing subsequent to the transfer, surrender or other termi- 39 nation of the license described in this subdivision. 40 f. Except as provided in subdivision m of this section, for designated 41 licensed vehicles whose license period is a two year period that begins 42 and ends on the same dates, the tax payable to the taxi and limousine 43 commission pursuant to this section with respect to a designated 44 licensed vehicle that is licensed or required to be licensed after the 45 commencement of such license period shall be determined as follows: 46 1. If such designated licensed vehicle is licensed or required to be 47 licensed before the first day of the seventh month of such period, the 48 tax shall be the amount determined pursuant to subdivision b of this 49 section. 50 2. If such designated licensed vehicle is licensed or required to be 51 licensed on or after the first day of the seventh month of such period 52 but before the first day of the thirteenth month of such period, the tax 53 shall be three-fourths of the amount determined pursuant to subdivision 54 b of this section. 55 3. If such designated licensed vehicle is licensed or required to be 56 licensed on or after the first day of the thirteenth month but before

S. 8578 752

1 the first day of the nineteenth month of such period, the tax shall be 2 one-half of the amount determined pursuant to subdivision b of this 3 section. 4 4. If such designated licensed vehicle is licensed or required to be 5 licensed on or after the first day of the nineteenth month of such peri- 6 od, the tax shall be one-fourth of the amount determined pursuant to 7 subdivision b of this section. 8 5. When the license period described in this section is for a period 9 of less than two years, the commissioner of finance shall have the 10 authority to provide by rule the amount to be payable under this subdi- 11 vision. 12 g. The provisions of subdivision b of section 11-808 of this chapter 13 shall apply to this section with such modifications or adaptations as 14 are necessary to carry out the purposes of this section and to ensure 15 collection of the appropriate annual tax specified in subdivision a of 16 section 11-802 of this chapter, and with due regard to the respective 17 responsibilities of the commissioner of finance and the taxi and limou- 18 sine commission under this section and to the definition of "tax year" 19 contained in subdivision fourteen of section 11-801 of this chapter and 20 to the definition of "tax period" contained in subdivision c of this 21 section. The agreement between the commissioner of finance and the taxi 22 and limousine commission authorized by subdivision k of this section may 23 contain such provisions concerning the division of responsibility for 24 collection of the taxes imposed by this chapter and the granting of 25 refunds or credits as are consistent with this section and subdivision b 26 of section 11-808 of this chapter, and the commissioner of finance and 27 the taxi and limousine commission may also adopt such rules as they deem 28 necessary for such purposes. 29 h. Notwithstanding any provision of section 11-807 of this chapter to 30 the contrary, at the time a tax is required to be paid to the taxi and 31 limousine commission pursuant to this section, the person required to 32 pay such tax shall file a return with the taxi and limousine commission 33 in such form and containing such information as the taxi and limousine 34 commission may prescribe. The taxpayer's application for a license or 35 the renewal thereof shall constitute the return required under this 36 subdivision unless the taxi and limousine commission shall otherwise 37 provide by rule. A return filed pursuant to this subdivision with 38 respect to a designated licensed vehicle for a tax period or periods 39 shall be in lieu of any return otherwise required to be filed with 40 respect thereto pursuant to section 11-807 of this chapter. Unless the 41 taxi and limousine commission otherwise requires, the filing of a return 42 shall not be required for the tax periods described in subparagraph (A) 43 of paragraph one of subdivision m of this section. 44 i. In any case in which the tax imposed by this chapter is required to 45 be paid to the taxi and limousine commission but is not so paid, the 46 commissioner of finance shall collect such tax and all of the provisions 47 of this chapter relating to collection of taxes by the commissioner of 48 finance shall apply with respect thereto. 49 j. Notwithstanding any provision of chapter five of title nineteen of 50 the code of the preceding municipality to the contrary, in those cases 51 in which the commissioner of finance is responsible for collecting the 52 tax imposed by this chapter, the taxi and limousine commission shall not 53 issue or renew a license for any designated licensed vehicle subject to 54 such tax with respect to which the commissioner of finance has notified 55 the taxi and limousine commission that such tax has not been paid, 56 unless the applicant for such license or renewal submits proof, in a

S. 8578 753

1 form approved by the taxi and limousine commission, that such tax has 2 been paid, or is not due, with respect to such designated licensed vehi- 3 cle. 4 k. The commissioner of finance is hereby authorized and empowered to 5 enter into an agreement with the taxi and limousine commission to govern 6 the collection of the taxes imposed by this chapter which are required 7 to be paid to the taxi and limousine commission pursuant to this 8 section. Such agreement may provide for the exclusive method of 9 collection, custody and remittal to the commissioner of finance of the 10 proceeds of any such tax; for the payment by the commissioner of finance 11 of reasonable expenses incurred by the taxi and limousine commission in 12 connection with the collection of any such tax; for the commissioner of 13 finance, or a duly designated representative, upon his or her request, 14 not more frequently than once in each calendar year at a time agreed 15 upon by the city comptroller, to audit the accuracy of the payments, 16 distributions and remittances to the commissioner of finance; and for 17 such other matters as may be necessary and proper to effectuate the 18 purposes of such agreement. 19 l. The taxi and limousine commission shall promptly notify the corpo- 20 ration counsel of the city and the commissioner of finance of any liti- 21 gation instituted against such commission which challenges the constitu- 22 tionality or validity of any provision of this chapter, or which 23 attempts to limit or question the application of this chapter, and such 24 notification shall include copies of the papers served upon such commis- 25 sion. 26 m. Except as otherwise provided in the agreement between the taxi and 27 limousine commission and the commissioner of finance authorized by 28 subdivision k of this section, or with respect to the periods described 29 in paragraph two of this subdivision, the taxi and limousine commission 30 shall begin to collect taxes in accordance with the provisions of this 31 section on the first day of April in the year two thousand twelve as 32 follows: 33 1. The tax due on a designated licensed vehicle, the license for which 34 expires on or after the first day of June in the year two thousand 35 twelve and before the first day of June in the year two thousand four- 36 teen, shall be determined as follows: 37 (A) For a designated licensed vehicle whose license expires on or 38 after the first day of June in the year two thousand twelve and before 39 the first day of June in the year two thousand fourteen, the amount of 40 tax for the tax period between the first day of June in the year two 41 thousand twelve and the date the license shall expire for such desig- 42 nated licensed vehicle pursuant to chapter five of title nineteen of the 43 code of the preceding municipality shall be the sum of (i) the annual 44 tax specified in subparagraph (C) of paragraph two of subdivision a of 45 section 11-802 of this chapter for any twelve-month period within such 46 tax period, and (ii) the amount determined under subparagraph (B) of 47 this paragraph for any period of less than twelve months within such tax 48 period. The amount of tax so determined shall be payable on or before 49 the first day of June in the year two thousand twelve. In the event the 50 amount of tax due and payable under this subparagraph shall not have 51 been paid within thirty days of the first day of June in the year two 52 thousand twelve, the taxi and limousine commission shall suspend the 53 license for such designated licensed vehicle, and the license for any 54 such designated licensed vehicle which has expired shall not be renewed 55 until such time as such tax is paid.

S. 8578 754

1 (B) For purposes of subparagraph (A) of this paragraph, the amount of 2 tax for a period of less than twelve months shall be determined as 3 follows: (i) if such period is nine months or more, the amount for such 4 period shall be the full amount of annual tax provided in subparagraph 5 (C) of paragraph two of subdivision a of section 11-802 of this chapter; 6 (ii) if such period is more than six months but less than nine months, 7 the amount for such period shall be three-fourths of the amount of annu- 8 al tax provided in subparagraph (C) of paragraph two of subdivision a of 9 section 11-802 of this chapter; (iii) if such period is more than three 10 months but less than six months, the amount for such period shall be 11 one-half of the amount of annual tax provided in subparagraph (C) of 12 paragraph two of subdivision a of section 11-802 of this chapter; and 13 (iv) if such period is less than three months, the amount for such peri- 14 od shall be one-fourth of the amount of annual tax provided in subpara- 15 graph (C) of paragraph two of subdivision a of section 11-802 of this 16 chapter. 17 2. Upon the date for payment set forth in subparagraph (A) of para- 18 graph one of this subdivision, the taxi and limousine commission shall 19 require the taxpayer to provide a proof of payment of the tax to the 20 commissioner of finance for the period beginning on the first day of 21 June in the year two thousand eleven and ending on the thirty-first day 22 of May in the year two thousand twelve or any part of such period for 23 which the taxpayer was subject to the tax. In the event the taxpayer has 24 not paid such tax to the commissioner of finance: (i) the license for 25 any designated licensed vehicle described in subparagraph (A) of this 26 paragraph shall not be renewed until such time as such tax, together 27 with any applicable interest or penalties, has been paid to the commis- 28 sioner of finance and (ii) if such tax remains unpaid as of the end of 29 the thirty-day period set forth in subparagraph (A) of paragraph one of 30 this subdivision, the license for any designated licensed vehicle 31 described in subparagraph (A) of paragraph one of this subdivision shall 32 be suspended until such time as such tax, together with any applicable 33 interest or penalties, is paid to the commissioner of finance. 34 n. In addition to any other powers granted to the taxi and limousine 35 commission in this chapter or any other law, the taxi and limousine 36 commission is hereby authorized and empowered: 37 1. to adopt and amend rules appropriate to the carrying out of its 38 responsibilities under this chapter; 39 2. to request information concerning motor vehicles and persons 40 subject to the provisions of this chapter from the commissioner of motor 41 vehicles, the department of motor vehicles of any other state, the trea- 42 sury department of the United States or the appropriate officials of any 43 city or county of the state of New York; and to afford such information 44 to such department of motor vehicles, treasury department or officials 45 of such city or county, any provision of this chapter to the contrary 46 notwithstanding; 47 3. to delegate its functions under this section to any commissioner or 48 employee of such commission; 49 4. to require any person who is an owner, as defined in chapter five 50 of title nineteen of the code of the preceding municipality, of a desig- 51 nated licensed vehicle to keep such records as it prescribes and to 52 furnish such information upon its request; and 53 5. to extend, for cause shown, the time for filing any return required 54 to be filed with the taxi and limousine commission for a period not 55 exceeding sixty days.

S. 8578 755

1 o. To the extent that any provision of this section is in conflict 2 with any other provision of this chapter, the provisions of this section 3 shall be controlling, but in all other respects such other provisions of 4 this chapter shall remain fully applicable with respect to the imposi- 5 tion, administration and collection of the taxes imposed by this chap- 6 ter. 7 § 11-810 Determination of tax. If a return required by this chapter is 8 not filed, or if a return when filed is incorrect or insufficient, the 9 commissioner of finance shall determine the amount of tax due from such 10 information as may be obtainable and, if necessary, may estimate the tax 11 on the basis of external indices such as motor vehicle registration with 12 the department of motor vehicles and/or any other factors. Notice of 13 such determination shall be given to the person liable for the payment 14 of the tax. Such determination shall finally and irrevocably fix the tax 15 unless the person against whom it is assessed, within ninety days after 16 the giving of notice of such determination or, if the commissioner of 17 finance has established a conciliation procedure pursuant to section 18 11-124 of this title and the taxpayer has requested a conciliation 19 conference in accordance therewith, within ninety days from the mailing 20 of a conciliation decision or the date of the commissioner's confirma- 21 tion of the discontinuance of the conciliation proceeding, both (1) 22 serves a petition upon the commissioner of finance and (2) files a peti- 23 tion with the tax appeals tribunal for a hearing, or unless the commis- 24 sioner of finance of his or her own motion shall redetermine the same. 25 Such hearing and any appeal to the tax appeals tribunal sitting en banc 26 from the decision rendered in such hearing shall be conducted in the 27 manner and subject to the requirements prescribed by the tax appeals 28 tribunal pursuant to sections one hundred sixty-eight through one 29 hundred seventy-two of the charter of the preceding municipality as it 30 existed January first, nineteen hundred ninety-four. After such hearing 31 the tax appeals tribunal shall give notice of its decision to the person 32 against whom the tax is assessed and to the commissioner of finance. A 33 decision of the tax appeals tribunal sitting en banc shall be reviewable 34 for error, illegality or unconstitutionality or any other reason whatso- 35 ever by a proceeding under article seventy-eight of the civil practice 36 law and rules if application therefor is made to the supreme court by 37 the person against whom the tax was assessed within four months after 38 the giving of the notice of such tax appeals tribunal decision. A 39 proceeding under article seventy-eight of the civil practice law and 40 rules shall not be instituted by a taxpayer unless: (a) the amount of 41 any tax sought to be reviewed, with penalties and interest thereon, if 42 any, shall be first deposited with the commissioner of finance and there 43 shall be filed with the commissioner of finance an undertaking, issued 44 by a surety company authorized to transact business in this state and 45 approved by the superintendent of insurance of this state as to solvency 46 and responsibility, in such amount and with such sureties as a justice 47 of the supreme court shall approve, to the effect that if such proceed- 48 ing be dismissed or the tax confirmed, the taxpayer will pay all costs 49 and charges which may accrue in the prosecution of the proceeding, or 50 (b) at the option of the taxpayer such undertaking filed with the 51 commissioner of finance may be in a sum sufficient to cover the taxes, 52 penalties and interest thereon stated in such decision plus the costs 53 and charges which may accrue against it in the prosecution of the 54 proceeding, in which event the taxpayer shall not be required to deposit 55 such taxes, penalties and interest as a condition precedent to the 56 application.

S. 8578 756

1 § 11-811 Refunds. a. In the manner provided in this section the 2 commissioner of finance shall refund or credit, without interest, any 3 tax, penalty or interest erroneously, illegally or unconstitutionally 4 collected or paid, if written application to the commissioner of finance 5 for such refund shall be made within one year from the payment thereof. 6 Whenever a refund or credit is made or denied, the commissioner of 7 finance shall state his or her reason therefor and give notice thereof 8 to the taxpayer in writing. The commissioner of finance may, in lieu of 9 any refund required to be made, allow credit therefor on payments due 10 from the applicant. 11 b. Any determination of the commissioner of finance denying a refund 12 or credit pursuant to subdivision a of this section shall be final and 13 irrevocable unless the applicant for such refund or credit, within nine- 14 ty days from the mailing or notice of such determination, or, if the 15 commissioner of finance has established a conciliation procedure pursu- 16 ant to section 11-124 of this title and the applicant has requested a 17 conciliation conference in accordance therewith, within ninety days from 18 the mailing of a conciliation decision or the date of the commissioner's 19 confirmation of the discontinuance of the conciliation proceeding, both 20 (1) serves a petition upon the commissioner of finance and (2) files a 21 petition with the tax appeals tribunal for a hearing. Such petition for 22 a refund or credit, made as herein provided, shall be deemed an applica- 23 tion for a revision of any tax, penalty or interest complained of. Such 24 hearing and any appeal to the tax appeals tribunal sitting en banc from 25 the decision rendered in such hearing shall be conducted in the manner 26 and subject to the requirements prescribed by the tax appeals tribunal 27 pursuant to sections one hundred sixty-eight through one hundred seven- 28 ty-two of the charter of the preceding municipality as it existed Janu- 29 ary first, nineteen hundred ninety-four. After such hearing, the tax 30 appeals tribunal shall give notice of its decision to the applicant and 31 to the commissioner of finance. The applicant shall be entitled to 32 institute a proceeding pursuant to article seventy-eight of the civil 33 practice law and rules to review a decision of the tax appeals tribunal 34 sitting en banc if application to the supreme court be made therefor 35 within four months after the giving of notice of such decision, and 36 provided, in the case of an application by a taxpayer, that a final 37 determination of tax due was not previously made. Such a proceeding 38 shall not be instituted by a taxpayer, unless an undertaking shall first 39 be filed with the commissioner of finance in such amount and with such 40 sureties as a justice of the supreme court shall approve, to the effect 41 that if such proceeding be dismissed or the tax confirmed, the taxpayer 42 will pay all costs and charges which may accrue in the prosecution of 43 the proceeding. 44 c. A person shall not be entitled to a revision, refund or credit 45 under this section of a tax, interest or penalty which had been deter- 46 mined to be due pursuant to the provisions of section 11-810 of this 47 chapter where such person has had a hearing or an opportunity for a 48 hearing, as provided in said section, or has failed to avail himself or 49 herself of the remedies therein provided. No refund or credit shall be 50 made of a tax, interest or penalty paid after a determination by the 51 commissioner of finance made pursuant to section 11-810 of this chapter 52 unless it be found that such determination was erroneous, illegal or 53 unconstitutional or otherwise improper, by the tax appeals tribunal 54 after a hearing or on the commissioner's own motion, or, if such tax 55 appeals tribunal affirms in whole or in part the determination of the 56 commissioner of finance, in a proceeding under article seventy-eight of

S. 8578 757

1 the civil practice law and rules, pursuant to the provisions of said 2 section, in which event refund or credit without interest shall be made 3 of the tax, interest or penalty found to have been overpaid. 4 § 11-812 Remedies exclusive. The remedies provided by this chapter 5 shall be the exclusive remedies available to any person for the review 6 of tax liability imposed by this chapter; and no determination or 7 proposed determination of tax or determination on any application for 8 refund by the commissioner of finance, nor any decision by the tax 9 appeals tribunal or any of its administrative law judges, shall be 10 enjoined or reviewed by an action for declaratory judgment, an action 11 for money had and received or by any action or proceeding other than, in 12 the case of a decision by the tax appeals tribunal sitting en banc, a 13 proceeding under article seventy-eight of the civil practice law and 14 rules; provided, however, that a taxpayer may proceed by declaratory 15 judgment if the taxpayer institutes suit within thirty days after a 16 deficiency assessment is made and pays the amount of the deficiency 17 assessment to the commissioner of finance prior to the institution of 18 such suit and posts a bond for costs as provided in section 11-810 of 19 this chapter. 20 § 11-813 Reserves. In cases where the taxpayer has applied for a 21 refund and has instituted a proceeding under article seventy-eight of 22 the civil practice law and rules to review a determination adverse to 23 the taxpayer on his or her application for refund, the comptroller shall 24 set up appropriate reserves to meet any decision adverse to the city. 25 § 11-814 Proceedings to recover tax. a. Whenever any person shall 26 fail to pay any tax or penalty or interest imposed by this chapter as 27 herein provided, the corporation counsel shall, upon the request of the 28 commissioner of finance, bring or cause to be brought an action to 29 enforce payment of the same against the person liable for the same on 30 behalf of the city of Staten Island in any court of the state of New 31 York or of any other state or of the United States. If, however, the 32 commissioner of finance in his or her discretion believes that a taxpay- 33 er subject to the provisions of this chapter is about to cease business, 34 leave the state or remove or dissipate the assets out of which tax or 35 penalties might be satisfied and that any such tax or penalty will not 36 be paid when due, the commissioner may declare such tax or penalty to be 37 immediately due and payable and may issue a warrant immediately. 38 b. As an additional or alternate remedy, the commissioner of finance 39 may issue a warrant, directed to the city sheriff commanding the sheriff 40 to levy upon and sell the real and personal property of such person 41 which may be found within the city, for the payment of the amount there- 42 of, with any penalties and interest, and the cost of executing the 43 warrant, and to return such warrant to the commissioner of finance and 44 to pay to the commissioner the money collected by virtue thereof within 45 sixty days after the receipt of such warrant. The city sheriff shall, 46 within five days after the receipt of the warrant, file with the county 47 clerk a copy thereof, and thereupon such clerk shall enter in the judge- 48 ment docket the name of the person mentioned in the warrant and the 49 amount of the tax, penalties and interest for which the warrant is 50 issued and the date when such copy is filed. Thereupon the amount of 51 such warrant so docketed shall become a lien upon the title to and 52 interest in real and personal property of the person against whom the 53 warrant is issued. The city sheriff shall then proceed upon the warrant 54 in the same manner and with like effect as that provided by law in 55 respect to executions issued against property upon judgments of a court 56 of record, and for services in executing the warrant the sheriff shall

S. 8578 758

1 be entitled to the same fees which he or she may collect in the same 2 manner. In the discretion of the commissioner of finance a warrant of 3 like terms, force and effect may be issued and directed to any officer 4 or employee of the department of finance, and in the execution thereof 5 such officer or employee shall have all the powers conferred by law upon 6 sheriffs, but such officer or employee shall be entitled to no fee or 7 compensation in excess of the actual expenses paid in the performance of 8 such duty. If a warrant is returned not satisfied in full, the commis- 9 sioner of finance may from time to time issue new warrants and shall 10 also have the same remedies to enforce the amount due thereunder as if 11 the city had recovered judgment therefor and execution thereon had been 12 returned unsatisfied. 13 c. Whenever there is made a sale, transfer or assignment in bulk of 14 any part or the whole of a stock of merchandise or of fixtures, or 15 merchandise and of fixtures pertaining to the conducting of the business 16 of the seller, transferor or assignor, otherwise than in the ordinary 17 course of trade and in the regular prosecution of said business, the 18 purchaser, transferee or assignee shall at least ten days before taking 19 possession of such merchandise, fixtures, or merchandise and fixtures, 20 or paying therefor, notify the commissioner of finance by registered 21 mail of the proposed sale and of the price, terms and conditions thereof 22 whether or not the seller, transferor or assignor, has represented to, 23 or informed the purchaser, transferee or assignee that it owes any tax 24 pursuant to this chapter and whether or not the purchaser, transferee or 25 assignee has knowledge that such taxes are owing, and whether any such 26 taxes are in fact owing. 27 Whenever the purchaser, transferee or assignee shall fail to give 28 notice to the commissioner of finance as required by the opening para- 29 graph of this subdivision, or whenever the commissioner of finance shall 30 inform the purchaser, transferee or assignee that a possible claim for 31 such tax or taxes exists, any sums of money, property or choses in 32 action, or other consideration, which the purchaser, transferee or 33 assignee is required to transfer over to the seller, transferor or 34 assignor shall be subject to a first priority right and lien for any 35 such taxes theretofore or thereafter determined to be due from the sell- 36 er, transferor or assignor to the city, and the purchaser, transferee or 37 assignee is forbidden to transfer to the seller, transferor or assignor 38 any such sums of money, property or choses in action to the extent of 39 the amount of the city's claim. For failure to comply with the 40 provisions of this subdivision, the purchaser, transferee or assignee, 41 in addition to being subject to the liabilities and remedies imposed 42 under the provisions of former section forty-four of the personal prop- 43 erty law, shall be personally liable for the payment to the city of any 44 such taxes theretofore or thereafter determined to be due to the city 45 from the seller, transferor or assignor, and such liability may be 46 assessed and enforced in the same manner as the liability for tax under 47 this chapter. 48 d. The commissioner of finance, if he or she finds that the interests 49 of the city will not thereby be jeopardized, and upon such conditions as 50 the commissioner of finance may require, may release any property from 51 the lien of any warrant or vacate such warrant for unpaid taxes, addi- 52 tions to tax, penalties and interest filed pursuant to subdivision b of 53 this section, and such release or vacating of the warrant may be 54 recorded in the office of any recording officer in which such warrant 55 has been filed. The clerk shall thereupon cancel and discharge as of the 56 original date of docketing the vacated warrant.

S. 8578 759

1 § 11-815 General powers of the commissioner of finance. In addition 2 to all other powers granted to the commissioner of finance in this chap- 3 ter, the commissioner is hereby authorized and empowered: 4 1. To make, adopt and amend rules and regulations appropriate to the 5 carrying out of this chapter and the purposes thereof; 6 2. To extend, for cause shown, the time for filing any kind of return 7 for a period not exceeding sixty days; and to compromise disputed claims 8 in connection with the taxes hereby imposed; 9 3. To request information concerning motor vehicles and persons 10 subject to the provisions of this chapter from the department of motor 11 vehicles and from the department of taxation and finance of the state of 12 New York or any successor to their duties, or the treasury department of 13 the United States relative to any person; and to afford information to 14 such department of motor vehicles, department of taxation and finance or 15 any successor to their duties, or to such treasury department relative 16 to any person, any other provision of this chapter to the contrary 17 notwithstanding; 18 4. To delegate the commissioner's functions hereunder to a deputy 19 commissioner of finance or any employee or employees of the department 20 of finance; 21 5. To assess, reassess, determine, revise and readjust the taxes 22 imposed under this chapter; 23 6. To provide methods for identifying motor vehicles not subject to or 24 exempt from the tax imposed under this chapter; 25 7. To provide that a certificate of registration need not be filed 26 with respect to any or all types of motor vehicles, or to provide that 27 such certificate of registration with respect to any or all types of 28 motor vehicles shall be contained on or combined with any return or 29 supplemental return required to be filed under this chapter. 30 § 11-816 Administration of oaths and compelling testimony. a. The 31 commissioner of finance, the commissioner's employees duly designated 32 and authorized by the commissioner, the tax appeals tribunal and any of 33 its duly designated and authorized employees shall have power to admin- 34 ister oaths and take affidavits in relation to any matter or proceeding 35 in the exercise of their powers and duties under this chapter. The 36 commissioner of finance and the tax appeals tribunal shall have power to 37 subpoena and require the attendance of witnesses and the production of 38 books, papers and documents to secure information pertinent to the 39 performance of the duties of the commissioner or of the tax appeals 40 tribunal hereunder and of the enforcement of this chapter and to examine 41 them in relation thereto, and to issue commissions for the examination 42 of witnesses who are out of the state or unable to attend before the 43 commissioner or the tax appeals tribunal or excused from attendance. 44 b. A justice of the supreme court either in court or at chambers shall 45 have power summarily to enforce by proper proceedings the attendance and 46 testimony of witnesses and the production and examination of books, 47 papers and documents called for by the subpoena of the commissioner of 48 finance or the tax appeals tribunal under this chapter. 49 c. Cross-reference; criminal penalties. For failure to obey subpoenas 50 or for testifying falsely, see section 11-4007 of the code of the 51 preceding municipality; for supplying false or fraudulent information, 52 see section 11-4009 of the code of the preceding municipality. 53 d. The officers who serve the summons or subpoena of the commissioner 54 of finance or the tax appeals tribunal hereunder and witnesses attending 55 in response thereto shall be entitled to the same fees as are allowed to 56 officers and witnesses in civil cases in courts of record, except as

S. 8578 760

1 herein otherwise provided. Such officers shall be the city sheriff, and 2 the sheriff's duly appointed deputies or any officers or employees of 3 the department of finance or the tax appeals tribunal, designated to 4 serve such process. 5 § 11-817 Interest and penalties. (a) Interest on underpayments. If 6 any amount of tax is not paid on or before the last date prescribed for 7 payment, without regard to any extension of time granted for payment, 8 interest on such amount at the rate set by the commissioner of finance 9 pursuant to subdivision (g) of this section, or, if no rate is set, at 10 the rate of seven and one-half percent per annum, shall be paid for the 11 period from such last date to the date of payment. In computing the 12 amount of interest to be paid, such interest shall be compounded daily. 13 Interest under this subdivision shall not be paid if the amount thereof 14 is less than one dollar. 15 (b) (1) Failure to file return. (A) In case of failure to file a 16 return under this chapter on or before the prescribed date, determined 17 with regard to any extension of time for filing, unless it is shown that 18 such failure is due to reasonable cause and not due to willful neglect, 19 there shall be added to the amount required to be shown as tax on such 20 return five percent of the amount of such tax if the failure is for not 21 more than one month, with an additional five percent for each additional 22 month or fraction thereof during which such failure continues, not 23 exceeding twenty-five percent in the aggregate. 24 (B) In the case of a failure to file a return of tax within sixty days 25 of the date prescribed for filing of such return, determined with regard 26 to any extension of time for filing, unless it is shown that such fail- 27 ure is due to reasonable cause and not due to willful neglect, the addi- 28 tion to tax under subparagraph (A) of this paragraph shall not be less 29 than the lesser of one hundred dollars or one hundred percent of the 30 amount required to be shown as tax on such return. 31 (C) For purposes of this paragraph, the amount of tax required to be 32 shown on the return shall be reduced by the amount of any part of the 33 tax which is paid on or before the date prescribed for payment of the 34 tax and by the amount of any credit against the tax which may be claimed 35 upon the return. 36 (2) Failure to pay tax shown on return. In case of failure to pay the 37 amount shown as tax on a return required to be filed under this chapter 38 on or before the prescribed date, determined with regard to any exten- 39 sion of time for payment, unless it is shown that such failure is due to 40 reasonable cause and not due to willful neglect, there shall be added to 41 the amount shown as tax on such return one-half of one percent of the 42 amount of such tax if the failure is not for more than one month, with 43 an additional one-half of one percent for each additional month or frac- 44 tion thereof during which such failure continues, not exceeding twenty- 45 five percent in the aggregate. For the purpose of computing the addition 46 for any month the amount of tax shown on the return shall be reduced by 47 the amount of any part of the tax which is paid on or before the begin- 48 ning of such month and by the amount of any credit against the tax which 49 may be claimed upon the return. If the amount of tax required to be 50 shown on a return is less than the amount shown as tax on such return, 51 this paragraph shall be applied by substituting such lower amount. 52 (3) Failure to pay tax required to be shown on return. In case of 53 failure to pay any amount in respect of any tax required to be shown on 54 a return required to be filed under this chapter which is not so shown, 55 including a determination made pursuant to section 11-810 of this chap- 56 ter, within ten days of the date of a notice and demand therefor, unless

S. 8578 761

1 it is shown that such failure is due to reasonable cause and not due to 2 willful neglect, there shall be added to the amount of tax stated in 3 such notice and demand one-half of one percent of such tax if the fail- 4 ure is not for more than one month, with an additional one-half of one 5 percent for each additional month or fraction thereof during which such 6 failure continues, not exceeding twenty-five percent in the aggregate. 7 For the purpose of computing the addition for any month, the amount of 8 tax stated in the notice and demand shall be reduced by the amount of 9 any part of the tax which is paid before the beginning of such month. 10 (4) Limitations on additions. 11 (A) With respect to any return, the amount of the addition under para- 12 graph one of this subdivision shall be reduced by the amount of the 13 addition under paragraph two of this subdivision for any month to which 14 an addition applies under both such paragraphs one and two. In any case 15 described in subparagraph (B) of paragraph one of this subdivision, the 16 amount of the addition under such paragraph one shall not be reduced 17 below the amount provided in such subparagraph. 18 (B) With respect to any return, the maximum amount of the addition 19 permitted under paragraph three of this subdivision shall be reduced by 20 the amount of the addition under paragraph one of this subdivision, 21 determined without regard to subparagraph (B) of such paragraph one, 22 which is attributable to the tax for which the notice and demand is made 23 and which is not paid within ten days of such notice and demand. 24 (c) Underpayment due to negligence. (1) If any part of an underpayment 25 of tax is due to negligence or intentional disregard of this chapter or 26 any rules or regulations hereunder, but without intent to defraud, there 27 shall be added to the tax a penalty equal to five percent of the under- 28 payment. 29 (2) There shall be added to the tax, in addition to the amount deter- 30 mined under paragraph one of this subdivision, an amount equal to fifty 31 percent of the interest payable under subdivision (a) of this section 32 with respect to the portion of the underpayment described in such para- 33 graph one which is attributable to the negligence or intentional disre- 34 gard referred to in such paragraph one, for the period beginning on the 35 last date prescribed by law for payment of such underpayment, determined 36 without regard to any extension, and ending on the date of the assess- 37 ment of the tax, or, if earlier, the date of the payment of the tax. 38 (d) Underpayment due to fraud. (1) If any part of an underpayment of 39 tax is due to fraud, there shall be added to the tax a penalty equal to 40 fifty percent of the underpayment. 41 (2) There shall be added to the tax, in addition to the penalty deter- 42 mined under paragraph one of this subdivision, an amount equal to fifty 43 percent of the interest payable under subdivision (a) of this section 44 with respect to the portion of the underpayment described in such para- 45 graph one which is attributable to fraud, for the period beginning on 46 the last day prescribed by law for payment of such underpayment, deter- 47 mined without regard to any extension, and ending on the date of the 48 assessment of the tax, or, if earlier, the date of the payment of the 49 tax. 50 (3) The penalty under this subdivision shall be in lieu of any other 51 addition to tax imposed by subdivision (b) or (c) of this section. 52 (e) Additional penalty. Any person who, with fraudulent intent, shall 53 fail to pay any tax imposed by this chapter, or to make, render, sign or 54 certify any return, or to supply any information within the time 55 required by or under this chapter, shall be liable for a penalty of not 56 more than one thousand dollars, in addition to any other amounts

S. 8578 762

1 required under this chapter to be imposed, assessed and collected by the 2 commissioner of finance. The commissioner of finance shall have the 3 power, in his or her discretion, to waive, reduce or compromise any 4 penalty under this subdivision. 5 (f) The interest and penalties imposed by this section shall be paid 6 and disposed of in the same manner as other revenues from this subchap- 7 ter. Unpaid interest and penalties may be enforced in the same manner as 8 the tax imposed by this chapter. 9 (g) (1) Authority to set interest rates. The commissioner of finance 10 shall set the rate of interest to be paid pursuant to subdivision (a) of 11 this section, but if no such rate of interest is set, such rate shall be 12 deemed to be set at seven and one-half percent per annum. Such rate 13 shall be the rate prescribed in paragraph two of this subdivision but 14 shall not be less than seven and one-half percent per annum. Any such 15 rate set by the commissioner of finance shall apply to taxes, or any 16 portion thereof, which remain or become due on or after the date on 17 which such rate becomes effective and shall apply only with respect to 18 interest computed or computable for periods or portions of periods 19 occurring in the period in which such rate is in effect. 20 (2) General rule. The rate of interest set under this subdivision 21 shall be the sum of (i) the federal short-term rate as provided under 22 paragraph three of this subdivision, plus (ii) seven percentage points. 23 (3) Federal short-term rate. For purposes of this subdivision: 24 (A) The federal short-term rate for any month shall be the federal 25 short-term rate determined by the United States secretary of the treas- 26 ury during such month in accordance with subsection (d) of section 27 twelve hundred seventy-four of the internal revenue code for use in 28 connection with section six thousand six hundred twenty-one of the 29 internal revenue code. Any such rate shall be rounded to the nearest 30 full percent, or, if a multiple of one-half of one percent, such rate 31 shall be increased to the next highest full percent. 32 (B) Period during which rate applies. 33 (i) In general. Except as provided in clause (ii) of this subpara- 34 graph, the federal short-term rate for the first month in each calendar 35 quarter shall apply during the first calendar quarter beginning after 36 such month. 37 (ii) Special rule for the month of September, nineteen hundred eight- 38 y-nine. The federal short-term rate for the month of April, nineteen 39 hundred eighty-nine shall apply with respect to setting the rate of 40 interest for the month of September, nineteen hundred eighty-nine. 41 (4) Publication of interest rate. The commissioner of finance shall 42 cause to be published in the City Record, and give other appropriate 43 general notice of, the interest rate to be set under this subdivision no 44 later than twenty days preceding the first day of the calendar quarter 45 during which such interest rate applies. The setting and publication of 46 such interest rate shall not be included within paragraph (a) of subdi- 47 vision five of section one thousand forty-one of the city charter of the 48 preceding municipality as it existed January first, nineteen hundred 49 ninety-four relating to the definition of a rule. 50 (h) Miscellaneous. (1) The certificate of the commissioner of finance 51 to the effect that a tax has not been paid, that a motor vehicle has not 52 been registered, that a return has not been filed, or that information 53 has not been supplied pursuant to the provisions of this chapter, shall 54 be presumptive evidence thereof. 55 (2) Cross-reference: For criminal penalties, see chapter forty of this 56 title.

S. 8578 763

1 § 11-818 Information and records to be secret. a. Except in accord- 2 ance with proper judicial order, or as otherwise provided by law, it 3 shall be unlawful for the commissioner of finance, the tax appeals 4 tribunal, any other agency, officer or employee of the city, the commis- 5 sioner of motor vehicles, any officer or employee of the department of 6 motor vehicles, any agent of the commissioner of motor vehicles, or any 7 other person who, pursuant to this section, is permitted to inspect any 8 registration or return filed pursuant to this chapter, or to whom a 9 copy, an abstract or portion of any registration or return filed pursu- 10 ant to this chapter is furnished, or to whom any information contained 11 in any registration or return filed pursuant to this chapter is 12 furnished, to divulge or make known in any manner any information relat- 13 ing to or contained in any registration or any kind of return filed 14 pursuant to this chapter. The officers charged with the custody of such 15 registration and returns pertaining to the tax assessed pursuant to this 16 chapter shall not be required to produce any of them or evidence of 17 anything contained in them in any action or proceeding in any court, 18 except on behalf of the city, the commissioner of finance, the state or 19 the commissioner of motor vehicles, in an action or proceeding under the 20 provisions of this chapter, or on behalf of any party to any action or 21 proceeding under the provisions of this chapter when the registration, 22 return or facts shown therein are directly involved in such action or 23 proceeding, in either of which events, the court may require the 24 production of, and may admit in evidence, so much of said registration, 25 return, or of the facts shown therein, as are pertinent to the action or 26 proceeding and no more. The commissioner of finance may, nevertheless, 27 publish a copy or a summary of any determination or decision rendered 28 after a formal hearing held pursuant to section 11-810 or 11-811 of this 29 chapter. Nothing herein shall be construed to prohibit the delivery to a 30 person or such person's duly authorized representative of a certified 31 copy of any registration or return filed by such person; nor to prohibit 32 the delivery of any original return, with any notation that the commis- 33 sioner of finance or the commissioner of motor vehicles may cause to be 34 made thereon, to the person filing the return, whether such person files 35 the return on his or her own behalf or on behalf of another, or to the 36 person on whose behalf the return is filed; nor to prohibit the commis- 37 sioner of finance from providing by rule for the display or production 38 of any original return, as an indicium of payment of the tax imposed by 39 this chapter; nor to prohibit the publication of statistics so classi- 40 fied as to prevent the identification of particular registrations and 41 returns and the items thereof; nor to prohibit the delivery of a certi- 42 fied copy of any registration or return to the United States of America 43 or any department thereof, the state of New York or any department ther- 44 eof, the city of New York or any department thereof provided it is 45 requested for official business, nor to prohibit the inspection by the 46 corporation counsel or other legal representatives of the city, the 47 attorney general of the state of New York or other legal representatives 48 of the department of motor vehicles, or by the district attorney of any 49 county within the city of the registration or return of any person who 50 shall bring action to set aside or review any tax assessed pursuant to 51 this section, or against whom an action or proceeding under this chapter 52 is instituted. Returns, or reproductions thereof, pertaining to any 53 motor vehicle registered pursuant to this section shall be preserved for 54 three years and thereafter until the commissioner of finance or the 55 commissioner of motor vehicles permits them to be destroyed.

S. 8578 764

1 b. (1) Any officer or employee of the city or the state of New York 2 who willfully violates the provisions of subdivision a of this section 3 shall be dismissed from office and be incapable of holding any public 4 office in this city or the state of New York for a period of five years 5 thereafter. 6 (2) Cross-reference: For criminal penalties, see chapter forty of this 7 title. 8 c. This section shall be deemed a state statute for purposes of para- 9 graph (a) of subdivision two of section eighty-seven of the public offi- 10 cers law. 11 d. Notwithstanding anything in subdivision a of this section to the 12 contrary, if a taxpayer has petitioned the tax appeals tribunal for 13 administrative review as provided in section one hundred seventy of the 14 charter of the preceding municipality as it existed January first, nine- 15 teen hundred ninety-four, the commissioner of finance shall be author- 16 ized to present to the tribunal any report or return of such taxpayer, 17 or any information contained therein or relating thereto, which may be 18 material or relevant to the proceeding before the tribunal. The tax 19 appeals tribunal shall be authorized to publish a copy or a summary of 20 any decision rendered pursuant to section one hundred seventy-one of the 21 charter of the preceding municipality as it existed January first, nine- 22 teen hundred ninety-four. 23 § 11-819 Notices and limitations of time. a. Any notice authorized or 24 required under the provisions of this chapter may be given to the person 25 for whom it is intended by mailing it in a postpaid envelope addressed 26 to such person at the address given in the last registration of a motor 27 vehicle filed by such person pursuant to the provisions of this chapter, 28 or in any application made by such person, or if no such registration 29 has been filed or application made, then to such address as may be 30 obtainable. The mailing of a notice as in this subdivision provided for 31 shall be presumptive evidence of the receipt of the same by the person 32 to whom addressed. Any period of time which is determined according to 33 the provisions of this chapter by the giving of notice shall commence to 34 run from the date of mailing of such notice as in this subdivision 35 provided. 36 b. The provisions of the civil practice law and rules or any other law 37 relative to limitations of time for the enforcement of a civil remedy 38 shall not apply to any proceeding or action taken by the city to levy, 39 appraise, assess, determine or enforce the collection of any tax or 40 penalty provided by this chapter. However, except in the case of a 41 wilfully false or fraudulent registration or return with intent to evade 42 the tax, no assessment of additional tax shall be made after the expira- 43 tion of more than three years from the date of such return; provided, 44 however, that where no registration or no return has been made as 45 provided by law, the tax may be assessed at any time. 46 c. Where before the expiration of the period prescribed in this 47 section for the assessment of an additional tax, a person has consented 48 in writing that such period be extended, the amount of such additional 49 tax due may be determined at any time within such extended period. The 50 period so extended may be further extended by subsequent consents in 51 writing made before the expiration of the extended period. 52 d. If any return, claim, statement, notice, application, or other 53 document required to be filed, or any payment required to be made, with- 54 in a prescribed period or on or before a prescribed date under authority 55 of any provision of this chapter is, after such period or such date, 56 delivered by United States mail to the commissioner of finance, commis-

S. 8578 765

1 sioner of motor vehicles, the tax appeals tribunal, bureau, office, 2 officer or person with which or with whom such document is required to 3 be filed, or to which or to whom such payment is required to be made, 4 the date of the United States postmark stamped on the envelope shall be 5 deemed to be the date of delivery. This subdivision shall apply only if 6 the postmark date falls within the prescribed period or on or before the 7 prescribed date for the filing of such document, or for making the 8 payment, including any extension granted for such filing or payment, and 9 only if such document or payment was deposited in the mail, postage 10 prepaid, properly addressed to the commissioner of finance, commissioner 11 of motor vehicles, the tax appeals tribunal, bureau, office, officer or 12 person with which or with whom the document is required to be filed or 13 to which or to whom such payment is required to be made. If any document 14 is sent by United States registered mail, such registration shall be 15 prima facie evidence that such document was delivered to the commission- 16 er of finance, commissioner of motor vehicles, the tax appeals tribunal, 17 bureau, office, officer or person to which or to whom addressed, and the 18 date of registration shall be deemed the postmark date. The commissioner 19 of finance or, where relevant, the tax appeals tribunal is authorized to 20 provide by regulation the extent to which the provisions of this subdi- 21 vision with respect to prima facie evidence of delivery and the postmark 22 date shall apply to certified mail. Except as provided in subdivision f 23 of this section, this subdivision shall apply in the case of postmarks 24 not made by the United States postal service only if and to the extent 25 provided by rule of the commissioner of finance or, where relevant, the 26 tax appeals tribunal. 27 e. When the last day prescribed under authority of this chapter, 28 including any extension of time, for performing any act falls on a 29 Saturday, Sunday or legal holiday in the state of New York, the perform- 30 ance of such act shall be considered timely if it is performed on the 31 next succeeding day which is not a Saturday, Sunday or legal holiday. 32 f. (1) Any reference in subdivision d of this section to the United 33 States mail shall be treated as including a reference to any delivery 34 service designated by the secretary of the treasury of the United States 35 pursuant to section seventy-five hundred two of the internal revenue 36 code and any reference in subdivision d of this section to a United 37 States postmark shall be treated as including a reference to any date 38 recorded or marked in the manner described in section seventy-five 39 hundred two of the internal revenue code by a designated delivery 40 service. If the commissioner of finance finds that any delivery service 41 designated by such secretary is inadequate for the needs of the city, 42 the commissioner of finance may withdraw such designation for purposes 43 of this title. The commissioner of finance may also designate additional 44 delivery services meeting the criteria of section seventy-five hundred 45 two of the internal revenue code for purposes of this title, or may 46 withdraw any such designation if the commissioner of finance finds that 47 a delivery service so designated is inadequate for the needs of the 48 city. Any reference in subdivision d of this section to the United 49 States mail shall be treated as including a reference to any delivery 50 service designated by the commissioner of finance and any reference in 51 subdivision d of this section to a United States postmark shall be 52 treated as including a reference to any date recorded or marked in the 53 manner described in section seventy-five hundred two of the internal 54 revenue code by a delivery service designated by the commissioner of 55 finance. Notwithstanding the provisions of this paragraph, any with- 56 drawal of designation or additional designation by the commissioner of

S. 8578 766

1 finance shall not be effective for purposes of service upon the tax 2 appeals tribunal, unless and until such withdrawal of designation or 3 additional designation is ratified by the president of the tax appeals 4 tribunal. 5 (2) Any equivalent of registered or certified mail designated by the 6 United States secretary of the treasury, or as may be designated by the 7 commissioner of finance pursuant to the same criteria used by such 8 secretary for such designations pursuant to section seventy-five hundred 9 two of the internal revenue code, shall be included within the meaning 10 of registered or certified mail as used in subdivision d of this 11 section. If the commissioner of finance finds that any equivalent of 12 registered or certified mail designated by such secretary or the commis- 13 sioner of finance is inadequate for the needs of the city, the commis- 14 sioner of finance may withdraw such designation for purposes of this 15 title. Notwithstanding the provisions of this paragraph, any withdrawal 16 of designation or additional designation by the commissioner of finance 17 shall not be effective for purposes of service upon the tax appeals 18 tribunal, unless and until such withdrawal of designation or additional 19 designation is ratified by the president of the tax appeals tribunal. 20 § 11-820 Construction and enforcement. This chapter shall be 21 construed and enforced in conformity with chapter one thousand thirty- 22 two of the laws of nineteen hundred sixty, pursuant to which it is 23 enacted.

24 CHAPTER 9 25 TAX UPON FOREIGN AND ALIEN INSURERS 26 § 11-901 Definitions. Wherever used in this chapter, the following 27 words and phrases shall mean and include: 28 "Alien insurer." Any insurer incorporated or organized under the laws 29 of any foreign nation, or of any province or territory not included 30 under the definition of a foreign insurer. 31 "Foreign insurer." Any insurer, except a mutual insurance company 32 taxed under the provisions of section nine thousand one hundred five of 33 the insurance law, incorporated or organized under the laws of any 34 state, as herein defined, other than this state. 35 "Fire insurance corporation, association or individuals." Any insurer, 36 regardless of the name, designation or authority under which it purports 37 to act, which insures property of any kind or nature against loss or 38 damage by fire. 39 "Loss or damage by fire." Loss or damage by fire, lightning, smoke or 40 anything used to combat fire, regardless of whether such risks or the 41 premiums therefor are stated or charged separately and apart from any 42 other risk or premium. 43 "State." Any state of the United States and the District of Columbia. 44 "Commissioner of finance." The commissioner of finance of the city or 45 any other officer of the city designated to perform the same functions. 46 "Department of finance." The department of finance of the city or any 47 other agency or department designated to perform the same functions. 48 "Fire commissioner." The fire commissioner of the city. 49 "Comptroller." The comptroller of the city. 50 "Tax appeals tribunal." The tax appeals tribunal established by 51 section one hundred sixty-eight of the charter of the preceding munici- 52 pality as it existed January first, nineteen hundred ninety-four. 53 § 11-902 General powers of the commissioner of finance. In addition 54 to all other powers granted to the commissioner of finance under this 55 chapter, the commissioner is hereby authorized and empowered:

S. 8578 767

1 1. To make, adopt and amend rules and regulations appropriate to the 2 carrying out of this chapter and the purposes thereof. 3 2. To compromise disputed claims in connection with taxes hereby 4 imposed. 5 3. To delegate his or her functions hereunder to any officer or 6 employee of the department of finance. 7 4. To prescribe reasonable methods, approved by the New York state 8 superintendent of insurance, for determining the amounts of premiums 9 subject to the tax. 10 5. To require any foreign or alien insurer subject to the tax to keep 11 detailed records of the premiums in a manner reasonably designed to show 12 the amounts thereof subject to the tax and to furnish such information 13 on request. 14 6. To assess, determine, revise and adjust the tax imposed under this 15 chapter. 16 7. To audit the reports of any insurer. 17 8. To allow an extension of time not in excess of thirty days for 18 filing the report and paying the tax required by this chapter, provided 19 the taxpayer requests such extension in writing prior to the date 20 prescribed for such filing and such payment by sections 11-904 and 21 11-903 of this chapter. 22 § 11-903 Tax on premiums on policies of foreign and alien insurers. 23 There shall be paid to the department of finance for the use and benefit 24 of the fire department of the city, on or before the first day of March, 25 in each year by every foreign and alien fire insurance corporation, 26 association or individuals which insure property against loss or damage 27 by fire, the sum of two percent of all gross direct premiums less return 28 premiums which, during the year ending on the preceding thirty-first day 29 of December, shall have been received by any such insurer for any insur- 30 ance against loss or damage by fire in the city. Any such insurer which 31 in any year shall cease or terminate doing business in the city shall 32 pay the tax for such year within thirty days after such cessation or 33 termination. 34 § 11-904 Report of premiums by insurers. Each insurer required to pay 35 a tax under this chapter shall, at the time such tax is paid or payable, 36 whichever is sooner, render to the commissioner of finance a verified 37 report setting forth such information as may be required by the commis- 38 sioner for the determination of the tax and the proper administration of 39 this chapter. The commissioner of finance shall prescribe the form and 40 furnish the necessary forms to enable such insurers to make such 41 reports. The commissioner or the commissioner's designated represen- 42 tative or the tax appeals tribunal or its designated representative 43 shall have power to examine any such insurer under oath and to require 44 the production by such insurer of all books and papers as the commis- 45 sioner or the tax appeals tribunal may deem necessary. All expenses of 46 collecting such tax shall be paid by the commissioner of finance from 47 the funds received under this chapter prior to the distribution thereof 48 as hereinafter authorized. 49 § 11-905 Interest and penalties. (a) Interest on underpayments. If any 50 amount of tax is not paid on or before the last date prescribed for 51 payment, without regard to any extension of time granted for payment, 52 interest on such amount at the underpayment rate set by the commissioner 53 of finance pursuant to subdivision (g) of this section, or, if no rate 54 is set, at the rate of seven and one-half percent per annum, shall be 55 paid for the period from such last date to the date of payment. In 56 computing the amount of interest to be paid, such interest shall be

S. 8578 768

1 compounded daily. Interest under this subdivision shall not be paid if 2 the amount thereof is less than one dollar. 3 (b) (1) Failure to file return. (A) In case of failure to file a 4 return under this chapter on or before the prescribed date, determined 5 with regard to any extension of time for filing, unless it is shown that 6 such failure is due to reasonable cause and not due to willful neglect, 7 there shall be added to the amount required to be shown as tax on such 8 return five percent of the amount of such tax if the failure is for not 9 more than one month, with an additional five percent for each additional 10 month or fraction thereof during which such failure continues, not 11 exceeding twenty-five percent in the aggregate. 12 (B) In the case of a failure to file a return of tax within sixty days 13 of the date prescribed for filing of such return, determined with regard 14 to any extension of time for filing, unless it is shown that such fail- 15 ure is due to reasonable cause and not due to willful neglect, the addi- 16 tion to tax under subparagraph (A) of this paragraph shall not be less 17 than the lesser of one hundred dollars or one hundred percent of the 18 amount required to be shown as tax on such return. 19 (C) For purposes of this paragraph, the amount of tax required to be 20 shown on the return shall be reduced by the amount of any part of the 21 tax which is paid on or before the date prescribed for payment of the 22 tax and by the amount of any credit against the tax which may be claimed 23 upon the return. 24 (2) Failure to pay tax shown on return. In case of failure to pay the 25 amount shown as tax on a return required to be filed under this chapter 26 on or before the prescribed date, determined with regard to any exten- 27 sion of time for payment, unless it is shown that such failure is due to 28 reasonable cause and not due to willful neglect, there shall be added to 29 the amount shown as tax on such return one-half of one percent of the 30 amount of such tax if the failure is not for more than one month, with 31 an additional one-half of one percent for each additional month or frac- 32 tion thereof during which such failure continues, not exceeding twenty- 33 five percent in the aggregate. For the purpose of computing the addition 34 for any month the amount of tax shown on the return shall be reduced by 35 the amount of any part of the tax which is paid on or before the begin- 36 ning of such month and by the amount of any credit against the tax which 37 may be claimed upon the return. If the amount of tax required to be 38 shown on a return is less than the amount shown as tax on such return, 39 this paragraph shall be applied by substituting such lower amount. 40 (3) Failure to pay tax required to be shown on return. In case of 41 failure to pay any amount in respect of any tax required to be shown on 42 a return required to be filed under this chapter which is not so shown, 43 including a determination made pursuant to section 11-906 of this chap- 44 ter, within ten days of the date of a notice and demand therefor, unless 45 it is shown that such failure is due to reasonable cause and not due to 46 willful neglect, there shall be added to the amount of tax stated in 47 such notice and demand one-half of one percent of such tax if the fail- 48 ure is not for more than one month, with an additional one-half of one 49 percent for each additional month or fraction thereof during which such 50 failure continues, not exceeding twenty-five percent in the aggregate. 51 For the purpose of computing the addition for any month, the amount of 52 tax stated in the notice and demand shall be reduced by the amount of 53 any part of the tax which is paid before the beginning of such month. 54 (4) Limitations on additions. 55 (A) With respect to any return, the amount of the addition under para- 56 graph one of this subdivision shall be reduced by the amount of the

S. 8578 769

1 addition under paragraph two of this subdivision for any month to which 2 an addition applies under both paragraphs one and two of this subdivi- 3 sion. In any case described in subparagraph (B) of paragraph one of 4 this subdivision, the amount of the addition under such paragraph one 5 shall not be reduced below the amount provided in such subparagraph. 6 (B) With respect to any return, the maximum amount of the addition 7 permitted under paragraph three of this subdivision shall be reduced by 8 the amount of the addition under paragraph one of this subdivision, 9 determined without regard to subparagraph (B) of such paragraph one 10 which is attributable to the tax for which the notice and demand is made 11 and which is not paid within ten days of such notice and demand. 12 (c) Underpayment due to negligence. (1) If any part of an underpayment 13 of tax is due to negligence or intentional disregard of this chapter or 14 any rules and regulations hereunder, but without intent to defraud, 15 there shall be added to the tax a penalty equal to five percent of the 16 underpayment. 17 (2) There shall be added to the tax, in addition to the amount deter- 18 mined under paragraph one of this subdivision an amount equal to fifty 19 percent of the interest payable under subdivision (a) of this section 20 with respect to the portion of the underpayment described in such para- 21 graph one which is attributable to the negligence or intentional disre- 22 gard referred to in such paragraph one, for the period beginning on the 23 last date prescribed by law for payment of such underpayment, determined 24 without regard to any extension, and ending on the date of the assess- 25 ment of the tax, or, if earlier, the date of the payment of the tax. 26 (d) Underpayment due to fraud. (1) If any part of an underpayment of 27 tax is due to fraud, there shall be added to the tax a penalty equal to 28 fifty percent of the underpayment. 29 (2) There shall be added to the tax, in addition to the penalty deter- 30 mined under paragraph one of this subdivision, an amount equal to fifty 31 percent of the interest payable under subdivision (a) of this section 32 with respect to the portion of the underpayment described in such para- 33 graph one which is attributable to fraud, for the period beginning on 34 the last day prescribed by law for payment of such underpayment, deter- 35 mined without regard to any extension, and ending on the date of the 36 assessment of the tax, or, if earlier, the date of the payment of the 37 tax. 38 (3) The penalty under this subdivision shall be in lieu of any other 39 addition to tax imposed by subdivision (b) or (c) of this section. 40 (e) Additional penalty. Any insurer who, with fraudulent intent, shall 41 fail to pay any tax imposed by this chapter, or to make, render, sign or 42 certify any return, or to supply any information within the time 43 required by or under this chapter, shall be liable for a penalty of not 44 more than one thousand dollars, in addition to any other amounts 45 required under this chapter to be imposed, assessed and collected by the 46 commissioner of finance. The commissioner of finance shall have the 47 power, in his or her discretion, to waive, reduce or compromise any 48 penalty under this subdivision. 49 (f) The interest and penalties imposed by this section shall be paid 50 and disposed of in the same manner as other revenues from this chapter. 51 Unpaid interest and penalties may be enforced in the same manner as the 52 tax imposed by this chapter. 53 (g) (1) Authority to set interest rates. The commissioner of finance 54 shall set the overpayment and underpayment rates of interest to be paid 55 pursuant to subdivision (a) of this section and subdivision (a) of 56 section 11-906 of this chapter, but if no such overpayment rate of

S. 8578 770

1 interest are set, such rate or rates shall be deemed to be set at six 2 percent per annum and such underpayment rate shall be deemed to be set 3 at seven and one-half percent per annum. Such rates shall be the over- 4 payment and underpayment rates prescribed in paragraph two of this 5 subdivision but the underpayment rate shall not be less than seven and 6 one-half percent per annum. Any such rates set by the commissioner of 7 finance shall apply to taxes, or any portion thereof, which remain or 8 become due or overpaid on or after the date on which such rates become 9 effective and shall apply only with respect to interest computed or 10 computable for periods or portions of periods occurring in the period in 11 which such rates are in effect. 12 (2) General rule. (A) Overpayment rate. The overpayment rate set under 13 this subdivision shall be the sum of (i) the federal short-term rate as 14 provided under paragraph three of this subdivision, plus (ii) two 15 percentage points. 16 (B) Underpayment rate. The underpayment rate set under this subdivi- 17 sion shall be the sum of (i) the federal short-term rate as provided 18 under paragraph three of this subdivision, plus (ii) seven percentage 19 points. 20 (3) Federal short-term rate. For purposes of this subdivision: 21 (A) The federal short-term rate for any month shall be the federal 22 short-term rate determined by the United States secretary of the treas- 23 ury during such month in accordance with subsection (d) of section 24 twelve hundred seventy-four of the internal revenue code for use in 25 connection with section six thousand six hundred twenty-one of the 26 internal revenue code. Any such rate shall be rounded to the nearest 27 full percent, or, if a multiple of one-half of one percent, such rate 28 shall be increased to the next highest full percent. 29 (B) Period during which rate applies. 30 (i) In general. Except as provided in clause (ii) of this subpara- 31 graph, the federal short-term rate for the first month in each calendar 32 quarter shall apply during the first calendar quarter beginning after 33 such month. 34 (ii) Special rule for the month of September, nineteen hundred eight- 35 y-nine. The federal short-term rate for the month of April, nineteen 36 hundred eighty-nine shall apply with respect to setting the rate of 37 interest for the month of September, nineteen hundred eighty-nine. 38 (4) Publication of interest rate. The commissioner of finance shall 39 cause to be published in the City Record, and give other appropriate 40 general notice of, the interest rate to be set under this subdivision no 41 later than twenty days preceding the first day of the calendar quarter 42 during which such interest rate applies. The setting and publication of 43 such interest rate shall not be included within paragraph (a) of subdi- 44 vision five of section one thousand forty-one of the city charter of the 45 preceding municipality as it existed January first, nineteen hundred 46 ninety-four relating to the definition of a rule. 47 § 11-906 Assessment, refund, collection, review and reserves. (a) The 48 provisions of the civil practice law and rules or any other law relative 49 to limitations of time for the enforcement of a civil remedy shall not 50 apply to any proceeding or action by the commissioner of finance to 51 levy, assess, determine or enforce the collection of tax, interest or 52 penalty imposed by this chapter. However, except in the case of a 53 wilfully false or fraudulent report, no assessment of additional tax, 54 interest or penalty shall be made after the expiration of more than 55 three years from the date of the filing of a report, provided, however, 56 that where no report has been filed as provided by law the tax may be

S. 8578 771

1 assessed at any time. The commissioner of finance shall refund or cred- 2 it, with interest at the overpayment rate set by the commissioner of 3 finance pursuant to subdivision (g) of section 11-905 of this chapter 4 or, if no rate is set, at the rate of six percent per annum computed 5 from the date of overpayment to a date, to be determined by the commis- 6 sioner of finance, preceding the date of a refund check by not more than 7 thirty days, any tax, penalty or interest erroneously, illegally or 8 unconstitutionally collected or paid if application to the commissioner 9 of finance for such refund shall be made within six months from the 10 payment thereof. Notice of any determination of the commissioner of 11 finance with respect to an assessment of tax, interest or penalty or 12 with respect to a claim for refund or any other notice, demand or 13 request shall be given by mailing the same to the insurer to the address 14 of its city of Staten Island office last filed with the commissioner of 15 finance or, if there is no such office, to the address of its main 16 office last filed with the commissioner of finance or, in the absence of 17 any filed address, to such address as may be obtainable. The mailing of 18 any notice, demand or request by the commissioner of finance shall be 19 presumptive evidence of its receipt by the insurer and any period of 20 time to be determined with reference to the giving of such notice, 21 demand or request shall commence to run from the date of such mailing. 22 The determination of the commissioner of finance shall finally and irre- 23 vocably fix the amount of any tax, interest or penalty due or to be 24 refunded unless the taxpayer, within ninety days after the giving of 25 notice of such determination, or if the commissioner of finance has 26 established a conciliation procedure pursuant to section 11-124 of this 27 title and the taxpayer has requested a conciliation conference in 28 accordance therewith, within ninety days from the mailing of a concil- 29 iation decision or the date of the commissioner's confirmation of the 30 discontinuance of the conciliation proceeding, both (1) serves a peti- 31 tion upon the commissioner of finance and (2) files a petition with the 32 tax appeals tribunal for a hearing, or unless the commissioner of 33 finance of his or her own motion shall redetermine the same. Such hear- 34 ing and any appeal to the tax appeals tribunal sitting en banc from the 35 decision rendered in such hearing shall be conducted in the manner and 36 subject to the requirements prescribed by the tax appeals tribunal 37 pursuant to sections one hundred sixty-eight through one hundred seven- 38 ty-two of the charter of the preceding municipality as it existed Janu- 39 ary first, nineteen hundred ninety-four. After such hearing the tax 40 appeals tribunal shall give notice of its decision to the taxpayer and 41 to the commissioner of finance with reference to the amount of the tax, 42 interest or penalty assessed or to be refunded. The decision of the tax 43 appeals tribunal sitting en banc shall be reviewable for error, illegal- 44 ity or unconstitutionality or any other reason, by a proceeding under 45 article seventy-eight of the civil practice law and rules if such 46 proceeding is commenced by the person against whom the tax was assessed 47 within four months after the giving of the notice of such tax appeals 48 tribunal decision. Such proceeding shall not be commenced by the taxpay- 49 er unless: (1) the amount of any tax assessed and sought to be reviewed 50 with penalties and interest thereon, if any, shall be first deposited 51 with the commissioner of finance and there shall be filed with the 52 commissioner of finance an undertaking in such amount and with such 53 sureties as a justice of the supreme court shall approve, to the effect 54 that if such proceeding be dismissed or the decision confirmed, the 55 taxpayer will pay all costs and charges which may accrue against the 56 taxpayer in the prosecution of the proceeding, or (2) in the case of a

S. 8578 772

1 review of a decision assessing any taxes, penalties and interest, at the 2 option of the taxpayer, such undertaking may be in a sum sufficient to 3 cover all of the taxes, penalties and interest assessed by such decision 4 plus the costs and charges which may accrue against the taxpayer in the 5 prosecution of the proceeding, in which event the taxpayer shall not be 6 required to deposit such taxes, penalties and interest as a condition 7 precedent to the commencement of the proceeding. No determination or 8 proposed determination of tax, interest or penalty due or to be refunded 9 shall be reviewed or enjoined in any manner except as set forth herein. 10 (b) In cases where the taxpayer has applied for a refund and has 11 commenced a proceeding under article seventy-eight of the civil practice 12 law and rules to review a decision of the tax appeals tribunal adverse 13 to such taxpayer on its application for a refund, the commissioner of 14 finance shall set up appropriate reserves to meet any decision adverse 15 to the city. 16 (c) In computing the amount of interest to be paid under this section, 17 such interest shall be compounded daily. 18 § 11-907 Place of business to be reported. Every insurer, on or 19 before the first day of March in each year, and as often in each year as 20 such insurer shall change its principal place of business or change or 21 terminate any office or place of business in the city, shall report in 22 writing, to the commissioner of finance, the location of its principal 23 place of business and any new principal place of business or of any new 24 office or place of business in the city or of the termination of any 25 such office or place of business. In the event of such change or termi- 26 nation, such report shall be made no later than fifteen days after such 27 change or termination. Any insurer who fails or neglects to make such 28 report within the time limited therefor shall be subject to a penalty of 29 one hundred dollars and, in addition thereto, fifty dollars for each 30 month or part thereof during which such report is not made. The total 31 of such penalties shall not exceed one thousand dollars. 32 § 11-908 Suits for violations. The tax provided to be paid by this 33 chapter, and the pecuniary penalties and interest imposed therein, or 34 any or either of them, may be sued for and recovered, with costs of 35 suit, in any court of record, by the commissioner of finance. 36 § 11-909 Distribution of tax on policies covering property in the city 37 of Staten Island. (a) The moneys received by the commissioner of finance 38 as a tax on policies covering property in the city shall be disbursed by 39 the commissioner of finance as follows: 40 1. Ten percent to the firemen's association of the state of New York, 41 for the endowment, benefit and maintenance of the volunteer firemen's 42 home at Hudson, but in no event to exceed the sum of thirty-five thou- 43 sand dollars annually. 44 2. The balance to the general fund of the city established pursuant to 45 section one hundred nine of the charter, except as provided in paragraph 46 three of this subdivision. 47 3. a. Volunteer firemen's benevolent fund; trustee. From the balance 48 specified in paragraph two of this subdivision, a sum, not to exceed one 49 hundred fifty thousand dollars in any one year, shall be paid into a 50 fund to be known as the volunteer firemen's benevolent fund, which shall 51 be administered as provided by the fire commissioner, as trustee of such 52 fund, for the benefit of indigent volunteer firefighters, their surviv- 53 ing spouses and orphans. 54 b. Persons entitled to benefits from fund. All funds received by the 55 fire commissioner as trustee under this paragraph shall be expended by 56 the fire commissioner for the relief of:

S. 8578 773

1 (i) all indigent volunteer firefighters who served as such for a peri- 2 od of five years in a duly organized volunteer fire company in the 3 former towns of New Lots, Flatlands, Gravesend, New Utrecht and Flatbush 4 in the county of Kings, or in the territory now included in the city of 5 Staten Island, or in the territory now included in the borough of 6 Queens, or in the territory now included in the borough of the Bronx, 7 and who were honorably discharged after such five years of service, or 8 who having been members of a duly organized volunteer fire company with- 9 in any such town or territory, which company was disbanded by reason of 10 the installation of a paid fire department, and were members of such 11 company for at least one year prior to its disbandment; 12 (ii) the surviving spouses and orphans of any such volunteer fire- 13 fighters. 14 c. Fund benefits of beneficiaries on rolls as of December thirty- 15 first, nineteen hundred fifty-one. During the lifetime of those relief 16 beneficiaries who appear as such as of December thirty-first, nineteen 17 hundred fifty-one upon the records of the trustees of the exempt fire- 18 men's benevolent fund of the county of Kings, or of the trustees of the 19 exempt firemen's benevolent fund of the borough of Queens, or of the 20 trustees of the exempt firemen's benevolent fund of the borough of 21 Staten Island, or of the trustees of the exempt firemen's benevolent 22 fund of the borough of the Bronx, it shall be the duty of the fire 23 commissioner, as such trustee, to pay to such beneficiaries from the 24 volunteer firemen's benevolent fund referred to in subparagraph a of 25 this paragraph, the same amounts as were being periodically paid to such 26 beneficiaries as of June thirtieth, nineteen hundred fifty-two. 27 d. Fund benefits of residents of firemen's home. It shall be the duty 28 of the fire commissioner, as such trustee, to pay from such fund 29 referred to in subparagraph a of this paragraph, the sum of ten dollars 30 monthly to each volunteer firefighter in residence at the volunteer 31 firemen's home at Hudson, who qualified for entrance into such home by 32 reason of service as a volunteer firefighter within the area now 33 included within the boundaries of the city. No other payments shall be 34 made from such fund to any such volunteer firefighter while in residence 35 at such home. 36 e. Eligibility of persons who applied for fund benefits after December 37 thirty-first, nineteen hundred fifty-one, and prior to the establishment 38 of fund. Upon the establishment of the volunteer firemen's benevolent 39 fund referred to in subparagraph a of this paragraph, the fire commis- 40 sioner or the fire commissioner's authorized subordinates shall investi- 41 gate and determine the need for benefits of all persons who, after 42 December thirty-first, nineteen hundred fifty-one and prior to the 43 establishment of such volunteer firemen's benevolent fund, applied for 44 benefits payable from any of the benevolent funds mentioned in subpara- 45 graph c of this paragraph, and who are receiving benefits therefrom at 46 the time of the establishment of such fund referred to in subparagraph a 47 of this paragraph. No such person shall be found to be in need of bene- 48 fits, nor shall any such person be paid any benefits from such last-men- 49 tioned fund unless the fire commissioner or the fire commissioner's 50 authorized subordinates shall determine that such person is indigent. In 51 the event that any such person is thus found to be in need of benefits, 52 the fire commissioner shall pay to such person from such last-mentioned 53 fund, the same periodic amounts as the trustees mentioned in subpara- 54 graph c of this paragraph were paying as of June thirtieth, nineteen 55 hundred fifty-two, to a person who had the same status and who was 56 receiving benefits from the borough or county fund which would be

S. 8578 774

1 currently liable for the payment of benefits to such person, but for the 2 provision of section 13-532 of the code of the preceding municipality. 3 It shall be the duty of the fire commissioner and the fire commission- 4 er's authorized subordinates to maintain and carry out continuously, 5 such investigation procedures as may be necessary to assure that bene- 6 fits will not be paid from such fund to any persons who are not in need 7 as herein specified. 8 f. Eligibility for benefits of persons applying therefor after estab- 9 lishment of fund. All persons applying after the establishment of the 10 volunteer firemen's benevolent fund for benefits payable therefrom shall 11 be investigated as to need by the fire commissioner or the fire commis- 12 sioner's authorized subordinates, and the eligibility of such persons 13 for benefits and the amount thereof to be awarded and paid to them shall 14 be determined by the fire commissioner or the fire commissioner's 15 authorized subordinates in accordance with the standards specified in 16 subparagraph e of this paragraph. Benefits shall be paid from such fund 17 to eligible persons in accordance with such determination and it shall 18 be the duty of the fire commissioner and the fire commissioner's subor- 19 dinates continuously to maintain and carry out as to such persons inves- 20 tigation procedures such as are described in subparagraph e of this 21 paragraph. The fire commissioner, as part of his or her investigation to 22 determine eligibility of persons for fund benefits, shall request from 23 the duly appointed representative of the volunteer firefighters in each 24 borough a report on such person's service and indigency. Such report 25 shall be solely for the information of the fire commissioner and shall 26 not be binding upon the fire commissioner in arriving at a determination 27 as to eligibility. In the event that such report is not submitted within 28 ten days from the date of request, the fire commissioner shall determine 29 eligibility on the basis of the facts developed in the fire commission- 30 er's own investigation. 31 g. Excess moneys. In the event that the benefits paid by the fire 32 commissioner, as trustee, during any period of one year beginning on the 33 first day of February shall not equal the sum of one hundred fifty thou- 34 sand dollars, the unexpended balance shall be paid into the general fund 35 of the city established pursuant to section one hundred nine of the 36 charter, except that the fire commissioner may retain in the volunteer 37 firemen's benevolent fund such amount as may be necessary to meet the 38 commitments of such fund until the revenue from the tax collected under 39 this chapter in the ensuing taxable year shall become available. 40 h. Depositories. The fire commissioner, as trustee, is hereby 41 empowered and directed to receive all moneys and assets belonging or 42 payable to such volunteer firemen's benevolent fund and shall deposit 43 all such moneys to the credit of such fund in banks and trust companies 44 to be selected by the fire commissioner. 45 i. Bond. The fire commissioner, as trustee of such fund, shall give a 46 bond with one or more sureties, in a sum sufficient for the faithful 47 performance of his or her duties, such bond to be approved as to amount 48 and adequacy, by the comptroller and filed in the comptroller's office. 49 j. Records. The officers and employees of the fire department who are 50 responsible for the maintenance of the books and records of the New York 51 fire department pension fund shall have charge of, and keep the accounts 52 of the fire commissioner as trustee of the volunteer firemen's benevo- 53 lent fund. 54 k. Reports. The fire commissioner, as trustee of such volunteer fire- 55 men's benevolent fund, shall submit to the mayor on or before the first 56 day of April of each year, a verified report in which shall be set forth

S. 8578 775

1 the account of the fire commissioner's proceedings as such trustee 2 during the twelve-month period ending on the thirty-first day of January 3 immediately preceding. Such report shall include a statement of all 4 receipts and disbursements on account of such benevolent fund, a list of 5 the names, residences and as nearly as possible, the ages of the benefi- 6 ciaries of such fund and the respective amounts paid to them during such 7 period. 8 1. Audit. The comptroller shall have the power to audit the books and 9 records of the fire commissioner as trustee of the volunteer firemen's 10 benevolent fund. 11 (b) The moneys received by the fire commissioner as trustee pursuant 12 to the provisions of paragraph three of subdivision (a) of this section 13 shall be expended by the fire commissioner only as provided in such 14 paragraph.

15 CHAPTER 10 16 OCCUPANCY TAX FOR LOW RENT HOUSING AND SLUM CLEARANCE 17 § 11-1001 Legislative findings. It is hereby declared that: In 18 certain areas of the city of Staten Island there exist unsanitary or 19 substandard housing conditions owing to overcrowding and concentration 20 of population, improper planning, excessive land coverage, lack of prop- 21 er light, air and space, unsanitary design and arrangement, or lack of 22 proper sanitary facilities; there is not an adequate supply of decent, 23 safe and sanitary dwelling accommodations for persons of low income; 24 these conditions cause an increase and spread of disease and crime and 25 constitute a menace to the health, safety, morals, welfare and comfort 26 of the citizens of the state, and impair economic values; these condi- 27 tions cannot be remedied by the ordinary operation of private enter- 28 prise; the clearance, replanning and reconstruction of the areas in 29 which unsanitary or substandard housing conditions exist and the provid- 30 ing of decent, safe and sanitary dwelling accommodations in such areas 31 and elsewhere for persons of low income are public uses and purposes for 32 which public money may be spent and private property acquired; therefore 33 the necessity in the public interest to enact the provisions of this 34 chapter is hereby declared, as a matter of legislative determination. 35 § 11-1002 Low rent housing and slum clearance; governmental functions. 36 It is hereby declared as a matter of legislative determination that the 37 clearing of areas in which the conditions described in section 11-1001 38 of this chapter exist and the furnishing of low rent housing for the 39 occupants thereof be hereafter a function of the government of the city 40 of Staten Island. 41 § 11-1003 Housing authority; agent for city. It is hereby declared 42 that the city housing authority be and it hereby is appointed as the 43 agent for the city of Staten Island to carry out the functions described 44 in section 11-1002 of this chapter. 45 § 11-1004 Definitions. When used in this chapter: a. The word "occu- 46 pation" means the use or possession for a consideration of any premises 47 under any lease, concession, permit, right of access, license to use, or 48 other agreement, for any gainful purpose. 49 b. The word "occupant" means any person who uses or possesses for a 50 consideration any premises under any lease, concession, permit, right of 51 access, license to use or other agreement for any gainful purpose. 52 c. The word "person" means an individual, co-partnership, society, 53 association, joint-stock company, corporation, estate, receiver, assig-

S. 8578 776

1 nee, trustee or any other person acting in a fiduciary capacity, whether 2 appointed by a court or otherwise, and any combination of individuals. 3 d. The word "premises" means any real property, or any part thereof, 4 any kind of space, or structure, except premises, as defined in this 5 subdivision, which are located in, upon, above or under any public 6 street, highway or public place, separately occupied in the city of 7 Staten Island by any person for his or her own use for gainful purpose 8 or by any concessionaire for such use for gainful purpose, whether by 9 ownership, lease, sublease, profit-sharing arrangement or otherwise. 10 e. The words "rental value" mean the amount of the consideration annu- 11 ally fixed or charged against any person for the occupation of any prem- 12 ises during the period of one year commencing on July sixteenth of the 13 year prior to the year in which the tax is due and terminating on July 14 fifteenth of the year in which the tax is due, or if computed on a basis 15 other than an annual basis, then the amount which would be equivalent to 16 an annual charge for the occupation of the premises. 17 f. The words "non-federal project" shall mean a project not aided or 18 financed in whole or in part by the federal government and where such 19 government does not reserve the right to approve or supervise the 20 construction or operation of the project. 21 g. The words "vending machine" mean a machine which vends or sells 22 tangible personal property; and shall also include but not be limited to 23 amusement devices, automatic sanitary facilities and all other machines 24 vending services. 25 § 11-1005 Imposition of the tax. a. To provide additional funds for 26 the purpose of fulfilling any contract to make capital or periodic 27 subsidies to the city housing authority in aid of a low rent or slum 28 clearance project or for the purpose of paying an indebtedness incurred 29 for a low rent or slum clearance project, every occupant of premises for 30 a year or any part thereof in excess of one month and fifteen days shall 31 pay annually to the commissioner of finance on June twentieth of each 32 year until and including June twentieth, nineteen hundred eighty-one, a 33 tax for each separate premises occupied at the rates computed, with 34 reference to the rental value for separate premises in the city of 35 Staten Island, as specified in the following table: 36 ====================================================================== 37 When the rental And not The amount of 38 value is at least more than the tax shall be 39 ________________________________________________________________________ 40 $1.00................... $1,000.99 $2.00 41 1,001.00................... 2,000.99 4.00 42 2,001.00................... 3,000.99 6.00 43 3,001.00................... 4,000.99 8.00 44 4,001.00................... 5,000.99 10.00 45 5,001.00 and over........................... 12.00 46 ======================================================================== 47 b. Where the premises are occupied by vending machines which sell 48 tangible personal property the tax shall be computed as specified in the 49 following table: 50 ======================================================================== 51 When the total value of the 52 coins used in such vending The amount of 53 machines is the tax shall be 54 ________________________________________________________________________ 55 $.01................................... $ .20 56 .02 to .14 incl....................... .40

S. 8578 777

1 .15 to .24 incl....................... 1.00 2 .25 and over.......................... 2.00 3 ======================================================================== 4 c. Where the premises are occupied by vending machines other than 5 those which sell tangible personal property the tax shall be computed as 6 specified in the following table: 7 ======================================================================== 8 When the total value of the 9 coins used in such vending The amount of 10 machines is the tax shall be 11 ________________________________________________________________________ 12 $.01..................................... $.40 13 .02 and over............................ 2.00 14 ======================================================================== 15 § 11-1006 Exemptions. No tax as imposed by section 11-1005 of this 16 chapter shall be due or payable in any event for the occupation of any 17 of the premises described in this section to the extent so occupied and 18 no return need be made therefor pursuant to the provisions of this chap- 19 ter if any of the following conditions be demonstrated to the satisfac- 20 tion of the commissioner of finance: 21 1. That the premises are occupied by: 22 (a) Peddlers. 23 (b) Bootblacks, excluding shoe shine machines or enterprises where 24 services other than the shining of shoes are rendered. 25 (c) Operators of pushcarts. 26 (d) Operators of kiosk or subway stands engaged solely and exclusively 27 in the sale of newspapers, magazines and periodicals, or any combination 28 thereof. 29 (e) Operators of stoop line stands licensed pursuant to chapter two of 30 title twenty of the code of the preceding municipality. 31 (f) Operators of newspaper stands licensed pursuant to chapter two of 32 title twenty of the code of the preceding municipality. 33 2. That the premises are occupied for a period of less than one month 34 and fifteen days during the period of one year preceding July fifteenth 35 of the year in which the tax is due. 36 3. That the premises are occupied by a co-operative corporation organ- 37 ized under the provisions of the cooperative corporations law of the 38 state of New York, or an agricultural co-operative organized under the 39 authority of the federal government. 40 4. That the premises are occupied by the state of New York, or any 41 public corporation, including a public corporation created pursuant to 42 agreement or compact with another state or the dominion of Canada, 43 improvement district or other political subdivision of the state where 44 it is the purchaser, user or consumer. 45 5. That the premises are occupied by the United Nations or other 46 world-wide international organizations of which the United States of 47 America is a member. 48 6. That the premises are occupied by a corporation, or association, or 49 trust, or community chest, fund or foundation, organized and operated 50 exclusively for religious, charitable, or educational purposes, or for 51 the prevention of cruelty to children or animals, no part of the net 52 earnings of which inures to the benefit of any private shareholder or 53 individual, and no substantial part of the activities of which is carry- 54 ing on propaganda, or otherwise attempting to influence legislation; 55 provided, however, that nothing in this subdivision shall include an 56 organization operated for the primary purpose of carrying on a trade or

S. 8578 778

1 business for profit, whether or not all of its profits are payable to 2 one or more organizations described in this subdivision. 3 7. That the premises are occupied by the United States of America 4 under circumstances which make the premises immune from taxation. 5 § 11-1007 Returns; payment of taxes. On or before the twentieth day 6 of June in each year, every person subject to a tax hereunder, shall 7 file a return with the commissioner of finance on the form to be 8 furnished by the commissioner of finance. At the time of filing such 9 return each person shall pay to the commissioner of finance the tax 10 imposed pursuant to this chapter. Such tax shall be due and payable 11 annually upon the twentieth day of June, whether or not a return is 12 filed. 13 § 11-1008 Presumption and burden of proof. It shall be presumed that 14 the occupant of any premises is subject to the tax until the contrary is 15 established, and the burden of proving that any occupation of premises 16 is exempt from taxation shall be upon such occupant. 17 § 11-1009 Determination of tax by the commissioner of finance. a. If 18 a return required by this chapter is not filed, or if a return when 19 filed is incorrect or insufficient and the maker fails to file a 20 corrected or sufficient return within twenty days after it is required 21 by a notice from the commissioner of finance, the commissioner of 22 finance shall tentatively determine the amount of tax due from such 23 information as he or she may be able to obtain and, if necessary, may 24 estimate the tax on the basis of external indices. The commissioner of 25 finance shall give notice of the amount so fixed to the person liable 26 for the tax. Unless the person against whom the tax is assessed shall 27 within fifteen days after the giving of such notice apply in writing to 28 the commissioner of finance for a hearing to correct such assessment, 29 such notice shall constitute a final and irrevocable determination of 30 the tax. After such hearing the commissioner of finance shall give 31 notice of his or her decision to the person liable for the tax. 32 b. Such determination and the decision of the commissioner of finance 33 upon any application to correct may be reviewed for error, illegality or 34 unconstitutionality or for any reason whatsoever by a proceeding under 35 article seventy-eight of the civil practice law and rules in the nature 36 of a certiorari proceeding if application therefor is made to the 37 supreme court within thirty days after the giving of notice thereof. 38 Whenever under this chapter a proceeding to review is instituted, it 39 shall not be allowed unless the amount of any tax sought to be reviewed, 40 with penalties thereon, if any, shall be first deposited with the 41 commissioner of finance, and an undertaking filed with the commissioner 42 of finance, in such amount and with such sureties as a justice of the 43 supreme court shall approve, to the effect that if such proceeding be 44 dismissed or the tax confirmed, such person will pay all costs and 45 charges which may accrue in the prosecution of such proceeding. 46 § 11-1010 Refunds. The commissioner of finance shall refund any tax 47 erroneously, illegally or unconstitutionally collected by or paid to him 48 or her, under protest in writing, stating in detail the ground or 49 grounds of the protest, if application therefor shall be made to the 50 commissioner of finance within one year from the payment thereof. For 51 like cause and within the same period a refund may be made on the initi- 52 ative of the commissioner of finance. Whenever a refund is made the 53 commissioner of finance shall state his or her reasons therefor in writ- 54 ing. A person shall not be entitled to a hearing in connection with any 55 application for a refund if he or she has already been given the oppor- 56 tunity of a hearing as provided in section 11-1009 of this chapter. No

S. 8578 779

1 refund shall be made of a tax or penalty paid pursuant to a determi- 2 nation of the commissioner of finance as provided in section 11-1009 of 3 this chapter, unless the commissioner of finance, after a hearing as in 4 said section provided, or of his or her own motion, shall have reduced 5 the tax or penalty, or it shall have been established in a proceeding 6 under article seventy-eight of the civil practice law and rules that 7 such determination was erroneous, illegal, unconstitutional, or other- 8 wise improper, in which event a refund with interest shall be made as 9 provided upon the determination of such proceeding. An application for 10 a refund made as provided in this chapter shall be deemed an application 11 for a revision of any tax or penalty complained of and the commissioner 12 of finance may receive evidence with respect thereto. After making his 13 or her determination the commissioner of finance shall give notice ther- 14 eof to the person interested who shall be entitled to review such deter- 15 mination by a proceeding under article seventy-eight of the civil prac- 16 tice law and rules if application to the supreme court be made therefor 17 within thirty days after such determination and an undertaking shall 18 first be filed with the commissioner of finance in such amount and with 19 such sureties as a justice of the supreme court shall approve, to the 20 effect that if such order be dismissed or the tax confirmed, the appli- 21 cant for the order will pay all costs and charges which may accrue in 22 the prosecution of the certiorari proceeding. 23 § 11-1011 Remedies exclusive. The remedies provided by section 24 11-1009 of this chapter shall be the exclusive remedies available to any 25 person for the review of tax liability imposed by this chapter; and no 26 determination of tax or determination on an application for refund shall 27 be enjoined or reviewed by an action for declaratory judgment, an action 28 for money had and received or by any legal or equitable action or 29 proceeding other than one under article seventy-eight of the civil prac- 30 tice law and rules. 31 § 11-1012 Reserves. In cases where the taxpayer has paid any tax 32 under written protest stating in detail the ground or grounds therefor, 33 or has applied for a refund and an order under article seventy-eight of 34 the civil practice law and rules to review a determination adverse to 35 the taxpayer on the taxpayer's application for refund, or has deposited 36 the amount of tax assessed in connection with a proceeding under section 37 11-1009 of this chapter the commissioner of finance shall set up appro- 38 priate reserves to meet any decision adverse to the city. 39 § 11-1013 Proceeding to recover tax. a. The commissioner of finance 40 may issue a warrant directed to any officer or employee of the depart- 41 ment of finance commanding him or her to levy upon and sell the real and 42 personal property of the person from whom the tax is due for the payment 43 of the amount thereof, with penalties, and the cost of executing the 44 warrants, and to return such warrant to the commissioner of finance and 45 to pay to him or her the money collected by virtue thereof, and in the 46 execution thereof such officer or employee shall have all the powers 47 conferred by law upon sheriffs, but he or she shall be entitled to no 48 fee or compensation in excess of the actual expenses paid in the 49 performance of such duty. If a warrant is returned not satisfied in 50 full, the commissioner of finance may from time to time issue new 51 warrants and shall also have the same remedies to enforce the amount due 52 pursuant to this section as if the city had recovered judgment therefor 53 and the execution thereon had been returned not satisfied. A copy of 54 any warrant issued may be filed with the county clerk in Richmond county 55 and thereupon such clerk shall enter in the judgment docket the name of 56 the person mentioned in the warrant and the amount of the tax and penal-

S. 8578 780

1 ty for which the warrant is issued and the date when such copy is filed. 2 Thereupon the amount of such warrant so docketed shall become a lien 3 upon the title to and interest in the real and personal property of the 4 person against whom the warrant is issued. 5 b. As an additional or alternate remedy the commissioner of finance 6 may request the corporation counsel to bring an action in the name of 7 the city to enforce payment of a tax or penalty which any person has 8 failed to pay. 9 c. The commissioner of finance, if he or she finds that the interests 10 of the city will not thereby be jeopardized, and upon such conditions as 11 the commissioner of finance may require, may release any property from 12 the lien of any warrant or vacate such warrant for unpaid taxes, addi- 13 tions to tax, penalties and interest filed pursuant to subdivision a of 14 this section, and such release or vacating of the warrant may be 15 recorded in the office of any recording officer in which such warrant 16 has been filed. The clerk shall thereupon cancel and discharge as of the 17 original date of docketing the vacated warrant. 18 § 11-1014 Notices and limitation of time. a. Any notice authorized or 19 required under the provisions of this chapter may be given by mailing 20 the same to the person for whom it is intended in a post paid envelope 21 addressed to such person at the address given in the return filed by 22 such person pursuant to the provisions of this chapter or if no return 23 has been filed then to such address as may be obtainable. The mailing 24 of such notice shall be presumptive evidence of the receipt of the same 25 by the person to whom addressed. Any period of time which is determined 26 according to the provisions of this chapter by the giving of notice 27 shall commence to run from the date of mailing of such notice. 28 b. The provisions of the civil practice law and rules relative to 29 limitations of time for the enforcement of a civil remedy shall not 30 apply to any proceeding or action by the city taken to levy, appraise, 31 assess, determine or enforce the collection of any tax or penalty 32 provided by this chapter. 33 § 11-1015 Penalties and interest. a. Any person failing to file a 34 return or corrected return or to pay any tax or any portion thereof that 35 may be required by this chapter shall be subject to a penalty of five 36 times the amount of the tax due, plus five per centum of such tax for 37 each month of delay or fraction thereof, but the commissioner of 38 finance, if satisfied that the delay was excusable, may remit all or any 39 part of such penalty, but not interest. Penalties shall be paid to the 40 commissioner of finance and disposed of in the manner as other receipts 41 under this chapter. Unpaid penalties may be enforced in the same manner 42 as the tax imposed by this chapter. 43 b. Any person filing or causing to be filed any return, certificate, 44 affidavit or statement required or authorized by this chapter, which is 45 wilfully false and any person who shall fail to file a return or to 46 furnish a statement or other information as required under this chapter, 47 shall be guilty of a misdemeanor, punishment for which shall be a fine 48 of not more than one thousand dollars or imprisonment for not more than 49 one year, or both such fine and imprisonment. 50 A certificate of the commissioner of finance to the effect that a tax 51 has not been paid, that a return has not been filed, or that information 52 has not been supplied pursuant to the provisions of this chapter, shall 53 be prima facie evidence thereof. 54 § 11-1016 General powers of the commissioner of finance. In the 55 administration of this chapter, the commissioner of finance is author- 56 ized to:

S. 8578 781

1 1. Make and publish reasonable rules and regulations as may be neces- 2 sary for the exercise of the commissioner's powers and the performance 3 of the commissioner's duties under this chapter. 4 2. Assess the tax authorized to be imposed under this chapter. 5 3. Subpoena and require the attendance of witnesses and the production 6 of books, papers and other documents, and to take testimony and proofs, 7 under oath, with reference to any matter within the line of the commis- 8 sioner's official duty under this chapter. 9 4. Delegate the commissioner's functions hereunder to a deputy commis- 10 sioner of finance or other employee or employees of the department of 11 finance. 12 5. Prescribe methods for determining the rental values of premises, 13 the occupant of which is taxable pursuant to the provisions of this 14 chapter. 15 6. Require any person who receives or is entitled to receive a consid- 16 eration for the occupation of premises to furnish a statement to the 17 commissioner of finance, upon his or her request, containing information 18 as to the name of each occupant and rental value of each for the occupa- 19 tion of such premises. 20 7. Nothing contained in section 11-1017 of this chapter or in any 21 other provision of this chapter shall be construed to limit the authori- 22 ty of the commissioner of finance, hereby authorized, to furnish any 23 information, whether or not contained in a return, to the tax commission 24 or any other agency or department of the state of New York, or to the 25 treasury department of the United States, or to any agency of the city 26 of Staten Island, or to the district attorney of Richmond county. 27 8. To extend, for cause shown, the time for filing any return for a 28 period not exceeding twenty days. 29 § 11-1017 Returns to be secret. Except in accordance with judicial 30 order, or upon subpoena issued by a court of competent jurisdiction, it 31 shall be unlawful for the commissioner of finance or any officer or 32 employee of the city to divulge or make known in any manner, any infor- 33 mation contained in any return required under this chapter. Nothing in 34 this section shall be construed to prohibit the delivery to a taxpayer 35 of a certified copy of any return filed by the taxpayer, nor to prohibit 36 the publication of statistics so classified as to prevent the identifi- 37 cation of particular returns, or the inspection by the corporation coun- 38 sel of the return to any taxpayer who shall bring action or proceeding 39 to set aside or review the tax based thereon, or against whom an action 40 or proceeding has been instituted or is contemplated for the collection 41 of a tax or penalty. Returns shall be preserved for three years and 42 thereafter until the commissioner of finance orders them to be 43 destroyed. 44 § 11-1018 Disposition of revenue. All revenues and moneys heretofore 45 or hereafter collected resulting from the imposition of taxes and penal- 46 ties imposed by this chapter shall be deposited in the city treasury, 47 and credited to a separate account. During each fiscal year, an amount 48 not in excess of the amount of the subsidies to be made, and the amount 49 of indebtedness incurred for low rent or slum clearance projects to be 50 paid, during such fiscal year shall be charged to such account and cred- 51 ited to the general fund. No other payments shall be charged to such an 52 account. The mayor may contract to make capital or periodic subsidies 53 to the city housing authority in aid of a low rent project, or may incur 54 indebtedness for a low rent slum clearance project, but such periodic 55 subsidies shall not be contracted for a period longer than the life of 56 such project and in no event for more than fifty years. If the amount

S. 8578 782

1 of any such periodic subsidy shall be equal to or greater than the 2 interest on and the amounts required annually for the payment of the 3 indebtedness contracted by the authority on account of such project in 4 each year, such contract shall constitute a guarantee of the principal 5 of and the interest on such indebtedness, and such contract and the 6 payments thereunder may be pledged by the authority as security in addi- 7 tion to all other security which the authority may give for such bonds. 8 No such contract or periodic subsidies shall be made until the plan for 9 such project shall have been approved in the manner provided by the 10 public housing law. 11 § 11-1019 Application; construction. If any provision of this chapter 12 shall be adjudged by any court of competent jurisdiction to be invalid, 13 such judgment shall not affect, impair or invalidate the remainder ther- 14 eof, but shall be confined in its operation to the provision directly 15 involved in the controversy in which such judgment shall have been 16 rendered. This chapter shall be construed in conformity with the public 17 housing law.

18 CHAPTER 11 19 UTILITY TAX 20 § 11-1101 Definitions. When used in this chapter the following terms 21 shall mean or include: 22 1. "Person." Includes any individual, partnership, society, associ- 23 ation, joint-stock company, corporation, estate, receiver, lessee, trus- 24 tee, assignee, assignee of rents, referee, or any other person acting in 25 a fiduciary or representative capacity, whether appointed by a court or 26 otherwise, and any combination of individuals. 27 2. "Comptroller." The comptroller of the city. 28 3. "Commissioner of finance." The commissioner of finance of the 29 city. 30 4. "Gross income." All receipts received in or by reason of any sale 31 made including receipts from the sale of residuals and by-products, 32 except sale of real property, or service rendered in the city, including 33 cash, credits and property of any kind or nature, whether or not such 34 sale is made or such service is rendered for profit, without any 35 deduction therefrom on account of the cost of the property sold, the 36 cost of material used, labor or services, delivery costs, any other 37 costs whatsoever, interest or discount paid, or any other expense what- 38 soever; also profits from the sale of securities; also profits from the 39 sale of real property growing out of the ownership or use of or interest 40 in such property; also profit from the sale of personal property, other 41 than property of a kind which would properly be included in the invento- 42 ry of the taxpayer if on hand at the close of the taxable period for 43 which a return is made; also receipts from interest, dividends and 44 royalties without any deductions therefrom for any expense whatsoever 45 incurred in connection with the receipt thereof, and also gains or 46 profits from any source whatsoever; but shall not include gross income 47 of railroads from the transportation of freight, gross income from the 48 operation of hotels, multiple dwellings or office buildings by persons 49 in the business of operating or leasing sleeping or parlor railroad cars 50 or of operating railroads other than street surface, rapid transit, 51 subway and elevated railroads, or interest or dividends received from a 52 corporation by such persons or by persons subject to taxation under the 53 provisions of section one hundred eighty-six-a of the tax law. Rents or 54 rentals shall not be deemed to be gross receipts subject to tax, except 55 rents or rentals derived from facilities used in the public service;

S. 8578 783

1 provided, however, that in the case of persons in the business of oper- 2 ating or leasing sleeping or parlor railroad cars or of operating rail- 3 roads other than street surface, rapid transit, subways and elevated 4 railroads, such last-mentioned rents or rentals derived from other such 5 utilities with respect to the operation of terminal facilities shall not 6 be deemed to be gross income subject to tax except for the amount in 7 excess of a user proportion of New York city real property and special 8 franchise taxes and expenses of maintenance and operation. Notwithstand- 9 ing anything to the contrary in this subdivision or any other provision 10 of law, for taxable periods beginning on or after August first, two 11 thousand two, gross income shall include eighty-four percent of charges 12 for the provision of mobile telecommunications services where the place 13 of primary use of the mobile telecommunications services is within the 14 territorial limits of the city except to the extent that such inclusion 15 would result in the taxation of charges for the provision of mobile 16 telecommunications services that is prohibited by federal law. 17 5. "Gross operating income." Includes receipts received in or by 18 reason of any sale made or service rendered, of the property and 19 services specified in subdivision seven of this section in the city, 20 including cash, credits and property of any kind or nature, whether or 21 not such sale is made or such service is rendered for profit, without 22 any deduction therefrom on account of the cost of the property sold, the 23 cost of materials used, labor or other services, delivery costs or any 24 other costs whatsoever, interest or discount paid or any other expenses 25 whatsoever, provided however, that if a vendor of utility service 26 purchases gas, electricity, steam, water or refrigeration or gas, elec- 27 tric, steam, water or refrigeration service in a transaction the 28 receipts from which are not subject to the tax imposed under this chap- 29 ter, the gross operating income derived by such vendor of utility 30 service from the resale of such gas, electricity, steam, water or 31 refrigeration or such gas, electric, steam, water or refrigeration 32 service to its tenants as an incident to such vendor's activity of rent- 33 ing premises to tenants, shall, if subject to the tax imposed under this 34 chapter on such vendor, be conclusively presumed to be equal to the 35 amount of such vendor's cost, including any associated transportation 36 cost, for the purchase of such gas, electricity, steam, water or refrig- 37 eration or gas, electric, steam, water or refrigeration service for 38 resale by such vendor. Notwithstanding anything to the contrary in this 39 subdivision or any other provision of law, for taxable periods beginning 40 on or after August first, two thousand two, gross operating income shall 41 include eighty-four percent of charges for the provision of mobile tele- 42 communications services where the place of primary use of the mobile 43 telecommunications services is within the territorial limits of the city 44 except to the extent that such inclusion would result in the taxation of 45 charges for the provision of mobile telecommunications services that is 46 prohibited by federal law. 47 6. "Utility." Every person subject to the supervision of the depart- 48 ment of public service and, for taxable periods beginning on or after 49 August first, two thousand two, every person, whether or not supervised 50 by the department of public service, eighty percent or more of the gross 51 receipts of which consists of charges for the provision of mobile tele- 52 communications services to customers. Notwithstanding anything to the 53 contrary in any other provision of law, for purposes of this subdivi- 54 sion, the gross receipts of a person shall not include the gross 55 receipts of any other related or unrelated person.

S. 8578 784

1 7. "Vendor of utility services." Every person not subject to the 2 supervision of the department of public service, and not otherwise a 3 utility as defined in subdivision six of this section, who furnishes or 4 sells gas, electricity, steam, water or refrigeration, or furnishes or 5 sells gas, electric, steam, water, refrigeration or telecommunications 6 services, or who operates omnibuses, whether or not such operation is on 7 the public streets; regardless of whether such furnishing, selling or 8 operation constitutes the main activity of such person or is merely 9 incidental thereto. 10 8. "Return." Includes any return filed or required to be filed as 11 provided under this chapter. 12 9. "Telecommunications services." Telephony or telegraphy, or tele- 13 phone or telegraph service, including, but not limited to, any trans- 14 mission of voice image, data, information and paging, through the use of 15 wire, cable, fiber-optic, laser, microwave, radio wave, satellite or 16 similar media or any combination thereof and shall include services that 17 are ancillary to the provision of telephone service, such as, but not 18 limited to, dial tone, basic service, directory information, call 19 forwarding, caller-identification, call waiting and the like, and also 20 include any equipment and services provided therewith; provided, howev- 21 er, that the definition of telecommunication services shall not apply to 22 separately stated charges for any service that alters the substantive 23 content of the message received by the recipient from that sent; and 24 that such services shall not include (i) cable television services that 25 consist of the transmitting to subscribers of programs broadcast by one 26 or more television or radio stations or any other programs originated by 27 any person by means of wire, cable, microwave or any other means or (ii) 28 air safety and navigation services where such telecommunication service 29 is provided by an organization, at least ninety percent of which, if a 30 corporation, ninety percent of the voting stock of which, is owned, 31 directly or indirectly, by air carriers, and which organization's prin- 32 cipal function is to fulfill the requirements of (a) the federal 33 aviation administration, or the successor thereto, or (b) the interna- 34 tional civil aviation organization, or the successor thereto, relating 35 to the existence of a communication system between aircraft and 36 dispatcher, aircraft and air traffic control or ground station and 37 ground station, or any combination of such, for the purposes of air 38 safety and navigation. 39 10. "Limited fare omnibus company." An omnibus company whose principal 40 source of revenue is derived from the daily transportation of passengers 41 wholly within the city on a route or zoned portion thereof pursuant to a 42 franchise agreement with, or consent of, the city, at the following 43 fares: for the period from August first, nineteen hundred sixty-five 44 until and including December thirty-first, nineteen hundred seventy- 45 five, at a fare not in excess of thirty-five cents per passenger; for 46 the period from January first, nineteen hundred seventy-six until and 47 including June twenty-seventh, nineteen hundred eighty, at a fare not in 48 excess of fifty cents per passenger; for the period from June twenty- 49 eighth, nineteen hundred eighty until and including August thirty-first, 50 nineteen hundred eighty, at a fare not in excess of sixty cents per 51 passenger; for the period from September first, nineteen hundred eighty 52 and thereafter, at a fare not in excess of the regular rate of fare 53 charged per passenger for comparable service both local and express on 54 regular rapid transit and surface lines operated by the New York city 55 transit authority. For purposes of this subdivision, the term "regular 56 rate of fare" shall be exclusive of fares for special train or bus

S. 8578 785

1 service, or additional charges for bridge or tunnel tolls or transfer 2 privileges. 3 11. "Commuter service." Mass transportation service, exclusive of 4 limited stop service to airports, racetracks or any place where enter- 5 tainment, amusement or sport activities are held or where recreational 6 facilities are supplied, provided pursuant to a franchise with, or 7 consent of, the city of New York. 8 12. "Tax appeals tribunal." The tax appeals tribunal established by 9 section one hundred sixty-eight of the charter of the preceding munici- 10 pality. 11 13. "Base Year." Means the calendar year ending immediately prior to 12 the calendar year containing the taxable period or periods for which a 13 return is required to be filed pursuant to the provisions of section 14 11-1104 of this chapter. 15 14. "Taxable Period." Means the period for which a return is required 16 to be filed pursuant to the provisions of this chapter and shall be 17 either (i) the semiannual period beginning the first day of January or 18 the first day of July of the calendar year, or (ii) the calendar month. 19 15. "Premises." Means for purposes of section 11-1102 of this chapter, 20 any real property or part thereof, and any structure thereon or space 21 therein. 22 16. "Tenant." Means a person paying, or required to pay, rent for 23 premises as a lessee, sublessee, licensee or concessionaire. 24 17. "Mobile telecommunications services." Telecommunications services 25 that are commercial mobile radio services. 26 18. "Commercial mobile radio services." Commercial mobile radio 27 services as defined in section 20.3 of title forty-seven of the Code of 28 Federal Regulations as in effect on June first, nineteen hundred nine- 29 ty-nine. 30 19. "Charges for mobile telecommunications services." Any charge for, 31 or associated with, the provision of mobile telecommunications services 32 and any charge for, or associated with, a service provided as an adjunct 33 to mobile telecommunications services that is billed to the customer by 34 or for the customer's home service provider regardless of whether indi- 35 vidual transmissions originate or terminate within the licensed service 36 area of the home service provider. 37 20. "Place of primary use." The street address representative of where 38 the customer's use of the mobile telecommunications services primarily 39 occurs, which must be (i) the residential street address or the primary 40 business street address of the customer; and (ii) within the licensed 41 service area of the home service provider. 42 21. "Licensed service area." The geographic area in which the home 43 service provider is authorized by law or contract to provide commercial 44 mobile radio services to the customer. 45 22. "Home service provider." The facilities-based carrier or reseller 46 with which the customer contracts for the provision of mobile telecommu- 47 nications services. 48 23. "Customer." The person or entity that contracts with the home 49 service provider for mobile telecommunications services. If the end user 50 of mobile telecommunications services is not the contracting party, 51 then, solely for purposes of subdivision twenty of this section, the 52 term "customer" shall mean the end user of the mobile telecommunications 53 services. The term customer does not include a reseller of mobile tele- 54 communications services, or a serving carrier under an arrangement to 55 serve the customer outside the home service provider's licensed service 56 area.

S. 8578 786

1 24. "Reseller." A provider who purchases telecommunications services 2 from another telecommunications service provider and then resells, uses 3 as a component part of, or integrates the purchased services into a 4 mobile telecommunications service. The term reseller does not include a 5 serving carrier with which a home service provider arranges for the 6 services to its customers outside the home service provider's licensed 7 service area. 8 25. "Serving carrier." A facilities-based carrier providing mobile 9 telecommunications service to a customer outside a home service provid- 10 er's or reseller's licensed service area. 11 26. "Cogeneration facility" means (i) a facility that was in operation 12 before January first, two thousand four and that produces electric ener- 13 gy and steam or other forms of useful energy, such thermal energy, that 14 are supplied to and used by tenants and/or occupants of a cooperative 15 corporation for industrial, commercial, or residential heating or cool- 16 ing purposes; or (ii) a cogeneration facility, as defined in clause (i) 17 of this subparagraph, that has been replaced by any other facility used 18 to generate electricity and steam or other forms of useful energy, such 19 as thermal energy, when such electricity and steam or other forms of 20 useful energy, such as thermal energy, are supplied to and used by 21 tenants and/or occupants of a cooperative corporation. 22 27. "Enhanced zip code." A United States postal zip code of nine or 23 more digits. 24 28. "Cooperative corporation" means a corporation organized under the 25 laws of New York, at least some of the stockholders of which are enti- 26 tled, by reason of the stockholders' ownership interest of stock in the 27 corporation, to occupy for dwelling purposes an apartment in a building 28 owned by the corporation pursuant to a lease or occupancy agreement with 29 the corporation. 30 § 11-1102 Imposition of excise tax. a. Notwithstanding any other 31 provisions of law to the contrary, for the privilege of exercising its 32 franchise or franchises, or of holding property, or of doing business in 33 the city, on or after August first, nineteen hundred sixty-five, every 34 utility shall pay to the commissioner of finance an excise tax which 35 shall be equal to two per centum of its gross income until and including 36 December thirty-first, nineteen hundred sixty-five, and shall be equal 37 to two and thirty-five hundredths per centum thereafter, except that the 38 rate as to persons engaged in the business of operating omnibuses with a 39 carrying capacity of more than seven persons shall be one per centum 40 until and including December thirty-first, nineteen hundred sixty-five, 41 and one and seventeen hundredths per centum thereafter, and except that 42 as to persons engaged in the business of operating or leasing sleeping 43 and parlor railroad cars or of operating railroads other than street 44 surface, rapid transit, subway and elevated railroads, the rate shall be 45 three per centum until and including December thirty-first, nineteen 46 hundred sixty-five, and three and fifty-two one hundredths per centum 47 thereafter, and every vendor of utility services in the city shall pay 48 to the commissioner of finance an excise tax which shall be equal to two 49 per centum of its gross operating income until and including December 50 thirty-first, nineteen hundred sixty-five, and shall be equal to two and 51 thirty-five one hundredths per centum thereafter, except that as to 52 persons engaged in the business of operating omnibuses with a carrying 53 capacity of more than seven persons other than omnibuses used exclu- 54 sively for the transportation of children to and from schools operated 55 under contracts made pursuant to the provisions of the education law, 56 and not subject to the jurisdiction of the department of public service,

S. 8578 787

1 the rate shall be one per centum of its gross operating income until and 2 including December thirty-first, nineteen hundred sixty-five, and one 3 and seventeen hundredths per centum thereafter. Such tax shall be in 4 addition to any and all other taxes, charges and fees imposed by any 5 other provision of law and shall be paid at the time and in the manner 6 provided in this section, but any person to the extent that it is 7 subject to tax pursuant to this section shall not be liable to any tax 8 under any other of the local laws of the preceding municipality as it 9 existed January first, nineteen hundred ninety-four enacted pursuant to 10 chapter ninety-three of the laws of nineteen hundred sixty-five as 11 amended, or the former article two-b of the general city law, with 12 respect to its gross income or gross operating income taxed pursuant to 13 this section, as the case may be. 14 b. So much of the gross income of a utility shall be excluded from the 15 measure of the tax imposed by this chapter, as is derived from sales for 16 resale to vendors of utility services validly subject to the tax imposed 17 by this chapter, except to the extent that such gross income is derived 18 from sales of gas, electricity, steam, water or refrigeration or sales 19 or rendering of gas, electric, steam, water or refrigeration service to 20 a vendor of utility services for resale to its tenants as an incident to 21 such vendor's activity of renting premises to tenants. 22 c. For the purpose of proper administration of this chapter and to 23 prevent evasion of the tax imposed by this section, it shall be presumed 24 that the gross income or gross operating income of any person taxable 25 pursuant to this section is taxable and is derived from business 26 conducted wholly within the territorial limits of the city until the 27 contrary is established, and the burden of proving that any part of its 28 gross income or gross operating income is not so derived shall be upon 29 such person. Notwithstanding anything to the contrary in this subdivi- 30 sion or in any provision of section twenty-b of the general city law or 31 any other provision of law, for taxable periods beginning on or after 32 August first, two thousand two, gross income and gross operating income 33 derived from the provision of mobile telecommunications services shall 34 be deemed to be derived from business conducted wholly within the terri- 35 torial limits of the city where the place of primary use of the mobile 36 telecommunications services is within the territorial limits of the 37 city. 38 d. The tax imposed by this chapter shall be inapplicable to the gross 39 income received by a limited fare omnibus company until and including 40 August thirty-first, nineteen hundred eighty. Thereafter, such tax shall 41 be applicable to such gross income received as follows: (1) for gross 42 income received from commuter service from September first, nineteen 43 hundred eighty until and including December thirty-first, nineteen 44 hundred eighty-three, the rate of tax shall be one hundredth of one per 45 centum; (2) for gross income received from commuter service from January 46 first, nineteen hundred eighty-four and thereafter, the rate of tax 47 shall be one tenth of one per centum; and (3) for gross income received 48 from all other sources, the rate of tax shall be as provided in subdivi- 49 sion a of this section. 50 e. The gross operating income of a vendor of utility services derived 51 from sales to its tenants of gas, electricity, steam, water, or refrig- 52 eration or sales or rendering to its tenants of gas, electric, steam, 53 water or refrigeration service, as an incident to such vendor's activity 54 of renting premises to tenants, shall be excluded from the measure of 55 the tax imposed by this chapter, but, with regard to sales to its 56 tenants of gas, electricity, or steam or sales or rendering to its

S. 8578 788

1 tenants of gas, electric or steam service, only to the extent that the 2 tax imposed by this chapter has been validly paid or accrued with 3 respect to a prior sale of such gas, electricity or steam or sale or 4 rendering of gas, electric or steam service. 5 f. (1) Notwithstanding anything contained in this chapter to the 6 contrary, for taxable periods beginning on or after August first, two 7 thousand two, if a partnership is subject to the tax imposed by this 8 chapter as a utility or as a vendor of utility services, no person who 9 is a partner in such a partnership shall be subject to the tax imposed 10 by this chapter on such partner's distributive share of the gross income 11 or gross operating income of such partnership. 12 (2) If a person is a partner in a partnership subject to the tax 13 imposed by this chapter and that person is separately subject to the 14 supervision of the state department of public service or is a utility or 15 a vendor of utility services based on its activities exclusive of any 16 activities of such partnership, for taxable periods beginning on or 17 after August first, two thousand two, such person shall be subject to 18 the tax imposed by this chapter only on its separate gross income or 19 separate gross operating income, which shall not include such person's 20 distributive share of the gross income or gross operating income of such 21 partnership. 22 (3) For purposes of this subdivision, the term "partner" shall include 23 a person who receives a distributive share of the gross income or gross 24 operating income, directly or indirectly through one or more tiers of 25 partnerships, of a partnership subject to the tax imposed by this chap- 26 ter. 27 g. Notwithstanding anything else contained in this chapter to the 28 contrary, for the taxable periods beginning on or after January first, 29 two thousand six, if a cooperative corporation containing at least 30 fifteen hundred apartments furnishes or sells electricity, steam, 31 refrigeration or water, or furnishes or sells electric, steam, refriger- 32 ation or water services that are (i) metered, (ii) generated or produced 33 by a cogeneration facility owned or operated by such cooperative corpo- 34 ration, and (iii) such electricity, steam, refrigeration or water and/or 35 electric, steam, refrigeration or water services are distributed to 36 tenants and/or occupants of a cooperative corporation, then such cooper- 37 ative corporation shall pay to the commissioner of finance an excise tax 38 which shall be equal to zero per centum of its gross income or its gross 39 operating income, as the case may be. 40 § 11-1103 Records to be kept. Every person subject to tax pursuant to 41 this chapter shall keep records of its business and in such form as the 42 commissioner of finance may by regulation require. Such records shall 43 be offered for inspection and examination at any time upon demand by 44 such commissioner or his or her duly authorized agent or employee and 45 shall be preserved for a period of three years, except that the commis- 46 sioner of finance may consent to their destruction within that period or 47 may require that they be kept longer. 48 § 11-1104 Returns; requirements as to. a. Except as otherwise 49 provided in subdivision e of this section with respect to taxable peri- 50 ods beginning after nineteen hundred ninety-eight, on or before the 51 twenty-fifth day of September, nineteen hundred sixty-five, and on or 52 before the twenty-fifth day of every month thereafter, every person 53 subject to tax pursuant to this chapter shall file a return with the 54 commissioner of finance on a form to be prescribed by such commissioner. 55 Such return shall state the gross income or gross operating income as 56 the case may be for the preceding calendar month, and shall contain any

S. 8578 789

1 other data, information or other matter which the commissioner of 2 finance may require to be included therein. The commissioner of finance 3 may require at any further time a supplemental return, which shall 4 contain any data upon such matters as such commissioner may specify. 5 Notwithstanding the provisions of this subdivision and notwithstanding 6 the provisions of subdivision e of this section, a vendor of utility 7 services, all of whose gross operating income is excluded from the meas- 8 ure of the tax imposed by this chapter pursuant to subdivision e of 9 section 11-1102 of this chapter during any taxable period, shall not be 10 required to file a return for such taxable period, provided, however, 11 that on or before the first day of September of each year, any such 12 vendor of utility services who was not required to file a return for any 13 taxable period during the period covered by the statement required to be 14 filed by such date pursuant to subdivision a of section 11-208.1 of this 15 title shall file an information return covering such period in such form 16 and containing such information as the commissioner of finance may spec- 17 ify. 18 b. The commissioner of finance may require amended returns to be filed 19 within twenty days after notice and to contain the information specified 20 in the notice. 21 c. If a return required by this chapter is not filed or if a return 22 when filed is incorrect or insufficient on its face, the commissioner of 23 finance shall take the necessary steps to enforce the filing of such 24 return or of a corrected return. 25 d. Where the state tax commission changes or corrects a taxpayer's 26 sales and compensating use tax liability with respect to the purchase or 27 use of items for which a sales or compensating use tax credit against 28 the tax imposed by this chapter was claimed, the taxpayer shall report 29 such change or correction to the commissioner of finance within ninety 30 days of the final determination of such change or correction, or as 31 required by the commissioner of finance, and shall concede the accuracy 32 of such determination or state wherein it is erroneous. Any taxpayer 33 filing an amended return or report with the state tax commission relat- 34 ing to the purchase or use of such items shall also file within ninety 35 days thereafter a copy of such amended return or report with the commis- 36 sioner of finance. 37 e. With respect to taxable periods beginning after nineteen hundred 38 ninety-eight, notwithstanding the provisions of subdivision a of this 39 section, if the amount of tax imposed pursuant to this section on any 40 person in the base year does not exceed one hundred thousand dollars, 41 the taxable period for which such person is required to file a return is 42 the semiannual period described in paragraph i of subdivision fourteen 43 of section 11-1101 of this chapter, and such person shall file a return 44 for each semiannual period of the first calendar year beginning after 45 the base year on or before the twenty-fifth day of the month following 46 the end of each such taxable period. Such return shall be filed with the 47 commissioner of finance on a form to be prescribed by such commissioner. 48 Such return shall state the gross income or gross operating income as 49 the case may be for the preceding taxable period and shall contain any 50 other data, information or other matter which the commissioner of 51 finance may require to be included therein. The commissioner of finance 52 may require at any further time a supplemental return, which shall 53 contain any data upon such matters as such commissioner may specify. For 54 the purposes of this subdivision, if the amount of tax imposed pursuant 55 to this chapter on such person in the base year is for a period of less 56 than one year, the amount of tax imposed on such person shall be annual-

S. 8578 790

1 ized by multiplying the amount of tax imposed by a fraction, the denomi- 2 nator of which is the number of months or parts thereof during which the 3 person was subject to the tax imposed pursuant to this chapter and the 4 numerator of which is twelve. Notwithstanding the provisions of this 5 subdivision, a person that first becomes subject to the tax pursuant to 6 this chapter shall file a return for each month in the calendar year in 7 which such person first becomes subject to such tax in accordance with 8 subdivision a of this section. 9 § 11-1105 Payment of tax; credit for certain sales and compensating 10 use taxes. a. At the time of filing each return, as provided under 11 section 11-1104 of this chapter, each person taxable pursuant to this 12 chapter shall pay to the commissioner of finance the taxes imposed by 13 this chapter upon its gross income or gross operating income, as the 14 case may be, for the taxable period covered by such return, less any 15 credit to which such person may be entitled under subdivision b of this 16 section. Such taxes shall be due and payable on the last day on which 17 the return for such period is required to be filed, regardless of wheth- 18 er a return is filed or whether the return which is filed correctly 19 indicates the amount of tax due. 20 b. (1) A taxpayer shall be allowed a credit against the taxes imposed 21 by this chapter for the amount of sales and compensating use taxes 22 imposed by section eleven hundred seven of the tax law which became 23 legally due on or after, and which were paid on or after, July first, 24 nineteen hundred seventy-seven but within the taxable period for which a 25 credit is claimed, with respect to the purchase or use by the taxpayer 26 of machinery or equipment for use or consumption directly and predomi- 27 nantly in the production of steam for sale, by manufacturing, process- 28 ing, generating, assembling, refining, mining or extracting, or tele- 29 phone central office equipment or station apparatus or comparable 30 telegraph equipment for use directly and predominantly in receiving at 31 destination or initiating and switching telephone or telegraph communi- 32 cation, but not including parts with a useful life of one year or less 33 or tools or supplies used in connection with such machinery, equipment 34 or apparatus. 35 (2) The amount of the credit provided in paragraph one of this subdi- 36 vision shall be limited to the amount of such sales and compensating use 37 taxes paid during the taxable period covered by the return under this 38 chapter on which the credit is taken less the amount of any credit or 39 refund of such sales and compensating use taxes during such taxable 40 period. If such credit exceeds the amount of tax under this chapter 41 payable for the taxable period in question, such excess amount shall be 42 refunded or credited except in the case of a vendor of utility services 43 who is entitled to a credit and/or refund for such sales and compensat- 44 ing use taxes under chapter five or six of this title. The credit 45 allowed under this subdivision shall be deemed an erroneous payment of 46 tax by the taxpayer to be credited or refunded in accordance with the 47 provisions of section 11-1108 of this chapter, except as otherwise 48 provided in this paragraph. 49 (3) Where the taxpayer receives a refund or credit of any tax imposed 50 under section eleven hundred seven of the tax law for which the taxpayer 51 has claimed a credit under the provisions of this subdivision in a prior 52 taxable period, the amount of such refund or credit shall be added to 53 the tax imposed by section 11-1102 of this chapter of the taxable period 54 in which such refund or credit of tax under section eleven hundred seven 55 of the tax law is received.

S. 8578 791

1 § 11-1105.1 Credit for rebates of charges for energy. A taxpayer shall 2 be allowed a credit against the amount of taxes imposed by this chapter 3 for the amount of special rebates and discounts made in accordance with 4 the provisions of section 22-602 of the code of the preceding munici- 5 pality and for the amount of special rebates and discounts made in 6 accordance with the provisions of section twenty-five-bb of the general 7 city law. Such credit shall be applied against the amount of tax other- 8 wise required to be paid as provided in subdivision a of section 11-1105 9 of this chapter and shall be claimed for the taxable period immediately 10 succeeding the taxable period in which such rebates or discounts are 11 made. 12 § 11-1105.2 Relocation and employment assistance program credit. (a) A 13 taxpayer that has obtained the certifications required by chapter six-B 14 of title twenty-two of the code of the preceding municipality shall be 15 allowed a credit against the tax imposed by this chapter, provided, 16 however, that a taxpayer that is a vendor of utility services shall not 17 be allowed the credit against the tax imposed by this chapter unless it 18 elects as provided in subdivision (d) of section 22-622 of the code of 19 the preceding municipality to take the credit against the tax imposed by 20 this chapter. The amount of the credit shall be the amount determined by 21 multiplying one thousand dollars or, in the case of an eligible business 22 that has obtained pursuant to chapter six-B of such title twenty-two a 23 certification of eligibility dated on or after July first, two thousand, 24 for a relocation to eligible premises located within a revitalization 25 area defined in subdivision (n) of section 22-621 of the code of the 26 preceding municipality, three thousand dollars, by the number of eligi- 27 ble aggregate employment shares maintained by the taxpayer during the 28 calendar year with respect to particular premises to which the taxpayer 29 has relocated; provided, however, with respect to a relocation for which 30 no application for a certificate of eligibility is submitted prior to 31 July first, two thousand three, to eligible premises that are within a 32 revitalization area, if the date of such relocation as determined pursu- 33 ant to subdivision (j) of section 22-621 of the code of the preceding 34 municipality is on or after January first, nineteen hundred ninety-nine, 35 and before July first, two thousand, the amount to be multiplied by the 36 number of eligible aggregate employment shares shall be one thousand 37 dollars; provided, however, that no credit shall be allowed for the 38 relocation of any retail activity or hotel services; and provided that 39 in the case of an eligible business that has obtained pursuant to chap- 40 ter six-B of such title twenty-two certifications of eligibility for 41 more than one relocation, the portion of the total amount of eligible 42 aggregate employment shares to be multiplied by the dollar amount speci- 43 fied in this subdivision for each such certification of a relocation 44 shall be the number of total attributed eligible aggregate employment 45 shares determined with respect to such relocation pursuant to subdivi- 46 sion (o) of section 22-621 of the code of the preceding municipality. 47 For purposes of this subdivision, the terms "eligible aggregate employ- 48 ment shares", "relocate", "retail activity" and "hotel services" shall 49 have the meanings ascribed by section 22-621 of the code of the preced- 50 ing municipality. 51 (b) The credit allowed under this subdivision with respect to eligible 52 aggregate employment shares maintained with respect to particular prem- 53 ises to which the taxpayer has relocated shall be allowed for the taxa- 54 ble periods in the first calendar year during which such eligible aggre- 55 gate employment shares are maintained with respect to such premises and 56 for taxable periods in any of the twelve succeeding calendar years

S. 8578 792

1 during which eligible aggregate employment shares are maintained with 2 respect to such premises, provided that the credit allowed for the taxa- 3 ble periods in the twelfth succeeding calendar year shall be calculated 4 by multiplying the number of eligible aggregate employment shares main- 5 tained with respect to such premises in the twelfth succeeding calendar 6 year by the lesser of one and a fraction the numerator of which is the 7 number of days in the calendar year of relocation less the number of 8 days the eligible business maintained employment shares in the eligible 9 premises in the calendar year of relocation and the denominator of which 10 is the number of days in such twelfth succeeding year during which such 11 eligible aggregate employment shares are maintained with respect to such 12 premises. The credit allowable under this section shall be applied 13 against the amount of tax otherwise required to be paid for the last 14 taxable period of the calendar year as provided in subdivision a of 15 section 11-1105 of this chapter, shall be deducted from the taxpayer's 16 tax prior to the deduction of the credit provided in subdivision b of 17 such section, and shall be claimed on the tax return for the last taxa- 18 ble period of the calendar year. Except as provided in subdivision (c) 19 of this section, if the amount of the credit allowable under this subdi- 20 vision for any calendar year exceeds the tax imposed for such last taxa- 21 ble period in such calendar year, the excess may be carried over, in 22 order, to the immediately succeeding taxable periods in the five imme- 23 diately succeeding calendar years and, to the extent not previously 24 allowable, shall be applied against the tax otherwise required to be 25 paid for such periods. Such carryover credit shall be deducted from the 26 taxpayer's tax prior to the deduction of the credit provided in subdivi- 27 sion b of section 11-1105 of this chapter. With respect to the last 28 taxable period in a calendar year, the credit for such calendar year 29 shall be taken prior to any carryover credit. If in any period there are 30 carryover credits available from more than one year, such credits shall 31 be applied against the tax in the order in which they were earned with 32 the oldest available credit being taken first. 33 (c) In the case of a taxpayer that has obtained a certification of 34 eligibility pursuant to chapter six-B of title twenty-two of the code of 35 the preceding municipality dated on or after July first, two thousand 36 for a relocation to eligible premises located within the revitalization 37 area defined in subdivision (n) of section 22-621 of the code of the 38 preceding municipality, the credits allowed under this section, or in 39 the case of a taxpayer that has relocated more than once, the portion of 40 such credits attributed to such certification of eligibility pursuant to 41 subdivision (a) of this section, against the tax imposed by this chapter 42 for the calendar year of such relocation and for the four calendar years 43 immediately succeeding the calendar year of such relocation, shall be 44 deemed to be erroneous payments of tax by the taxpayer to be credited or 45 refunded, in accordance with the provisions of section 11-1108 of this 46 chapter. For such calendar years, such credits or portions thereof may 47 not be carried over to any succeeding taxable year; provided, however, 48 that this subdivision shall not apply to any relocation for which an 49 application for a certification of eligibility was not submitted prior 50 to July first, two thousand three unless the date of such relocation is 51 on or after July first, two thousand. 52 § 11-1105.3 Lower Manhattan relocation employment assistance credit. 53 (a) A taxpayer that has obtained the certifications required by chapter 54 six-C of title twenty-two of the code of the preceding municipality 55 shall be allowed a credit against the tax imposed by this chapter, 56 provided, however, that a taxpayer that is a vendor of utility services

S. 8578 793

1 shall not be allowed the credit against the tax imposed by this chapter 2 unless it elects as provided in subdivision (d) of section 22-624 of the 3 code of the preceding municipality to take the credit against the tax 4 imposed by this chapter. The amount of the credit shall be the amount 5 determined by multiplying three thousand dollars by the number of eligi- 6 ble aggregate employment shares maintained by the taxpayer during the 7 calendar year with respect to eligible premises to which the taxpayer 8 has relocated; provided, however, that no credit shall be allowed for 9 the relocation of any retail activity or hotel services. For purposes of 10 this subdivision, the terms "eligible aggregate employment shares", 11 "eligible premises", "relocate", "retail activity" and "hotel services" 12 shall have the meanings ascribed by section 22-623 of the code of the 13 preceding municipality. 14 (b) The credit allowed under this section with respect to eligible 15 aggregate employment shares maintained with respect to eligible premises 16 to which the taxpayer has relocated shall be allowed for the taxable 17 period in which the relocation to eligible premises takes place and for 18 succeeding taxable periods in the calendar year of the relocation and in 19 any of the twelve succeeding calendar years during which eligible aggre- 20 gate employment shares are maintained with respect to eligible premises, 21 provided that the credit allowed for the taxable periods in the twelfth 22 succeeding calendar year shall be calculated by multiplying the number 23 of eligible aggregate employment shares maintained with respect to 24 eligible premises in the twelfth succeeding calendar year by the lesser 25 of one and a fraction the numerator of which is the number of days in 26 the calendar year of relocation less the number of days the taxpayer 27 maintained employment shares in eligible premises in the calendar year 28 of relocation and the denominator of which is the number of days in such 29 twelfth succeeding calendar year during which such eligible aggregate 30 employment shares are maintained with respect to such premises. The 31 credit allowable under this section shall be applied against the amount 32 of tax otherwise required to be paid for the last taxable period of the 33 calendar year as provided in subdivision a of section 11-1105 of this 34 chapter, shall be deducted from the taxpayer's tax prior to the 35 deduction of the credit provided in subdivision b of such section but 36 after the credit provided for in section 11-1105.2 of this chapter, and 37 shall be claimed on the tax return for the last taxable period of the 38 calendar year. Except as provided in subdivision (c) of this section, if 39 the amount of the credit allowable under this subdivision for any calen- 40 dar year exceeds the tax imposed for such last taxable period in such 41 calendar year, the excess may be carried over, in order, to the imme- 42 diately succeeding taxable periods in the five immediately succeeding 43 calendar years and, to the extent not previously allowable, shall be 44 applied against the tax otherwise required to be paid for such periods. 45 Such carryover credit shall be deducted from the taxpayer's tax prior to 46 the deduction of the credit provided in subdivision b of section 11-1105 47 of this chapter but after the credit provided for in section 11-1105.2 48 of this chapter. With respect to the last taxable period in a calendar 49 year, the credit for such calendar year shall be taken prior to any 50 carryover credit. If in any period there are carryover credits available 51 from more than one year, such credits shall be applied against the tax 52 in the order in which they were earned with the oldest available credit 53 being taken first. 54 (c) The credits allowed under this section, against the tax imposed by 55 this chapter for the calendar year of the relocation and for the four 56 taxable years immediately succeeding the calendar year of such relo-

S. 8578 794

1 cation, shall be deemed to be overpayments of tax by the taxpayer to be 2 credited or refunded, without interest, in accordance with the 3 provisions of section 11-1108 of this chapter. For such calendar years, 4 such credits or portions thereof may not be carried over to any succeed- 5 ing calendar year. 6 § 11-1106 Determination of tax. In case the return required by this 7 chapter shall be insufficient or unsatisfactory or if such return is not 8 filed, the commissioner of finance shall determine the amount of the tax 9 due from such information as is obtainable, and if necessary the tax may 10 be estimated upon the basis of external indices. Notice of such determi- 11 nation shall be given to the person liable for the payment of the tax. 12 Such determination shall finally and irrevocably fix such tax unless the 13 person against whom it is assessed, within ninety days after the giving 14 of notice of such determination or, if the commissioner of finance has 15 established a conciliation procedure pursuant to section 11-124 of this 16 title and the taxpayer has requested a conciliation conference in 17 accordance therewith, within ninety days from the mailing of a concil- 18 iation decision or the date of the commissioner's confirmation of the 19 discontinuance of the conciliation proceeding, both (1) serves a peti- 20 tion upon the commissioner of finance and (2) files a petition with the 21 tax appeals tribunal for a hearing, or unless such commissioner of his 22 or her own motion shall redetermine the same. Such hearing and any 23 appeal to the tax appeals tribunal sitting en banc from the decision 24 rendered in such hearing shall be conducted in the manner and subject to 25 the requirements prescribed by the tax appeals tribunal pursuant to 26 sections one hundred sixty-eight through one hundred seventy-two of the 27 charter of the preceding municipality as it existed January first, nine- 28 teen hundred ninety-four. After such hearing the tax appeals tribunal 29 shall give notice of its decision to the person against whom the tax is 30 assessed and to the commissioner of finance. A decision of the tax 31 appeals tribunal sitting en banc shall be reviewable for error, illegal- 32 ity, unconstitutionality or any other reason whatsoever by a proceeding 33 under article seventy-eight of the civil practice law and rules if 34 instituted by the person against whom the tax was assessed within four 35 months after the giving of the notice of such tax appeals tribunal deci- 36 sion. A proceeding under such article of such law and rules shall not be 37 instituted by a taxpayer unless (a) the amount of any tax sought to be 38 reviewed with penalties and interest thereon, if any, shall first be 39 deposited with the commissioner of finance and there shall be filed with 40 such commissioner an undertaking, issued by a surety company authorized 41 to transact business in this state and approved by the superintendent of 42 insurance of this state as to solvency and responsibility, in such 43 amount and with such sureties as a justice of the supreme court shall 44 approve, to the effect that if such proceeding be dismissed or the tax 45 confirmed, the taxpayer will pay all costs and charges which may accrue 46 in the prosecution of the proceeding, or (b) at the option of the 47 taxpayer such undertaking filed with the commissioner of finance may be 48 in a sum sufficient to cover the taxes, penalties and interest thereon 49 stated in such decision, plus the costs and charges which may accrue 50 against it in the prosecution of the proceeding, in which event the 51 taxpayer shall not be required to deposit such taxes, penalties and 52 interest as a condition precedent to the application. 53 § 11-1107 Assessment of tax where change or correction of sales and 54 compensating use tax liability involved. a. If a taxpayer fails to 55 comply with subdivision d of section 11-1104 of this chapter in not 56 reporting a change or correction of its sales and compensating use tax

S. 8578 795

1 liability or in not filing a copy of an amended return or report relat- 2 ing to its sales and compensating use tax liability, instead of the mode 3 and time of assessment provided for in section 11-1106 of this chapter, 4 the commissioner of finance may assess a deficiency based upon such 5 changed or corrected sales and compensating use tax liability, as same 6 relates to credits claimed under this chapter, by mailing to the taxpay- 7 er a notice of additional tax due specifying the amount of the deficien- 8 cy, and such deficiency, together with the interest and penalties stated 9 in such notice, shall be deemed assessed on the date such notice is 10 mailed unless within thirty days after the mailing of such notice a 11 report of the state change or correction or a copy of an amended return 12 or report, where such copy was required, is filed accompanied by a 13 statement showing wherein such state determination and such notice of 14 additional tax due are erroneous. Such notice shall not be considered as 15 a notice of determination for the purposes of section 11-1106 of this 16 chapter. 17 b. If a report filed pursuant to subdivision d of section 11-1104 of 18 this chapter concedes the accuracy of a state change or correction of 19 sales and compensating use tax liability, any deficiency in tax result- 20 ing therefor shall be deemed assessed on the date of filing such report. 21 § 11-1108 Refunds. a. In the manner provided in this section the 22 commissioner of finance shall refund or credit, without interest, any 23 tax, penalty or interest erroneously, illegally or unconstitutionally 24 collected or paid, if application for such refund shall be made to the 25 commissioner of finance within three years from the time the return was 26 filed or two years from the time the tax was paid, whichever of such 27 periods expires later, or if no return was filed, within two years from 28 the time the tax was paid. If the claim is filed within the three-year 29 period, the amount of the credit or refund shall not exceed the portion 30 of the tax paid within the three years immediately preceding the filing 31 of the claim plus the period of any extension of time for filing the 32 return. Whenever a refund or credit is made or denied by the commission- 33 er of finance, he or she shall state his or her reason therefor and give 34 notice thereof to the taxpayer in writing. The commissioner of finance 35 may, in lieu of any refund required to be made, allow credit therefor on 36 payments due from the applicant. 37 b. Any determination of the commissioner of finance denying a refund 38 or credit pursuant to subdivision a of this section shall be final and 39 irrevocable unless the applicant for such refund or credit, within nine- 40 ty days from the mailing of notice of such determination, or, if the 41 commissioner of finance has established a conciliation procedure pursu- 42 ant to section 11-124 of this title and the applicant has requested a 43 conciliation conference in accordance therewith, within ninety days from 44 the mailing of a conciliation decision or the date of the commissioner's 45 confirmation of the discontinuance of the conciliation proceeding, both 46 (1) serves a petition upon the commissioner of finance and (2) files a 47 petition with the tax appeals tribunal for a hearing. Such petition for 48 a refund or credit, made as provided in this section, shall be deemed an 49 application for a revision of any tax, penalty or interest complained 50 of. Such hearing and any appeal to the tax appeals tribunal sitting en 51 banc from the decision rendered in such hearing shall be conducted in 52 the manner and subject to the requirements prescribed by the tax appeals 53 tribunal pursuant to sections one hundred sixty-eight through one 54 hundred seventy-two of the charter of the preceding municipality as it 55 existed January first, nineteen hundred ninety-four. After such hearing, 56 the tax appeals tribunal shall give notice of its decision to the appli-

S. 8578 796

1 cant and to the commissioner of finance. The applicant shall be entitled 2 to institute a proceeding under article seventy-eight of the civil prac- 3 tice law and rules to review a decision of the tax appeals tribunal 4 sitting en banc if application to the supreme court be made therefor 5 within four months after the giving of notice of such decision, and 6 provided, in the case of an application by a taxpayer, a final determi- 7 nation of tax due was not previously made. 8 c. If a taxpayer is required by subdivision d of section 11-1104 of 9 this chapter to file a report or amended return in respect of a change 10 or correction of its sales and compensating use tax liability, claim for 11 credit or refund of any resulting overpayment of tax shall be filed by 12 the taxpayer within one year from the time such report or amended return 13 was required to be filed with the commissioner of finance. This subdivi- 14 sion shall not affect the time within which or the amount for which a 15 claim for credit or refund may be filed apart from this subdivision. 16 d. A person shall not be entitled to a revision, refund or credit 17 under this section of a tax, interest or penalty which had been deter- 18 mined to be due pursuant to the provisions of section 11-1106 or 11-1107 19 of this chapter where he or she has had a hearing or an opportunity for 20 a hearing, as provided in such sections, or has failed to avail himself 21 or herself of the remedies therein provided. No refund or credit shall 22 be made of a tax, interest or penalty paid after a determination by the 23 commissioner of finance made pursuant to section 11-1106 or 11-1107 of 24 this chapter unless it be found that such determination was erroneous, 25 illegal or unconstitutional or otherwise improper, by the tax appeals 26 tribunal after a hearing or of the commissioner of finance's own motion 27 or, if such tax appeals tribunal affirms in whole or in part the deter- 28 mination of the commissioner of finance, in a proceeding under article 29 seventy-eight of the civil practice law and rules pursuant to the 30 provisions of said section, in which event refund or credit without 31 interest shall be made of the tax, interest or penalty found to have 32 been overpaid. 33 § 11-1109 Reserves. In cases where the taxpayer has applied for a 34 refund and has instituted a proceeding under article seventy-eight of 35 the civil practice law and rules to review a determination adverse to 36 him or her on his or her application for refund, the comptroller shall 37 set up appropriate reserves to meet any decision adverse to the city. 38 § 11-1110 Remedies exclusive. The remedies provided by this chapter 39 shall be the exclusive remedies available to any person for the review 40 of tax liability imposed by this chapter; and no determination or 41 proposed determination of tax or determination on any application for 42 refund by the commissioner of finance, nor any decision by the tax 43 appeals tribunal or any of its administrative law judges, shall be 44 enjoined or reviewed by an action for declaratory judgment, an action 45 for money had and received or by any action or proceeding other than, in 46 the case of a decision by the tax appeals tribunal sitting en banc, a 47 proceeding under article seventy-eight of the civil practice law and 48 rules; provided, however, that a taxpayer may proceed by a declaratory 49 judgment if he or she institutes suit within thirty days after a defi- 50 ciency assessment is made and pays the amount of the deficiency assess- 51 ment to the commissioner of finance prior to the institution of such 52 suit and posts a bond for costs as provided in section 11-1106 of this 53 chapter. 54 § 11-1111 Proceedings to recover tax. a. Whenever any person shall 55 fail to pay any tax or penalty or interest imposed by this chapter as 56 provided in this section, the corporation counsel shall, upon the

S. 8578 797

1 request of the commissioner of finance, bring or cause to be brought an 2 action to enforce payment of the same against the person liable for the 3 same on behalf of the city of Staten Island in any court of the state of 4 New York or of any other state or of the United States. If, however, 5 such commissioner in his or her discretion believes that a taxpayer 6 subject to the provisions of this chapter is about to cease business, 7 leave the state or remove or dissipate the assets out of which tax or 8 penalties might be satisfied and that any such tax or penalty will not 9 be paid when due, he or she may declare such tax or penalty to be imme- 10 diately due and payable and may issue a warrant immediately. 11 b. As a further additional or alternate remedy, the commissioner of 12 finance may issue a warrant, directed to the city sheriff, commanding 13 him or her to levy upon and sell the real and personal property of such 14 person which may be found within the city, for the payment of the amount 15 thereof, with any penalties and the cost of executing the warrant and to 16 return such warrant to such commissioner and to pay to him or her the 17 money collected by virtue thereof within sixty days after the receipt of 18 such warrant. The city sheriff shall, within five days after the 19 receipt of the warrant, file with the county clerk a copy thereof and 20 thereupon such clerk shall enter in the judgment docket the name of the 21 person mentioned in the warrant and the amount of the tax and penalties 22 for which the warrant is issued and the date when such copy is filed. 23 Thereupon the amount of such warrant so docketed shall have the full 24 force and effect of a judgment and shall become a lien upon the title to 25 and interest in real and personal property of the person against whom 26 the warrant is issued. The city sheriff shall then proceed upon the 27 warrant in the same manner and with like effect as that provided by law 28 in respect to executions against property upon judgments of a court of 29 record, and for services in executing the warrant he or she shall be 30 entitled to the same fees which he or she may collect in the same 31 manner. In the discretion of the commissioner of finance a warrant of 32 like terms, force and effect may be issued and directed to any officer 33 or employee of the department of finance and in the execution thereof 34 such officer or employee shall have all the power conferred by law upon 35 sheriffs, but he or she shall be entitled to no fee or compensation in 36 excess of the actual expenses paid in the performance of such duty. If 37 a warrant is returned not satisfied in full, the commissioner of finance 38 may from time to time issue new warrants and shall also have the same 39 remedies to enforce the amount due thereunder as if the city had recov- 40 ered judgment therefor and execution thereon had been returned unsatis- 41 fied. 42 c. Whenever there is made a sale, transfer or assignment in bulk of 43 any part or the whole of a stock of merchandising or of fixtures, or 44 merchandise and of fixtures pertaining to the conducting of the business 45 of the seller, transferor or assignor, otherwise than in the ordinary 46 course of trade and in the regular prosecution of said business, the 47 purchaser, transferee or assignee shall at least ten days before taking 48 possession of such merchandise, fixtures, or merchandise and fixtures, 49 or paying therefor, notify the commissioner of finance by registered 50 mail of the proposed sale and of the price, terms and conditions there- 51 of, whether or not the seller, transferor or assignor, has represented 52 to, or informed the purchaser, transferee or assignee that it owes any 53 tax pursuant to this chapter, whether or not the purchaser, transferee 54 or assignee has knowledge that such taxes are owing, and whether or not 55 any such taxes are in fact owing.

S. 8578 798

1 Whenever the purchaser, transferee or assignee shall fail to give the 2 notice to the commissioner of finance required by this subdivision, or 3 whenever such commissioner shall inform the purchaser, transferee or 4 assignee that a possible claim for such tax or taxes exists, any sums of 5 money, property or choses in action, or other consideration, which the 6 purchaser, transferee or assignee is required to transfer over to the 7 seller, transferor or assignor shall be subject to a first priority 8 right and lien for any such taxes theretofore or thereafter determined 9 to be due from the seller, transferor or assignor to the city, and the 10 purchaser, transferee or assignee is forbidden to transfer to the sell- 11 er, transferor or assignor any such sums of money, property or choses in 12 action to the extent of the amount of the city's claim. For failure to 13 comply with the provisions of this subdivision the purchaser, transferee 14 or assignee, in addition to being subject to the liabilities and reme- 15 dies imposed under the provisions of former article six of the uniform 16 commercial code shall be personally liable for the payment to the city 17 of any such taxes theretofore or thereafter determined to be due to the 18 city from the seller, transferor or assignor and such liability may be 19 assessed and enforced in the same manner as the liability for tax is 20 imposed under this chapter. 21 d. The commissioner of finance, if he or she finds that the interests 22 of the city will not thereby be jeopardized, and upon such conditions as 23 the commissioner of finance may require, may release any property from 24 the lien of any warrant or vacate such warrant for unpaid taxes, addi- 25 tions to tax, penalties and interest filed pursuant to subdivision b of 26 this section, and such release or vacating of the warrant may be 27 recorded in the office of any recording officer in which such warrant 28 has been filed. The clerk shall thereupon cancel and discharge as of the 29 original date of docketing the vacated warrant. 30 § 11-1112 General powers of the commissioner of finance. In addition 31 to the powers granted to the commissioner of finance in this chapter, he 32 or she is hereby authorized and empowered: 33 1. To make, adopt and amend rules and regulations appropriate to the 34 carrying out of this chapter and the purposes thereof; and to prescribe 35 the form of blanks, reports and other records relating to the enforce- 36 ment and administration of this chapter; 37 2. To prescribe methods for determining the amount of "gross income" 38 and "gross operating income" received by a person subject to tax pursu- 39 ant to this chapter; 40 3. To request information from the tax commission of the state of New 41 York or treasury department of the United States relative to any person; 42 and to afford returns, reports and other information to such tax commis- 43 sion or such treasury department relative to any person, any other 44 provision in this chapter to the contrary notwithstanding; 45 4. To extend, for cause shown, the time for filing any return for a 46 period not exceeding thirty days; and to compromise disputed claims in 47 connection with the taxes imposed pursuant to this chapter; 48 5. To delegate his or her functions hereunder to a deputy commission- 49 er of finance or other employee or employees of the department of 50 finance of the city; 51 6. To assess, determine, revise and readjust the taxes imposed under 52 this chapter. 53 § 11-1113 Administration of oaths and compelling testimony. a. The 54 commissioner of finance, his or her employees duly designated and 55 authorized by him or her, the tax appeals tribunal and any of its duly 56 designated and authorized employees shall have power to administer oaths

S. 8578 799

1 and take affidavits in relation to any matter or proceedings in the 2 exercise of their powers and duties under this chapter. Such commis- 3 sioner and the tax appeals tribunal shall have power to subpoena and 4 require the attendance of witnesses and the production of books, papers 5 and documents to secure information pertinent to the performance of the 6 duties of such commissioner or of the tax appeals tribunal hereunder and 7 of the enforcement of this chapter, and to examine them in relation 8 thereto, and to issue commissions for the examination of witnesses who 9 are out of the state or unable to attend before the commissioner or the 10 tax appeals tribunal or excused from attendance. 11 b. A justice of the supreme court either in court or at chambers shall 12 have power summarily to enforce by proper proceedings the attendance and 13 testimony of witnesses and the production and examination of books, 14 papers and documents called for by the subpoena of the commissioner of 15 finance or the tax appeals tribunal under this chapter. 16 c. Cross-reference; criminal penalties. For failure to obey subpoenas 17 or for testifying falsely, see section 11-4007 of this title; for 18 supplying false or fraudulent information, see section 11-4002 of this 19 title. 20 d. The officers who serve the summons or subpoena of the commissioner 21 of finance or the tax appeals tribunal and witnesses attending in 22 response thereto shall be entitled to the same fees as are allowed to 23 officers and witnesses in civil cases in courts of record, except as 24 herein otherwise provided. Such officers shall be the city sheriff, and 25 his or her duly appointed deputies or any officers or employees of the 26 department of finance or the tax appeals tribunal, designated to serve 27 such process. 28 § 11-1114 Interest and penalties. (a) Interest on underpayments. If 29 any amount of tax is not paid on or before the last date prescribed for 30 payment, without regard to any extension of time granted for payment, 31 interest on such amount at the rate set by the commissioner of finance 32 pursuant to subdivision (g) of this section, or, if no rate is set, at 33 the rate of seven and one-half percent per annum, shall be paid for the 34 period from such last date to the date of payment. In computing the 35 amount of interest to be paid, such interest shall be compounded daily. 36 Interest under this subdivision shall not be paid if the amount thereof 37 is less than one dollar. 38 (b) (1) Failure to file return. (A) In case of failure to file a 39 return under this chapter on or before the prescribed date, determined 40 with regard to any extension of time for filing, unless it is shown that 41 such failure is due to reasonable cause and not due to willful neglect, 42 there shall be added to the amount required to be shown as tax on such 43 return five percent of the amount of such tax if the failure is for not 44 more than one month, with an additional five percent for each additional 45 month or fraction thereof during which such failure continues, not 46 exceeding twenty-five percent in the aggregate. 47 (B) In the case of a failure to file a return of tax within sixty days 48 of the date prescribed for filing of such return, determined with regard 49 to any extension of time for filing, unless it is shown that such fail- 50 ure is due to reasonable cause and not due to willful neglect, the addi- 51 tion to tax under subparagraph (A) of this paragraph shall not be less 52 than the lesser of one hundred dollars or one hundred percent of the 53 amount required to be shown as tax on such return. 54 (C) For purposes of this paragraph, the amount of tax required to be 55 shown on the return shall be reduced by the amount of any part of the 56 tax which is paid on or before the date prescribed for payment of the

S. 8578 800

1 tax and by the amount of any credit against the tax which may be claimed 2 upon the return. 3 (2) Failure to pay tax shown on return. In case of failure to pay the 4 amount shown as tax on a return required to be filed under this chapter 5 on or before the prescribed date, determined with regard to any exten- 6 sion of time for payment, unless it is shown that such failure is due to 7 reasonable cause and not due to willful neglect, there shall be added 8 to the amount shown as tax on such return one-half of one percent of the 9 amount of such tax if the failure is not for more than one month, with 10 an additional one-half of one percent for each additional month or frac- 11 tion thereof during which such failure continues, not exceeding twenty- 12 five percent in the aggregate. For the purpose of computing the addition 13 for any month the amount of tax shown on the return shall be reduced by 14 the amount of any part of the tax which is paid on or before the begin- 15 ning of such month and by the amount of any credit against the tax which 16 may be claimed upon the return. If the amount of tax required to be 17 shown on a return is less than the amount shown as tax on such return, 18 this paragraph shall be applied by substituting such lower amount. 19 (3) Failure to pay tax required to be shown on return. In case of 20 failure to pay any amount in respect of any tax required to be shown on 21 a return required to be filed under this chapter which is not so shown, 22 including a determination made pursuant to section 11-1106 of this chap- 23 ter, within ten days of the date of a notice and demand therefor, unless 24 it is shown that such failure is due to reasonable cause and not due to 25 willful neglect, there shall be added to the amount of tax stated in 26 such notice and demand one-half of one percent of such tax if the fail- 27 ure is not for more than one month, with an additional one-half of one 28 percent for each additional month or fraction thereof during which such 29 failure continues, not exceeding twenty-five percent in the aggregate. 30 For the purpose of computing the addition for any month, the amount of 31 tax stated in the notice and demand shall be reduced by the amount of 32 any part of the tax which is paid before the beginning of such month. 33 (4) Limitations on additions. 34 (A) With respect to any return, the amount of the addition under para- 35 graph one of this subdivision shall be reduced by the amount of the 36 addition under paragraph two of this subdivision for any month to which 37 an addition applies under both paragraphs one and two of this subdivi- 38 sion. In any case described in subparagraph (B) of paragraph one of 39 this subdivision, the amount of the addition under such paragraph one 40 shall not be reduced below the amount provided in such subparagraph. 41 (B) With respect to any return, the maximum amount of the addition 42 permitted under paragraph three of this subdivision shall be reduced by 43 the amount of the addition under paragraph one of this subdivision, 44 determined without regard to subparagraph (B) of such paragraph one 45 which is attributable to the tax for which the notice and demand is made 46 and which is not paid within ten days of such notice and demand. 47 (c) Underpayment due to negligence. (1) If any part of an underpayment 48 of tax is due to negligence or intentional disregard of this chapter or 49 any rules or regulations hereunder, but without intent to defraud, there 50 shall be added to the tax a penalty equal to five percent of the under- 51 payment. 52 (2) There shall be added to the tax, in addition to the amount deter- 53 mined under paragraph one of this subdivision, an amount equal to fifty 54 percent of the interest payable under subdivision (a) of this section 55 with respect to the portion of the underpayment described in such para- 56 graph one which is attributable to the negligence or intentional disre-

S. 8578 801

1 gard referred to in such paragraph one, for the period beginning on the 2 last date prescribed by law for payment of such underpayment, determined 3 without regard to any extension, and ending on the date of the assess- 4 ment of the tax, or, if earlier, the date of the payment of the tax. 5 (3) If any payment is shown on a return made by a payor with respect 6 to dividends, patronage dividends and interest under subsection (a) of 7 section six thousand forty-two, subsection (a) of section six thousand 8 forty-four or subsection (a) of section six thousand forty-nine of the 9 internal revenue code of nineteen hundred fifty-four, respectively, and 10 the payee fails to include any portion of such payment in gross income 11 or gross operating income, when required under this chapter to be so 12 included, any portion of an underpayment attributable to such failure 13 shall be treated, for purposes of this subdivision, as due to negligence 14 in the absence of clear and convincing evidence to the contrary. If any 15 penalty is imposed under this subdivision by reason of this paragraph, 16 the amount of the penalty imposed by paragraph one of this subdivision 17 shall be five percent of the portion of the underpayment which is 18 attributable to the failure described in this paragraph. 19 (d) Underpayment due to fraud. (1) If any part of an underpayment of 20 tax is due to fraud, there shall be added to the tax a penalty equal to 21 two times of the underpayment. 22 (2) The penalty under this subdivision shall be in lieu of any other 23 addition to tax imposed by subdivision (b) or (c) of this section. 24 (e) Additional penalty. Any person who, with fraudulent intent, shall 25 fail to pay any tax imposed by this chapter, or to make, render, sign or 26 certify any return, or to supply any information within the time 27 required by or under this chapter, shall be liable for a penalty of not 28 more than one thousand dollars, in addition to any other amounts 29 required under this chapter to be imposed, assessed and collected by the 30 commissioner of finance. The commissioner of finance shall have the 31 power, in his or her discretion, to waive, reduce or compromise any 32 penalty under this subdivision. 33 (f) The interest and penalties imposed by this section shall be paid 34 and disposed of in the same manner as other revenues from this chapter. 35 Unpaid interest and penalties may be enforced in the same manner as the 36 tax imposed by this chapter. 37 (g) (1) Authority to set interest rates. The commissioner of finance 38 shall set the rate of interest to be paid pursuant to subdivision (a) of 39 this section, but if no such rate of interest is set, such rate shall be 40 deemed to be set at seven and one-half percent per annum. Such rate 41 shall be the rate prescribed in paragraph two of this subdivision but 42 shall not be less than seven and one-half percent per annum. Any such 43 rate set by the commissioner of finance shall apply to taxes, or any 44 portion thereof, which remain or become due on or after the date on 45 which such rate becomes effective and shall apply only with respect to 46 interest computed or computable for periods or portions of periods 47 occurring in the period in which such rate is in effect. 48 (2) General rule. The rate of interest set under this subdivision 49 shall be the sum of (i) the federal short-term rate as provided under 50 paragraph three of this subdivision, plus (ii) seven percentage points. 51 (3) Federal short-term rate. For purposes of this subdivision: 52 (A) The federal short-term rate for any month shall be the federal 53 short-term rate determined by the United States secretary of the treas- 54 ury during such month in accordance with subsection (d) of section 55 twelve hundred seventy-four of the internal revenue code for use in 56 connection with section six thousand six hundred twenty-one of the

S. 8578 802

1 internal revenue code. Any such rate shall be rounded to the nearest 2 full percent, or, if a multiple of one-half of one percent, such rate 3 shall be increased to the next highest full percent. 4 (B) Period during which rate applies. 5 (i) In general. Except as provided in clause (ii) of this subpara- 6 graph, the federal short-term rate for the first month in each calendar 7 quarter shall apply during the first calendar quarter beginning after 8 such month. 9 (ii) Special rule for the month of September, nineteen hundred eight- 10 y-nine. The federal short-term rate for the month of April, nineteen 11 hundred eighty-nine shall apply with respect to setting the rate of 12 interest for the month of September, nineteen hundred eighty-nine. 13 (4) Publication of interest rate. The commissioner of finance shall 14 cause to be published in the City Record, and give other appropriate 15 general notice of, the interest rate to be set under this subdivision no 16 later than twenty days preceding the first day of the calendar quarter 17 during which such interest rate applies. The setting and publication of 18 such interest rate shall not be included within paragraph (a) of subdi- 19 vision five of section one thousand forty-one of the city charter of the 20 preceding municipality as it existed January first, nineteen hundred 21 ninety-four relating to the definition of a rule. 22 (h) Miscellaneous. (1) The certificate of the commissioner of finance 23 to the effect that a tax has not been paid, that a return has not been 24 filed, or that information has not been supplied pursuant to the 25 provisions of this chapter shall be prima facie evidence thereof. 26 (2) Cross-reference: For criminal penalties, see chapter forty of this 27 title. 28 (i) Substantial understatement of liability. If there is a substantial 29 understatement of tax for any taxable period, there shall be added to 30 the tax an amount equal to ten percent of the amount of any underpayment 31 attributable to such understatement. For purposes of this subdivision, 32 there is a substantial understatement of tax for any taxable period if 33 the amount of the understatement for the taxable period exceeds the 34 greater of ten percent of the tax required to be shown on the return for 35 the taxable period or five thousand dollars. For purposes of this subdi- 36 vision, the term "understatement" means the excess of the amount of the 37 tax required to be shown on the return for the taxable period, over the 38 amount of the tax imposed which is shown on the return, reduced by any 39 rebate. The amount of such understatement shall be reduced by that 40 portion of the understatement which is attributable to the tax treatment 41 of any item by the taxpayer if there is or was substantial authority for 42 such treatment, or any item with respect to which the relevant facts 43 affecting the item's tax treatment are adequately disclosed in the 44 return or in a statement attached to the return. The commissioner of 45 finance may waive all or any part of the addition to tax provided by 46 this subdivision on a showing by the taxpayer that there was reasonable 47 cause for the understatement, or part thereof, and that the taxpayer 48 acted in good faith. 49 (j) Aiding or assisting in the giving of fraudulent returns, reports, 50 statements or other documents. (1) Any person who, with the intent that 51 tax be evaded, shall, for a fee or other compensation or as an incident 52 to the performance of other services for which such person receives 53 compensation, aid or assist in, or procure, counsel, or advise the prep- 54 aration or presentation under, or in connection with any matter arising 55 under this title of any return, report, statement or other document 56 which is fraudulent or false as to any material matter, or supply any

S. 8578 803

1 false or fraudulent information, whether or not such falsity or fraud is 2 with the knowledge or consent of the person authorized or required to 3 present such return, report, statement or other document shall pay a 4 penalty not exceeding ten thousand dollars. 5 (2) For purposes of paragraph one of this subdivision, the term 6 "procures" includes ordering, or otherwise causing, a subordinate to do 7 an act, and knowing of, and not attempting to prevent, participation by 8 a subordinate in an act. The term "subordinate" means any other person, 9 whether or not a director, officer, employee, or agent of the taxpayer 10 involved, over whose activities the person has direction, supervision, 11 or control. 12 (3) For purposes of paragraph one of this subdivision, a person 13 furnishing typing, reproducing, or other mechanical assistance with 14 respect to a document shall not be treated as having aided or assisted 15 in the preparation of such document by reason of such assistance. 16 (4) The penalty imposed by this subdivision shall be in addition to 17 any other penalty provided by law. 18 (k) Failure to include on return information relating to issuer's 19 allocation percentage. Where a return is filed but does not contain (1) 20 the information necessary to compute the taxpayer's issuer's allocation 21 percentage, as defined in subparagraph one of paragraph (b) of subdivi- 22 sion three of section 11-604 of this title, where the same is called for 23 on the return, or, (2) the taxpayer's issuer's allocation percentage, 24 where the same is called for on the return but where all of the informa- 25 tion necessary for the computation of such percentage is not called for 26 on the return, then unless it is shown that such failure is due to 27 reasonable cause and not due to willful neglect there shall be added to 28 the tax a penalty of five hundred dollars. 29 (l) False or fraudulent document penalty. Any taxpayer that submits a 30 false or fraudulent document to the department shall be subject to a 31 penalty of one hundred dollars per document submitted, or five hundred 32 dollars per tax return submitted. Such penalty shall be in addition to 33 any other penalty or addition provided by law. 34 § 11-1115 Notices and limitations of time. a. Any notice authorized 35 or required under the provisions of this chapter may be given by mailing 36 the same to the person for whom it is intended in a postpaid envelope 37 addressed to such person at the address given in the last return filed 38 by such person pursuant to the provisions of this chapter or in any 39 application made by him or her, or, if no return has been filed or 40 application made, then to such address as may be obtainable. The mail- 41 ing of such notice shall be presumptive evidence of the receipt of the 42 same by the person to whom addressed. Any period of time which is 43 determined according to the provisions of this chapter by the giving of 44 notice shall commence to run from the date of mailing of such notice. 45 b. The provisions of the civil practice law and rules or any other law 46 relative to limitations of time for the enforcement of a civil remedy 47 shall not apply to any proceeding or action by the city taken to levy, 48 appraise, assess, determine or enforce the collection of any tax or 49 penalty provided by this chapter. However, except in the case of a 50 wilfully false or fraudulent return with intent to evade the tax, no 51 assessment of additional tax imposed under a local law for the preceding 52 municipality enacted subsequent to July first, nineteen hundred thirty- 53 eight, shall be made after the expiration of more than three years from 54 the date of the filing of a return, provided, however, that where no 55 return has been filed, or where the taxpayer fails to file a report or 56 return in respect of a change or correction in the amount of sales and

S. 8578 804

1 compensating use tax liability as provided by law, the tax may be 2 assessed at any time. Where the taxpayer files a report or return in 3 respect of a change or correction in sales and compensating use tax 4 liability, as required by subdivision d of section 11-1104 of this chap- 5 ter, an assessment may be made at any time within two years after such 6 report or return was filed, provided, however, that this sentence shall 7 not affect the time within which an assessment may otherwise be made. 8 c. Where, before the expiration of the period prescribed herein for 9 the assessment of an additional tax, a taxpayer has consented in writing 10 that such period be extended, the amount of such additional tax due may 11 be determined at any time within such extended period. The period so 12 extended may be further extended by subsequent consents in writing made 13 before the expiration of the extended period. 14 d. If any return, claim, statement, notice, application, or other 15 document required to be filed, or any payment required to be made, with- 16 in a prescribed period or on or before a prescribed date under authority 17 of any provision of this chapter is, after such period or such date, 18 delivered by United States mail to the commissioner of finance, the tax 19 appeals tribunal, bureau, office, officer or person with which or with 20 whom such document is required to be filed, or to which or to whom such 21 payment is required to be made, the date of the United States postmark 22 stamped on the envelope shall be deemed to be the date of delivery. This 23 subdivision shall apply only if the postmark date falls within the 24 prescribed period or on or before the prescribed date for the filing of 25 such document, or for making the payment, including any extension grant- 26 ed for such filing or payment, and only if such document or payment was 27 deposited in the mail, postage prepaid, properly addressed to the 28 commissioner of finance, the tax appeals tribunal, bureau, office, offi- 29 cer or person with which or with whom the document is required to be 30 filed or to which or to whom such payment is required to be made. If any 31 document is sent by United States registered mail, such registration 32 shall be prima facie evidence that such document was delivered to the 33 commissioner of finance, the tax appeals tribunal, bureau, office, offi- 34 cer or person to which or to whom addressed, and the date of registra- 35 tion shall be deemed the postmark date. The commissioner of finance or, 36 where relevant, the tax appeals tribunal is authorized to provide by 37 regulation the extent to which the provisions such with respect to prima 38 facie evidence of delivery and the postmark date shall apply to certi- 39 fied mail. Except as provided in subdivision f of this section, this 40 subdivision shall apply in the case of postmarks not made by the United 41 States postal service only if and to the extent provided by regulation 42 of the commissioner of finance or where relevant, the tax appeals tribu- 43 nal. 44 e. When the last day prescribed under authority of this chapter, 45 including any extension of time, for performing any act falls on a 46 Saturday, Sunday or legal holiday in the state, the performance of such 47 act shall be considered timely if it is performed on the next succeeding 48 day which is not a Saturday, Sunday or legal holiday. 49 f. (1) Any reference in subdivision d of this section to the United 50 States mail shall be treated as including a reference to any delivery 51 service designated by the secretary of the treasury of the United States 52 pursuant to section seventy-five hundred two of the internal revenue 53 code and any reference in subdivision d of this section to a United 54 States postmark shall be treated as including a reference to any date 55 recorded or marked in the manner described in section seventy-five 56 hundred two of the internal revenue code by a designated delivery

S. 8578 805

1 service. If the commissioner of finance finds that any delivery service 2 designated by such secretary is inadequate for the needs of the city, 3 the commissioner of finance may withdraw such designation for purposes 4 of this title. The commissioner of finance may also designate additional 5 delivery services meeting the criteria of section seventy-five hundred 6 two of the internal revenue code for purposes of this title, or may 7 withdraw any such designation if the commissioner of finance finds that 8 a delivery service so designated is inadequate for the needs of the 9 city. Any reference in subdivision d of this section to the United 10 States mail shall be treated as including a reference to any delivery 11 service designated by the commissioner of finance and any reference in 12 subdivision d of this section to a United States postmark shall be 13 treated as including a reference to any date recorded or marked in the 14 manner described in section seventy-five hundred two of the internal 15 revenue code by a delivery service designated by the commissioner of 16 finance; provided, however, any withdrawal of designation or additional 17 designation by the commissioner of finance shall not be effective for 18 purposes of service upon the tax appeals tribunal, unless and until such 19 withdrawal of designation or additional designation is ratified by the 20 president of the tax appeals tribunal. 21 (2) Any equivalent of registered or certified mail designated by the 22 United States secretary of the treasury, or as may be designated by the 23 commissioner of finance pursuant to the same criteria used by such 24 secretary for such designations pursuant to section seventy-five hundred 25 two of the internal revenue code, shall be included within the meaning 26 of registered or certified mail as used in subdivision d of this 27 section. If the commissioner of finance finds that any equivalent of 28 registered or certified mail designated by such secretary or the commis- 29 sioner of finance is inadequate for the needs of the city, the commis- 30 sioner of finance may withdraw such designation for purposes of this 31 title. Notwithstanding the foregoing, any withdrawal of designation or 32 additional designation by the commissioner of finance shall not be 33 effective for purposes of service upon the tax appeals tribunal, unless 34 and until such withdrawal of designation or additional designation is 35 ratified by the president of the tax appeals tribunal. 36 § 11-1116 Returns to be secret. a. Except in accordance with proper 37 judicial order or as otherwise provided by law, it shall be unlawful for 38 the commissioner of finance, the tax appeals tribunal, or any officer or 39 employee of the department of finance or the tax appeals tribunal to 40 divulge or make known in any manner, the receipts or any other informa- 41 tion relating to the business of a taxpayer contained in any return 42 required under this chapter. The officers charged with the custody of 43 such returns shall not be required to produce any of them or evidence of 44 anything contained in them in any action or proceeding in any court, 45 except on behalf of the city or the commissioner of finance, or on 46 behalf of any party to any action or proceeding under the provisions of 47 this chapter when the returns or facts shown thereby are directly 48 involved in such action or proceeding, in either of which events, the 49 court may require the production of, and may admit in evidence, so much 50 of said returns or of the facts shown thereby, as are pertinent to the 51 action or proceeding and no more. Nothing in this subdivision shall be 52 construed to prohibit the delivery to a taxpayer or his or her duly 53 authorized representative of a certified copy of any return filed in 54 connection with his or her tax, nor to prohibit the publication of 55 statistics so classified as to prevent the identification of particular 56 returns and the items thereof, or the inspection by the corporation

S. 8578 806

1 counsel of the city or other legal representatives of such city of the 2 return of any taxpayer who shall bring action or proceeding to set aside 3 or review the tax based thereon, or against whom an action or proceeding 4 has been instituted or is contemplated for the collection of a tax, 5 penalty or interest. Returns shall be preserved for three years and 6 thereafter until the commissioner of finance permits them to be 7 destroyed. 8 b. (1) Any officer or employee of the city who willfully violates the 9 provisions of subdivision a of this section shall be dismissed from 10 office and be incapable of holding any public office in this city for a 11 period of five years thereafter. 12 (2) Cross-reference: For criminal penalties, see chapter forty of this 13 title. 14 c. This section shall be deemed a state statute for purposes of para- 15 graph (a) of subdivision two of section eighty-seven of the public offi- 16 cers law. 17 d. Notwithstanding anything in subdivision a of this section to the 18 contrary, if a taxpayer has petitioned the tax appeals tribunal for 19 administrative review as provided in section one hundred seventy of the 20 charter of the preceding municipality as it existed January first, nine- 21 teen hundred ninety-four, the commissioner of finance shall be author- 22 ized to present to the tribunal any report or return of such taxpayer, 23 or any information contained therein or relating thereto, which may be 24 material or relevant to the proceeding before the tribunal. The tax 25 appeals tribunal shall be authorized to publish a copy or a summary of 26 any decision rendered pursuant to section one hundred seventy-one of the 27 charter of the preceding municipality as it existed January first, nine- 28 teen hundred ninety-four. 29 § 11-1117 Construction and enforcement. This chapter shall be 30 construed and enforced in conformity with chapter ninety-three of the 31 laws of nineteen hundred sixty-five, as amended, pursuant to which it is 32 enacted. 33 § 11-1118 Disposition of revenues. All revenues resulting from the 34 imposition of the tax under this chapter shall be paid into the treasury 35 of the city and shall be credited to and deposited in the general fund 36 of the city, but no part of such revenues may be expended unless appro- 37 priated in the annual budget of the city. 38 § 11-1119 Determinations of place of primary use of wireless telecom- 39 munications services. a. A home service provider shall be responsible 40 for obtaining and maintaining the customer's place of primary use as 41 defined in subdivision twenty of section 11-1101 of this chapter. Except 42 as provided in subdivision b of this section, if the home service 43 provider's reliance on the information provided by its customer is in 44 good faith: (1) the home service provider can rely on the applicable 45 residential or business street address supplied by the home service 46 provider's customer; and (2) the home service provider shall not be held 47 liable for any additional taxes under this chapter based on a different 48 determination of the place of primary use. 49 b. The commissioner of finance, or the commissioner of taxation and 50 finance of the state of New York on behalf of the commissioner of 51 finance, may determine that the address used by a home service provider 52 for purposes of this chapter does not meet the definition of place of 53 primary use as defined in subdivision twenty of section 11-1101 of this 54 chapter and may give binding notice to the home service provider to 55 change the place of primary use on a prospective basis from the date of 56 notice of determination if:

S. 8578 807

1 (1) where the determination is made by the commissioner of finance, 2 such commissioner obtains the consent of all affected taxing jurisdic- 3 tions within this state before giving such notice of determination; and 4 (2) before the commissioner of finance or the commissioner of taxation 5 and finance of the state of New York gives such notice of determination, 6 the customer is given an opportunity to demonstrate, in accordance with 7 applicable procedures established by the commissioner of finance making 8 the determination, that that address is the customer's place of primary 9 use. 10 c. Except as provided in subdivision b of this section, a home service 11 provider may treat the address used by the home service provider for 12 purposes of this chapter for the last taxable period beginning before 13 August first, two thousand two, for any customer under a service 14 contract or agreement in effect on July twenty-eighth, two thousand two 15 as that customer's place of primary use for the remaining term of such 16 service contract or agreement, excluding any extension or renewal of 17 such service contract or agreement. 18 § 11-1120 Assignment of place of primary use of telecommunications 19 services to the city. a. If an electronic database meeting the require- 20 ments of subsection a of section one hundred nineteen of title four of 21 the United States Code is provided by the state of New York, or by a 22 designated database provider as defined in subsection three of section 23 one hundred twenty-four of such title, and the requirements of 24 subsection b of such section one hundred nineteen are met, a home 25 service provider shall use that database to determine whether the 26 customer's place of primary use is within the territorial limits of the 27 city and shall reflect changes to such database in accordance with 28 subsection c of such section one hundred nineteen. 29 b. A home service provider using the data contained in an electronic 30 database described in subdivision a of this section shall be held harm- 31 less from any tax liability that otherwise would be due under this chap- 32 ter solely as a result of any error or omission in such database 33 provided the home service provider has properly reflected changes to 34 such database in accordance with subsection c of section one hundred 35 nineteen of title four of the United States Code. 36 c. (1) If no electronic database is provided as described in subdivi- 37 sion a of this section, a home service provider shall be held harmless 38 from any tax liability under this chapter that otherwise would be due 39 solely as a result of an assignment of a street address to an incorrect 40 taxing jurisdiction if, subject to subdivision d of this section, the 41 home service provider employs an enhanced zip code to assign each street 42 address to a specific taxing jurisdiction for each level of taxing 43 jurisdiction and exercises due diligence at each level of taxing juris- 44 diction to ensure that each such street address is assigned to the 45 correct taxing jurisdiction. If an enhanced zip code overlaps boundaries 46 of taxing jurisdictions of the same level, the home service provider 47 must designate one specific jurisdiction within such enhanced zip code 48 for use in taxing the activity for such enhanced zip code for each level 49 of taxing jurisdiction. Any enhanced zip code assignment changed in 50 accordance with subdivision d of this section is deemed to be in compli- 51 ance with this subdivision. For purposes of this subdivision, there is a 52 rebuttable presumption that a home service provider has exercised due 53 diligence if such home service provider demonstrates that it has: (i) 54 expended reasonable resources to implement and maintain an appropriately 55 detailed electronic database of street address assignments to taxing 56 jurisdictions; (ii) implemented and maintained reasonable internal

S. 8578 808

1 controls to promptly correct misassignments of street addresses to 2 taxing jurisdictions; and (iii) used all reasonably obtainable and 3 usable data pertaining to municipal annexations, incorporations, reor- 4 ganizations and any other changes in jurisdictional boundaries that 5 materially affect the accuracy of such database. 6 (2) Paragraph one of this subdivision applies to a home service 7 provider that is in compliance with the requirements of such paragraph 8 until the later of: (i) eighteen months after the nationwide standard 9 numeric code described in subsection (a) of section one hundred nineteen 10 of title four of the United States Code has been approved by the feder- 11 ation of tax administrators and the multistate tax commission; or (ii) 12 six months after the state of New York or a designated database provider 13 provides a database as prescribed in subdivision a of this section. 14 d. The commissioner of finance, or the commissioner of taxation and 15 finance of the state of New York on behalf of the commissioner of 16 finance, may determine that the assignment of a street address to a 17 taxing jurisdiction by a home service provider under subdivision c of 18 this section does not reflect the correct taxing jurisdiction and give 19 binding notice to the home service provider to change the assignment on 20 a prospective basis from the date of notice of determination if: (1) 21 where the determination is made by the commissioner of finance, such 22 commissioner obtains the consent of all affected taxing jurisdictions 23 within this state before giving such notice of determination; and (2) 24 the home service provider is given an opportunity to demonstrate in 25 accordance with applicable procedures established by the commissioner of 26 finance making the determination that the assignment reflects the 27 correct taxing jurisdiction.

28 CHAPTER 12 29 HORSE RACE ADMISSIONS TAX 30 § 11-1201 Definitions. When used in this chapter the following terms 31 shall mean or include: 32 1. "Racing corporation or association." A racing corporation or 33 association or other person owning or operating race meeting grounds or 34 enclosures located wholly or partly within the city of Staten Island, 35 and/or a racing corporation or association or other person conducting 36 race meetings at such grounds or enclosures. 37 2. "Person." Includes an individual, partnership, society, associ- 38 ation, joint-stock company, corporation, estate, receiver, trustee, 39 assignee, referee, or any other person acting in a fiduciary or repre- 40 sentative capacity, whether appointed by a court or otherwise, and any 41 combination of individuals. 42 3. "Return." Includes any return filed or required to be filed as 43 herein provided. 44 4. "Comptroller." The comptroller of the city. 45 5. "Commissioner of finance." The commissioner of finance of the 46 city. 47 6. "Admissions." The charge required to be paid by patrons for 48 admission to a running horse race meeting, including any charge required 49 to be paid by such patrons for admission to the clubhouse or other 50 special facilities within the race meeting grounds or enclosure at which 51 the running race meeting is conducted. 52 7. "Tax appeals tribunal." The tax appeals tribunal established by 53 section one hundred sixty-eight of the charter of the preceding munici- 54 pality as it existed January first, nineteen hundred ninety-four.

S. 8578 809

1 § 11-1202 Imposition of tax. A tax is hereby imposed on all admis- 2 sions to running horse race meetings conducted at race meeting grounds 3 or enclosures located wholly or partly within the city of Staten Island 4 at the rate of three percent of the admission price. The racing associ- 5 ation or corporation conducting a running horse race meeting shall, in 6 addition to the admission price, collect such tax on all tickets sold or 7 otherwise disposed of to patrons for admission with the sole exception 8 of those issued free passes, cards or badges in accordance with the 9 specific authority of the laws of the state of New York. In case of 10 failure to collect such tax the tax shall be imposed on the racing 11 corporation or association conducting such meeting. 12 § 11-1203 Payment of the tax. a. The tax imposed by this chapter 13 shall be paid by the racing corporation or association to the commis- 14 sioner of finance daily after each day of each race meeting, by deposit- 15 ing it to the account of the city in such bank or banks as may be desig- 16 nated by the city in accordance with the provisions of section four 17 hundred twenty-one of the charter of the preceding municipality as it 18 existed January first, nineteen hundred ninety-four or at such regular 19 intervals as the commissioner of finance may require. 20 b. The amount of the tax paid on admissions pursuant to this chapter 21 shall be the property of the city of Staten Island and shall be held by 22 the racing corporation or association as trustee for and on account of 23 the city of Staten Island and the racing corporation or association 24 shall be liable for the tax. Officers of the racing corporation or 25 association shall be personally liable for the tax collected or required 26 to be collected hereunder. 27 c. Every racing corporation or association conducting running horse 28 race meetings at race meeting grounds or enclosures located wholly or 29 partly within the city of Staten Island shall, on or before April first, 30 nineteen hundred fifty-two and annually thereafter, before the opening 31 of any race meeting in each year, execute and file with the commissioner 32 of finance a bond issued by a surety company authorized to transact 33 business in this state and approved by the superintendent of insurance 34 of this state as to solvency and responsibility in an amount sufficient 35 to secure the payment of the taxes and/or penalties and interest due or 36 which may become due pursuant to this section, to be fixed by the 37 commissioner of finance. 38 § 11-1204 Returns. a. Every racing corporation or association 39 shall file with the commissioner of finance daily after each day of each 40 race meeting or at such regular intervals as the commissioner of finance 41 may require and upon such forms as shall be prescribed by the commis- 42 sioner of finance a return showing the taxes collected pursuant to this 43 chapter and the number of persons admitted to meetings conducted by the 44 racing corporation or association during the periods covered by the 45 return, together with any and all other information which the commis- 46 sioner of finance shall require to be included and reported in such 47 return. The commissioner of finance may require at any time supple- 48 mental or amended returns of such additional information or data as he 49 or she may specify. 50 b. Every return required pursuant to this section shall have annexed 51 thereto an affidavit of an officer of the racing corporation or associ- 52 ation to the effect that the statements contained therein are true. 53 § 11-1205 Records to be kept and audits by commissioner of finance. 54 Every racing corporation or association shall keep such records as may 55 be prescribed by the commissioner of finance, of all admissions and 56 taxes collected pursuant to this chapter. Such records shall be avail-

S. 8578 810

1 able for inspection and examination at any time upon demand by the 2 commissioner of finance or the commissioner's duly authorized agents or 3 employees, and such records shall be preserved for a period of three 4 years, except that the commissioner of finance may consent to their 5 destruction within that period, and may require that they be kept longer 6 than three years. 7 § 11-1206 Determination of tax. If a return required by this chapter 8 is not filed, or if a return when filed is incorrect or insufficient the 9 amount of tax due shall be determined by the commissioner of finance 10 from such information as may be obtainable and, if necessary, the tax 11 may be estimated on the basis of external indices, such as number of 12 race meetings held, admissions, paid attendance, and/or other factors. 13 Notice of such determination shall be given to the person liable for the 14 collection and/or payment of the tax. Such determination shall finally 15 and irrevocably fix the tax unless the person against whom it is 16 assessed, within ninety days after giving the notice of such determi- 17 nation, or, if the commissioner of finance has established a concil- 18 iation procedure pursuant to section 11-124 of this title and the 19 taxpayer has requested a conciliation conference in accordance there- 20 with, within ninety days from the mailing of a conciliation decision or 21 the date of the commissioner's confirmation of the discontinuance of the 22 conciliation proceeding, both (1) serves a petition upon the commission- 23 er of finance and (2) files a petition with the tax appeals tribunal for 24 a hearing, or unless the commissioner of finance of his or her own 25 motion shall redetermine the same. Such hearing and any appeal to the 26 tax appeals tribunal sitting en banc from the decision rendered in such 27 hearing shall be conducted in the manner and subject to the requirements 28 prescribed by the tax appeals tribunal pursuant to sections one hundred 29 sixty-eight through one hundred seventy-two of the charter of the 30 preceding municipality as it existed January first, nineteen hundred 31 ninety-four. After such hearing the tax appeals tribunal shall give 32 notice of its decision to the person liable for the tax and to the 33 commissioner of finance. A decision of the tax appeals tribunal sitting 34 en banc shall be reviewable for error, illegality or unconstitutionality 35 or any other reason whatsoever by a proceeding under article seventy- 36 eight of the civil practice law and rules if application therefor is 37 made to the supreme court by the person against whom the tax was 38 assessed within four months after the giving of the notice of such tax 39 appeals tribunal decision. A proceeding under article seventy-eight of 40 the civil practice law and rules shall not be instituted by a person 41 liable for the tax unless the amount of any tax sought to be reviewed 42 with interest and penalties thereon, if any, shall be first deposited 43 with the commissioner of finance and there shall be filed with the 44 commissioner of finance an undertaking, issued by a surety company 45 authorized to transact business in this state and approved by the super- 46 intendent of insurance of this state as to solvency and responsibility, 47 in such amount as a justice of the supreme court shall approve to the 48 effect that if such proceeding be dismissed or the tax confirmed, such 49 person will pay all costs and charges which may accrue in the prose- 50 cution of the proceeding, or at the option of such person such undertak- 51 ing filed with the commissioner of finance may be in a sum sufficient to 52 cover the taxes, penalties and interest thereon stated in such decision 53 plus the costs and charges which may accrue against it in the prose- 54 cution of the proceeding, in which event such person shall not be 55 required to deposit such taxes, penalties and interest as a condition 56 precedent to the application.

S. 8578 811

1 § 11-1207 Refunds. a. In the manner provided in this section the 2 commissioner of finance shall refund or credit, without interest, any 3 tax, penalty or interest erroneously, illegally, or unconstitutionally 4 collected or paid if application to the commissioner of finance for such 5 refund shall be made within one year from the payment thereof. Whenever 6 a refund or credit is made or denied by the commissioner of finance, he 7 or she shall state his or her reason therefor and give notice thereof to 8 the applicant in writing. The commissioner of finance may, in lieu of 9 any refund required to be made, allow credit therefor on payments due 10 from the applicant. 11 b. Any determination of the commissioner of finance denying a refund 12 or credit pursuant to subdivision a of this section shall be final and 13 irrevocable unless the applicant for such refund or credit, within nine- 14 ty days from the mailing of notice of such determination, or, if the 15 commissioner of finance has established a conciliation procedure, pursu- 16 ant to section 11-124 of this title and the applicant has requested a 17 conciliation conference in accordance therewith, within ninety days of 18 the mailing of a conciliation decision or the date of the commissioner's 19 confirmation of the discontinuance of the conciliation proceeding, both 20 (1) serves a petition upon the commissioner of finance and (2) files a 21 petition with the tax appeals tribunal for a hearing. Such petition for 22 a refund or credit, made as provided under this section, shall be deemed 23 an application for a revision of any tax, penalty or interest complained 24 of. Such hearing and any appeal to the tax appeals tribunal sitting en 25 banc from the decision rendered in such hearing shall be conducted in 26 the manner and subject to the requirements prescribed by the tax appeals 27 tribunal pursuant to section one hundred sixty-eight through one hundred 28 seventy-two of the charter of the preceding municipality as it existed 29 January first, nineteen hundred ninety-four. After such hearing, the tax 30 appeals tribunal shall give notice of its decision to the applicant and 31 to the commissioner of finance. The applicant shall be entitled to 32 institute a proceeding pursuant to article seventy-eight of the civil 33 practice law and rules to review a decision of the tax appeals tribunal 34 sitting en banc, provided such proceeding is instituted within four 35 months after the giving of the notice of such decision, and provided, in 36 the case of an application by a person liable for the tax, that a final 37 determination of tax due was not previously made. Such a proceeding 38 shall not be instituted by a person liable for the tax unless an under- 39 taking is filed with the commissioner of finance in such amount and with 40 such sureties as a justice of the supreme court shall approve to the 41 effect that if such proceeding be dismissed or the tax confirmed, such 42 person will pay all costs and charges which may accrue in the prose- 43 cution of such proceeding. 44 c. A person shall not be entitled to a revision, refund or credit 45 under this section of a tax, interest or penalty which has been deter- 46 mined to be due pursuant to the provisions of section 11-1206 of this 47 chapter where such person has had a hearing or an opportunity for a 48 hearing, as provided in said section, or has failed to avail himself or 49 herself of the remedies therein provided. No refund or credit shall be 50 made of a tax, interest or penalty paid after a determination by the 51 commissioner of finance made pursuant to section 11-1206 of this chapter 52 unless it be found that such determination was erroneous, illegal or 53 unconstitutional or otherwise improper, by the tax appeals tribunal 54 after a hearing or of the commissioner's own motion, or, if such tax 55 appeals tribunal affirms in whole or in part the determination of the 56 commissioner of finance, in a proceeding under article seventy-eight of

S. 8578 812

1 the civil practice law and rules, pursuant to the provisions of said 2 section, in which event refund or credit without interest shall be made 3 of the tax, interest or penalty found to have been overpaid. 4 § 11-1208 Reserves. In cases where a person has applied for a 5 refund and has instituted a proceeding under article seventy-eight of 6 the civil practice law and rules to review a determination adverse to 7 such person on his or her application for refund, the comptroller shall 8 set up appropriate reserves to meet any decision adverse to the city. 9 § 11-1209 Remedies exclusive. The remedies provided by sections 10 11-1206 and 11-1207 of this chapter shall be exclusive remedies avail- 11 able to any person for the review of tax liability imposed by this chap- 12 ter, and no determination or proposed determination of tax or determi- 13 nation on any application for refund by the commissioner of finance, nor 14 any decision by the tax appeals tribunal or any of its administrative 15 law judges, shall be enjoined or reviewed by an action for declaratory 16 judgment, an action for money had and received or by any action or 17 proceeding other than, in the case of a decision by the tax appeals 18 tribunal sitting en banc, a proceeding in the nature of a certiorari 19 proceeding under article seventy-eight of the civil practice law and 20 rules; provided, however, that such person may proceed by declaratory 21 judgment if such person institutes suit within ninety days after a defi- 22 ciency assessment is made and pays the amount of the deficiency assess- 23 ment to the commissioner of finance prior to the institution of such 24 suit and posts a bond for costs as provided in section 11-1206 of this 25 chapter. 26 § 11-1210 Proceedings to recover tax. a. Whenever any racing 27 corporation or association or any of its officers or any other person 28 shall fail to collect and pay over any tax or to pay any tax, penalty or 29 interest imposed by this chapter as therein provided, the corporation 30 counsel shall, upon the request of the commissioner of finance bring or 31 cause to be brought an action to enforce the payment of the same on 32 behalf of the city of Staten Island in any court of the state of New 33 York or of any other state or of the United States. If, however, the 34 commissioner of finance in his or her discretion believes that a person 35 subject to the provisions of this chapter is about to cease business, 36 leave the state or remove or dissipate the assets out of which the tax 37 or penalties might be satisfied, and that any such tax or penalty will 38 not be paid when due, the commissioner of finance may declare such tax 39 or penalty to be immediately due and payable and may issue a warrant 40 immediately. 41 b. As an additional or alternate remedy, the commissioner of finance 42 may issue a warrant, directed to the city sheriff commanding the sheriff 43 to levy upon and sell the real and personal property of the racing 44 corporation or association or its officers or any other person which may 45 be found within the city, for the payment of the amount thereof, with 46 any penalties and interest, and the cost of executing the warrant, and 47 to return such warrant to the commissioner of finance and to pay to the 48 commissioner of finance the money collected by virtue thereof within 49 sixty days after the receipt of such warrant. The city sheriff shall 50 within five days after the receipt of the warrant file with the county 51 clerk a copy thereof, and thereupon such clerk shall enter in the judg- 52 ment docket the name of the person mentioned in the warrant and the 53 amount of the tax, penalties and interest for which the warrant is 54 issued and the date when such copy is filed. Thereupon the amount of 55 such warrant so docketed shall become a lien upon the title to and 56 interest in real and personal property of the person against whom the

S. 8578 813

1 warrant is issued. The city sheriff shall then proceed upon the warrant 2 in the same manner, and with like effect, as that provided by law in 3 respect to executions issued against property upon judgments of a court 4 of record and for services in executing the warrants the city sheriff 5 shall be entitled to the same fees, which the city sheriff may collect 6 in the same manner. In the discretion of the commissioner of finance a 7 warrant of like terms, force and effect may be issued and directed to 8 any officer or employee of the department of finance, and in the 9 execution thereof such officer or employee shall have all the powers 10 conferred by law upon sheriffs, but shall be entitled to no fee or 11 compensation in excess of the actual expenses paid in the performance of 12 such duty. If a warrant is returned not satisfied in full, the commis- 13 sioner of finance may from time to time issue new warrants and shall 14 also have the same remedies to enforce the amount due thereunder as if 15 the city had recovered judgment therefor and execution thereon had been 16 returned unsatisfied. 17 c. Whenever a corporation or association shall make a sale, transfer 18 or assignment in bulk or any part or the whole of its race meeting 19 grounds or enclosures and the building and structures thereon, or its 20 lease, license or other agreement or right to possess or operate such 21 race meeting grounds or enclosures or of the equipment, machinery, 22 fixtures or supplies, or of the said race meeting grounds or enclosures 23 and the building and structures thereon, or lease, license or other 24 agreement or right to possess or operate such race meeting grounds or 25 enclosures, and the equipment, machinery, fixtures or supplies pertain- 26 ing to the conduct or the operation of the said race meeting grounds or 27 enclosures, otherwise than in the ordinary course of trade and in the 28 regular prosecution of said business, the purchaser, transferee or 29 assignee shall at least ten days before taking possession of such race 30 meeting grounds or enclosures and the building and structures thereon, 31 or lease, license or other agreement or right to possess or operate such 32 race meeting grounds or enclosures or the equipment, machinery, fixtures 33 or supplies, or of the said race meeting grounds or enclosures and the 34 building and structures thereon, or lease, license or other agreement or 35 right to possess or operate such race meeting grounds or enclosures, and 36 the equipment, machinery, fixtures or supplies or paying thereof, notify 37 the commissioner of finance by registered mail of the proposed sale and 38 of the price, terms and conditions thereof whether or not the seller, 39 transferor or assignor, has represented to, or informed the purchaser, 40 transferee or assignee that it owes any tax pursuant to this chapter and 41 whether or not the purchaser, transferee or assignee has knowledge that 42 such taxes are owing, and whether any such taxes are in fact owing. 43 Whenever the purchaser, transferee or assignee shall fail to give 44 notice to the commissioner of finance as required by the opening para- 45 graph of this subdivision, or whenever the commissioner of finance shall 46 inform the purchaser, transferee or assignee that a possible claim for 47 such tax or taxes exists, any sums of money, property or choses in 48 action, or other consideration, which the purchaser, transferee or 49 assignee is required to transfer over to the seller, transferor or 50 assignor shall be subject to a first priority right and lien for any 51 such taxes theretofore or thereafter determined to be due from the sell- 52 er, transferor or assignor to the city, and the purchaser, transferee or 53 assignee is forbidden to transfer to the seller, transferor or assignor 54 any such sums of money, property or choses in action to the extent of 55 the amount of the city's claim. For failure to comply with the 56 provisions of this subdivision, the purchaser, transferee or assignee,

S. 8578 814

1 in addition to being subject to the liabilities and remedies imposed 2 under the provisions of former article six of the uniform commercial 3 code, shall be personally liable for the payment to the city of any such 4 taxes theretofore or thereafter determined to be due to the city from 5 the seller, transferor or assignor, and such liability may be assessed 6 and enforced in the same manner as the liability for tax under this 7 chapter. 8 d. The commissioner of finance, if he or she finds that the interests 9 of the city will not thereby be jeopardized, and upon such conditions as 10 the commissioner of finance may require, may release any property from 11 the lien of any warrant or vacate such warrant for unpaid taxes, addi- 12 tions to tax, penalties and interest filed pursuant to subdivision b of 13 this section, and such release or vacating of the warrant may be 14 recorded in the office of any recording officer in which such warrant 15 has been filed. The clerk shall thereupon cancel and discharge as of the 16 original date of docketing the vacated warrant. 17 § 11-1211 General powers of the commissioner of finance. In addition 18 to the powers granted to the commissioner of finance in this chapter, 19 such commissioner is hereby authorized and empowered: 20 1. To make, adopt and amend rules and regulations appropriate to the 21 carrying out of this chapter and the purposes thereof; 22 2. To extend, for cause shown, the time for filing any return for a 23 period not exceeding thirty days; and to compromise disputed claims in 24 connection with the taxes hereby imposed; 25 3. To request information from the racing commission and the tax 26 commission of the state of New York, or any other state or the treasury 27 department of the United States relative to any person; and to afford 28 information to such commission or such treasury department relative to 29 any person, any other provision of this chapter to the contrary notwith- 30 standing; 31 4. To delegate his or her functions under this section to a deputy 32 commissioner of finance or any employee or employees of the department 33 of finance; 34 5. To prescribe methods for determining the amount of the admissions 35 and for determining the tax; 36 6. To require racing corporations or associations to keep detailed 37 records of all race meetings and all attendance thereat, and to furnish 38 such information upon request to the commissioner of finance; 39 7. To require that the amount of the tax be printed, separate from 40 the price of admission, on tickets of admission. 41 § 11-1212 Administration of oaths and compelling testimony. a. The 42 commissioner of finance, his or her employees or agents duly designated 43 and authorized by the commissioner of finance, the tax appeals tribunal 44 and any of its duly designated and authorized employees or agents shall 45 have power to administer oaths and take affidavits in relation to any 46 matter or proceeding in the exercise of their powers and duties under 47 this chapter. The commissioner of finance and the tax appeals tribunal 48 shall have power to subpoena and require the attendance of witnesses and 49 the production of books, papers and documents to secure information 50 pertinent to the performance of the duties of the commissioner or of the 51 tax appeals tribunal under this section and of the enforcement of this 52 chapter and to examine them in relation thereto, and to issue commis- 53 sions for the examination of witnesses who are out of the state or 54 unable to attend before the commissioner of finance or the tax appeals 55 tribunal or excused from attendance.

S. 8578 815

1 b. A justice of the supreme court either in court or at chambers shall 2 have power summarily to enforce by proper proceedings the attendance and 3 testimony of witnesses and the production and examination of books, 4 papers and documents called for by the subpoena of the commissioner of 5 finance or the tax appeals tribunal under this chapter. 6 c. Cross-reference; criminal penalties. For failure to obey subpoenas 7 or for testifying falsely, see section 11-4007 of this title; for 8 supplying false or fraudulent information, see section 11-4009 of this 9 title. 10 d. The officers who serve the summons or subpoena of the commissioner 11 of finance or the tax appeals tribunal and witnesses attending in 12 response thereto shall be entitled to the same fees as are allowed to 13 officers and witnesses in civil cases in courts of record, except as 14 herein otherwise provided. Such officers shall be the city sheriff and 15 his or her duly appointed deputies, or any officers or employees of the 16 department of finance or the tax appeals tribunal, designated to serve 17 such process. 18 § 11-1213 Interest and penalties. (a) Interest on underpayments. If 19 any amount of tax is not paid over or paid on or before the last date 20 prescribed for payment, without regard to any extension of time granted 21 for payment, interest on such amount at the rate set by the commissioner 22 of finance pursuant to subdivision (g) of this section, or, if no rate 23 is set, at the rate of seven and one-half percent per annum, shall be 24 paid for the period from such last date to the date of payment. In 25 computing the amount of interest to be paid, such interest shall be 26 compounded daily. Interest under this subdivision shall not be paid if 27 the amount thereof is less than one dollar. 28 (b) (1) Failure to file return. (A) In case of failure to file a 29 return under this chapter on or before the prescribed date, determined 30 with regard to any extension of time for filing, unless it is shown that 31 such failure is due to reasonable cause and not due to willful neglect, 32 there shall be added to the amount required to be shown as tax on such 33 return five percent of the amount of such tax if the failure is for not 34 more than one month, with an additional five percent for each additional 35 month or fraction thereof during which such failure continues, not 36 exceeding twenty-five percent in the aggregate. 37 (B) In the case of a failure to file a return of tax within sixty days 38 of the date prescribed for filing of such return, determined with regard 39 to any extension of time for filing, unless it is shown that such fail- 40 ure is due to reasonable cause and not due to willful neglect, the addi- 41 tion to tax under subparagraph (A) of this paragraph shall not be less 42 than the lesser of one hundred dollars or one hundred percent of the 43 amount required to be shown as tax on such return. 44 (C) For purposes of this paragraph, the amount of tax required to be 45 shown on the return shall be reduced by the amount of any part of the 46 tax which is paid on or before the date prescribed for payment of the 47 tax and by the amount of any credit against the tax which may be claimed 48 upon the return. 49 (2) Failure to pay tax shown on return. In case of failure to pay the 50 amount shown as tax on a return required to be filed under this chapter 51 on or before the prescribed date, determined with regard to any exten- 52 sion of time for payment, unless it is shown that such failure is due to 53 reasonable cause and not due to willful neglect, there shall be added to 54 the amount shown as tax on such return one-half of one percent of the 55 amount of such tax if the failure is not for more than one month, with 56 an additional one-half of one percent for each additional month or frac-

S. 8578 816

1 tion thereof during which such failure continues, not exceeding twenty- 2 five percent in the aggregate. For the purpose of computing the addition 3 for any month the amount of tax shown on the return shall be reduced by 4 the amount of any part of the tax which is paid on or before the begin- 5 ning of such month and by the amount of any credit against the tax which 6 may be claimed upon the return. If the amount of tax required to be 7 shown on a return is less than the amount shown as tax on such return, 8 this paragraph shall be applied by substituting such lower amount. 9 (3) Failure to pay tax required to be shown on return. In case of 10 failure to pay any amount in respect of any tax required to be shown on 11 a return required to be filed under this chapter which is not so shown, 12 including a determination made pursuant to section 11-1206 of this chap- 13 ter, within ten days of the date of a notice and demand therefor, unless 14 it is shown that such failure is due to reasonable cause and not due to 15 willful neglect, there shall be added to the amount of tax stated in 16 such notice and demand one-half of one percent of such tax if the fail- 17 ure is not for more than one month, with an additional one-half of one 18 percent for each additional month or fraction thereof during which such 19 failure continues, not exceeding twenty-five percent in the aggregate. 20 For the purpose of computing the addition for any month, the amount of 21 tax stated in the notice and demand shall be reduced by the amount of 22 any part of the tax which is paid before the beginning of such month. 23 (4) Limitations on additions. (A) With respect to any return, the 24 amount of the addition under paragraph one of this subdivision shall be 25 reduced by the amount of the addition under paragraph two of this subdi- 26 vision for any month to which an addition applies under both paragraphs 27 one and two. In any case described in subparagraph (B) of paragraph one 28 of this subdivision, the amount of the addition under such paragraph one 29 shall not be reduced below the amount provided in such subparagraph. 30 (B) With respect to any return, the maximum amount of the addition 31 permitted under paragraph three of this subdivision shall be reduced by 32 the amount of the addition under paragraph one of this subdivision, 33 determined without regard to subparagraph (B) of such paragraph one, 34 which is attributable to the tax for which the notice and demand is made 35 and which is not paid within ten days of such notice and demand. 36 (c) Underpayment due to negligence. (1) If any part of an underpay- 37 ment of tax is due to negligence or intentional disregard of this chap- 38 ter or any rules or regulations hereunder, but without intent to 39 defraud, there shall be added to the tax a penalty equal to five percent 40 of the underpayment. 41 (2) There shall be added to the tax, in addition to the amount deter- 42 mined under paragraph one of this subdivision, an amount equal to fifty 43 percent of the interest payable under subdivision (a) of this section 44 with respect to the portion of the underpayment described in such para- 45 graph one which is attributable to the negligence or intentional disre- 46 gard referred to in such paragraph one, for the period beginning on the 47 last date prescribed by law for payment of such underpayment, determined 48 without regard to any extension, and ending on the date of the assess- 49 ment of the tax, or, if earlier, the date of the payment of the tax. 50 (d) Underpayment due to fraud. (1) If any part of an underpayment of 51 tax is due to fraud, there shall be added to the tax a penalty equal to 52 fifty percent of the underpayment. 53 (2) There shall be added to the tax, in addition to the penalty deter- 54 mined under paragraph one of this subdivision, an amount equal to fifty 55 percent of the interest payable under subdivision (a) of this section 56 with respect to the portion of the underpayment described in such para-

S. 8578 817

1 graph one which is attributable to fraud, for the period beginning on 2 the last day prescribed by law for payment of such underpayment, deter- 3 mined without regard to any extension, and ending on the date of the 4 assessment of the tax, or, if earlier, the date of the payment of the 5 tax. 6 (3) The penalty under this subdivision shall be in lieu of any other 7 addition to tax imposed by subdivision (b) or (c) of this section. 8 (e) Additional penalty. Any person who, with fraudulent intent, shall 9 fail to pay any tax imposed by this chapter, or to make, render, sign or 10 certify any return, or to supply any information within the time 11 required by or under this chapter, shall be liable for a penalty of not 12 more than one thousand dollars, in addition to any other amounts 13 required under this chapter to be imposed, assessed and collected by the 14 commissioner of finance. The commissioner of finance shall have the 15 power, in his or her discretion, to waive, reduce or compromise any 16 penalty under this subdivision. 17 (f) The interest and penalties imposed by this section shall be paid 18 and disposed of in the same manner as other revenues from this chapter. 19 Unpaid interest and penalties may be enforced in the same manner as the 20 tax imposed by this chapter. 21 (g)(1) Authority to set interest rates. The commissioner of finance 22 shall set the rate of interest to be paid pursuant to subdivision (a) of 23 this section, but if no such rate of interest is set, such rate shall be 24 deemed to be set at seven and one-half percent per annum. Such rate 25 shall be the rate prescribed in paragraph two of this subdivision but 26 shall not be less than seven and one-half percent per annum. Any such 27 rate set by the commissioner of finance shall apply to taxes, or any 28 portion thereof, which remain or become due on or after the date on 29 which such rate becomes effective and shall apply only with respect to 30 interest computed or computable for periods or portions of periods 31 occurring in the period in which such rate is in effect. 32 (2) General rule. The rate of interest set under this subdivision 33 shall be the sum of (i) the federal short-term rate as provided under 34 paragraph three of this subdivision, plus (ii) seven percentage points. 35 (3) Federal short-term rate. For purposes of this subdivision: 36 (A) The federal short-term rate for any month shall be the federal 37 short-term rate determined by the United States secretary of the treas- 38 ury during such month in accordance with subsection (d) of section 39 twelve hundred seventy-four of the internal revenue code for use in 40 connection with section six thousand six hundred twenty-one of the 41 internal revenue code. Any such rate shall be rounded to the nearest 42 full percent, or, if a multiple of one-half of one percent, such rate 43 shall be increased to the next highest full percent. 44 (B) Period during which rate applies. 45 (i) In general. Except as provided in clause (ii) of this subpara- 46 graph, the federal short-term rate for the first month in each calendar 47 quarter shall apply during the first calendar quarter beginning after 48 such month. 49 (ii) Special rule for the month of September, nineteen hundred eight- 50 y-nine. The federal short-term rate for the month of April, nineteen 51 hundred eighty-nine shall apply with respect to setting the rate of 52 interest for the month of September, nineteen hundred eighty-nine. 53 (4) Publication of interest rate. The commissioner of finance shall 54 cause to be published in the City Record, and give other appropriate 55 general notice of, the interest rate to be set under this subdivision no 56 later than twenty days preceding the first day of the calendar quarter

S. 8578 818

1 during which such interest rate applies. The setting and publication of 2 such interest rate shall not be included within paragraph (a) of subdi- 3 vision five of section one thousand forty-one of the city charter of the 4 preceding municipality as it existed January first, nineteen hundred 5 ninety-four relating to the definition of a rule. 6 (h) Miscellaneous. (1) Officers of a racing corporation or association 7 shall be personally liable for the tax collected or required to be 8 collected under this chapter, and subject to the penalties imposed by 9 this section. 10 (2) The certificate of the commissioner of finance to the effect that 11 a tax has not been paid, that a return or bond has not been filed, or 12 that information has not been supplied pursuant to the provisions of 13 this chapter, shall be presumptive evidence thereof. 14 (3) Cross-reference: For criminal penalties, see chapter forty of this 15 title. 16 § 11-1214 Returns to be secret. a. Except in accordance with proper 17 judicial order, or as otherwise provided by law, it shall be unlawful 18 for the commissioner of finance or the tax appeals tribunal or any offi- 19 cer or employee of the department of finance to divulge or make known in 20 any manner any of the information relating to the business of any person 21 contained in any return required under this chapter. The officers 22 charged with the custody of such returns shall not be required to 23 produce any of them or evidence of anything contained in them in any 24 action or proceeding in any court, except on behalf of the commissioner 25 of finance in an action or proceeding under the provisions of this chap- 26 ter, or on behalf of any party to any action or proceeding under the 27 provisions of this chapter, when the returns or facts shown thereby are 28 directly involved in such action or proceeding, in either of which 29 events the courts may require the production of, and may admit in 30 evidence, so much of said returns or of the facts shown thereby, as are 31 pertinent to the action or proceeding and no more. The commissioner of 32 finance may, nevertheless, publish a copy or a summary of any determi- 33 nation or decision rendered after a formal hearing held pursuant to 34 section 11-1206 or 11-1207 of this chapter. Nothing in this section 35 shall be construed to prohibit the delivery to a person or such person's 36 duly authorized representative of a certified copy of any return filed 37 by such person nor to prohibit the publication of statistics so classi- 38 fied as to prevent the identification of particular returns and the 39 items thereof, or the inspection by the corporation counsel or other 40 legal representatives of the city, or by the district attorney of Rich- 41 mond county, of the return of any person who shall bring action to set 42 aside or review the tax based thereon, or against whom an action or 43 proceeding has been instituted for the collection of a tax or penalty. 44 Returns shall be preserved for three years and thereafter until the 45 commissioner of finance permits them to be destroyed. 46 b. (1) Any officer or employee of the city who willfully violates the 47 provisions of subdivision a of this section shall be dismissed from 48 office and be incapable of holding any public office in this city for a 49 period of five years thereafter. 50 (2) Cross-reference: For criminal penalties, see chapter forty of this 51 title. 52 c. This section shall be deemed a state statute for purposes of para- 53 graph (a) of subdivision two of section eighty-seven of the public offi- 54 cers law. 55 d. Notwithstanding anything in subdivision a of this section to the 56 contrary, if a taxpayer has petitioned the tax appeals tribunal for

S. 8578 819

1 administrative review as provided in section one hundred seventy of the 2 charter of the preceding municipality as it existed January first, nine- 3 teen hundred ninety-four, the commissioner of finance shall be author- 4 ized to present to the tribunal any report or return of such taxpayer, 5 or any information contained therein or relating thereto, which may be 6 material or relevant to the proceeding before the tribunal. The tax 7 appeals tribunal shall be authorized to publish a copy or a summary of 8 any decision rendered pursuant to section one hundred seventy-one of the 9 charter of the preceding municipality as it existed January first, nine- 10 teen hundred ninety-four. 11 § 11-1215 Notices and limitations of time. a. Any notice author- 12 ized or required under the provisions of this chapter may be given by 13 mailing the same to the person for whom it is intended in a postpaid 14 envelope addressed to such person at the address given in the last 15 return filed by such person pursuant to the provisions of this chapter 16 or in any application made by such person or if no return has been filed 17 or application made, then to such address as may be obtainable. The 18 mailing of such notice shall be presumptive evidence of the receipt of 19 the same by the person to whom addressed. Any period of time which is 20 determined according to the provisions of this chapter by the giving of 21 notice shall commence to run from the date of mailing of such notice. 22 b. The provisions of the civil practice law and rules or any other 23 law relative to limitations of time for the enforcement of a civil reme- 24 dy shall not apply to any proceeding or action taken by the city to 25 levy, appraise, assess, determine or enforce the collection of any tax 26 or penalty provided by this chapter. However, except in the case of a 27 wilfully false or fraudulent return with intent to evade the tax, no 28 assessment of additional tax shall be made after the expiration of more 29 than three years from the date of the filing of a return, provided, that 30 where no return has been filed as provided by law the tax may be 31 assessed at any time. 32 c. Where, before the expiration of the period prescribed under this 33 section for the assessment of an additional tax, a person has consented 34 in writing that such period be extended, the amount of such additional 35 tax due may be determined at any time within such extended period. The 36 period so extended may be further extended by subsequent consents in 37 writing made before the expiration of the extended period. 38 d. If any return, claim, statement, notice, application, or other 39 document required to be filed, or any payment required to be made, with- 40 in a prescribed period or on or before a prescribed date under authority 41 of any provision of this chapter is, after such period or such date, 42 delivered by United States mail to the commissioner of finance, the tax 43 appeals tribunal, bureau, office, officer or person with which or with 44 whom such document is required to be filed, or to which or to whom such 45 payment is required to be made, the date of the United States postmark 46 stamped on the envelope shall be deemed to be the date of delivery. This 47 subdivision shall apply only if the postmark date falls within the 48 prescribed period or on or before the prescribed date for the filing of 49 such document, or for making the payment, including any extension grant- 50 ed for such filing or payment, and only if such document or payment was 51 deposited in the mail, postage prepaid, properly addressed to the 52 commissioner of finance, bureau, office, officer or person with which or 53 with whom the document is required to be filed or to which or to whom 54 such payment is required to be made. If any document is sent by United 55 States registered mail, such registration shall be prima facie evidence 56 that such document was delivered to the commissioner of finance, the tax

S. 8578 820

1 appeals tribunal, bureau, office, officer or person to which or to whom 2 addressed, and the date of registration shall be deemed the postmark 3 date. The commissioner of finance or, where relevant, the tax appeals 4 tribunal is authorized to provide by regulation the extent to which the 5 provisions of the preceding sentence with respect to prima facie 6 evidence of delivery and the postmark date shall apply to certified 7 mail. Except as provided in subdivision f of this section, this subdivi- 8 sion shall apply in the case of postmarks not made by the United States 9 postal service only if and to the extent provided by regulation of the 10 commissioner of finance or, where relevant, the tax appeals tribunal. 11 e. When the last day prescribed under authority of this chapter, 12 including any extension of time, for performing any act falls on a 13 Saturday, Sunday or legal holiday in the state, the performance of such 14 act shall be considered timely if it is performed on the next succeeding 15 day which is not a Saturday, Sunday or legal holiday. 16 f. (1) Any reference in subdivision d of this section to the United 17 States mail shall be treated as including a reference to any delivery 18 service designated by the secretary of the treasury of the United States 19 pursuant to section seventy-five hundred two of the internal revenue 20 code and any reference in subdivision d of this section to a United 21 States postmark shall be treated as including a reference to any date 22 recorded or marked in the manner described in section seventy-five 23 hundred two of the internal revenue code by a designated delivery 24 service. If the commissioner of finance finds that any delivery service 25 designated by such secretary is inadequate for the needs of the city, 26 the commissioner of finance may withdraw such designation for purposes 27 of this title. The commissioner of finance may also designate additional 28 delivery services meeting the criteria of section seventy-five hundred 29 two of the internal revenue code for purposes of this title, or may 30 withdraw any such designation if the commissioner of finance finds that 31 a delivery service so designated is inadequate for the needs of the 32 city. Any reference in subdivision d of this section to the United 33 States mail shall be treated as including a reference to any delivery 34 service designated by the commissioner of finance and any reference in 35 subdivision d of this section to a United States postmark shall be 36 treated as including a reference to any date recorded or marked in the 37 manner described in section seventy-five hundred two of the internal 38 revenue code by a delivery service designated by the commissioner of 39 finance. Notwithstanding the provisions of this paragraph, any with- 40 drawal of designation or additional designation by the commissioner of 41 finance shall not be effective for purposes of service upon the tax 42 appeals tribunal, unless and until such withdrawal of designation or 43 additional designation is ratified by the president of the tax appeals 44 tribunal. 45 (2) Any equivalent of registered or certified mail designated by the 46 United States secretary of the treasury, or as may be designated by the 47 commissioner of finance pursuant to the same criteria used by such 48 secretary for such designations pursuant to section seventy-five hundred 49 two of the internal revenue code, shall be included within the meaning 50 of registered or certified mail as used in subdivision d of this 51 section. If the commissioner of finance finds that any equivalent of 52 registered or certified mail designated by such secretary or the commis- 53 sioner of finance is inadequate for the needs of the city, the commis- 54 sioner of finance may withdraw such designation for purposes of this 55 title. Notwithstanding the foregoing, any withdrawal of designation or 56 additional designation by the commissioner of finance shall not be

S. 8578 821

1 effective for purposes of service upon the tax appeals tribunal, unless 2 and until such withdrawal of designation or additional designation is 3 ratified by the president of the tax appeals tribunal. 4 § 11-1216 Disposition of revenues. All revenues resulting from the 5 imposition of the tax under this chapter at race meeting grounds or 6 enclosures located wholly within the city of Staten Island shall be 7 credited and deposited in the general fund of the city.

8 CHAPTER 13 9 CIGARETTE TAX 10 § 11-1301 Definitions. When used in this chapter the following words 11 shall have the meanings herein indicated: 12 1. "Cigarette." (a) Any roll for smoking made wholly or in part of 13 tobacco or any other substance wrapped in paper or in any other 14 substance not containing tobacco, and (b) any roll for smoking made 15 wholly or in part of tobacco wrapped in any substance containing tobacco 16 which, because of its appearance, the type of tobacco used in the 17 filler, or its packaging and labeling, is likely to be offered to, or 18 purchased by, consumers as a cigarette described in paragraph (a) of 19 this subdivision. However, a roll will not be considered to be a ciga- 20 rette for purposes of paragraph (b) of this subdivision if it is not 21 treated as a cigarette for federal excise tax purposes under the appli- 22 cable federal statute in effect on April first, two thousand eight. 23 "Cigarette" shall not include a research tobacco product. 24 2. "Person." Any individual, partnership, society, association, joint- 25 stock company, corporation, estate, receiver, trustee, assignee, referee 26 or any other person acting in a fiduciary or representative capacity, 27 whether appointed by a court or otherwise, and any combination of indi- 28 viduals. 29 3. "Sale or purchase." Any transfer of title or possession or both, 30 exchange or barter, conditional or otherwise, in any manner or by any 31 means whatsoever or any agreement therefor. 32 4. "Use." Any exercise of a right or power, actual or constructive, 33 and shall include but is not limited to the receipt, storage, or any 34 keeping or retention for any length of time, but shall not include 35 possession for sale by a dealer. 36 5. "Dealer." Any wholesale dealer or retail dealer as defined in 37 subdivisions six and seven of this section. 38 6. "Wholesale dealer." Any person who sells cigarettes or tobacco 39 products to retail dealers or other persons for purposes of resale only, 40 and any person who owns, operates or maintains one or more cigarette 41 vending machines in, at or upon premises owned or occupied by any other 42 person. 43 7. "Retail dealer." Any person other than a wholesale dealer engaged 44 in selling cigarettes or tobacco products. For the purposes of this 45 chapter, the possession or transportation at any one time of five thou- 46 sand or more cigarettes or little cigars, or more than fifty cigars, or 47 more than one pound of loose tobacco, smokeless tobacco, snus or shisha, 48 or any combination thereof, by any person other than a manufacturer, an 49 agent, a licensed wholesale dealer or a person delivering cigarettes or 50 tobacco products in the regular course of business for a manufacturer, 51 an agent or a licensed wholesale or retail dealer, shall be presumptive 52 evidence that such person is a retail dealer.

S. 8578 822

1 8. "Package." The individual package, box or other container in or 2 from which retail sales of cigarettes are normally made or intended to 3 be made. 4 9. "Agent." Any person authorized to purchase and affix adhesive or 5 meter stamps under this chapter who is designated as an agent by the 6 commissioner of finance. 7 10. "Comptroller." The comptroller of the city. 8 11. "Commissioner of finance." The commissioner of finance of the 9 city. 10 12. "City." The city of Staten Island. 11 13. "Tax appeals tribunal." The tax appeals tribunal established by 12 section one hundred sixty-eight of the charter of the preceding munici- 13 pality as it existed January first, nineteen hundred ninety-four. 14 14. "Cigar." Any roll of tobacco for smoking that is wrapped in leaf 15 tobacco or in any substance containing tobacco, with or without a tip or 16 mouthpiece. Cigar does not include a little cigar as defined in this 17 section. 18 15. "Little cigar." Any roll of tobacco for smoking that is wrapped in 19 leaf tobacco or in any substance containing tobacco and that weighs no 20 more than four pounds per thousand or has a cellulose acetate or other 21 integrated filter. 22 16. "Loose tobacco." Any product that consists of loose leaves or 23 pieces of tobacco that is intended for use by consumers in a pipe, roll- 24 your-own cigarette, or similar product or device. 25 17. "Smokeless tobacco." Any tobacco product that consists of cut, 26 ground, powdered, or leaf tobacco and that is intended to be placed in 27 the oral or nasal cavity. 28 18. "Snus." Any smokeless tobacco product marketed and sold as snus, 29 and sold in ready-to-use pouches or loose as a moist powder. 30 19. "Tobacco product." Any product which contains tobacco that is 31 intended for human consumption, including any component, part, or acces- 32 sory of such product. Tobacco product shall include, but not be limited 33 to, any cigar, little cigar, chewing tobacco, pipe tobacco, roll-your- 34 own tobacco, snus, bidi, snuff, shisha, or dissolvable tobacco product. 35 Tobacco product shall not include cigarettes or any product that has 36 been approved by the United States food and drug administration for sale 37 as a tobacco use cessation product or for other medical purposes and 38 that is being marketed and sold solely for such purposes. "Tobacco 39 products" shall not include research tobacco products. 40 20. "Shisha." Any product that contains tobacco and is smoked or 41 intended to be smoked in a hookah or water pipe. 42 21. "Research tobacco product." A tobacco product or cigarette that is 43 labeled as a research tobacco product, is manufactured for use in 44 research for health, scientific, or similar experimental purposes, is 45 exclusively used for such purposes by an accredited college, university 46 or hospital, or a researcher affiliated with an accredited college, 47 university or hospital, and is not offered for sale or sold to consumers 48 for any purpose. 49 § 11-1302 Imposition of tax. a. There is hereby imposed and shall 50 be paid a tax on: 51 1. All cigarettes possessed in the city for sale except as provided 52 in this section; 53 2. The use of all cigarettes in the city except as provided in this 54 section; 55 3. It is intended that the ultimate incidence of and liability for the 56 tax shall be upon the consumer, and that any agent, distributor or deal-

S. 8578 823

1 er who shall pay the tax to the commissioner of finance shall collect 2 the tax from the purchaser or consumer. Such tax shall be at the rate of 3 four cents for each ten cigarettes or fraction thereof, provided, howev- 4 er, that if a package of cigarettes contains more than twenty ciga- 5 rettes, the rate of tax on the cigarettes in such package in excess of 6 twenty shall be two cents for each five cigarettes or fraction thereof. 7 Provided further, however, that on and after July second, two thousand 8 two, such tax shall be at the rate of seventy-five cents for each ten 9 cigarettes or fraction thereof, provided, however, that if a package of 10 cigarettes contains more than twenty cigarettes, the rate of tax on the 11 cigarettes in such package in excess of twenty shall be thirty-eight 12 cents for each five cigarettes or fraction thereof. Such tax shall be 13 imposed only once on the same package of cigarettes. 14 b. The tax imposed by this section shall not apply to: 15 1. The use, otherwise than for sale, of four hundred cigarettes or 16 less brought into the city, on or in possession of, any person; 17 2. Cigarettes sold to the United States; 18 3. Cigarettes sold to or by a voluntary unincorporated organization 19 of the armed forces of the United States operating a place for the sale 20 of goods pursuant to regulations promulgated by the appropriate execu- 21 tive agency of the United States; 22 4. Cigarettes possessed in the city by any agent or wholesale dealer 23 for sale to a dealer outside the city or for sale and shipment to any 24 person in another state for use there, provided such agent or wholesale 25 dealer complies with the regulations relating thereto. 26 c. The tax imposed under this section shall be in addition to any and 27 all other taxes. 28 d. It shall be presumed that all sales or uses mentioned in this 29 section are subject to tax until the contrary is established, and the 30 burden of proof that a sale or use is not taxable under this section 31 shall be upon the vendor or the purchaser. 32 e. Except as provided in this section, the tax shall be advanced and 33 paid by the agent or distributor. The agent shall be liable for the 34 collection and payment of the tax to the commissioner of finance by 35 purchasing from the commissioner of finance adhesive stamps of such 36 design and denomination as may be prescribed by such commissioner, 37 subject to the approval of the state commissioner of taxation and 38 finance. The tax may also be paid by the use of such metering machines 39 as are prescribed by the commissioner of finance subject to the approval 40 of the state commissioner of taxation and finance. 41 f. Within twenty-four hours after liability for the tax on the use of 42 cigarettes accrues each person liable for the tax shall file with the 43 commissioner of finance a return in such form as the commissioner of 44 finance may prescribe, together with a remittance of the tax shown to be 45 due thereon. 46 g. Agents located within or without the city shall purchase stamps 47 and affix them in the manner prescribed to packages of cigarettes to be 48 sold within the city. 49 h. The amount of taxes advanced and paid by the agent or distributor 50 as provided in this section shall be added to and collected as part of 51 the sales price of the cigarettes. 52 i. The commissioner of finance, notwithstanding any other provision 53 of this chapter, may, subject to the approval of the state commissioner 54 of taxation and finance, provide by regulation that the tax imposed by 55 this section shall be collected without the use of stamps.

S. 8578 824

1 § 11-1302.1. Imposition of tax on tobacco products. a. In accordance 2 with section one hundred ten of the public housing law, an excise tax on 3 the sale of tobacco products is hereby imposed and shall be paid on all 4 tobacco products possessed in the city for sale, except as provided 5 under this section. It is intended that the ultimate incidence of and 6 liability for the tax shall be upon the consumer. Any dealer or distrib- 7 utor who pays the tax to the commissioner of finance shall collect the 8 tax from the purchaser or consumer. Such tax shall be at the rate of ten 9 percent of the price floor for a package of the specified category of 10 tobacco product, exclusive of sales tax, set forth in the following 11 table, which shall be consistent with the price floors described in 12 subdivision d of section 17-176.1 of the code of the preceding munici- 13 pality:

14 Tobacco Product Price floor Amount of OTP tax 15 (excluding OTP and (excluding sales tax) 16 sales taxes)

17 Cigar $8.00 per cigar sold $0.80 per cigar; for 18 individually; for a a package, $0.80 for 19 package, number of first cigar, plus 20 cigars multiplied by $0.175 for each 21 $1.75 plus $6.25 additional cigar

22 Little cigar $10.95 per pack of 20 $1.09 per pack 23 little cigars

24 Smokeless tobacco $8.00 per 1.2 oz. pack- $0.80 per 1.2 oz. plus 25 age plus $2.00 for each an additional $0.20 for 26 additional 0.3 oz. or each 0.3 oz. or any 27 any fraction thereof in fraction thereof in 28 excess of 1.2 oz. excess of 1.2 oz.

29 Snus $8.00 per 0.32 oz. pack- $0.80 per 0.32 oz. 30 age plus $2.00 for each plus an additional 31 additional 0.08 oz. or $0.20 for each 0.08 oz. 32 any fraction thereof in or any fraction thereof 33 excess of 0.32 oz. in excess of 0.32 oz.

34 Shisha $17.00 per 3.5 oz. pack- $1.70 per 3.5 oz. plus 35 age plus $3.40 for each an additional $0.34 for 36 additional 0.7 oz. or for each 0.7 oz. or any 37 any fraction thereof in fraction thereof in 38 excess of 3.5 oz. excess of 3.5 oz.

39 Loose tobacco $2.55 per 1.5 oz. pack- $0.25 per 1.5 oz. pack- 40 age plus $0.51 for each age plus an additional 41 additional 0.3 oz. or $0.05 for each 0.3 oz. 42 any fraction thereof or any fraction thereof 43 in excess of 1.5 oz. in excess of 1.5 oz.

44 b. The tax imposed hereunder shall not apply to: 45 1. The state of New York, or any public corporation, including a 46 public corporation created pursuant to agreement or compact with another 47 state or the Dominion of Canada, improvement district or other political 48 subdivision of the state where it is the purchaser, user or consumer;

S. 8578 825

1 2. The United States of America, in so far as it is immune from taxa- 2 tion; 3 3. The United Nations or other world-wide international organizations 4 of which the United States of America is a member; 5 4. Any corporation, or association, or trust, or community chest, fund 6 or foundation, organized and operated exclusively for religious, chari- 7 table, or educational purposes, or for the prevention of cruelty to 8 children or animals, no part of the net earnings of which inures to the 9 benefit of any private shareholder or individual, and no substantial 10 part of the activities of which is carrying on propaganda, or otherwise 11 attempting to influence legislation; provided, however, that nothing in 12 this paragraph shall include an organization operated for the primary 13 purpose of carrying on a trade or business for profit, whether or not 14 all of its profits are payable to one or more organizations described in 15 this paragraph; and 16 5. Tobacco products possessed in the city by any dealer for sale 17 outside the city or for sale and shipment to any person in another state 18 for use there, provided such dealer complies with the regulations relat- 19 ing thereto. 20 c. Nothing in subdivision b of this section shall exempt sales by any 21 shop or store operated by any college, university or other public or 22 private institution for higher education from the taxes described in 23 this section. 24 d. The tax imposed under this section shall be in addition to any and 25 all other taxes. 26 e. It shall be presumed that all sales mentioned in this section are 27 subject to tax until the contrary is established, and the burden of 28 proof that a sale is not taxable under this section shall be upon the 29 dealer or the purchaser. 30 f. 1. Except as provided in this subdivision, the tax shall be 31 advanced and paid by the wholesale dealer. The wholesale dealer shall be 32 liable for the collection and payment of the tax to the commissioner of 33 finance as required under subdivision g of this section. The commission- 34 er may require the wholesale dealer to keep tobacco products for which 35 the tax has not yet been paid separately from tobacco products for which 36 the tax has been paid. For purposes of this chapter, retention by the 37 wholesale dealer of any tobacco products beyond the time prescribed for 38 payment under this section, without having made the requisite payment, 39 or storing any such products in violation of any separation requirements 40 prescribed by the commissioner, shall be presumptive evidence that such 41 tobacco products are possessed in violation of the provisions of this 42 chapter. 43 2. Every retail dealer shall be liable for the tax on all tobacco 44 products in his or her possession at any time, upon which tax has not 45 been paid, and the failure of any retail dealer to produce and exhibit 46 to the commissioner of finance or such commissioner's duly authorized 47 representatives upon demand, an invoice by a licensed wholesale dealer 48 for any tobacco products in his or her possession, shall be presumptive 49 evidence the tax thereon has not been paid, that such retail dealer is 50 liable for the tax thereon, and the tobacco products are possessed in 51 violation of this chapter, unless evidence of such invoice or payment 52 shall later be produced. 53 g. 1. Each wholesale dealer shall file with the commissioner of 54 finance a return, on a form required by such commissioner, indicating 55 the amount of tax due pursuant to this section and any other information 56 the commissioner may require, on a monthly basis, or on such other regu-

S. 8578 826

1 lar interval as such commissioner may prescribe. Each wholesale dealer 2 shall file the return on the twentieth day of the month following the 3 end of the month or other interval covered by the return, unless the 4 commissioner of finance prescribes a greater number of days following 5 the end of the month or a different reporting interval. Each wholesale 6 dealer shall pay the amount of tax due upon filing the return unless the 7 commissioner prescribes a different date or time for such payment. 8 2. The commissioner of finance may: 9 (A) Authorize another person, including a distributor as defined in 10 subdivision twelve of section four hundred seventy of the tax law, who 11 is not a wholesale dealer, to advance and pay the tax imposed under this 12 section; 13 (B) Exempt wholesale dealers from the requirements of this subdivi- 14 sion, upon such conditions as may be imposed by such commissioner, if he 15 or she is satisfied the tax on the tobacco products has been or is being 16 advanced and paid by another wholesale dealer or a distributor author- 17 ized under this subdivision. 18 h. The amount of taxes advanced and paid by the wholesale dealer 19 pursuant to this section shall be added to and collected as part of the 20 sales price of the tobacco products. 21 § 11-1303 License. a. License required of wholesale and retail deal- 22 ers. 1. It shall be unlawful for a person to engage in business as a 23 wholesale or retail dealer without a license as prescribed in this 24 section or subchapter one of chapter two of title twenty of the code of 25 the preceding municipality, whichever is applicable. 26 2. It shall be unlawful for a person to permit any premises under such 27 person's control to be used by any other person in violation of para- 28 graph one of subdivision a of this section. 29 b. Application for license. 1. Wholesale tobacco license. In order to 30 obtain a license to engage in business as a wholesale dealer, a person 31 shall file application with the commissioner of finance for one license 32 for each place of business that he or she desires to have for the sale 33 of cigarettes or tobacco products in the city. Every application for a 34 wholesale tobacco license shall be made upon a form prescribed and 35 prepared by the commissioner of finance and shall set forth such infor- 36 mation as the commissioner shall require. The commissioner of finance 37 may, for cause, refuse to issue a wholesale tobacco license. Upon 38 approval of the application, the commissioner of finance shall grant and 39 issue to the applicant a wholesale tobacco license for each place of 40 business within the city set forth in the application. Wholesale tobacco 41 licenses shall not be assignable and shall be valid only for the persons 42 in whose names such licenses have been issued and for the transaction of 43 business in the places designated therein and shall at all times be 44 conspicuously displayed at the places for which issued. 45 2. Retail tobacco license. In order to obtain a license to engage in 46 business as a retail dealer, a person shall file application with the 47 commissioner of consumer affairs and worker protection in accordance 48 with the provisions of section 20-202 of the code of the preceding muni- 49 cipality. 50 c. Duplicate licenses. Whenever any license issued by the commissioner 51 of finance under the provisions of this section is defaced, destroyed or 52 lost, the commissioner of finance shall issue a duplicate license to the 53 holder of the defaced, destroyed or lost license upon the payment of a 54 fee of fifteen dollars. A duplicate retail dealer license may be 55 obtained from the commissioner of consumer and worker protection as 56 provided in section 20-204 of the code of the preceding municipality.

S. 8578 827

1 d. Suspension or revocation of licenses. (1) After a hearing, the 2 commissioner of finance may suspend or revoke a wholesale tobacco 3 license and the commissioner of consumer and worker protection, upon 4 notice from the commissioner of finance, may suspend or revoke a retail 5 tobacco license whenever the commissioner of finance finds that the 6 holder thereof has failed to comply with any of the provisions of this 7 chapter or any rules of the commissioner of finance prescribed, adopted 8 and promulgated under this chapter. 9 (2) The commissioner of finance may also suspend or revoke a wholesale 10 tobacco license in accordance with the requirements of any other 11 sections of this code or any rules promulgated thereunder which author- 12 izes the suspension or revocation of a wholesale tobacco license. 13 (3) The commissioner of consumer and worker protection may also 14 suspend or revoke a retail tobacco license in accordance with the 15 requirements of any other section of this code or any rules promulgated 16 thereunder which authorize suspension or revocation of a retail tobacco 17 license. 18 (4) Upon suspending or revoking any wholesale tobacco license, the 19 commissioner of finance shall direct the holder thereof to surrender to 20 the commissioner of finance immediately all wholesale tobacco licenses 21 or duplicates thereof issued to such holder and the holder shall surren- 22 der promptly all such licenses to the commissioner of finance as 23 directed. Before the commissioner of finance suspends or revokes a 24 wholesale tobacco license or notifies the commissioner of consumer and 25 worker protection of a finding of a violation of this chapter with 26 respect to a retail tobacco license pursuant to paragraph one of this 27 subdivision, the commissioner of finance shall notify the holder and the 28 holder shall be entitled to a hearing, if desired, if the holder, within 29 ninety days from the date of such notification, or, if the commissioner 30 of finance has established a conciliation procedure pursuant to section 31 11-124 of this title and the taxpayer has requested a conciliation 32 conference in accordance therewith, within ninety days from the mailing 33 of a conciliation decision or the date of the commissioner's confirma- 34 tion of the discontinuance of the conciliation proceeding, both (A) 35 serves a petition upon the commissioner of finance and (B) files a peti- 36 tion with the tax appeals tribunal for a hearing. After such hearing, 37 the commissioner of finance, good cause appearing therefor, may suspend 38 or revoke the wholesale tobacco license, and, in the case of a retail 39 tobacco license, notify the commissioner of consumer and worker 40 protection of a violation of this chapter or any rules promulgated ther- 41 eunder. Upon such notification, the commissioner of consumer and worker 42 protection may suspend or revoke a retail cigarette license as provided 43 in subdivision b of section 20-206 of the code of the preceding munici- 44 pality. The commissioner of finance may, by rule, provide for granting a 45 similar hearing to an applicant who has been refused a wholesale ciga- 46 rette license by the commissioner of finance. 47 e. Prohibited sales and purchases. No agent or dealer shall sell ciga- 48 rettes or tobacco products to an unlicensed wholesale or retail dealer, 49 or to a wholesale or retail dealer whose license has been suspended or 50 revoked. 51 No dealer shall purchase cigarettes or tobacco products from any 52 person other than a manufacturer or a licensed wholesale dealer. 53 f. Retail dealers. The commissioner of finance may, after hearing, 54 issue an order prohibiting a retail dealer from selling cigarettes, for 55 such period as the order shall specify, for failure to comply with any 56 of the provisions of this chapter or any rules or regulations of the

S. 8578 828

1 commissioner of finance prescribed, adopted and promulgated under this 2 chapter. 3 g. License fees; numbering and registering of licenses; term. 1. The 4 annual fee for a wholesale dealer's license shall be six hundred 5 dollars, and the annual fee for a retail dealer's license shall be as 6 provided in subdivision c of section 20-202 of the code of the preceding 7 municipality. 8 2. Wholesale tobacco licenses shall be regularly numbered and duly 9 registered. 10 3. Wholesale tobacco licenses shall expire on January thirty-first 11 next succeeding the date of issuance unless sooner suspended or revoked. 12 § 11-1304 Preparation and sale of stamps; commissions. a. The 13 commissioner of finance shall, subject to the approval of the state tax 14 commission, prescribe, prepare and furnish stamps of such denominations 15 and quantities as may be necessary for the payment of the tax imposed by 16 this chapter, and may, from time to time, provide for the issuance and 17 exclusive use of stamps of a new design and forbid the use of stamps of 18 any other design. Such stamps shall be in the form of a single stamp 19 for the payment of the tax imposed by this chapter or, in lieu thereof, 20 a joint single stamp to be prepared and issued by the state of New York 21 and the city for the payment of the tax imposed by this chapter and the 22 taxes imposed by article twenty of the tax law. The commissioner of 23 finance may make such arrangements with the state tax commission for the 24 method of acquiring and the manner of sharing the costs of such joint 25 single stamps as he or she deems appropriate. The commissioner of 26 finance, subject to the approval of the state commissioner of taxation 27 and finance, shall make provisions for the sale of such stamps at such 28 places as he or she may deem necessary, and may appoint fiscal agents 29 for such purpose. 30 b. The commissioner of finance may appoint wholesale dealers of ciga- 31 rettes and any other person within or without the city as agents to 32 affix stamps to be used in paying the tax hereby imposed, but an agent 33 shall at all times have the right to appoint the person in his or her 34 employ who is to affix the stamps to any cigarettes under the agent's 35 control. Whenever the commissioner of finance shall sell, consign or 36 deliver to any such agent any such stamps, such agent shall be entitled 37 to receive as compensation for his or her services and expenses in 38 affixing such stamps, and to retain out of the moneys to be paid by the 39 agent for such stamps, a commission on the par value thereof. The 40 commissioner of finance is hereby authorized to prescribe a schedule of 41 commissions not exceeding five per centum, allowable to such agent for 42 affixing such stamps; provided, however, that the commissioner of 43 finance may authorize commissions to agents and temporary agents not 44 exceeding ten per centum for a special period not exceeding fifteen days 45 immediately following the enactment of this chapter to cover the initial 46 stamping of packages of cigarettes. Such schedule shall be uniform for 47 each type and denomination of stamp used, and may be on a graduated 48 scale with respect to the number of stamps purchased. In the event that 49 a joint stamp is issued, the commissions allowed shall be determined 50 jointly by the state commissioner of taxation and finance and the 51 commissioner of finance and shall be based on the full par value of such 52 stamp. The extent to which the city and the state of New York shall 53 bear the expense of such commissions shall be determined by agreement 54 between the commissioner of taxation and finance and the commissioner 55 of finance. The commissioner of finance may in his or her discretion 56 permit an agent to pay for such stamps within thirty days after the date

S. 8578 829

1 of sale, consignment or delivery of such stamps to such agents, and may 2 require any such agent to file with the commissioner of finance a bond, 3 issued by a surety company approved by the superintendent of insurance 4 as to solvency and responsibility and authorized to transact business in 5 the state, in such amounts as the commissioner of finance may fix, to 6 secure the payment of any sums from such agent pursuant to this chapter. 7 c. The commissioner of finance may redeem unused stamps lawfully in 8 the possession of any person. No person shall sell or offer for sale 9 any stamp issued under this chapter, except by written permission of the 10 commissioner of finance. The commissioner of finance may prescribe 11 rules and regulations concerning refunds, sales of stamps and redemp- 12 tions under the provisions of this chapter. 13 d. (1) Except as provided in this subdivision, it shall be unlawful 14 for any person to sell, offer for sale, possess or transport any affixed 15 or unaffixed false, altered or counterfeit cigarette tax stamps, 16 imprints or impressions. 17 (2) Paragraph one of this subdivision shall not apply to: 18 (A) a person, other than a retail dealer, in possession of twenty or 19 fewer affixed tax stamps; 20 (B) public officers or employees in the performance of their official 21 duties requiring possession or control of affixed or unaffixed false, 22 altered or counterfeit cigarette tax stamps, imprints or impressions; or 23 (C) any person authorized by the commissioner of finance or the 24 commissioner of the department of taxation and finance of the state of 25 New York to perform law enforcement functions. 26 § 11-1305 Affixation and cancellation of stamps; presumptions. a. 27 Each agent shall affix to each package of cigarettes stamps evidencing 28 the payment of tax imposed by this chapter and shall cancel such stamps 29 prior to delivery of such cigarettes to any dealer in the city, unless 30 stamps have been affixed to such packages of cigarettes and cancelled 31 before such agent received them. 32 b. Each dealer, other than an agent, in the city shall immediately 33 upon the receipt of any cigarettes at his or her place of business mark 34 in ink on each unopened box, carton or other container of such ciga- 35 rettes the word "received" and the year, month, day and hour of such 36 receipt and shall affix his or her signature thereto or shall mark them 37 in any other manner prescribed by the commissioner of finance. In addi- 38 tion, each retail dealer shall, within twenty-four hours after receipt 39 of any cigarettes at his or her place of business and prior to exposing 40 for sale or sale by such retail dealer of such cigarettes, open such 41 box, carton or other container and, unless such stamps have been previ- 42 ously affixed, immediately notify the dealer from whom he or she 43 purchased such cigarettes and arrange for the replacement by the dealer 44 of such cigarettes by cigarettes with such stamps affixed within twen- 45 ty-four hours. 46 c. Stamps shall be cancelled in the manner prescribed by regulation. 47 d. Whenever any cigarettes are found in the place of business of a 48 dealer without the stamps affixed and cancelled, or not marked as having 49 been received within the preceding twenty-four hours, the prima facie 50 presumption shall arise that such cigarettes are kept therein in 51 violation of the provisions of this chapter. 52 e. Stamps shall be affixed to each package of cigarettes of an aggre- 53 gate denomination not less than the amount of the tax upon the contents 54 therein, and shall be affixed in such manner as to be visible to the 55 purchaser.

S. 8578 830

1 § 11-1306 Possession and transportation of unstamped cigarettes. 2 Every person who shall possess or transport upon the public highways, 3 roads or streets of this city more than four hundred cigarettes in 4 unstamped packages, shall be required to have in his or her actual 5 possession invoices or delivery tickets for such cigarettes. All such 6 invoices or delivery tickets shall show the true name and address of the 7 consignor or seller, the true name and address of the consignee or 8 purchaser and the quantity and brands of the cigarettes transported. 9 The absence of such invoices or delivery tickets shall be prima facie 10 evidence that such person is a dealer in cigarettes in the city and 11 subject to the provisions of this chapter. 12 § 11-1307 Records to be kept; examination. a. 1. At the time of 13 delivering cigarettes to any person in the city, each agent or wholesale 14 dealer shall make a true duplicate invoice showing the date of delivery, 15 the number of packages and the number of cigarettes contained therein in 16 each shipment of cigarettes delivered, and the name of the purchaser to 17 whom delivery is made, and shall retain the same for a period of three 18 years subject to the use and inspection of the commissioner of finance. 19 Each dealer shall procure and retain invoices showing the number of 20 packages and the number of cigarettes contained therein in each shipment 21 of cigarettes received by such dealer, the date thereof, and the name of 22 the shipper, and shall retain the same for a period of three years 23 subject to the use and inspection of the commissioner of finance. 24 2. At the time of delivering tobacco products to any person in the 25 city, each wholesale dealer shall make a true duplicate invoice showing 26 the date of delivery, the number of packages and the number of tobacco 27 products contained therein as well as any tobacco products not in pack- 28 ages in each shipment of tobacco products delivered, and the name of the 29 purchaser to whom delivery is made and shall retain the same for a peri- 30 od of three years subject to the use and inspection of the commissioner 31 of finance. Each dealer shall procure and retain invoices showing the 32 number of packages and the number of tobacco products contained therein 33 as well as any tobacco products not in packages in each shipment of 34 tobacco products received by such dealer, the date thereof, and the name 35 of the shipper, and shall retain the same for a period of three years 36 subject to the use and inspection of the commissioner of finance. 37 3. Each dealer shall retain any other records and in such form as may 38 be required by the commissioner of finance indicating proof of the 39 payment of the tax imposed under section 11-1302.1 of this chapter. Any 40 failure to provide such records upon request by the commissioner of 41 finance or such commissioner's duly authorized representatives shall be 42 presumptive evidence that the dealer has violated the provisions of this 43 chapter. 44 b. The commissioner of finance by regulation may provide that whenever 45 cigarettes or tobacco products are shipped into the city, the railroad 46 company, express company, trucking company, or carrier transporting any 47 shipment thereof shall file with the commissioner of finance a copy of 48 the freight bill within ten days after the delivery in the city of each 49 shipment. 50 c. All dealers shall maintain and keep for a period of three years 51 such other records of cigarettes or tobacco products received or sold 52 within the city as may be required by the commissioner of finance. All 53 wholesale dealers shall maintain and keep for a period of three years 54 such other records of cigarettes or tobacco products delivered within 55 the city.

S. 8578 831

1 d. Without limiting the powers granted the commissioner of consumer 2 and worker protection pursuant to title twenty of the code of the 3 preceding municipality and any rules promulgated thereunder, the commis- 4 sioner of finance or the commissioner's duly authorized representatives 5 are hereby authorized to examine the books, papers, invoices and other 6 records, and stock of cigarettes or tobacco products in and upon any 7 premises where the same are placed, stored and sold, and equipment of 8 any such agent or dealer pertaining to the sale and delivery of ciga- 9 rettes or tobacco products taxable under this chapter. To verify the 10 accuracy of the tax imposed and assessed by this chapter, each such 11 person is hereby directed and required to give to the commissioner of 12 finance or the commissioner's duly authorized representatives, the 13 means, facilities and opportunity for such examinations as are herein 14 provided for and required. 15 e. The commissioner of finance shall investigate any failure to pay 16 the tax required by this chapter or any other failure to comply with 17 this chapter or the rules or regulations promulgated thereunder, and 18 shall take the necessary steps to enforce compliance therewith. 19 § 11-1308 General powers of the commissioner of finance. In addition 20 to the powers granted to the commissioner of finance in this chapter, he 21 or she is hereby authorized and empowered: 22 1. To make, adopt and amend rules and regulations appropriate to the 23 carrying out of this chapter and the purposes thereof; and to require 24 the filing of reports by agents and/or dealers; 25 2. To prescribe the method and the means to be used in the cancella- 26 tion of stamps; 27 3. To fix the denominations and the method of sale of stamps; 28 4. To delegate his or her powers to a deputy or other employee or 29 employees of the department of finance; 30 5. To extend, for cause shown, the time for filing any return or 31 reports for a period not exceeding thirty days; and to compromise 32 disputed claims in connection with the taxes hereby imposed; 33 6. To assess, determine, revise and adjust the taxes imposed under 34 this chapter; 35 7. To request information from the state commissioner of taxation and 36 finance, the treasury department of the United States or the taxing 37 officials of any other state or city that imposes a similar tax to any 38 tax imposed by this chapter, and to afford information to such commis- 39 sion, department or other taxing official, any other provision of this 40 chapter to the contrary notwithstanding; 41 8. To enter into an arrangement with the state commissioner of taxa- 42 tion and finance with respect to cooperative collection, auditing or 43 administration of the taxes imposed by this chapter and the taxes 44 imposed by article twenty of the tax law of the state of New York. 45 9. To prescribe forms to be filled out by the vendor or purchaser, or 46 both, in each instance in which a sale is made by an agent or wholesale 47 dealer to a person outside the state or the city or to a dealer in the 48 city for purposes of resale outside the state or the city. 49 10. To appoint any dealer as a temporary agent to buy and affix 50 stamps for a period not in excess of fifteen days. 51 11. In furtherance of the purposes of paragraph three of subdivision 52 a of section 11-1302 of this chapter, to provide by appropriate regu- 53 lation for the maintenance of such differentials in wholesale and retail 54 prices of cigarettes sold by any vendor, other than the manufacturer, so 55 as to reflect the amounts of tax attributable to the tar and nicotine 56 content of cigarettes sold. In so doing he or she may use and consider

S. 8578 832

1 the factory price of various brands of cigarettes. In addition, the 2 commissioner may consider the mode or method by which retail sales are 3 effected and limit his or her regulations so as to affect any one or 4 more or all of such modes or methods. 5 § 11-1309 Notifying taxpayers of assessments. a. The owner of any 6 lot, piece or parcel of land in the city of Staten Island or any person 7 interested in such lot, piece or parcel, may file with the bureau of 8 city collections a statement containing a brief description of such 9 land, together with the section, block and lot number thereof, or such 10 other designation as at the time is established by the department of 11 finance, and a statement of the applicant's interest therein, together 12 with a written request that such lot, piece or parcel of land be regis- 13 tered in such bureau, in the name of the applicant. In such statement 14 the applicant shall designate a post office address to which notifica- 15 tions addressed to such applicant shall be sent. A brief description of 16 such lot, piece or parcel of land corresponding to the description ther- 17 eof in the statement so filed, together with the name of the applicant 18 and his or her post office address and the date of such application, 19 shall thereupon be registered in the offices of such bureau as herein- 20 after provided. 21 b. As soon as any assessment for a local improvement shall have been 22 confirmed, including assessments confirmed by a court of record, and the 23 list thereof shall have been entered and filed in the bureau of city 24 collections, such assessment list shall be examined and thereupon, with- 25 in twenty days after such entry there shall be mailed a notice addressed 26 to each person in whose name any lot, piece or parcel of land, affected 27 by such assessment, is registered, at the post office address registered 28 in the records of such bureau, which notice shall contain the brief 29 description of the lot, piece or parcel of land registered in the name 30 of the person to whom such notice is addressed, together with the amount 31 assessed thereon, date of entry, and title of the improvement for which 32 such assessment is made, and a statement of the rate of interest or 33 penalty imposed for the nonpayment of such assessment, and the date from 34 which the interest or penalty will be computed. Failure to comply with 35 the provisions of this section, however, shall in no manner affect the 36 validity or collectibility of any assessment heretofore or hereafter 37 confirmed, nor shall any claim arise or exist against the comptroller, 38 the commissioner of finance, the city collector or any officer of the 39 city by reason of such failure. 40 c. The city collector shall for the purpose of this section provide 41 appropriate records for each section of the city as the same shall 42 appear upon the tax maps of the city. 43 § 11-1310 Determination of tax. If any person fails to pay the tax, or 44 to file a return required by this chapter or if a return, when filed, is 45 insufficient and the maker fails to file a corrected or sufficient 46 return within ten days after the same may be required by notice from the 47 commissioner of finance, the commissioner of finance shall determine the 48 amount of tax due from such information as may be obtainable or on the 49 basis of external indices, such as number of cigarettes purchased or 50 sold, number of tobacco products purchased or sold, stock on hand, 51 volume of sales by similar dealers or other factors. Notice of such 52 determination shall be given to the person liable for the payment of the 53 tax. Such determination shall finally and irrevocably fix the tax unless 54 the person against whom it is assessed shall, within ninety days of the 55 giving of such notice, or, if the commissioner of finance has estab- 56 lished a conciliation procedure pursuant to section 11-124 of this title

S. 8578 833

1 and the person liable for the tax has requested a conciliation confer- 2 ence in accordance therewith, within ninety days from the mailing of a 3 conciliation decision or the date of the commissioner's confirmation of 4 the discontinuance of the conciliation proceeding, both (1) serves a 5 petition upon the commissioner of finance and (2) files a petition with 6 the tax appeals tribunal for a hearing, or unless the commissioner of 7 finance shall of his or her own motion redetermine such tax. Such hear- 8 ing and any appeal to the tax appeals tribunal sitting en banc from the 9 decision rendered in such hearing shall be conducted in the manner and 10 subject to the requirements prescribed by the tax appeals tribunal 11 pursuant to sections one hundred sixty-eight through one hundred seven- 12 ty-two of the charter of the preceding municipality as it existed Janu- 13 ary first, nineteen hundred ninety-four. After such hearing the tax 14 appeals tribunal shall give notice of its decision to the person liable 15 for the tax and to the commissioner of finance. A decision of the tax 16 appeals tribunal sitting en banc shall be reviewable for error, illegal- 17 ity, unconstitutionality or any other reason whatsoever by a proceeding 18 under article seventy-eight of the civil practice law and rules if 19 instituted by the person against whom the tax was assessed within four 20 months after the giving of the notice of such tax appeals tribunal deci- 21 sion; provided however, that if such decision regards the tax imposed 22 under section 11-1302.1 of this chapter, such proceeding must be insti- 23 tuted by the person against whom the tax was assessed within thirty days 24 after the giving of the notice of such tax appeals tribunal decision. 25 Such proceeding shall not be instituted by a person liable for the tax 26 unless the amount of any tax sought to be reviewed with interest and 27 penalties thereon, if any, shall have first been deposited with the 28 commissioner of finance and an undertaking filed with the commissioner 29 of finance in such amount and with such sureties as a justice of the 30 supreme court shall approve, to the effect that if such proceeding be 31 dismissed or the tax confirmed, such person will pay all costs and 32 charges which may accrue in the prosecution of the proceeding. 33 § 11-1311 Refunds. a. In the manner provided in this subdivision the 34 commissioner of finance shall refund, without interest, any tax, inter- 35 est or penalty erroneously, illegally or unconstitutionally collected or 36 paid. In addition, whenever any cigarettes upon which stamps have been 37 affixed have been sold and shipped to a dealer outside the city for sale 38 there or to any person in another state for use there, or have become 39 unfit for use and consumption or unsalable, or have been destroyed, the 40 dealer shall be entitled to a refund of the amount of tax paid, less the 41 applicable commission, with respect to such cigarettes. 42 In any event no refund shall be granted unless application to the 43 commissioner of finance therefor is made within two years after the 44 stamps were affixed to such cigarettes or the tax was paid, except if a 45 person has consented in writing to an extension of the period for 46 assessment of additional tax pursuant to subdivision c of section 47 11-1315 of this chapter, and such consent is given within the two-year 48 period for making a refund application provided in this subdivision, the 49 period for making a refund application shall not expire prior to six 50 months after the expiration of the period within which an assessment 51 could be made pursuant to such consent or any extension thereof. 52 Whenever a refund is made or denied by the commissioner of finance, 53 the commissioner shall state his or her reasons therefor and give notice 54 thereof to the applicant in writing. A person shall not be entitled to a 55 hearing in connection with such application for a refund if such person 56 has already had a hearing or had been given the opportunity of a hearing

S. 8578 834

1 as provided in section 11-1310 of this chapter or has failed to avail 2 himself or herself of the remedies therein provided. No refund shall be 3 made of a tax, interest or penalty paid pursuant to a determination of 4 the commissioner of finance as provided in section 11-1310 of this chap- 5 ter, unless the tax appeals tribunal, after a hearing as in said section 6 provided or the commissioner of finance, of his or her own motion, shall 7 have reduced the tax or penalty, or it shall have been established in a 8 proceeding, pursuant to article seventy-eight of the civil practice law 9 and rules that such determination was erroneous, illegal, unconstitu- 10 tional or otherwise improper, in which event a refund without interest 11 shall be made as provided upon the determination of such proceeding. Any 12 determination of the commissioner of finance denying a refund pursuant 13 to this subdivision shall be final and irrevocable unless the applicant 14 for such refund, within ninety days from the mailing of notice of such 15 determination, or, if the commissioner of finance has established a 16 conciliation procedure pursuant to section 11-124 of this title and the 17 applicant has requested a conciliation conference in accordance there- 18 with, within ninety days from the mailing of a conciliation decision or 19 the date of the commissioner's confirmation of the discontinuance of the 20 conciliation proceeding, both (1) serves a petition upon the commission- 21 er of finance and (2) files a petition with the tax appeals tribunal for 22 a hearing. 23 Such petition for a refund made as provided in this subdivision shall 24 be deemed an application for a revision of any tax, penalty or interest 25 complained of. Such hearing and any appeal to the tax appeals tribunal 26 sitting en banc from the decision rendered in such hearing shall be 27 conducted in the manner and subject to the requirements prescribed by 28 the tax appeals tribunal pursuant to sections one hundred sixty-eight 29 through one hundred seventy-two of the charter of the preceding munici- 30 pality. After such hearing, the tax appeals tribunal shall give notice 31 of its decision to the applicant and to the commissioner of finance. 32 The applicant shall be entitled to maintain a proceeding under article 33 seventy-eight of the civil practice law and rules to review a decision 34 of the tax appeals tribunal sitting en banc, provided, however, that 35 such proceeding is instituted within four months after such decision, 36 provided however, that if such decision regards the tax imposed under 37 section 11-1302.1 of this chapter, such proceeding must be instituted 38 within thirty days after such decision, and provided, further, in the 39 case of an application by a person liable for the tax, that a final 40 determination of tax due was not previously made, and that an undertak- 41 ing shall first be filed by such person with the commissioner of finance 42 in such amount and with such sureties as a justice of the supreme court 43 shall approve, to the effect that if such proceeding be dismissed or the 44 tax confirmed such person will pay all costs and charges which may 45 accrue in the prosecution of such proceeding. 46 b. If the commissioner of finance is satisfied that any dealer is 47 entitled to a refund the commissioner shall issue to such dealer stamps 48 of sufficient value to cover the refund or to make such refund. 49 § 11-1312 Reserves. In cases where the taxpayer has applied for a 50 refund and has instituted proceedings under article seventy-eight of the 51 civil practice law and rules to review a determination adverse to the 52 taxpayer on his or her application for refund or has deposited the 53 amount of tax assessed in connection with proceedings under section 54 11-1310 of this chapter, the comptroller shall set up appropriate 55 reserves to meet any decision adverse to the city.

S. 8578 835

1 § 11-1313 Remedies exclusive. The remedies provided by sections 2 11-1310 and 11-1311 of this chapter shall be the exclusive remedies 3 available to any person for the review of tax liability imposed by this 4 chapter; and no determination or proposed determination of tax or deter- 5 mination on an application for refund by the commissioner of finance, 6 nor any decision by the tax appeals tribunal or any of its administra- 7 tive law judges, shall be enjoined or reviewed by an action for declara- 8 tory judgment, an action for money had and received, or by any legal or 9 equitable action or proceeding other than, in the case of a decision by 10 the tax appeals tribunal sitting en banc, a proceeding under article 11 seventy-eight of the civil practice law and rules; provided, however, 12 that a taxpayer may proceed by declaratory judgment if the taxpayer 13 institutes suit within thirty days after a deficiency assessment is made 14 and pays the amount of the deficiency assessment to the commissioner of 15 finance prior to the institution of such suit and posts a bond for costs 16 as provided in section 11-1310 of this chapter. 17 § 11-1314 Proceedings to recover tax. a. Whenever any person shall 18 fail to pay any tax, penalty or interest imposed by this chapter as 19 herein provided, the corporation counsel shall, upon the request of the 20 commissioner of finance, bring or cause to be brought an action to 21 enforce the payment of the same on behalf of the city in any court of 22 the state of New York or of any other state or of the United States. 23 If, however, the commissioner of finance in his or her discretion 24 believes that a taxpayer subject to the provisions of this chapter is 25 about to cease business, leave the state or remove or dissipate the 26 assets out of which the tax, interest or penalties might be satisfied 27 and that any such tax, interest or penalty will not be paid when due, he 28 or she may declare such tax, interest or penalty to be immediately due 29 and payable and may issue a warrant immediately. 30 b. In addition to all other remedies for the collection of any taxes, 31 penalties or interest due under the provisions of this chapter, the 32 commissioner of finance may with respect to any tax imposed under 33 section 11-1302 of this chapter or any penalties or interest related 34 thereto issue a warrant, directed to the city sheriff commanding the 35 sheriff to levy upon and sell the real and personal property of the 36 person liable for the tax which may be found within the city, for the 37 payment of the amount thereof, with any penalties and interest and the 38 cost of executing the warrant, and to return such warrant to the commis- 39 sioner of finance and to pay to the commissioner the money collected by 40 virtue thereof within sixty days after the receipt of such warrant. The 41 city sheriff shall within five days after the receipt of the warrant 42 file with the county clerk a copy thereof, and thereupon such clerk 43 shall enter in the judgment docket the name of the person mentioned in 44 the warrant and the amount of the taxes, penalty and interest for which 45 the warrant is issued and the date when such copy is filed. Thereupon 46 the amount of such warrant shall become a lien upon the title to and 47 interest in real and personal property of the person against whom the 48 warrant is issued. The city sheriff shall then proceed upon the warrant 49 in the same manner and with like effect as that provided by law in 50 respect to executions issued against property upon judgments of a court 51 of record, and for services in executing the warrant the city sheriff 52 shall be entitled to the same fees which he or she may collect in the 53 same manner. In the discretion of the commissioner of finance a warrant 54 of like terms, force and effect may be issued and directed to any offi- 55 cer or employee of the department of finance, and in the execution ther- 56 eof such officer or employee shall have all the powers conferred by law

S. 8578 836

1 upon sheriffs, but shall be entitled to no fee or compensation in excess 2 of the actual expenses paid in the performance of such duty. If a 3 warrant is returned not satisfied in full, the commissioner of finance 4 may from time to time issue new warrants and shall have the same reme- 5 dies to enforce the amount due thereunder as if the city had recovered 6 judgment therefor and execution thereon had been returned unsatisfied. 7 c. The commissioner of finance, if he or she finds that the interests 8 of the city will not thereby be jeopardized, and upon such conditions as 9 the commissioner of finance may require, may release any property from 10 the lien of any warrant or vacate such warrant for unpaid taxes, addi- 11 tions to tax, penalties and interest filed pursuant to subdivision b of 12 this section, and such release or vacating of the warrant may be 13 recorded in the office of any recording officer in which such warrant 14 has been filed. The clerk shall thereupon cancel and discharge as of the 15 original date of docketing the vacated warrant. 16 § 11-1315 Notices and limitations of time. a. Any notice author- 17 ized or required under the provisions of this chapter may be given by 18 mailing the same to the person for whom it is intended in a postpaid 19 envelope addressed to such person at the address given in the last 20 return filed by such person pursuant to the provisions of this chapter 21 or in any application made by such person or, if no return has been 22 filed or application made, then to such address as may be obtainable. 23 The mailing of such notice shall be presumptive evidence of the receipt 24 of the same by the person to whom addressed. Any period of time which 25 is determined according to the provisions of this chapter by the giving 26 of notice shall commence to run from the date of mailing of such notice. 27 b. The provisions of the civil practice law and rules or any other 28 law relative to limitations of time for the enforcement of a civil reme- 29 dy shall not apply to any proceeding or action taken by the city to 30 levy, appraise, assess, determine or enforce the collection of any tax, 31 interest or penalty provided by this chapter. However, except in the 32 case of a wilfully false or fraudulent return with intent to evade the 33 tax, no assessment of additional tax shall be made after the expiration 34 of more than three years from the date of the filing of a return, 35 provided, that where no return has been filed as provided by law the tax 36 may be assessed at any time. 37 c. Where, before the expiration of the period prescribed herein for 38 the assessment of an additional tax, a person has consented in writing 39 that such period be extended, the amount of such additional tax due may 40 be determined at any time within such extended period. The period so 41 extended may be further extended by subsequent consents in writing made 42 before the expiration of the extended period. 43 d. If any return, claim, statement, notice, application, or other 44 document required to be filed, or any payment required to be made, with- 45 in a prescribed period or on or before a prescribed date under authority 46 of any provision of this chapter is, after such period or such date, 47 delivered by United States mail to the commissioner of finance, the tax 48 appeals tribunal, bureau, office, officer or person with which or with 49 whom such document is required to be filed, or to which or to whom such 50 payment is required to be made, the date of the United States postmark 51 stamped on the envelope shall be deemed to be the date of delivery. This 52 subdivision shall apply only if the postmark date falls within the 53 prescribed period or on or before the prescribed date for the filing of 54 such document, or for making the payment, including any extension grant- 55 ed for such filing or payment, and only if such document or payment was 56 deposited in the mail, postage prepaid, properly addressed to the

S. 8578 837

1 commissioner of finance, the tax appeals tribunal, bureau, office, offi- 2 cer or person with which or with whom the document is required to be 3 filed or to which or to whom such payment is required to be made. If any 4 document is sent by United States registered mail, such registration 5 shall be prima facie evidence that such document was delivered to the 6 commissioner of finance, the tax appeals tribunal, bureau, office, offi- 7 cer or person to which or to whom addressed, and the date of registra- 8 tion shall be deemed the postmark date. The commissioner of finance or, 9 where relevant, the tax appeals tribunal is authorized to provide by 10 regulation the extent to which the provisions of this subdivision with 11 respect to prima facie evidence of delivery and the postmark date shall 12 apply to certified mail. Except as provided in subdivision f of this 13 section, this subdivision shall apply in the case of postmarks not made 14 by the United States postal service only if and to the extent provided 15 by regulation of the commissioner of finance or, where relevant, the tax 16 appeals tribunal. 17 e. When the last day prescribed under authority of this chapter, 18 including any extension of time, for performing any act falls on a 19 Saturday, Sunday or legal holiday in the state, the performance of such 20 act shall be considered timely if it is performed on the next succeeding 21 day which is not a Saturday, Sunday or legal holiday. 22 f. (1) Any reference in subdivision d of this section to the United 23 States mail shall be treated as including a reference to any delivery 24 service designated by the secretary of the treasury of the United States 25 pursuant to section seventy-five hundred two of the internal revenue 26 code and any reference in subdivision d of this section to a United 27 States postmark shall be treated as including a reference to any date 28 recorded or marked in the manner described in section seventy-five 29 hundred two of the internal revenue code by a designated delivery 30 service. If the commissioner of finance finds that any delivery service 31 designated by such secretary is inadequate for the needs of the city, 32 the commissioner of finance may withdraw such designation for purposes 33 of this title. The commissioner of finance may also designate additional 34 delivery services meeting the criteria of section seventy-five hundred 35 two of the internal revenue code for purposes of this title, or may 36 withdraw any such designation if the commissioner of finance finds that 37 a delivery service so designated is inadequate for the needs of the 38 city. Any reference in subdivision d of this section to the United 39 States mail shall be treated as including a reference to any delivery 40 service designated by the commissioner of finance and any reference in 41 subdivision d of this section to a United States postmark shall be 42 treated as including a reference to any date recorded or marked in the 43 manner described in section seventy-five hundred two of the internal 44 revenue code by a delivery service designated by the commissioner of 45 finance, provided, however, any withdrawal of designation or additional 46 designation by the commissioner of finance shall not be effective for 47 purposes of service upon the tax appeals tribunal, unless and until such 48 withdrawal of designation or additional designation is ratified by the 49 president of the tax appeals tribunal. 50 (2) Any equivalent of registered or certified mail designated by the 51 United States secretary of the treasury, or as may be designated by the 52 commissioner of finance pursuant to the same criteria used by such 53 secretary for such designations pursuant to section seventy-five hundred 54 two of the internal revenue code, shall be included within the meaning 55 of registered or certified mail as used in subdivision d of this 56 section. If the commissioner of finance finds that any equivalent of

S. 8578 838

1 registered or certified mail designated by such secretary or the commis- 2 sioner of finance is inadequate for the needs of the city, the commis- 3 sioner of finance may withdraw such designation for purposes of this 4 title, provided, however, any withdrawal of designation or additional 5 designation by the commissioner of finance shall not be effective for 6 purposes of service upon the tax appeals tribunal, unless and until such 7 withdrawal of designation or additional designation is ratified by the 8 president of the tax appeals tribunal. 9 § 11-1317 Penalties and interest. a. (1) Any person failing to pay a 10 tax payable under section 11-1302 of this chapter when due shall be 11 subject to a penalty of fifty per centum of the amount of tax due, but 12 the commissioner of finance, if satisfied that the delay was excusable, 13 may remit all or any part of such penalty. Such penalty shall be paid 14 and disposed of in the same manner as other revenues under this chapter. 15 Unpaid penalties may be enforced in the same manner as the tax imposed 16 by section 11-1302 of this chapter. 17 (2) Any person failing to pay a tax payable under section 11-1302.1 of 18 this chapter when due shall be subject to a penalty of three hundred per 19 centum of the amount of tax due, but the commissioner of finance, if 20 satisfied that the delay was excusable, may remit all or any part of 21 such penalty. Such penalty shall be paid and disposed of in the same 22 manner as other revenues from the tax imposed under section 11-1302.1 of 23 this chapter. Unpaid penalties may be enforced in the same manner as the 24 tax imposed by section 11-1302.1 of this chapter. 25 b. (1) In addition to any other penalty imposed by this section, the 26 commissioner of finance may (a) impose a penalty of not more than one 27 hundred dollars for each two hundred cigarettes or fraction thereof in 28 excess of one thousand cigarettes in unstamped or unlawfully stamped 29 packages in the possession or under the control of any person and (b) 30 impose a penalty of not more than two hundred dollars for each ten 31 affixed or unaffixed false, altered or counterfeit cigarette tax stamps, 32 imprints or impressions, or fraction thereof, in excess of one hundred 33 affixed or unaffixed false, altered or counterfeit cigarette tax stamps, 34 imprints or impressions in the possession or under the control of any 35 person. Such penalty shall be determined as provided in section 11-1310 36 of this chapter, and may be reviewed only pursuant to such section. Such 37 penalty may be enforced in the same manner as the tax imposed by this 38 chapter. The commissioner of finance, in his or her discretion, may 39 remit all or part of such penalty. Such penalty shall be paid and 40 disposed of in the same manner as other revenues under this chapter. 41 (2) The penalties imposed by this paragraph may be imposed by the 42 commissioner of finance in addition to any other penalty imposed by this 43 section, but in lieu of the penalties imposed by subparagraph (a) of 44 paragraph one of this subdivision: (a) not less than thirty dollars but 45 not more than two hundred dollars for each two hundred cigarettes, or 46 fraction thereof, in excess of one thousand cigarettes but less than or 47 equal to five thousand cigarettes in unstamped or unlawfully stamped 48 packages knowingly in the possession or knowingly under the control of 49 any person; (b) not less than seventy-five dollars but not more than two 50 hundred dollars for each two hundred cigarettes, or fraction thereof, in 51 excess of five thousand cigarettes but less than or equal to twenty 52 thousand cigarettes in unstamped or unlawfully stamped packages knowing- 53 ly in the possession or knowingly under the control of any person; and 54 (c) not less than one hundred dollars but not more than two hundred 55 dollars for each two hundred cigarettes, or fraction thereof, in excess 56 of twenty thousand cigarettes in unstamped or unlawfully stamped pack-

S. 8578 839

1 ages, knowingly in the possession or knowingly under the control of any 2 person. Such penalty shall be determined as provided in section 11-1310 3 of this chapter, and may be reviewed only pursuant to such section. Such 4 penalty may be enforced in the same manner as the tax imposed by this 5 chapter. The commissioner of finance, in his or her discretion, may 6 remit all or part of such penalty. Such penalty shall be paid and 7 disposed of in the same manner as other revenues under this chapter. 8 c. (1) The possession within the city of more than four hundred ciga- 9 rettes in unstamped or unlawfully stamped packages shall be presumptive 10 evidence that such cigarettes are subject to tax as provided by this 11 chapter. 12 (2) Nothing in this section shall apply to common or contract carriers 13 or warehousemen while engaged in lawfully transporting or storing 14 unstamped packages of cigarettes as merchandise, nor to any employee of 15 such carrier or warehouseman acting within the scope of his or her 16 employment, nor to public officers or employees in the performance of 17 their official duties requiring possession or control of unstamped or 18 unlawfully stamped packages of cigarettes, nor to temporary incidental 19 possession by employees or agents of persons lawfully entitled to 20 possession, nor to persons whose possession is for the purpose of aiding 21 police officers in performing their duties. 22 d. (1) If any amount of tax is not paid on or before the last date 23 prescribed for payment, without regard to any extension of time granted 24 for payment, interest on such amount at the rate set by the commissioner 25 of finance pursuant to paragraph two of this subdivision, or, if no rate 26 is set, at the rate of seven and one-half percent per annum, shall be 27 paid for the period from such last date to the date of payment. In 28 computing the amount of interest to be paid, such interest shall be 29 compounded daily. Interest under this subdivision shall not be paid if 30 the amount thereof is less than one dollar. The interest imposed by this 31 subdivision shall be paid and disposed of in the same manner as other 32 revenues from this chapter. Unpaid interest may be enforced in the same 33 manner as the tax imposed by this chapter. 34 (2) (A) The commissioner of finance shall set the rate of interest to 35 be paid pursuant to paragraph one of this subdivision, but if no such 36 rate of interest is set, such rate shall be deemed to be set at seven 37 and one-half percent per annum. Such rate shall be the rate prescribed 38 in subparagraph (B) of this paragraph but shall not be less than seven 39 and one-half percent per annum. Any such rate set by the commissioner of 40 finance shall apply to taxes, or any portion thereof, which remain or 41 become due on or after the date on which such rate becomes effective and 42 shall apply only with respect to interest computed or computable for 43 periods or portions of periods occurring in the period in which such 44 rate is in effect. 45 (B) General rule. The rate of interest set under this subdivision 46 shall be the sum of (i) the federal short-term rate as provided under 47 paragraph three of this subdivision, plus (ii) seven percentage points. 48 (3) Federal short-term rate. For purposes of this subdivision: 49 (A) The federal short-term rate for any month shall be the federal 50 short-term rate determined by the United States secretary of the treas- 51 ury during such month in accordance with subsection (d) of section 52 twelve hundred seventy-four of the internal revenue code for use in 53 connection with section six thousand six hundred twenty-one of the 54 internal revenue code. Any such rate shall be rounded to the nearest 55 full percent, or, if a multiple of one-half of one percent, such rate 56 shall be increased to the next highest full percent.

S. 8578 840

1 (B) Period during which rate applies. 2 (i) In general. Except as provided in clause (ii) of this subpara- 3 graph, the federal short-term rate for the first month in each calendar 4 quarter shall apply during the first calendar quarter beginning after 5 such month. 6 (ii) Special rule for the month of September, nineteen hundred eight- 7 y-nine. The federal short-term rate for the month of April, nineteen 8 hundred eighty-nine shall apply with respect to setting the rate of 9 interest for the month of September, nineteen hundred eighty-nine. 10 (4) Publication of interest rate. The commissioner of finance shall 11 cause to be published in the City Record, and give other appropriate 12 general notice of, the interest rate to be set under this subdivision no 13 later than twenty days preceding the first day of the calendar quarter 14 during which such interest rate applies. The setting and publication of 15 such interest rate shall not be included within paragraph (a) of subdi- 16 vision five of section one thousand forty-one of the charter of the 17 preceding municipality as it existed January first, nineteen hundred 18 ninety-four relating to the definition of a rule. 19 e. Cross-reference: For criminal penalties, see chapter forty of this 20 title. 21 § 11-1318 Disposition of revenues. a. All revenues resulting from the 22 imposition of the tax under section 11-1302 of this chapter shall be 23 paid into the treasury of the city and shall be credited to and deposit- 24 ed in the general fund of the city, except that, after the payment of 25 refunds with respect to such tax, effective on and after July second, 26 two thousand two, forty-six and one-half percent and, effective on and 27 after April first, two thousand three, forty-six percent of such reven- 28 ues, including taxes, interest and penalties, collected or received 29 shall be paid to the state comptroller. 30 (b) All revenues resulting from the imposition of the tax under 31 section 11-1302.1 of this chapter during a fiscal year, including any 32 interest and penalties, shall be paid into the treasury of the city in 33 accordance with section one hundred twelve of the public housing law, 34 and shall be payable from the city to the New York city housing authori- 35 ty in such fiscal year. 36 § 11-1319 Construction and enforcement. Section 11-1302 and the 37 provisions of this chapter related thereto shall be construed and 38 enforced in conformity with chapter two hundred thirty-five of the laws 39 of nineteen hundred fifty-two. Section 11-1302.1 and the provisions of 40 this chapter related thereto shall be construed and enforced in conform- 41 ity with subdivision e of section one hundred ten and sections one 42 hundred eleven, one hundred twelve and one hundred thirteen of the 43 public housing law.

44 CHAPTER 14 45 TAX ON TRANSFER OF TAXICAB LICENSES 46 § 11-1401 Definitions. When used in this chapter the following terms 47 shall mean or include: 48 1. "City." The city of Staten Island. 49 2. "Commissioner of finance." The commissioner of finance of the 50 city of Staten Island. 51 3. "Comptroller." The comptroller of the city of Staten Island. 52 4. "Consideration." The total price paid or agreed to be paid for 53 the transfer of a taxicab license or interest therein, whether paid or 54 agreed to be paid in money, property, or any other thing of value,

S. 8578 841

1 including the cancellation or discharge of an indebtedness or obli- 2 gation, without any deduction whatsoever. 3 5. "Person." An individual, partnership, society, association, 4 joint-stock company, corporation, estate, receiver, trustee, assignee, 5 referee or any other person acting in a fiduciary or representative 6 capacity, whether appointed by a court or otherwise, any combination of 7 individuals, and any other form of unincorporated enterprise owned or 8 conducted by two or more persons. 9 6. "Taxi and limousine commission." The city of Staten Island taxi 10 and limousine commission. 11 7. "Taxicab." Any motor vehicle carrying passengers for hire in the 12 city, duly licensed as a taxicab by the taxi and limousine commission, 13 and permitted to accept hails from passengers in the street. 14 8. "Taxicab license." A license issued by the taxi and limousine 15 commission to operate a taxicab. 16 9. "Taxpayer." Any person subject to tax under this chapter. 17 10. "Transfer." Any transfer of interest, whether or not such inter- 18 est constitutes title, or possession, or both, exchange or barter, 19 rental, lease, or license to use, conditional or otherwise, in any 20 manner or by any means whatsoever for a consideration, or any agreement 21 therefor. 22 11. "Transferee." The person to whom a taxicab license or interest 23 therein is transferred, in a transfer as defined in subdivision ten of 24 this section. 25 12. "Transferor." The person who transfers a taxicab license or 26 interest pursuant to this chapter, in a transfer as defined in subdivi- 27 sion ten of this section. 28 13. "Tax appeals tribunal." The tax appeals tribunal established by 29 section one hundred sixty-eight of the charter of the preceding munici- 30 pality as it existed January first, nineteen hundred ninety-four. 31 § 11-1402 Imposition of tax. a. On and after March twenty-first, 32 two thousand seventeen, there is hereby imposed and there shall be paid 33 a tax on each transfer of a taxicab license or interest therein, at the 34 rate of one-half percent of the consideration given for such transfer. 35 b. Where there is a transfer of the economic interest in a taxicab 36 license or interest therein, effected by the transfer of shares of stock 37 of a corporation which hold such taxicab license or interest therein or 38 by the transfer of an interest or interests in a partnership or associ- 39 ation which holds such taxicab license or interest therein, such trans- 40 fer of shares of stock or of an interest or interests in a partnership 41 or association shall be treated as a transfer of the taxicab license or 42 interest therein, and shall be subject to the tax imposed by subdivision 43 a of this section. 44 c. Notwithstanding any other provision of this chapter, the tax 45 imposed hereby shall not apply to a transfer made pursuant to a bona 46 fide written contract or agreement made and executed prior to July 47 first, nineteen hundred eighty, provided such contract or agreement is 48 registered with the taxi and limousine commission prior to July first, 49 nineteen hundred eighty, and provided further that one or more payments 50 were made pursuant to such contract or agreement on or before June twen- 51 tieth, nineteen hundred eighty. 52 d. Where a taxicab or any other property is transferred to a trans- 53 feree in conjunction with the transfer of a taxicab license or interest 54 therein, the tax imposed by this section shall be computed on the total 55 consideration for the transfer of such license or interest therein and

S. 8578 842

1 the taxicab or other property so transferred, less the fair market value 2 of such taxicab or other property. 3 e. The tax imposed by this chapter shall be in addition to any and 4 all other taxes. 5 § 11-1403 Payment of tax. The tax imposed by this chapter shall be 6 paid by the transferee to the taxi and limousine commission, as agent of 7 the commissioner of finance, at the time of approval of such transfer by 8 the taxi and limousine commission, but in no event later than thirty 9 days following the transfer. The transferor shall also be liable for the 10 payment of such tax at such time in the event that the amount of tax due 11 is not paid by the transferee. Notwithstanding any other provision of 12 law to the contrary, no transfer of a taxicab license or interest there- 13 in shall be approved or effective until the tax imposed by this chapter 14 has been paid. All moneys received as such payments by the taxi and 15 limousine commission during any day shall be transmitted to the commis- 16 sioner of finance at the close of business on such day or at such other 17 time as the commissioner of finance may require. 18 § 11-1404 Returns. a. A joint return shall be filed by both the 19 transferee and the transferor. Such return shall be filed at the time of 20 payment of any tax imposed pursuant to this chapter, and such filing 21 shall be accomplished by delivering the return to the taxi and limousine 22 commission for transmittal to the commissioner of finance. The commis- 23 sioner of finance shall prescribe the form of the return and the infor- 24 mation which it shall contain. The return shall be signed under oath by 25 both the transferee and the transferor. Where either the transferee or 26 the transferor has failed to sign the return, it shall be accepted as a 27 return, but the party who has failed to sign the return or file a sepa- 28 rate return shall be subject to the penalties applicable to a person who 29 has failed to file a return, and the period of limitations for assess- 30 ment of tax or of additional tax shall not apply to such party. 31 b. Returns shall be preserved for three years and thereafter until the 32 commissioner of finance permits them to be destroyed. 33 c. The commissioner of finance may require amended returns to be filed 34 within twenty days after notice and to contain the information specified 35 in the notice. 36 d. If a return required by this chapter is not filed, or if a return, 37 when filed, is incorrect or insufficient on its face, the commissioner 38 of finance shall take the necessary steps to enforce the filing of such 39 a return or of a corrected return. 40 § 11-1405 Exemptions. a. The tax imposed under this chapter shall not 41 be imposed on any transaction by or with the following: 42 1. The state of New York, or any of its agencies, instrumentalities, 43 public corporations, including a public corporation created pursuant to 44 agreement or compact with another state or Canada, or political subdivi- 45 sions where it is the purchaser, user or consumer; 46 2. The United States of America, and any of its agencies and instru- 47 mentalities insofar as it is immune from taxation where it is the 48 purchaser, user or consumer; 49 3. The United Nations or other international organizations of which 50 the United States of America is a member; and 51 4. Any corporation, or association, or trust, or community chest, fund 52 or foundation, organized and operated exclusively for religious, chari- 53 table, or educational purposes, or for the prevention of cruelty to 54 children or animals, and no part of the net earnings of which inures to 55 the benefit of any private shareholder or individual, and no substantial 56 part of the activities of which is carrying on propaganda, or otherwise

S. 8578 843

1 attempting to influence legislation; provided, however, that nothing in 2 this paragraph shall include an organization operated for the primary 3 purpose of carrying on a trade or business for profit, whether or not 4 all of its profits are payable to one or more organizations described in 5 this subdivision. 6 b. The tax imposed by this chapter shall not apply to the transfer of 7 a taxicab license or interest therein by means of a lease, license or 8 other rental arrangement, where the term of such lease, license or other 9 rental arrangement, including the maximum period for which it can be 10 extended or renewed, does not exceed six months. 11 § 11-1406 Determination of tax. If a return required by this chapter 12 is not filed, or if a return when filed is incorrect or insufficient, 13 the amount of tax due shall be determined by the commissioner of finance 14 from external indices and such other information as may be obtainable. 15 Notice of such determination shall be given to the person liable for the 16 tax. Such determination shall finally and irrevocably fix the tax unless 17 the person against whom it is assessed, within ninety days after the 18 giving of notice of such determination, or, if the commissioner of 19 finance has established a conciliation procedure pursuant to section 20 11-124 of this title and the taxpayer has requested a conciliation 21 conference in accordance therewith, within ninety days from the mailing 22 of a conciliation decision or the date of the commissioner's confirma- 23 tion of the discontinuance of the conciliation proceeding, both (1) 24 serves a petition upon the commissioner of finance and (2) files a peti- 25 tion with the tax appeals tribunal for a hearing, or unless the commis- 26 sioner of finance of his or her own motion shall redetermine the same. 27 Such hearing and any appeal to the tax appeals tribunal sitting en banc 28 from the decision rendered in such hearing shall be conducted in the 29 manner and subject to the requirements prescribed by the tax appeals 30 tribunal pursuant to sections one hundred sixty-eight through one 31 hundred seventy-two of the charter of the preceding municipality as it 32 existed January first, nineteen hundred ninety-four. After such hearing 33 the tax appeals tribunal shall give notice of its decision to the person 34 against whom the tax is assessed and to the commissioner of finance. A 35 decision of the tax appeals tribunal sitting en banc shall be reviewable 36 for error, illegality or unconstitutionality or any other reason whatso- 37 ever by a proceeding under article seventy-eight of the civil practice 38 law and rules if application therefor is made to the supreme court by 39 the person against whom the tax was assessed within four months after 40 the giving of the notice of such tax appeals tribunal decision. A 41 proceeding under article seventy-eight of the civil practice law and 42 rules shall not be instituted by a taxpayer unless: (a) the amount of 43 any tax sought to be reviewed, with penalties and interest thereon, if 44 any, shall be first deposited with the commissioner of finance and there 45 shall be filed with the commissioner of finance an undertaking, issued 46 by a surety company authorized to transact business in this state and 47 approved by the superintendent of insurance of this state as to solvency 48 and responsibility, in such amount and with such sureties as a justice 49 of the supreme court shall approve, to the effect that if such proceed- 50 ing be dismissed or the tax confirmed, the taxpayer will pay all costs 51 and charges which may accrue in the prosecution of the proceeding; or 52 (b) at the option of the taxpayer such undertaking filed with the 53 commissioner of finance may be in a sum sufficient to cover the taxes, 54 penalties and interest thereon stated in such decision plus the costs 55 and charges which may accrue against it in the prosecution of the 56 proceeding, in which event the taxpayer shall not be required to deposit

S. 8578 844

1 such taxes, penalties and interest as a condition precedent to the 2 application. 3 § 11-1407 Refunds. a. In the manner provided in this section the 4 commissioner of finance shall refund or credit, without interest, any 5 tax, penalty or interest erroneously, illegally or unconstitutionally 6 collected or paid if application to the commissioner of finance for such 7 refund shall be made within one year from the payment thereof. Whenever 8 a refund is made or denied by the commissioner of finance, the commis- 9 sioner shall state his or her reason therefor and give notice thereof to 10 the taxpayer in writing. Such application may be made by the transferee 11 or transferor who has actually paid the tax. The commissioner of 12 finance may, in lieu of any refund required to be made, allow credit 13 therefor on payments due from the applicant. 14 b. Any determination of the commissioner of finance denying a refund 15 or credit pursuant to subdivision a of this section shall be final and 16 irrevocable unless the applicant for such refund or credit, within nine- 17 ty days from the mailing of notice of such determination, or, if the 18 commissioner of finance has established a conciliation procedure pursu- 19 ant to section 11-124 of this title and the applicant has requested a 20 conciliation conference in accordance therewith, within ninety days from 21 the mailing of a conciliation decision or the date of the commissioner's 22 confirmation of the discontinuance of the conciliation proceeding, both 23 (1) serves a petition upon the commissioner of finance and (2) files a 24 petition with the tax appeals tribunal for a hearing. Such petition for 25 a refund or credit, made pursuant to this section, shall be deemed an 26 application for a revision of any tax, penalty or interest complained 27 of. Such hearing and any appeal to the tax appeals tribunal sitting en 28 banc from the decision rendered in such hearing shall be conducted in 29 the manner and subject to the requirements prescribed by the tax appeals 30 tribunal pursuant to sections one hundred sixty-eight through one 31 hundred seventy-two of the charter of the preceding municipality as it 32 existed January first, nineteen hundred ninety-four. After such hearing, 33 the tax appeals tribunal shall give notice of its decision to the appli- 34 cant and to the commissioner of finance. The applicant shall be entitled 35 to review a decision of the tax appeals tribunal sitting en banc by a 36 proceeding pursuant to article seventy-eight of the civil practice law 37 and rules, provided such proceeding is instituted within four months 38 after the giving of notice of such decision, and provided, in the case 39 of an application by a taxpayer, that a final determination of tax due 40 was not previously made. Such a proceeding shall not be instituted by a 41 taxpayer unless an undertaking is filed with the commissioner of finance 42 in such amount and with such sureties as a justice of the supreme court 43 shall approve to the effect that if such proceeding be dismissed or the 44 tax confirmed, the taxpayer will pay all costs and charges which may 45 accrue in the prosecution of such proceeding. 46 c. A person shall not be entitled to a revision, refund or credit 47 under this section of a tax, or penalty which had been determined to be 48 due pursuant to the provisions of section 11-1406 of this chapter where 49 such person has had a hearing or an opportunity for a hearing, as 50 provided in said section, or has failed to avail himself or herself of 51 the remedies therein provided. No refund or credit shall be made of a 52 tax, interest or penalty paid after a determination by the commissioner 53 of finance made pursuant to section 11-1406 of this chapter unless it be 54 found that such determination was erroneous, illegal or unconstitutional 55 or otherwise improper, by the tax appeals tribunal after a hearing, or 56 on the commissioner's own motion, or, is such tax appeals tribunal

S. 8578 845

1 affirms in whole or in part the determination of the commissioner of 2 finance, in a proceeding under article seventy-eight of the civil prac- 3 tice law and rules, pursuant to the provisions of said section, in which 4 event refund or credit without interest shall be made of the tax, inter- 5 est or penalty found to be overpaid. 6 § 11-1408 Reserves. In cases where the transferee or transferor has 7 applied for a refund and has instituted a proceeding under article 8 seventy-eight of the civil practice law and rules to review a determi- 9 nation adverse to the transferee or transferor on his or her application 10 for refund, the comptroller shall set up appropriate reserves to meet 11 any decisions adverse to the city. 12 § 11-1409 Remedies exclusive. The remedies provided by sections 13 11-1406 and 11-1407 of this chapter shall be the exclusive remedies 14 available to any person for the review of tax liability imposed by this 15 chapter; and no determination or proposed determination of tax or deter- 16 mination on any application for refund by the commissioner of finance, 17 nor any decision by the tax appeals tribunal or any of its administra- 18 tive law judges shall be enjoined or reviewed by an action for declara- 19 tory judgment, an action for money had and received or by any action or 20 proceeding other than, in the case of a decision by the tax appeals 21 tribunal sitting en banc, a proceeding in the nature of a certiorari 22 proceeding under article seventy-eight of the civil practice law and 23 rules; provided, however, that a taxpayer may proceed by declaratory 24 judgment if the taxpayer institutes suit within thirty days after a 25 deficiency assessment is made and pays the amount of the deficiency 26 assessment to the commissioner of finance prior to the institution of 27 such suit and posts a bond for costs as provided in section 11-1406 of 28 this chapter. 29 § 11-1410 Proceedings to recover tax. a. Whenever any transferee or 30 transferor shall fail to pay any tax, penalty or interest imposed by 31 this chapter as herein provided, the corporation counsel shall, upon the 32 request of the commissioner of finance bring or cause to be brought an 33 action to enforce the payment of the same on behalf of the city of 34 Staten Island in any court of the state of New York or of any other 35 state or of the United States. If, however, the commissioner of finance 36 in his or her discretion believes that any such transferee or transferor 37 subject to the provisions of this chapter is about to cease business, 38 leave the state or remove or dissipate the assets out of which the tax 39 or penalty might be satisfied, and that any such tax or penalty will not 40 be paid when due, the commissioner may declare such tax or penalty to be 41 immediately due and payable and may issue a warrant immediately. 42 b. As an additional or alternate remedy, the commissioner of finance 43 may issue a warrant, directed to the city sheriff commanding the sheriff 44 to levy upon and sell the real and personal property of the transferee 45 or transferor or other person liable for the tax which may be found 46 within the city, for the payment of the amount thereof, with any penalty 47 and interest, and the cost of executing the warrant, and to return such 48 warrant to the commissioner of finance and to pay to the commissioner 49 the money collected by virtue thereof within sixty days after the 50 receipt of such warrant. The city sheriff shall within five days after 51 the receipt of the warrant file with the county clerk a copy thereof, 52 and thereupon such clerk shall enter in the judgment docket the name of 53 the person mentioned in the warrant and the amount of the tax, penalty 54 and interest for which the warrant is issued and the date when such copy 55 is filed. Thereupon the amount of such warrant so docketed shall become 56 a lien upon the title to and the interest in real and personal property

S. 8578 846

1 of the person against whom the warrant is issued. The city sheriff shall 2 then proceed upon the warrant in the same manner, and with like effect, 3 as that provided by law in respect to executions issued against property 4 upon judgments of a court of record and for services in executing the 5 warrant the sheriff shall be entitled to the same fees, which he or she 6 may collect in the same manner. In the discretion of the commissioner of 7 finance a warrant of like terms, force and effect may be issued and 8 directed to an officer or employee of the department of finance, and in 9 the execution thereof such officer or employee shall have all the powers 10 conferred by law upon sheriffs, but shall be entitled to no fee or 11 compensation in excess of the actual expenses paid in the performance of 12 such duty. If a warrant is returned not satisfied in full, the commis- 13 sioner of finance may from time to time issue new warrants and shall 14 also have the same remedies to enforce the amount due thereunder as if 15 the city had recovered judgment therefor and execution thereon had been 16 returned unsatisfied. 17 c. Whenever there is made a sale, transfer or assignment in bulk or 18 any part of the whole of a stock of merchandise or of fixtures, or 19 merchandise and of fixtures pertaining to the conducting of the business 20 of the seller, transferor or assignor, otherwise than in the ordinary 21 course of trade and in the regular prosecution of said business, the 22 purchaser, transferee or assignee shall at least ten days before taking 23 possession of such merchandise, fixtures, or merchandise and fixtures, 24 or paying therefor, notify the commissioner of finance by registered 25 mail of the proposed sale and of the price, terms and conditions thereof 26 whether or not the seller, transferor or assignor, has represented to, 27 or informed the purchaser, transferee or assignee that it owes any tax 28 pursuant to this chapter and whether or not the purchaser, transferee or 29 assignee has knowledge that such taxes are owing, and whether any such 30 taxes are in fact owing. 31 d. Whenever, the purchaser, transferee or assignee shall fail to give 32 notice to the commissioner of finance as required by subdivision c of 33 this section, or whenever the commissioner of finance shall inform the 34 purchaser, transferee or assignee that a possible claim for such tax or 35 taxes exists, any sums of money, property or choses in action, or other 36 consideration, which the purchaser, transferee or assignee is required 37 to transfer over to the seller or assignor shall be subject to a first 38 priority right and lien for any such taxes theretofore or thereafter 39 determined to be due from the seller, transferor or assignor to the 40 city, and the purchaser, transferee or assignee is forbidden to transfer 41 to the seller, transferor or assignor any such sums of money, property 42 or choses in action to the extent of the amount of the city's claim. For 43 failure to comply with the provisions of this subdivision, the purchas- 44 er, transferee or assignee shall be personally liable for the payment to 45 the city of any such taxes theretofore or thereafter determined to be 46 due to the city from the seller, transferor or assignor, and such 47 liability may be assessed and enforced in the same manner as the liabil- 48 ity for tax under this chapter. 49 e. The commissioner of finance, if he or she finds that the interests 50 of the city will not thereby be jeopardized, and upon such conditions as 51 the commissioner of finance may require, may release any property from 52 the lien of any warrant or vacate such warrant for unpaid taxes, addi- 53 tions to tax, penalties and interest filed pursuant to subdivision b of 54 this section, and such release or vacating of the warrant may be 55 recorded in the office of any recording officer in which such warrant

S. 8578 847

1 has been filed. The clerk shall thereupon cancel and discharge as of the 2 original date of docketing the vacated warrant. 3 § 11-1411 General powers of the commissioner of finance. In addition 4 to the powers granted to the commissioner of finance in this chapter, he 5 or she is hereby authorized and empowered: 6 1. To make, adopt and amend rules and regulations appropriate to the 7 carrying out of this chapter and the purposes thereof; 8 2. To extend, for cause shown, the time for filing any return for a 9 period not exceeding ninety days; and to compromise disputed claims in 10 connection with the taxes imposed under this chapter; 11 3. To request information from the taxi and limousine commission, the 12 tax commission of the state of New York or the treasury department of 13 the United States relative to any person; and to afford returns, reports 14 and other information to such taxi and limousine commission, tax commis- 15 sion or treasury department relative to any person, any other provision 16 of this chapter to the contrary notwithstanding; 17 4. To delegate his or her functions hereunder to a deputy commissioner 18 of finance or any employee or employees of the department of finance; 19 5. To prescribe the methods for determining the consideration subject 20 to the tax, and if there is a transfer of a taxicab or other property in 21 conjunction with the transfer of a taxicab license or interest therein, 22 to prescribe rules and methods for determining the fair market value of 23 such taxicab or other property; 24 6. To require any transferee or transferor to keep such records, and 25 for such lengths of time as may be required for the proper adminis- 26 tration of this chapter and to furnish such records to the commissioner 27 of finance or the taxi and limousine commission upon request; 28 7. To assess, determine, revise and adjust the taxes imposed under 29 this chapter. 30 § 11-1412 Administration of oaths and compelling testimony. a. The 31 commissioner of finance, the employees or agents duly designated by him 32 or her, the tax appeals tribunal and any of its duly designated and 33 authorized employees or agents shall have power to administer oaths and 34 take affidavits in relation to any matter or proceeding in the exercise 35 of their powers and duties under this chapter. The commissioner of 36 finance and the tax appeals tribunal shall have power to subpoena and 37 require the attendance of witnesses and the production of books, papers 38 and documents to secure information pertinent to the performance of the 39 duties of the commissioner or of the tax appeals tribunal hereunder and 40 of the enforcement of this chapter and to examine them in relation ther- 41 eto, and to issue commissions for the examination of witnesses who are 42 out of the state or unable to attend before the commissioner or the tax 43 appeals tribunal or excused from attendance. 44 b. A justice of the supreme court either in court or at chambers shall 45 have power summarily to enforce by proper proceedings the attendance and 46 testimony of witnesses and the production and examination of books, 47 papers and documents called for by the subpoena of the commissioner of 48 finance or the tax appeals tribunal under this chapter. 49 c. Cross-reference; criminal penalties. For failure to obey subpoenas 50 or for testifying falsely, see section 11-4007 of this title; for 51 supplying false or fraudulent information, see section 11-4009 of this 52 title. 53 d. The officers who serve the summons or subpoena of the commissioner 54 of finance or the tax appeals tribunal and witnesses attending in 55 response thereto shall be entitled to the same fees as are allowed to 56 officers and witnesses in civil cases in courts of record, except as

S. 8578 848

1 herein otherwise provided. Such officers shall be the city sheriff and 2 his or her duly appointed deputies or any officers or employees of the 3 department of finance or the tax appeals tribunal, designated to serve 4 such process. 5 § 11-1413 Interest and penalties. (a) Interest on underpayments. If 6 any amount of tax is not paid on or before the last date prescribed for 7 payment, without regard to any extension of time granted for payment, 8 interest on such amount at the rate set by the commissioner of finance 9 pursuant to subdivision (g) of this section, or, if no rate is set, at 10 the rate of seven and one-half percent per annum, shall be paid for the 11 period from such last date to the date of payment. In computing the 12 amount of interest to be paid, such interest shall be compounded daily. 13 Interest under this subdivision shall not be paid if the amount thereof 14 is less than one dollar. 15 (b) (1) Failure to file return. (A) In case of failure to file a 16 return under this chapter on or before the prescribed date, determined 17 with regard to any extension of time for filing, unless it is shown that 18 such failure is due to reasonable cause and not due to willful neglect, 19 there shall be added to the amount required to be shown as tax on such 20 return five percent of the amount of such tax if the failure is for not 21 more than one month, with an additional five percent for each additional 22 month or fraction thereof during which such failure continues, not 23 exceeding twenty-five percent in the aggregate. 24 (B) In the case of a failure to file a return of tax within sixty days 25 of the date prescribed for filing of such return, determined with regard 26 to any extension of time for filing, unless it is shown that such fail- 27 ure is due to reasonable cause and not due to willful neglect, the addi- 28 tion to tax under subparagraph (A) of this paragraph shall not be less 29 than the lesser of one hundred dollars or one hundred percent of the 30 amount required to be shown as tax on such return. 31 (C) For purposes of this paragraph, the amount of tax required to be 32 shown on the return shall be reduced by the amount of any part of the 33 tax which is paid on or before the date prescribed for payment of the 34 tax and by the amount of any credit against the tax which may be claimed 35 upon the return. 36 (2) Failure to pay tax shown on return. In case of failure to pay the 37 amount shown as tax on a return required to be filed under this chapter 38 on or before the prescribed date, determined with regard to any exten- 39 sion of time for payment, unless it is shown that such failure is due to 40 reasonable cause and not due to willful neglect, there shall be added to 41 the amount shown as tax on such return one-half of one percent of the 42 amount of such tax if the failure is not for more than one month, with 43 an additional one-half of one percent for each additional month or frac- 44 tion thereof during which such failure continues, not exceeding twenty- 45 five percent in the aggregate. For the purpose of computing the addition 46 for any month the amount of tax shown on the return shall be reduced by 47 the amount of any part of the tax which is paid on or before the begin- 48 ning of such month and by the amount of any credit against the tax which 49 may be claimed upon the return. If the amount of tax required to be 50 shown on a return is less than the amount shown as tax on such return, 51 this paragraph shall be applied by substituting such lower amount. 52 (3) Failure to pay tax required to be shown on return. In case of 53 failure to pay any amount in respect of any tax required to be shown on 54 a return required to be filed under this chapter which is not so shown, 55 including a determination made pursuant to section 11-1406 of this chap- 56 ter, within ten days of the date of a notice and demand therefor, unless

S. 8578 849

1 it is shown that such failure is due to reasonable cause and not due to 2 willful neglect, there shall be added to the amount of tax stated in 3 such notice and demand one-half of one percent of such tax if the fail- 4 ure is not for more than one month, with an additional one-half of one 5 percent for each additional month or fraction thereof during which such 6 failure continues, not exceeding twenty-five percent in the aggregate. 7 For the purpose of computing the addition for any month, the amount of 8 tax stated in the notice and demand shall be reduced by the amount of 9 any part of the tax which is paid before the beginning of such month. 10 (4) Limitations on additions. 11 (A) With respect to any return, the amount of the addition under para- 12 graph one of this subdivision shall be reduced by the amount of the 13 addition under paragraph two of this subdivision for any month to which 14 an addition applies under both paragraphs one and two. In any case 15 described in subparagraph (B) of paragraph one of this subdivision, the 16 amount of the addition under such paragraph one shall not be reduced 17 below the amount provided in such subparagraph. 18 (B) With respect to any return, the maximum amount of the addition 19 permitted under paragraph three of this subdivision shall be reduced by 20 the amount of the addition under paragraph one of this subdivision, 21 determined without regard to subparagraph (B) of such paragraph one, 22 which is attributable to the tax for which the notice and demand is made 23 and which is not paid within ten days of such notice and demand. 24 (c) Underpayment due to negligence. (1) If any part of an underpay- 25 ment of tax is due to negligence or intentional disregard of this chap- 26 ter or any rules or regulations hereunder, but without intent to 27 defraud, there shall be added to the tax a penalty equal to five percent 28 of the underpayment. 29 (2) There shall be added to the tax, in addition to the amount deter- 30 mined under paragraph one of this subdivision, an amount equal to fifty 31 percent of the interest payable under subdivision (a) of this section 32 with respect to the portion of the underpayment described in such para- 33 graph one which is attributable to the negligence or intentional disre- 34 gard referred to in such paragraph one, for the period beginning on the 35 last date prescribed by law for payment of such underpayment, determined 36 without regard to any extension, and ending on the date of the assess- 37 ment of the tax, or, if earlier, the date of the payment of the tax. 38 (d) Underpayment due to fraud. (1) If any part of an underpayment of 39 tax is due to fraud, there shall be added to the tax a penalty equal to 40 fifty percent of the underpayment. 41 (2) There shall be added to the tax, in addition to the penalty deter- 42 mined under paragraph one of this subdivision, an amount equal to fifty 43 percent of the interest payable under subdivision (a) of this section 44 with respect to the portion of the underpayment described in such para- 45 graph one which is attributable to fraud, for the period beginning on 46 the last day prescribed by law for payment of such underpayment, deter- 47 mined without regard to any extension, and ending on the date of the 48 assessment of the tax, or, if earlier, the date of the payment of the 49 tax. 50 (3) The penalty under this subdivision shall be in lieu of any other 51 addition to tax imposed by subdivision (b) or (c) of this section. 52 (e) Additional penalty. Any person who, with fraudulent intent, shall 53 fail to pay any tax imposed by this chapter, or to make, render, sign or 54 certify any return, or to supply any information within the time 55 required by or under this chapter, shall be liable for a penalty of not 56 more than one thousand dollars, in addition to any other amounts

S. 8578 850

1 required under this chapter to be imposed, assessed and collected by the 2 commissioner of finance. The commissioner of finance shall have the 3 power, in his or her discretion, to waive, reduce or compromise any 4 penalty under this subdivision. 5 (f) The interest and penalties imposed by this section shall be paid 6 and disposed of in the same manner as other revenues from this chapter. 7 Unpaid interest and penalties may be enforced in the same manner as the 8 tax imposed by this chapter. 9 (g)(1) Authority to set interest rates. The commissioner of finance 10 shall set the rate of interest to be paid pursuant to subdivision (a) of 11 this section, but if no such rate of interest is set, such rate shall be 12 deemed to be set at seven and one-half percent per annum. Such rate 13 shall be the rate prescribed in paragraph two of this subdivision but 14 shall not be less than seven and one-half percent per annum. Any such 15 rate set by the commissioner of finance shall apply to taxes, or any 16 portion thereof, which remain or become due on or after the date on 17 which such rate becomes effective and shall apply only with respect to 18 interest computed or computable for periods or portions of periods 19 occurring in the period in which such rate is in effect. 20 (2) General rule. The rate of interest set under this subdivision 21 shall be the sum of (i) the federal short-term rate as provided under 22 paragraph three of this subdivision, plus (ii) seven percentage points. 23 (3) Federal short-term rate. For purposes of this subdivision: 24 (A) The federal short-term rate for any month shall be the federal 25 short-term rate determined by the United States secretary of the treas- 26 ury during such month in accordance with subsection (d) of section 27 twelve hundred seventy-four of the internal revenue code for use in 28 connection with section six thousand six hundred twenty-one of the 29 internal revenue code. Any such rate shall be rounded to the nearest 30 full percent, or, if a multiple of one-half of one percent, such rate 31 shall be increased to the next highest full percent. 32 (B) Period during which rate applies. 33 (i) In general. Except as provided in clause (ii) of this subpara- 34 graph, the federal short-term rate for the first month in each calendar 35 quarter shall apply during the first calendar quarter beginning after 36 such month. 37 (ii) Special rule for the month of September, nineteen hundred eight- 38 y-nine. The federal short-term rate for the month of April, nineteen 39 hundred eighty-nine shall apply with respect to setting the rate of 40 interest for the month of September, nineteen hundred eighty-nine. 41 (4) Publication of interest rate. The commissioner of finance shall 42 cause to be published in the City Record, and give other appropriate 43 general notice of, the interest rate to be set under this subdivision no 44 later than twenty days preceding the first day of the calendar quarter 45 during which such interest rate applies. The setting and publication of 46 such interest rate shall not be included within paragraph (a) of subdi- 47 vision five of section one thousand forty-one of the charter of the 48 preceding municipality as it existed January first, nineteen hundred 49 ninety-four relating to the definition of a rule. 50 (h) Miscellaneous. (1) The certificate of the commissioner of finance 51 to the effect that a tax has not been paid or that information has not 52 been supplied pursuant to the provisions of this chapter shall be 53 presumptive evidence thereof. 54 (2) Cross-reference: For criminal penalties, see chapter forty of this 55 title.

S. 8578 851

1 § 11-1414 Returns to be secret. a. Except in accordance with proper 2 judicial order or as otherwise provided by law, it shall be unlawful for 3 the commissioner of finance, the chairperson of the taxi and limousine 4 commission, the tax appeals tribunal or any officer or employee of the 5 department of finance or taxi and limousine commission or the tax 6 appeals tribunal, to divulge or make known in any manner any information 7 contained in or relating to any return provided for by this chapter. The 8 officers charged with the custody of such returns shall not be required 9 to produce any of them or evidence of anything contained in them in any 10 action or proceeding in any court, except on behalf of the commissioner 11 of finance in an action or proceeding under the provisions of this chap- 12 ter, or on behalf of any party to an action or proceeding under the 13 provisions of this chapter when the returns or facts shown thereby are 14 directly involved in such action or proceeding, in either of which 15 events the court may require the production of, and may admit in 16 evidence, so much of said returns or of the facts shown thereby, as are 17 pertinent to the action or proceeding and no more. Nothing in this 18 section shall be construed to prohibit the delivery to a transferee or 19 transferor or to the duly authorized representative of either of them of 20 a certified copy of any return filed in connection with the tax imposed 21 by this chapter; nor to prohibit the delivery of such a certified copy 22 of such return or of any information contained in or relating thereto to 23 the United States of America or any department thereof, the state of New 24 York or any department thereof, the city of Staten Island or any depart- 25 ment thereof provided the same is required for official business; nor to 26 prohibit the inspection for official business of such returns by the 27 chairperson of the taxi and limousine commission, the corporation coun- 28 sel or other legal representatives of the city or by the district attor- 29 ney of Richmond county; nor to prohibit the publication of statistics so 30 classified as to prevent the identification of particular returns or 31 items thereof. 32 b. (1) Any officer or employee of the city who willfully violates the 33 provisions of subdivision a of this section shall be dismissed from 34 office and be incapable of holding any public office in this city for a 35 period of five years thereafter. 36 (2) Cross-reference: For criminal penalties, see chapter forty of this 37 title. 38 c. This section shall be deemed a state statute for purposes of para- 39 graph (a) of subdivision two of section eighty-seven of the public offi- 40 cers law. 41 d. Notwithstanding anything in subdivision a of this section to the 42 contrary, if a taxpayer has petitioned the tax appeals tribunal for 43 administrative review as provided in section one hundred seventy of the 44 charter of the preceding municipality as it existed January first, nine- 45 teen hundred ninety-four, the commissioner of finance shall be author- 46 ized to present to the tribunal any report or return of such taxpayer, 47 or any information contained therein or relating thereto, which may be 48 material or relevant to the proceeding before the tribunal. The tax 49 appeals tribunal shall be authorized to publish a copy or a summary of 50 any decision rendered pursuant to section one hundred seventy-one of the 51 charter of the preceding municipality as it existed January first, nine- 52 teen hundred ninety-four. 53 § 11-1415 Notices and limitations of time. a. Any notice authorized 54 or required under the provisions of this chapter may be given by mailing 55 the same to the person for whom it is intended in a postpaid envelope 56 addressed to such person at the address given in the last return filed

S. 8578 852

1 by such person pursuant to the provisions of this chapter, in any appli- 2 cation made by such person, or in the records maintained by the taxi and 3 limousine commission, or, if no return has been filed or application 4 made or address found in the records of the taxi and limousine commis- 5 sion, then to such address as may be obtainable. The mailing of such 6 notice shall be presumptive evidence of the receipt of the same by the 7 person to whom addressed. Any period of time which is determined accord- 8 ing to the provisions of this chapter by the giving of notice shall 9 commence to run from the date of mailing of such notice. 10 b. The provisions of the civil practice law and rules or any other law 11 relative to limitations of time for the enforcement of a civil remedy 12 shall not apply to any proceeding or action taken by the city to levy, 13 appraise, assess, determine or enforce the collection of any tax or 14 penalty provided by this chapter. However, except in the case of a 15 wilfully false or fraudulent return with intent to evade the tax, no 16 assessment of additional tax shall be made after the expiration of more 17 than three years from the date of the filing of a return; provided, 18 however, that where no return has been filed as provided by law the tax 19 may be assessed at any time. 20 c. Where, before the expiration of the period prescribed herein for 21 the assessment of an additional tax, a taxpayer has consented in writing 22 that such period be extended, the amount of such additional tax due may 23 be determined at any time within such extended period. The period so 24 extended may be further extended by subsequent consents in writing made 25 before the expiration of the extended period. 26 d. If any return, claim, statement, notice, application, or other 27 document required to be filed, or any payment required to be made, with- 28 in a prescribed period or on or before a prescribed date under authority 29 of any provision of this chapter is, after such period or such date, 30 delivered by United States mail to the commissioner of finance, the tax 31 appeals tribunal, bureau, office, officer or person with which or with 32 whom such document is required to be filed, or to which or to whom such 33 payment is required to be made, the date of the United States postmark 34 stamped on the envelope shall be deemed to be the date of delivery. This 35 subdivision shall apply only if the postmark date falls within the 36 prescribed period or on or before the prescribed date for the filing of 37 such document, or for making the payment, including any extension grant- 38 ed for such filing or payment, and only if such document or payment was 39 deposited in the mail, postage prepaid, properly addressed to the 40 commissioner of finance, the tax appeals tribunal, bureau, office, offi- 41 cer or person with which or with whom the document is required to be 42 filed or to which or to whom such payment is required to be made. If any 43 document is sent by United States registered mail, such registration 44 shall be prima facie evidence that such document was delivered to the 45 commissioner of finance, the tax appeals tribunal, bureau, office, offi- 46 cer or person to which or to whom addressed, and the date of registra- 47 tion shall be deemed the postmark date. The commissioner of finance and, 48 where relevant, the tax appeals tribunal are authorized to provide by 49 regulation the extent to which such provisions with respect to prima 50 facie evidence of delivery and the postmark date shall apply to certi- 51 fied mail. Except as provided in subdivision f of this section, this 52 subdivision shall apply in the case of postmarks not made by the United 53 States postal service only if and to the extent provided by regulation 54 of the commissioner of finance or, where relevant, the tax appeals 55 tribunal.

S. 8578 853

1 e. When the last day prescribed under authority of this chapter, 2 including any extension of time, for performing any act falls on a 3 Saturday, Sunday or legal holiday in the state, the performance of such 4 act shall be considered timely if it is performed on the next succeeding 5 day which is not a Saturday, Sunday or legal holiday. 6 f. (1) Any reference in subdivision d of this section to the United 7 States mail shall be treated as including a reference to any delivery 8 service designated by the secretary of the treasury of the United States 9 pursuant to section seventy-five hundred two of the internal revenue 10 code and any reference in subdivision d of this section to a United 11 States postmark shall be treated as including a reference to any date 12 recorded or marked in the manner described in section seventy-five 13 hundred two of the internal revenue code by a designated delivery 14 service. If the commissioner of finance finds that any delivery service 15 designated by such secretary is inadequate for the needs of the city, 16 the commissioner of finance may withdraw such designation for purposes 17 of this title. The commissioner of finance may also designate additional 18 delivery services meeting the criteria of section seventy-five hundred 19 two of the internal revenue code for purposes of this title, or may 20 withdraw any such designation if the commissioner of finance finds that 21 a delivery service so designated is inadequate for the needs of the 22 city. Any reference in subdivision d of this section to the United 23 States mail shall be treated as including a reference to any delivery 24 service designated by the commissioner of finance and any reference in 25 subdivision d of this section to a United States postmark shall be 26 treated as including a reference to any date recorded or marked in the 27 manner described in section seventy-five hundred two of the internal 28 revenue code by a delivery service designated by the commissioner of 29 finance, provided, however, any withdrawal of designation or additional 30 designation by the commissioner of finance shall not be effective for 31 purposes of service upon the tax appeals tribunal, unless and until such 32 withdrawal of designation or additional designation is ratified by the 33 president of the tax appeals tribunal. 34 (2) Any equivalent of registered or certified mail designated by the 35 United States secretary of the treasury, or as may be designated by the 36 commissioner of finance pursuant to the same criteria used by such 37 secretary for such designations pursuant to section seventy-five hundred 38 two of the internal revenue code, shall be included within the meaning 39 of registered or certified mail as used in subdivision d of this 40 section. If the commissioner of finance finds that any equivalent of 41 registered or certified mail designated by such secretary or the commis- 42 sioner of finance is inadequate for the needs of the city, the commis- 43 sioner of finance may withdraw such designation for purposes of this 44 title, provided, however, any withdrawal of designation or additional 45 designation by the commissioner of finance shall not be effective for 46 purposes of service upon the tax appeals tribunal, unless and until such 47 withdrawal of designation or additional designation is ratified by the 48 president of the tax appeals tribunal. 49 § 11-1416 Construction and enforcement. This chapter shall be 50 construed and enforced in conformity with subdivision (j) of section 51 twelve hundred one of the tax law. 52 § 11-1417 Disposition of revenues. All revenues resulting from the 53 imposition of the tax under this chapter shall be paid into the treasury 54 of the city and shall be credited to and deposited in the general fund 55 of the city, but no part of such revenue may be expended unless appro- 56 priated in the annual budget of the city.

S. 8578 854

1 CHAPTER 16 2 TAX ON CONTAINERS 3 § 11-1601 Definitions. When used in this chapter, the following terms 4 shall mean and include: 5 1. "Person." An individual, partnership, society, association, joint- 6 stock company, corporation, estate, receiver, trustee, assignee, refer- 7 ee, or any other person acting in a fiduciary or representative capaci- 8 ty, whether appointed by a court or otherwise and any combination 9 thereof. 10 2. "Container." Any article, thing or contrivance made in whole or in 11 part of rigid or semi-rigid plastic, including, but not limited to, 12 barrels, baskets, bottles, boxes, cartons, carrying cases, crates, cups, 13 cylinders, drums, jars, jugs, pails, pots, trays, tubs, tubes, tumblers, 14 and vessels, intended for use in packing or packaging any product 15 intended for sale: 16 (a) Metal containers and paperboard or fiber containers which have 17 been impregnated, lined or coated with plastic or other materials shall 18 be considered to be classified as metal containers and paperboard 19 containers, respectively; 20 (b) Paperboard or fiber containers with fastenings, tops or bottoms 21 made of plastic shall be classified as paperboard or fiber containers; 22 (c) Plastic caps that are easily, readily, usually, and customarily 23 separated from the container before disposal shall not be considered 24 part of the container. 25 3. "Recycled material." Component materials which have been derived 26 from previously used material or from new or old scrap material. 27 4. "Taxable period." Such calendar period prescribed for filing 28 returns by this chapter or by the commissioner of finance. 29 5. "Retail sale" or "sale at retail." A sale to any person for any 30 purpose other than for resale as such or as a physical component part of 31 tangible personal property. 32 6. "Sale." The sale or furnishing of a container by a seller or 33 supplier to a retailer. 34 7. "Seller or supplier." Any person who sells containers to a retail- 35 er. 36 8. "Retailer." Any person who purchases containers, whether filled or 37 unfilled, for the purpose of using them in connection with and as part 38 of sales at retail or who receives them as containers of products 39 intended for sale at retail. 40 9. "City." The city of Staten Island. 41 10. "Commissioner of finance." The commissioner of finance of the 42 city. 43 11. "Comptroller." The comptroller of the city. 44 § 11-1602 General powers of the commissioner of finance. In addi- 45 tion to the powers granted to the commissioner of finance in this chap- 46 ter, the commissioner is hereby authorized and empowered: 47 1. To make, adopt and amend rules and regulations appropriate to the 48 carrying chapter and the purposes thereof; 49 2. To extend, for cause shown, the time of filing any return for a 50 period not exceeding thirty days; and for cause shown, to remit penal- 51 ties but not interest computed at the rate of six per cent per annum; 52 and to compromise disputed claims in connection with the taxes hereby 53 imposed; 54 3. To request information from the tax commission of the state of New 55 York or the treasury department of the United States relative to any 56 person; and to afford information to such tax commission or such treas-

S. 8578 855

1 ury department relative to any person, any other provision of this chap- 2 ter to the contrary notwithstanding; 3 4. To delegate the commissioner's functions under this section to an 4 assistant commissioner or deputy commissioner in the department of 5 finance or to any employee or employees of the commissioner of finance; 6 5. To prescribe methods for determining the containers sold or 7 supplied or purchased and to determine which are taxable and nontaxable; 8 6. To require sellers and suppliers and retailers within the city to 9 keep detailed records with respect to containers bought, sold, used, 10 manufactured or produced, and stock and production records with respect 11 to such containers whether or not subject to the tax imposed by this 12 chapter, and to furnish any information with respect thereto upon 13 request to the commissioner of finance; 14 7. To assess, determine, revise and readjust the taxes imposed under 15 this chapter. 16 § 11-1603 Administration of oaths and compelling testimony. a. The 17 commissioner of finance or the commissioner's employees or agents duly 18 designated and authorized by the commissioner shall have power to admin- 19 ister oaths and take affidavits in relation to any matter or proceeding 20 in the exercise of their powers and duties under this chapter. The 21 commissioner of finance shall have power to subpoena and require the 22 attendance of witnesses and the production of books, papers and docu- 23 ments to secure information pertinent to the performance of the commis- 24 sioner's duties hereunder and of the enforcement of this chapter and to 25 examine them in relation thereto, and to issue commissions for the exam- 26 ination of witnesses who are out of the state or unable to attend before 27 the commissioner or excused from attendance. 28 b. A justice of the supreme court either in court or at chambers shall 29 have power summarily to enforce by proper proceedings the attendance and 30 testimony of witnesses and the production and examination of books, 31 papers and documents called for by the subpoena of the commissioner of 32 finance under this chapter. 33 c. Any person who shall refuse to testify or to produce books or 34 records or who shall testify falsely in any material matter pending 35 before the commissioner of finance under this chapter shall be guilty of 36 a misdemeanor, punishment for which shall be a fine of not more than one 37 thousand dollars or imprisonment for not more than one year, or both 38 such fine and imprisonment. 39 d. The officers who serve the summons or subpoena of the commissioner 40 of finance and witnesses attending in response thereto shall be entitled 41 to the same fees as are allowed to officers and witnesses in civil cases 42 in courts of record, except as otherwise provided. Such officers shall 43 be the city sheriff and the city sheriff's duly appointed deputies or 44 any officers or employees of the commissioner of finance, designated to 45 serve such process. 46 § 11-1604 Imposition of tax. 1. On and after July first, nineteen 47 hundred seventy-one, there is hereby imposed within the city and there 48 shall be paid a tax upon every sale of a plastic container at the rate 49 of two cents for each container sold. 50 2. A credit shall be allowed against the taxes imposed by this chap- 51 ter of one cent for each taxable container if manufactured with a mini- 52 mum of thirty percent of recycled material. 53 § 11-1605 Presumptions and burden of proof. For the purpose of 54 proper administration of this chapter and to prevent evasion of the tax 55 hereby imposed, it shall be presumed that all sales of plastic contain- 56 ers are taxable, and not entitled to any credit allowed against the

S. 8578 856

1 taxes imposed. Such presumptions shall prevail until the contrary is 2 established and the burden of proving the contrary shall be upon the 3 taxpayer. 4 § 11-1606 Payment of the tax. The tax imposed pursuant to this 5 chapter shall be paid by the seller or supplier. However, where the tax 6 has not been paid on a sale by such seller or supplier, the retailer 7 shall be liable for tax thereon upon purchasing the container. Should 8 sellers and suppliers having no business situs in the city, who sell 9 containers to retailers within the city, pay the tax, the retailer 10 purchasing the containers shall not be liable for the tax. 11 § 11-1607 Records to be kept. Every seller or supplier and every 12 retailer shall keep records of all plastic containers taxed pursuant to 13 this chapter and of all purchases and sales thereof and of the taxes due 14 and payable on the sale or on the purchase thereof, in such form as the 15 commissioner of finance may by regulation require. Such records shall 16 be available for inspection and examination at any time upon demand by 17 the commissioner of finance or the commissioner's duly authorized agent 18 or employee and shall be preserved for a period of three years, except 19 that the commissioner of finance may consent to their destruction within 20 that period or may require that they be kept longer. 21 § 11-1608 Exemptions. 1. The following shall be exempt from the 22 payment of the tax imposed by this chapter: 23 (a) The state of New York, or any of its agencies, instrumentalities, 24 public corporations, including a public corporation created pursuant to 25 agreement or compact with another state or Canada, or political subdivi- 26 sions where it is the purchaser, user or consumer; 27 (b) The United States of America, and any of its agencies and instru- 28 mentalities insofar as it is immune from taxation where it is the 29 purchaser, user or consumer; 30 (c) The United Nations or other international organizations of which 31 the United States of America is a member; and 32 (d) Any corporation, or association, or trust, or community chest, 33 fund or foundation, organized and operated exclusively for religious, 34 charitable, or educational purposes, or for the prevention of cruelty to 35 children or animals, and no part of the net earnings of which inures to 36 the benefit of any private shareholder or individual, and no substantial 37 part of the activities of which is carrying on propaganda, or otherwise 38 attempting to influence legislation; provided, however, that nothing in 39 this paragraph shall include an organization operated for the primary 40 purpose of carrying on a trade or business for profit, whether or not 41 all of its profits are payable to one or more organizations described in 42 this paragraph. 43 2. The following containers shall be exempt from the tax imposed by 44 this chapter: a. Containers sold or furnished containing products 45 intended for use in manufacturing processes and not for final retail 46 sale. 47 b. Containers used as receptacles for food, food products, beverages, 48 dietary foods and health supplements, sold for human consumption but not 49 including: (i) candy and confectionery, (ii) fruit drinks which contain 50 less than seventy percent of natural fruit juice, (iii) soft drinks, 51 sodas and beverages such as are ordinarily dispensed at soda fountains 52 or in connection therewith, other than coffee, tea and cocoa, and (iv) 53 beer, wine or other alcoholic beverages. 54 § 11-1609 Returns. 1. Every seller or supplier shall file with the 55 commissioner of finance a return of containers sold and of the taxes due 56 and payable thereon for the period from July first, nineteen hundred

S. 8578 857

1 seventy-one until the last day of September, nineteen hundred seventy- 2 one and thereafter for each of the four-monthly periods ending on the 3 last day of January, May and September of each year. 4 2. Every retailer shall file with the commissioner of finance a 5 return of containers purchased by such retailer from sellers or suppli- 6 ers having no situs within the city and of the taxes due thereon for the 7 same periods provided in subdivision one of this section. 8 3. The returns shall be filed within twenty days after the end of the 9 periods covered thereby. The commissioner of finance may permit or 10 require returns to be made for other periods and upon such dates as the 11 commissioner may specify. If the commissioner of finance deems it 12 necessary in order to insure the payment of the tax imposed by this 13 chapter, the commissioner may require returns to be made for shorter 14 periods than those prescribed pursuant to the provisions of this subdi- 15 vision and upon such dates as he or she may specify. 16 4. The forms of returns shall be prescribed by the commissioner of 17 finance and shall contain such information as the commissioner may deem 18 necessary for the proper administration of this chapter. The commis- 19 sioner of finance may require amended returns to be filed within twenty 20 days after notice and to contain the information specified in the 21 notice. 22 5. If a return required by this chapter is not filed or if a return 23 when filed is incorrect or insufficient on its face the commissioner of 24 finance shall take the necessary steps to enforce the filing of such a 25 return or a corrected return. 26 § 11-1610 Determination of tax. If a return required by this chapter 27 is not filed, or if a return when filed is incorrect or insufficient, 28 the amount of tax due shall be determined by the commissioner of finance 29 from such information as may be obtainable and, if necessary, the tax 30 may be estimated on the basis of external indices, such as volume of 31 sales, inventories, purchases of containers, or of raw materials, 32 production figures, or other factors. Notice of such determination shall 33 be given to the person liable for the collection or payment of the tax. 34 Such determination shall finally and irrevocably fix the tax unless the 35 person against whom it is assessed, within thirty days after giving 36 notice of such determination, shall apply to the commissioner of finance 37 for a hearing, or unless the commissioner of finance of his or her own 38 motion shall redetermine the same. After such hearing the commissioner 39 of finance shall give notice of his or her determination to the person 40 against whom the tax is assessed. The determination of the commissioner 41 of finance shall be reviewable for error, illegality or unconstitution- 42 ality or any other reason whatsoever by a proceeding under article 43 seventy-eight of the civil practice law and rules if application there- 44 for is made to the supreme court within four months after the giving of 45 the notice of such determination. A proceeding under article seventy- 46 eight of the civil practice law and rules shall not be instituted 47 unless: (a) the amount of any tax sought to be reviewed, with penalties 48 and interest thereon, if any, shall be first deposited with the commis- 49 sioner of finance and there shall be filed with the commissioner of 50 finance an undertaking, issued by a surety company authorized to trans- 51 act business in this state and approved by the superintendent of insur- 52 ance of this state as to solvency and responsibility, in such amount as 53 a justice of the supreme court shall approve to the effect that if such 54 proceeding be dismissed or the tax confirmed, the petitioner will pay 55 all costs and charges which may accrue in the prosecution of the 56 proceeding; or (b) at the option of the applicant such undertaking filed

S. 8578 858

1 with the commissioner of finance may be in a sum sufficient to cover the 2 taxes, penalties and interest thereon stated in such determination plus 3 the costs and charges which may accrue against it in the prosecution of 4 the proceeding, in which event the applicant shall not be required to 5 deposit such taxes, penalties and interest as a condition precedent to 6 the application. 7 § 11-1611 Refunds. a. In the manner provided in this section the 8 commissioner of finance shall refund or credit, without interest, any 9 tax, penalty or interest erroneously, illegally or unconstitutionally 10 collected or paid if application to the commissioner of finance for such 11 refund shall be made within one year from the payment thereof. Whenever 12 a refund is made by the commissioner of finance, the commissioner shall 13 state his or her reasons therefor in writing. Such application may be 14 made by the seller or supplier or the retailer or other person who has 15 actually paid the tax. The commissioner of finance may, in lieu of any 16 refund required to be made, allow credit therefor on payments due from 17 the applicant. 18 b. An application for a refund or credit made as herein provided shall 19 be deemed an application for revision of any tax, penalty or interest 20 complained of. If the commissioner of finance, prior to any hearing 21 held, initially denies the application for refund, the commissioner 22 shall give notice of such determination of denial to the applicant. Such 23 determination shall be final and irrevocable unless the applicant, with- 24 in thirty days after the giving of notice of such determination, shall 25 apply to the commissioner of finance for a hearing, or unless the 26 commissioner of finance of his or her own motion shall redetermine the 27 same. After such hearing the commissioner of finance shall give notice 28 of his or her determination to the applicant, who shall be entitled to 29 review such determination by a proceeding pursuant to article seventy- 30 eight of the civil practice law and rules, provided such proceeding is 31 instituted within four months after the giving of the notice of such 32 determination, and provided that a final determination of tax was not 33 previously made. Such a proceeding shall not be instituted unless an 34 undertaking is filed with the commissioner of finance in such amount and 35 with such sureties as a justice of the supreme court shall approve to 36 the effect that if such proceeding be dismissed or the tax confirmed, 37 the petitioner shall pay all costs and charges which may accrue in the 38 prosecution of such proceeding. 39 c. A person shall not be entitled to a revision, refund or credit 40 under this section of a tax, interest or penalty which had been deter- 41 mined to be due pursuant to the provisions of section 11-1610 of this 42 chapter where such person has had a hearing or an opportunity for a 43 hearing, as provided in said section, or has failed to avail himself or 44 herself of the remedies therein provided. No refund or credit shall be 45 made of a tax, interest or penalty paid after a determination by the 46 commissioner of finance made pursuant to section 11-1609 of this chapter 47 unless it be found that such determination was erroneous, illegal or 48 unconstitutional or otherwise improper, by the commissioner of finance 49 after a hearing or of the commissioner's own motion, or in a proceeding 50 under article seventy-eight of the civil practice law and rules, pursu- 51 ant to the provisions of said section, in which event refund or credit 52 without interest shall be made of the tax, interest or penalty found to 53 have been overpaid. 54 § 11-1612 Reserves. In cases where the seller or supplier or the 55 retailer has applied for a refund and has instituted a proceeding under 56 article seventy-eight of the civil practice law and rules to review a

S. 8578 859

1 determination adverse to him or her on his or her application for 2 refund, the comptroller shall set up appropriate reserves to meet any 3 decision adverse to the city. 4 § 11-1613 Remedies exclusive. The remedies provided by sections 5 11-1610 and 11-1611 of this chapter shall be the exclusive remedies 6 available to any person for the review of tax liability imposed by this 7 chapter; and no determination or proposed determination of tax or deter- 8 mination on any application for refund shall be enjoined or reviewed by 9 an action for declaratory judgment, an action for money had and received 10 or by any action or proceeding other than a proceeding in the nature of 11 a certiorari proceeding under article seventy-eight of the civil prac- 12 tice law and rules; provided, however, that a taxpayer may proceed by 13 declaratory judgment if such taxpayer institutes suit within thirty days 14 after a deficiency assessment is made and pays the amount of the defi- 15 ciency assessment to the commissioner of finance prior to the institu- 16 tion of such suit and posts a bond for costs as provided in section 17 11-1610 of this chapter. 18 § 11-1614 Proceedings to recover tax. a. Whenever any seller or 19 supplier or retailer or other person shall fail to pay any tax, penalty 20 or interest imposed by this chapter, the corporation counsel shall, upon 21 the request of the commissioner of finance bring or cause to be brought 22 an action to enforce the payment of the same on behalf of the city of 23 Staten Island in any court of the state of New York or of any other 24 state or of the United States. If, however, the commissioner of finance 25 in his or her discretion believes that any such seller or supplier or 26 retailer or other person is about to cease business, leave the state or 27 remove or dissipate the assets out of which the tax, penalties or inter- 28 est might be satisfied, and that any such tax, penalty or interest will 29 not be paid when due, the commissioner of finance may declare such tax, 30 penalty or interest to be immediately due and payable and may issue a 31 warrant immediately. 32 b. As an additional or alternate remedy, the commissioner of finance 33 may issue a warrant, directed to the city sheriff commanding the city 34 sheriff to levy upon and sell the real and personal property of the 35 seller or supplier or retailer or other person liable for the tax, which 36 may be found within the city, for the payment of the amount thereof, 37 with any penalties and interest, and the cost of executing the warrant, 38 and to return such warrant to the commissioner of finance and to pay to 39 the commissioner of finance the money collected by virtue thereof within 40 sixty days after the receipt of such warrant. The city sheriff shall 41 within five days after the receipt of the warrant file with the county 42 clerk a copy thereof, and thereupon such clerk shall enter in the judg- 43 ment docket the name of the person mentioned in the warrant and the 44 amount of the tax, penalties and interest for which the warrant is 45 issued and the date when such copy is filed. Thereupon the amount of 46 such warrant so docketed shall become a lien upon the title to and 47 interest in real and personal property of the person against whom the 48 warrant is issued. The city sheriff shall then proceed upon the warrant, 49 in the same manner, and with like effect, as that provided by law in 50 respect to executions issued against property upon judgments of a court 51 of record, and for services in executing the warrant the city sheriff 52 shall be entitled to the same fees, which he or she may collect in the 53 same manner. In the discretion of the commissioner of finance a warrant 54 of like terms, force and effect may be issued and directed to any offi- 55 cer or employee of the department of finance, and in the execution ther- 56 eof such officer or employee shall have all the powers conferred by law

S. 8578 860

1 upon sheriffs, but shall be entitled to no fee or compensation in excess 2 of the actual expenses paid in the performance of such duty. If a 3 warrant is returned not satisfied in full, the commissioner of finance 4 may from time to time issue new warrants and shall also have the same 5 remedies to enforce the amount due thereunder as if the city had recov- 6 ered judgment therefor and execution thereon had been returned unsatis- 7 fied. 8 c. Whenever a seller or supplier or the retailer shall make a sale, 9 transfer, or assignment in bulk of any part of the whole of his or her 10 fixtures, or of his or her stock of merchandise, or of stock or merchan- 11 dise and of fixtures pertaining to the conduct or operation of business 12 of the seller or supplier or the retailer, otherwise than in the ordi- 13 nary course of trade and regular prosecution of business, the purchaser, 14 transferee or assignee shall at least ten days before taking possession 15 of the subject of said sale, transfer or assignment, or paying therefor, 16 notify the commissioner of finance by registered mail of the proposed 17 sale and of the price, terms and conditions thereof whether or not the 18 seller, transferor or assignor, has represented to, or informed the 19 purchaser, transferee or assignee that it owes any tax pursuant to this 20 chapter, and whether or not the purchaser, transferee or assignee has 21 knowledge that such taxes are owing, and whether any such taxes are in 22 fact owing. 23 Whenever the purchaser, transferee or assignee shall fail to give 24 notice to the commissioner of finance as required by the opening para- 25 graph of this subdivision, or whenever the commissioner of finance shall 26 inform the purchaser, transferee or assignee that a possible claim for 27 such tax or taxes exists, any sums of money, property or chooses in 28 action, or other consideration, which the purchaser, transferee or 29 assignee is required to transfer over to the seller, transferor or 30 assignor shall be subject to a first priority right and lien for any 31 such taxes theretofore or thereafter determined to be due from the sell- 32 er, transferor or assignor to the city, and the purchaser, transferee or 33 assignee is forbidden to transfer to the seller, transferor or assignor 34 any such sums of money, property or chooses in action to the extent of 35 the amount of the city's claim. For failure to comply with the 36 provisions of this subdivision, the purchaser, transferee or assignee, 37 in addition to being subject to the liabilities and remedies imposed 38 under the provisions of article six of the uniform commercial code, 39 shall be personally liable for the payment to the city of any such taxes 40 theretofore or thereafter determined to be due to the city from the 41 seller, transferor or assignor, and such liability may be assessed and 42 enforced in the same manner as the liability for tax under this chapter. 43 d. The commissioner of finance, if he or she finds that the interests 44 of the city will not thereby be jeopardized, and upon such conditions as 45 the commissioner of finance may require, may release any property from 46 the lien of any warrant or vacate such warrant for unpaid taxes, addi- 47 tions to tax, penalties and interest filed pursuant to subdivision b of 48 this section, and such release or vacating of the warrant may be 49 recorded in the office of any recording officer in which such warrant 50 has been filed. The clerk shall thereupon cancel and discharge as of the 51 original date of docketing the vacated warrant. 52 § 11-1615 Penalties and interest. a. Any person failing to file a 53 return or to pay any tax to the commissioner of finance within the time 54 required by this chapter shall be subject to a penalty of five percent 55 of the amount of tax due; plus interest at the rate of one percent of 56 such tax for each month of delay excepting the first month after such

S. 8578 861

1 return was required to be filed or such tax became due; but the commis- 2 sioner of finance if satisfied that the delay was excusable, may remit 3 all or any part of such penalty, but not interest at the rate of six 4 percent per year. Such penalties and interest shall be paid and disposed 5 of in the same manner as other revenues from this chapter. Unpaid penal- 6 ties and interest may be enforced in the same manner as the tax imposed 7 by this chapter. 8 b. Any seller or supplier or any retailer or any officer of a corpo- 9 rate seller or supplier or retailer, failing to file a return as 10 required by this chapter, or filing or causing to be filed or making or 11 causing to be made or given or causing to be given any return, certif- 12 icate, affidavit, representation, information, testimony or statement 13 required or authorized by this chapter which is willfully false, and any 14 seller or supplier or any retailer or any officer of a corporate seller 15 or supplier or retailer failing to keep the records required by subdivi- 16 sion six of section 11-1602 of this chapter, shall, in addition to the 17 penalties under this subdivision or elsewhere prescribed, be guilty of a 18 misdemeanor, punishment for which shall be a fine of not more than one 19 thousand dollars or imprisonment for not more than one year, or both 20 such fine and imprisonment. It shall not be any defense to a prosecution 21 under this subdivision that the failure to file a return or that the 22 actions or failures to act mentioned in this subdivision was uninten- 23 tional or not willful. 24 c. The certificate of the commissioner of finance to the effect that a 25 tax has not been paid, that a return has not been filed, or that infor- 26 mation has not been supplied pursuant to the provisions of this chapter, 27 shall be presumptive evidence thereof. 28 § 11-1616 Return to be secret. a. Except in accordance with proper 29 judicial order, or as otherwise provided by law, it shall be unlawful 30 for the commissioner of finance, any officer or employee of the depart- 31 ment of finance, any person engaged or retained on an independent 32 contract basis or any person who, pursuant to this section is permitted 33 to inspect any return or to whom a copy, an abstract or a portion of any 34 return is furnished, or to whom any information contained in any return 35 is furnished, to divulge or make known in any manner any information 36 contained in or relating to any return required under this chapter. The 37 officers charged with the custody of such returns shall not be required 38 to produce any of them or evidence of anything contained in them in any 39 action or proceeding in any court, except on behalf of the commissioner 40 of finance in an action or proceeding under the provisions of this chap- 41 ter, or on behalf of any party to any action or proceeding under the 42 provisions of this chapter, when the returns or facts shown thereby are 43 directly involved in such action or proceeding, in either of which 44 events the court may require the production of, and may admit in 45 evidence, so much of said returns or of the facts shown thereby, as are 46 pertinent to the action or proceeding and no more. Nothing under this 47 subdivision shall be construed to prohibit the delivery to a taxpayer or 48 such taxpayer's duly authorized representative of a certified copy of 49 any return filed in connection with such taxpayer's tax; nor to prohibit 50 the delivery of such a certified copy of such return or of any informa- 51 tion contained in or relating thereto, the United States of America or 52 any department thereof, to the state of New York or any department ther- 53 eof, or to any agency or department of the city of Staten Island, 54 provided the same is requested for official business; nor to prohibit 55 the inspection for official business of such returns by the corporation 56 counsel or other legal representatives of the city or by the district

S. 8578 862

1 attorney of Richmond county; nor to prohibit the publication of statis- 2 tics so classified as to prevent the identification of particular 3 returns and the items thereof. Returns shall be preserved for three 4 years and thereafter until the commissioner of finance permits them to 5 be destroyed. 6 b. Any violation of subdivision a of this section shall be punishable 7 by a fine not exceeding one thousand dollars, or by imprisonment not 8 exceeding one year, or both, in the discretion of the court, and if the 9 offender be an officer or employee of the city he or she shall be 10 dismissed from office and be incapable of holding any public office for 11 a period of five years thereafter. 12 § 11-1617 Notices and limitations of time. a. Any notice author- 13 ized or required under the provisions of this chapter may be given by 14 mailing the same to the person for whom it is intended in a postpaid 15 envelope addressed to such person at the address given in the last 16 return filed by such person pursuant to the provisions of this chapter 17 or in any application made by such person or, if no return has been 18 filed or application made, then to such address as may be obtainable. 19 The mailing of such notice shall be presumptive evidence of the receipt 20 of the same by the person to whom addressed. Any period of time which 21 is determined according to the provisions of this chapter by the giving 22 of notice shall commence to run from the date of mailing of such notice. 23 b. The provisions of the civil practice law and rules or any other 24 law relative to limitations of time for the enforcement of a civil reme- 25 dy shall not apply to any proceeding or action taken by the city to 26 levy, appraise, assess, determine or enforce the collection of any tax 27 or penalty provided by this chapter. However, except in the case of a 28 willfully false or fraudulent return with intent to evade the tax, no 29 assessment of additional tax shall be made after the expiration of more 30 than three years from the date of the filing of a return; provided, 31 however, that where no return has been filed as provided by law the tax 32 may be assessed at any time. 33 c. Where, before the expiration of the period prescribed under this 34 section for assessment of an additional tax, a taxpayer has consented in 35 writing that such period be extended, the amount of such additional tax 36 due may be determined at any time within such extended period. The 37 period so extended may be further extended by subsequent consents in 38 writing made before the expiration of the extended period. 39 § 11-1618 Construction and enforcement. This chapter shall be 40 construed and enforced in conformity with chapter three hundred ninety- 41 nine of the laws of nineteen hundred seventy-one, pursuant to which it 42 is enacted.

43 CHAPTER 17 44 CITY PERSONAL INCOME TAX ON RESIDENTS

45 SUBCHAPTER 1 46 GENERAL

47 § 11-1701 Imposition of tax. General. A tax is hereby imposed on the 48 city taxable income of every city resident individual, estate and trust 49 determined in accordance with the rates set forth in subdivision (a) of 50 this section for taxable years beginning before two thousand twenty-sev- 51 en, and in accordance with the rates set forth in subdivision (b) of 52 this section for taxable years beginning after two thousand twenty-six. 53 Provided, however, that if, for any taxable year beginning after two

S. 8578 863

1 thousand twenty-six, the rates set forth in such subdivision (b) are 2 rendered inapplicable and the rates set forth in such subdivision (a) 3 are rendered applicable, then the tax for such taxable year shall be at 4 the rates provided under subparagraph (A) of paragraphs one, two and 5 three of such subdivision (a). 6 Notwithstanding the opening paragraph of this section, for taxable 7 years beginning after two thousand two and before two thousand six, a 8 tax is hereby imposed on the city taxable income of every city resident 9 individual, estate and trust determined in accordance with the rates set 10 forth in subdivision (g) of this section and in accordance with the 11 provisions of subdivision (h) of this section. During any taxable year 12 beginning after two thousand two and before two thousand six, in which 13 the tax imposed pursuant to this section is determined in accordance 14 with subdivisions (g) and (h) of this section, the rates set forth in 15 subdivisions (a) and (b) of this section shall be inapplicable, and the 16 tax imposed pursuant to section 11-1704.1 of this chapter shall be 17 suspended. 18 (a) Rate of tax. A tax imposed pursuant to this section shall be 19 determined as follows: 20 (1) Resident married individuals filing joint returns and resident 21 surviving spouses. The tax under this section for each taxable year on 22 the city taxable income of every city resident married individual who 23 makes a single return jointly with his or her spouse under subdivision 24 (b) of section 11-1751 of this chapter and on the city taxable income of 25 every city resident surviving spouse shall be determined in accordance 26 with the following tables:

27 (A) For taxable years beginning after two thousand sixteen:

28 If the city taxable income is: The tax is: 29 Not over $21,600 2.7% of the city taxable income 30 Over $21,600 but not $583 plus 3.3% of excess 31 over $45,000 over $21,600 32 Over $45,000 but not $1,355 plus 3.35% of excess 33 over $90,000 over $45,000 34 Over $90,000 $2,863 plus 3.4% of excess 35 over $90,000

36 (B) For taxable years beginning after two thousand fourteen and before 37 two thousand seventeen:

38 If the city taxable income is: The tax is: 39 Not over $21,600 2.55% of the city taxable income 40 Over $21,600 but not $551 plus 3.1% of excess 41 over $45,000 over $21,600 42 Over $45,000 but not $1,276 plus 3.15% of excess 43 over $90,000 over $45,000 44 Over $90,000 but not $2,694 plus 3.2% of excess 45 over $500,000 over $90,000 46 Over $500,000 $16,803 plus 3.4% of excess 47 over $500,000

48 (C) For taxable years beginning after two thousand nine and before two 49 thousand fifteen:

50 If the city taxable income is: The tax is:

S. 8578 864

1 Not over $21,600 2.55% of the city taxable income 2 Over $21,600 but not $551 plus 3.1% of excess 3 over $45,000 over $21,600 4 Over $45,000 but not $1,276 plus 3.15% of excess 5 over $90,000 over $45,000 6 Over $90,000 but not $2,694 plus 3.2% of excess 7 over $500,000 over $90,000 8 Over $500,000 $15,814 plus 3.4% of excess 9 over $500,000

10 (2) Resident heads of households. The tax under this section for each 11 taxable year on the city taxable income of every city resident head of a 12 household shall be determined in accordance with the following tables: 13 (A) For taxable years beginning after two thousand sixteen:

14 If the city taxable income is: The tax is: 15 Not over $14,400 2.7% of the city taxable income 16 Over $14,400 but not $389 plus 3.3% of excess 17 over $30,000 over $14,400 18 Over $30,000 but not $904 plus 3.35% of excess 19 over $60,000 over $30,000 20 Over $60,000 $1,909 plus 3.4% of excess 21 over $60,000

22 (B) For taxable years beginning after two thousand fourteen and before 23 two thousand seventeen:

24 If the city taxable income is: The tax is: 25 Not over $14,400 2.55% of the city taxable income 26 Over $14,400 but not $367 plus 3.1% of excess 27 over $30,000 over $14,400 28 Over $30,000 but not $851 plus 3.15% of excess 29 over $60,000 over $30,000 30 Over $60,000 but not $1,796 plus 3.2% of excess 31 over $500,000 over $60,000 32 Over $500,000 $16,869 plus 3.4% of excess 33 over $500,000

34 (C) For taxable years beginning after two thousand nine and before two 35 thousand fifteen:

36 If the city taxable income is: The tax is: 37 Not over $14,400 2.55% of the city taxable income 38 Over $14,400 but not $367 plus 3.1% of excess 39 over $30,000 over $14,400 40 Over $30,000 but not $851 plus 3.15% of excess 41 over $60,000 over $30,000 42 Over $60,000 but not $1,796 plus 3.2% of excess 43 over $500,000 over $60,000 44 Over $500,000 $15,876 plus 3.4% of excess 45 over $500,000

46 (3) Resident unmarried individuals, resident married individuals 47 filing separate returns and resident estates and trusts. The tax under 48 this section for each taxable year on the city taxable income of every 49 city resident individual who is not a married individual who makes a

S. 8578 865

1 single return jointly with his or her spouse under subdivision (b) of 2 section 11-1751 of this chapter or a city resident head of a household 3 or a city resident surviving spouse, and on the city taxable income of 4 every city resident estate and trust shall be determined in accordance 5 with the following tables: 6 (A) For taxable years beginning after two thousand sixteen:

7 If the city taxable income is: The tax is: 8 Not over $12,000 2.7% of the city taxable income 9 Over $12,000 but not $324 plus 3.3% of excess 10 over $25,000 over $12,000 11 Over $25,000 but not $753 plus 3.35% of excess 12 over $50,000 over $25,000 13 Over $50,000 $1,591 plus 3.4% of excess 14 over $50,000

15 (B) For taxable years beginning after two thousand fourteen and before 16 two thousand seventeen:

17 If the city taxable income is: The tax is: 18 Not over $12,000 2.55% of the city taxable income 19 Over $12,000 but not $306 plus 3.1% of excess 20 over $25,000 over $12,000 21 Over $25,000 but not $709 plus 3.15% of excess 22 over $50,000 over $25,000 23 Over $50,000 but not $1,497 plus 3.2% of excess 24 over $500,000 over $50,000 25 Over $500,000 $16,891 plus 3.4% of excess 26 over $500,000

27 (C) For taxable years beginning after two thousand nine and before two 28 thousand fifteen:

29 If the city taxable income is: The tax is: 30 Not over $12,000 2.55% of the city taxable income 31 Over $12,000 but not $306 plus 3.1% of excess 32 over $25,000 over $12,000 33 Over $25,000 but not $709 plus 3.15% of excess 34 over $50,000 over $25,000 35 Over $50,000 but not $1,497 plus 3.2% of excess 36 over $500,000 over $50,000 37 Over $500,000 $15,897 plus 3.4% of excess 38 over $500,000

39 (b) Rate of tax. A tax imposed pursuant to this section shall be 40 determined as follows: 41 (1) Resident married individuals filing joint returns and resident 42 surviving spouses. The tax under this section for each taxable year on 43 the city taxable income of every city resident married individual who 44 makes a single return jointly with his or her spouse under subdivision 45 (b) of section 11-1751 of this chapter and on the city taxable income of 46 every city resident surviving spouse shall be determined in accordance 47 with the following table: 48 For taxable years beginning after two thousand twenty-six:

S. 8578 866

1 If the city taxable income is: The tax is: 2 Not over $21,600 1.18% of the city taxable income 3 Over $21,600 but not $255 plus 1.435% of excess 4 over $45,000 over $21,600 5 Over $45,000 but not $591 plus 1.455% of excess 6 over $90,000 over $45,000 7 Over $90,000 $1,245 plus 1.48% of excess 8 over $90,000 9 (2) Resident heads of households. The tax under this section for each 10 taxable year on the city taxable income of every city resident head of a 11 household shall be determined in accordance with the following table: 12 For taxable years beginning after two thousand twenty-six:

13 If the city taxable income is: The tax is: 14 Not over $14,400 1.18% of the city taxable income 15 Over $14,400 but not $170 plus 1.435% of excess 16 over $30,000 over $14,400 17 Over $30,000 but not $394 plus 1.455% of excess 18 over $60,000 over $30,000 19 Over $60,000 $830 plus 1.48% of excess 20 over $60,000

21 (3) Resident unmarried individuals, resident married individuals 22 filing separate returns and resident estates and trusts. The tax under 23 this section for each taxable year on the city taxable income of every 24 city resident individual who is not a married individual who makes a 25 single return jointly with his or her spouse under subdivision (b) of 26 section 11-1751 of this chapter or a city resident head of a household 27 or a city resident surviving spouse, and on the city taxable income of 28 every city resident estate and trust shall be determined in accordance 29 with the following table: 30 For taxable years beginning after two thousand twenty-six:

31 If the city taxable income is: The tax is: 32 Not over $12,000 1.18% of the city taxable income 33 Over $12,000 but not $142 plus 1.435% of excess 34 over $25,000 over $12,000 35 Over $25,000 but not $328 plus 1.455% of excess 36 over $50,000 over $25,000 37 Over $50,000 $692 plus 1.48% of excess 38 over $50,000

39 (c) Partners and partnerships. A partnership as such shall not be 40 subject to tax under this chapter. Persons carrying on business as part- 41 ners shall be liable for tax under this chapter only in their separate 42 or individual capacities. As used in this chapter, the term "partner- 43 ship" shall include, unless a different meaning is clearly required, a 44 subchapter K limited liability company. The term "subchapter K limited 45 liability company" shall mean a limited liability company classified as 46 a partnership for federal income tax purposes. The term "limited liabil- 47 ity company" means a domestic limited liability company or a foreign 48 limited liability company, as defined in section one hundred two of the 49 limited liability company law, a limited liability investment company 50 formed pursuant to section five hundred seven of the banking law, or a 51 limited liability company formed pursuant to section one hundred two-a 52 of the banking law.

S. 8578 867

1 (d) Associations taxable as corporations. An association, trust or 2 other unincorporated organization which is taxable as a corporation for 3 federal income tax purposes shall not be subject to tax under this chap- 4 ter. 5 (e) Exempt trusts and organizations. A trust or other unincorporated 6 organization which by reason of its purposes or activities is exempt 7 from federal income tax shall be exempt from tax under this chapter, 8 regardless of whether subject to federal and state income tax on unre- 9 lated business taxable income. 10 (f) Cross references. For definitions of city taxable income of: 11 (1) City resident individual, see section 11-1711 of this chapter. 12 (2) City resident estate or trust, see section 11-1718 of this chap- 13 ter. 14 (g) Rate of tax. For taxable years beginning after two thousand two 15 and before two thousand six, the tax imposed pursuant to this section 16 shall be determined as follows: 17 (1) Resident married individuals filing joint returns and resident 18 surviving spouses. The tax under this section for each taxable year on 19 the city taxable income of every city resident married individual who 20 makes a single return jointly with his or her spouse under subdivision 21 (b) of section 11-1751 of this chapter and on the city taxable income of 22 every city resident surviving spouse shall be determined in accordance 23 with the following tables:

24 (A) For taxable years beginning in two thousand five:

25 If the city taxable income is: The tax is: 26 Not over $21,600 2.907% of the city taxable income 27 Over $21,600 but not over $45,000 $628 plus 3.534% of excess over 28 $21,600 29 Over $45,000 but not over $90,000 $1,455 plus 3.591% of excess over 30 $45,000 31 Over $90,000 but not over $150,000 $3,071 plus 3.648% of excess over 32 $90,000 33 Over $150,000 but not over $500,000 $5,260 plus 4.05% of excess over 34 $150,000 35 Over $500,000 $19,435 plus 4.45% of excess over 36 $500,000

37 (B) For taxable years beginning in two thousand four:

38 If the city taxable income is: The tax is: 39 Not over $21,600 2.907% of the city taxable income 40 Over $21,600 but not over $45,000 $628 plus 3.534% of excess over 41 $21,600 42 Over $45,000 but not over $90,000 $1,455 plus 3.591% of excess over 43 $45,000 44 Over $90,000 but not over $150,000 $3,071 plus 3.648% of excess over 45 $90,000 46 Over $150,000 but not over $500,000 $5,260 plus 4.175% of excess over 47 $150,000 48 Over $500,000 $19,872 plus 4.45% of excess over 49 $500,000

50 (C) For taxable years beginning in two thousand three:

S. 8578 868

1 If the city taxable income is: The tax is: 2 Not over $21,600 2.907% of the city taxable income 3 Over $21,600 but not over $45,000 $628 plus 3.534% of excess over 4 $21,600 5 Over $45,000 but not over $90,000 $1,455 plus 3.591% of excess over 6 $45,000 7 Over $90,000 but not over $150,000 $3,071 plus 3.648% of excess over 8 $90,000 9 Over $150,000 but not over $500,000 $5,260 plus 4.25% of excess over 10 $150,000 11 Over $500,000 $20,135 plus 4.45% of excess over 12 $500,000

13 (2) Resident heads of households. The tax under this section for each 14 taxable year on the city taxable income of every city resident head of a 15 household shall be determined in accordance with the following tables:

16 (A) For taxable years beginning in two thousand five:

17 If the city taxable income is: The tax is: 18 Not over $14,400 2.907% of the city taxable income 19 Over $14,400 but not over $30,000 $419 plus 3.534% of excess over 20 $14,400 21 Over $30,000 but not over $60,000 $970 plus 3.591% of excess over 22 $30,000 23 Over $60,000 but not over $125,000 $2,047 plus 3.648% of excess over 24 $60,000 25 Over $125,000 but not over $500,000 $4,418 plus 4.05% of excess over 26 $125,000 27 Over $500,000 $19,606 plus 4.45% of excess over 28 $500,000

29 (B) For taxable years beginning in two thousand four:

30 If the city taxable income is: The tax is: 31 Not over $14,400 2.907% of the city taxable income 32 Over $14,400 but not over $30,000 $419 plus 3.534% of excess over 33 $14,400 34 Over $30,000 but not over $60,000 $970 plus 3.591% of excess over 35 $30,000 36 Over $60,000 but not over $125,000 $2,047 plus 3.648% of excess over 37 $60,000 38 Over $125,000 but not over $500,000 $4,418 plus 4.175% of excess over 39 $125,000 40 Over $500,000 $20,075 plus 4.45% of excess over 41 $500,000

42 (C) For taxable years beginning in two thousand three:

43 If the city taxable income is: The tax is: 44 Not over $14,400 2.907% of the city taxable income 45 Over $14,400 but not over $30,000 $419 plus 3.534% of excess over 46 $14,400 47 Over $30,000 but not over $60,000 $970 plus 3.591% of excess over 48 $30,000 49 Over $60,000 but not over $125,000 $2,047 plus 3.648% of excess over

S. 8578 869

1 $60,000 2 Over $125,000 but not over $500,000 $4,418 plus 4.25% of excess over 3 $125,000 4 Over $500,000 $20,356 plus 4.45% of excess over 5 $500,000

6 (3) Resident unmarried individuals, resident married individuals 7 filing separate returns and resident estates and trusts. The tax under 8 this section for each taxable year on the city taxable income of every 9 city resident individual who is not a married individual who makes a 10 single return jointly with his or her spouse under subdivision (b) of 11 section 11-1751 of this chapter or a city resident head of household or 12 a city resident surviving spouse, and on the city taxable income of 13 every city resident estate and trust shall be determined in accordance 14 with the following tables:

15 (A) For taxable years beginning in two thousand five:

16 If the city taxable income is: The tax is: 17 Not over $12,000 2.907% of the city taxable income 18 Over $12,000 but not over $25,000 $349 plus 3.534% of excess over 19 $12,000 20 Over $25,000 but not over $50,000 $808 plus 3.591% of excess over 21 $25,000 22 Over $50,000 but not over $100,000 $1,706 plus 3.648% of excess over 23 $50,000 24 Over $100,000 but not over $500,000 $3,530 plus 4.05% of excess over 25 $100,000 26 Over $500,000 $19,730 plus 4.45% of excess over 27 $500,000

28 (B) For taxable years beginning in two thousand four:

29 If the city taxable income is: The tax is: 30 Not over $12,000 2.907% of the city taxable income 31 Over $12,000 but not over $25,000 $349 plus 3.534% of excess over 32 $12,000 33 Over $25,000 but not over $50,000 $808 plus 3.591% of excess over 34 $25,000 35 Over $50,000 but not over $100,000 $1,706 plus 3.648% of excess over 36 $50,000 37 Over $100,000 but not over $500,000 $3,530 plus 4.175% of excess over 38 $100,000 39 Over $500,000 $20,230 plus 4.45% of excess over 40 $500,000

41 (C) For taxable years beginning in two thousand three:

42 If the city taxable income is: The tax is: 43 Not over $12,000 2.907% of the city taxable income 44 Over $12,000 but not over $25,000 $349 plus 3.534% of excess over 45 $12,000 46 Over $25,000 but not over $50,000 $808 plus 3.591% of excess over 47 $25,000 48 Over $50,000 but not over $100,000 $1,706 plus 3.648% of excess over

S. 8578 870

1 $50,000 2 Over $100,000 but not over $500,000 $3,530 plus 4.25% of excess over 3 $100,000 4 Over $500,000 $20,530 plus 4.45% of excess over 5 $500,000

6 (h) Tax table benefit recapture. For taxable years beginning after two 7 thousand two and before two thousand six, there is hereby imposed a 8 supplemental tax, in addition to the tax imposed under the opening para- 9 graph of this section, for the purpose of recapturing the benefit of the 10 tax tables contained in subdivision (g) of this section. The supple- 11 mental tax shall be an amount equal to the sum of the tax table benefits 12 in paragraphs one and two of this subdivision multiplied by their 13 respective fractions in such paragraphs provided, however, that para- 14 graph one of this subdivision shall not apply to taxpayers who are not 15 subject to the second highest rate of tax. 16 (1) Resident married individuals filing joint returns, surviving 17 spouses, resident heads of households, resident unmarried individuals, 18 resident married individuals filing separate returns and resident 19 estates and trusts. (A) The tax table benefit is the difference between 20 (i) the amount of taxable income set forth in the tax table in subdivi- 21 sion (g) of this section not subject to the second highest rate of tax 22 for the taxable year multiplied by such rate and (ii) the second highest 23 dollar denominated tax for such amount of taxable income set forth in 24 the tax table applicable to the taxable year in subdivision (g) of this 25 section. 26 (B) The fraction is computed as follows: the numerator is the lesser 27 of fifty thousand dollars or the excess of New York adjusted gross 28 income for the taxable year over one hundred fifty thousand dollars and 29 the denominator is fifty thousand dollars. 30 (C) This paragraph shall only apply to taxable years beginning after 31 two thousand two and before two thousand six. 32 (2) Resident married individuals filing joint returns, surviving 33 spouses, resident heads of households, resident unmarried individuals, 34 resident married individuals filing separate returns and resident 35 estates and trusts. (A) The tax table benefit is the difference between 36 (i) the amount of taxable income set forth in the tax table in subdivi- 37 sion (g) of this section not subject to the highest rate of tax for the 38 taxable year multiplied by such rate and (ii) the highest dollar denomi- 39 nated tax for such amount of taxable income set forth in the tax table 40 applicable to the taxable year in subdivision (g) of this section less 41 the sum of the tax table benefits in paragraph one of this subdivision. 42 (B) For such taxpayers with adjusted gross income over five hundred 43 thousand dollars, the fraction is one. Provided, however, that the total 44 tax prior to the application of any tax credits shall not exceed the 45 highest rate of tax set forth in the tax table in subdivision (g) of 46 this section multiplied by the taxpayer's taxable income. 47 (C) This paragraph shall only apply to taxable years beginning after 48 two thousand two and before two thousand six. 49 § 11-1703 Separate tax on the ordinary income portion of lump sum 50 distributions. (a) Imposition of separate tax. In addition to any other 51 tax imposed by this chapter, there is hereby imposed for each taxable 52 year a separate tax on the ordinary income portion of a lump sum 53 distribution of every city resident individual, estate and trust which 54 has made an election of lump sum treatment under subsection (e) of 55 section four hundred two of the internal revenue code. The recipient of

S. 8578 871

1 a lump sum distribution shall be liable for the tax imposed by this 2 section. The credits against tax under this chapter, except for the 3 credit under section 11-1773, shall not be allowed against the tax 4 imposed by this section. 5 (b) Cross reference. For computation of tax, see section 11-1724 of 6 this chapter. 7 § 11-1704 Tax surcharge. (a) In addition to the taxes imposed by 8 sections 11-1701 and 11-1703 of this subchapter, there is hereby imposed 9 for each taxable year beginning after nineteen hundred eighty-nine but 10 before nineteen hundred ninety-nine, a tax surcharge on the city taxable 11 income of every city resident individual, estate and trust. 12 (b) The tax surcharge imposed pursuant to this section shall be deter- 13 mined as follows: 14 (1) Resident married individuals filing joint returns and resident 15 surviving spouses. The tax surcharge under this section on the city 16 taxable income of every city resident married individual who makes a 17 single return jointly with his or her spouse under subdivision (b) of 18 section 11-1751 of this chapter and on the city taxable income of every 19 city resident surviving spouse shall be determined in accordance with 20 the following tables:

21 (A) For taxable years beginning after nineteen hundred eighty-nine and 22 before nineteen hundred ninety-five:

23 If the city taxable income is: The tax surcharge is: 24 Not over $15,500 0 25 Over $15,500 but not over $27,000 0.51% of city taxable income in 26 excess of $15,500 27 Over $27,000 but not over $45,000 $59 plus 0.55% of excess over 28 $27,000 29 Over $45,000 but not over $108,000 $158 plus 0.51% of excess over 30 $45,000 31 Over $108,000 $479 plus 0.51% of excess over 32 $108,000

33 (B) For taxable years beginning after nineteen hundred ninety-four but 34 before nineteen hundred ninety-nine:

35 If the city taxable income is: The tax surcharge is: 36 Not over $14,400 0 37 Over $14,400 but not over $27,000 0.51% of city taxable income in 38 excess of $14,400 39 Over $27,000 but not over $45,000 $64 plus 0.55% of excess over 40 $27,000 41 Over $45,000 but not over $108,000 $162 plus 0.51% of excess over 42 $45,000 43 Over $108,000 $484 plus 0.51% of excess over 44 $108,000

45 (2) Resident heads of households. The tax surcharge under this section 46 on the city taxable income of every city resident head of household 47 shall be determined in accordance with the following tables: 48 (A) For taxable years beginning after nineteen hundred eighty-nine and 49 before nineteen hundred ninety-five:

S. 8578 872

1 If the city taxable income is: The tax surcharge is: 2 Not over $8,800 0 3 Over $8,800 but not over $16,500 0.51% of city taxable income in 4 excess of $8,800 5 Over $16,500 but not over $27,500 $39 plus 0.55% of excess over 6 $16,500 7 Over $27,500 but not over $66,000 $100 plus 0.51% of excess over 8 $27,500 9 Over $66,000 $296 plus 0.51% of excess over 10 $66,000

11 (B) For taxable years beginning after nineteen hundred ninety-four but 12 before nineteen hundred ninety-nine:

13 If the city taxable income is: The tax surcharge is: 14 Not over $7,350 0 15 Over $7,350 but not over $9,200 0.42% of city taxable income in 16 excess of $7,350 17 Over $9,200 but not over $17,250 $7 plus 0.51% of excess over 18 $9,200 19 Over $17,250 but not over $28,750 $48 plus 0.55% of excess over 20 $17,250 21 Over $28,750 but not over $69,000 $111 plus 0.51% of excess over 22 $28,750 23 Over $69,000 $317 plus 0.51% of excess over 24 $69,000

25 (3) Resident unmarried individuals, resident married individuals 26 filing separate returns and resident estates and trusts. The tax 27 surcharge under this section on the city taxable income of every city 28 resident individual who is not a city resident married individual who 29 makes a single return jointly with his or her spouse under subdivision 30 (b) of section 11-1751 of this chapter or a city resident head of house- 31 hold or a city resident surviving spouse, and on the city taxable income 32 of every city resident estate and trust shall be determined in accord- 33 ance with the following tables: 34 (A) For taxable years beginning after nineteen hundred eighty-nine and 35 before nineteen hundred ninety-five:

36 If the city taxable income is: The tax surcharge is: 37 Not over $9,000 0 38 Over $9,000 but not over $15,000 0.51% of city taxable income in 39 excess of $9,000 40 Over $15,000 but not over $25,000 $31 plus 0.55% of excess over 41 $15,000 42 Over $25,000 but not over $60,000 $86 plus 0.51% of excess over 43 $25,000 44 Over $60,000 $264 plus 0.51% of excess over 45 $60,000

46 (B) For taxable years beginning after nineteen hundred ninety-four but 47 before nineteen hundred ninety-nine:

48 If the city taxable income is: The tax surcharge is: 49 Not over $8,400 0 50 Over $8,400 but not over $15,000 0.51% of city taxable income in

S. 8578 873

1 excess of $8,400 2 Over $15,000 but not over $25,000 $33 plus 0.55% of excess over 3 $15,000 4 Over $25,000 but not over $60,000 $88 plus 0.51% of excess over 5 $25,000 6 Over $60,000 $266 plus 0.51% of excess over 7 $60,000

8 (c) The tax surcharge imposed pursuant to this section shall be admin- 9 istered, collected and distributed by the commissioner of taxation and 10 finance in the same manner as the taxes imposed pursuant to sections 11 11-1701 and 11-1703 of this subchapter, and all of the provisions of 12 this chapter, including sections 11-1706, 11-1721 and 11-1773 of this 13 chapter, shall apply to the tax surcharge imposed by this section. 14 (d) (1) Notwithstanding subdivision (b) of this section, with respect 15 to taxable years beginning in nineteen hundred ninety-three, nineteen 16 hundred ninety-four, nineteen hundred ninety-five and nineteen hundred 17 ninety-six, the mayor shall, by August first of nineteen hundred nine- 18 ty-two, nineteen hundred ninety-four and nineteen hundred ninety-five, 19 and by September fifteenth of nineteen hundred ninety-three, transmit to 20 the commissioner of taxation and finance a certification setting forth 21 the percentage of non-achievement regarding the combined police 22 uniformed staffing level with respect to the fiscal year of the city 23 ending on the immediately preceding June thirtieth, provided, however, 24 that for the city fiscal year ending in nineteen hundred ninety-three 25 the percentage of non-achievement shall be determined by the combined 26 police uniformed staffing level existing on August thirtieth, nineteen 27 hundred ninety-three, and further provided for all such fiscal years 28 that the percentage of non-achievement shall be calculated according to 29 the procedure specified in a memorandum of understanding relating to the 30 New York city safe streets-safe city program and to the enactment of 31 this subdivision dated February eleventh, nineteen hundred ninety-one, 32 as amended, and executed by the governor, the temporary president of the 33 senate, the speaker of the assembly, the minority leader of the senate, 34 the minority leader of the assembly, the mayor and the speaker of the 35 city council, any modification of such memorandum of understanding 36 subsequently agreed upon by all such signatories in a single subsequent 37 memorandum of understanding. If such percentage of non-achievement is 38 equal to or exceeds twenty-five percent with respect to the fiscal year 39 of the city of New York ending in nineteen hundred ninety-two, twenty 40 percent with respect to the city fiscal year ending in nineteen hundred 41 ninety-three or five percent with respect to the city fiscal years 42 ending in nineteen hundred ninety-four and nineteen hundred ninety-five, 43 then the rates of the tax surcharge imposed by this section for taxable 44 years beginning in the calendar year beginning on January first next 45 succeeding such August first or September fifteenth shall be the 46 products of the rates set forth in subdivision (b) of this section and a 47 percentage equal to the difference between one hundred percent and such 48 percentage of non-achievement, such products computed to the nearest 49 hundredth of a percent, and the dollar denominated amounts of the tax 50 surcharge set forth in subdivision (b) of this section shall be reduced 51 conformably. 52 (2) Notwithstanding subdivision (b) of this section, with respect to 53 the taxable year beginning in nineteen hundred ninety-eight, the mayor 54 shall, by August first of nineteen hundred ninety-seven, transmit to the 55 state commissioner of taxation and finance a certification setting forth

S. 8578 874

1 the percentage of non-achievement regarding the police uniformed staff- 2 ing level with respect to the fiscal year ending on the immediately 3 preceding June thirtieth, provided, however, that such percentage of 4 non-achievement shall be calculated according to the procedure specified 5 in a new memorandum of understanding relating to the enactment of this 6 paragraph dated no later than thirty days after such enactment, as 7 executed by the governor, the temporary president of the senate, the 8 speaker of the assembly, the minority leader of the senate, the minority 9 leader of the assembly, the mayor and the speaker of the city council 10 and any modifications of such new memorandum of understanding subse- 11 quently agreed upon by all such signatories in a single subsequent memo- 12 randum of understanding. If such percentage of non-achievement exceeds 13 two percent with respect to the fiscal year of the city ending in nine- 14 teen hundred ninety-seven, then the rates of the tax surcharge author- 15 ized by this section for the taxable years beginning in the calendar 16 year beginning on January first, nineteen hundred ninety-eight shall be 17 the products of the rates set forth in subdivision (b) of this section 18 and a percentage equal to the difference between one hundred percent and 19 the portion of the percentage of non-achievement that is in excess of 20 two percent, such products computed to the nearest hundredth of a 21 percent, and the dollar denominated amounts of the tax surcharge set 22 forth in subdivision (b) of this section shall be reduced conformably. 23 (3) If the rates of the surcharge imposed by this section are modified 24 pursuant to paragraph one or paragraph two of this subdivision, the 25 state commissioner of taxation and finance shall promulgate regulations 26 stating the modified rates. 27 (e) Notwithstanding anything in this section or section 11-1798 of 28 this chapter to the contrary, of the total revenue, including interest 29 and penalties, from the tax surcharge imposed by this section which the 30 state comptroller is required to pay, after June thirtieth, nineteen 31 hundred ninety-two, to the chief fiscal officer of the city for payment 32 into the treasury of the city, one hundred ten million dollars thereof 33 paid to the chief fiscal officer during the fiscal year of the city 34 commencing July first, nineteen hundred ninety-two, two hundred million 35 dollars thereof paid to the chief fiscal officer during the fiscal year 36 of the city commencing July first, nineteen hundred ninety-three, one 37 hundred sixty-seven million dollars thereof paid to the chief fiscal 38 officer during the fiscal year of the city commencing July first, nine- 39 teen hundred ninety-four, and one hundred eighty-five million dollars 40 thereof paid to the chief fiscal officer during the fiscal year of the 41 city commencing July first, nineteen hundred ninety-five, shall be cred- 42 ited to and deposited in the criminal justice account established within 43 the general fund of the city for the implementation of the safe streets- 44 safe city program. The balance of such revenue shall be credited to the 45 general fund of the city and shall be applied exclusively to or in aid 46 or support of the city's provision of criminal justice and fire 47 protection services. 48 (f) Notwithstanding anything in this article to the contrary, of the 49 total revenue, including interest and penalties, from the tax surcharge 50 imposed pursuant to the authority of this section which the state comp- 51 troller is required to pay to the chief fiscal officer of the city for 52 payment into the treasury of the city, ninety million dollars thereof 53 paid to such chief fiscal officer during the fiscal year of the city 54 commencing during calendar year nineteen hundred ninety-six, and one 55 hundred eighty-five million dollars thereof paid to such chief fiscal 56 officer during the fiscal year of the city commencing during calendar

S. 8578 875

1 year nineteen hundred ninety-seven, shall be credited to and deposited 2 in a criminal justice account established by the city within its general 3 fund. The balance of such revenue from such tax surcharge which the 4 state comptroller is required to pay to such chief fiscal officer for 5 payment into the treasury of the city for the taxable years beginning in 6 the calendar years beginning on January first, nineteen hundred ninety- 7 seven and January first, nineteen hundred ninety-eight shall be credited 8 to the general fund of the city to be applied exclusively to or in aid 9 or support of the city's provision of criminal justice and fire 10 protection services; provided however, that, notwithstanding the forego- 11 ing, such balance shall be applied to implementation of the capital 12 program for public schools within the city and a supplemental capital 13 rehabilitation program for such schools, to the extent that such appli- 14 cation is necessary for the timely implementation of such programs in 15 accordance with the memorandum of understanding executed pursuant to 16 paragraph two of subdivision (d) of this section and any modifications 17 thereto. 18 § 11-1704.1 Additional tax. (a) (1) In addition to any other taxes 19 imposed by this chapter, there is hereby imposed for each taxable year 20 beginning after nineteen hundred ninety but before two thousand twenty- 21 seven, an additional tax on the city taxable income of every city resi- 22 dent individual, estate and trust, to be calculated for each taxable 23 year as follows: (i) for each taxable year beginning after nineteen 24 hundred ninety but before nineteen hundred ninety-nine, at the rate of 25 fourteen percent of the sum of the taxes for each such taxable year 26 determined pursuant to section 11-1701 and section 11-1704 of this 27 subchapter; and (ii) for each taxable year beginning after nineteen 28 hundred ninety-eight, at the rate of fourteen percent of the tax for 29 such taxable year determined pursuant to such section 11-1701 of this 30 subchapter. 31 (2) Notwithstanding paragraph one of this subdivision, for each taxa- 32 ble year beginning after two thousand but before two thousand two, the 33 additional tax shall be calculated as follows: (i) Resident married 34 individuals filing joint returns and resident surviving spouses. The 35 additional tax under this section for each taxable year on the tax 36 determined pursuant to section 11-1701 of this subchapter of every city 37 resident married individual who makes a single return jointly with his 38 or her spouse under subdivision (b) of section 11-1751 of this chapter 39 and on the tax determined pursuant to section 11-1701 of this subchapter 40 of every city resident surviving spouse shall be determined as follows: 41 (A) If the tax determined pursuant to section 11-1701 of this subchapter 42 is based on city taxable income equal to or less than ninety thousand 43 dollars, then the additional tax shall be 5.25% of such tax; (B) If the 44 tax determined pursuant to section 11-1701 of this subchapter is based 45 on city taxable income over ninety thousand dollars, then the additional 46 tax shall be the sum of 5.25% of such tax on city taxable income up to 47 and including ninety thousand dollars and 12.25% of such tax on city 48 taxable income in excess of ninety thousand dollars. 49 (ii) Resident heads of households. The additional tax under this 50 section for each taxable year on the tax determined pursuant to section 51 11-1701 of this subchapter of every city resident head of a household 52 shall be determined as follows: (A) If the tax determined pursuant to 53 section 11-1701 of this subchapter is based on city taxable income equal 54 to or less than sixty thousand dollars, then the additional tax shall be 55 5.25% of such tax; (B) If the tax determined pursuant to section 11-1701 56 of this subchapter is based on city taxable income over sixty thousand

S. 8578 876

1 dollars, then the additional tax shall be the sum of 5.25% of such tax 2 on city taxable income up to and including sixty thousand dollars and 3 12.25% of such tax on city taxable income in excess of sixty thousand 4 dollars. 5 (iii) Resident unmarried individuals, resident married individuals 6 filing separate returns and resident estates and trusts. The additional 7 tax under this section for each taxable year on the tax determined 8 pursuant to section 11-1701 of this subchapter of every city resident 9 individual who is not a married individual who makes a single return 10 jointly with his or her spouse under subdivision (b) of section 11-1751 11 of this chapter or a city resident head of a household or a city resi- 12 dent surviving spouse, and on the tax determined pursuant to section 13 11-1701 of this subchapter of every city resident estate and trust shall 14 be determined as follows: (A) If the tax determined pursuant to section 15 11-1701 of this subchapter is based on city taxable income equal to or 16 less than fifty thousand dollars, then the additional tax shall be 5.25% 17 of such tax; (B) If the tax determined pursuant to section 11-1701 of 18 this subchapter is based on city taxable income over fifty thousand 19 dollars, then the additional tax shall be the sum of 5.25% of such tax 20 on city taxable income up to and including fifty thousand dollars and 21 12.25% of such tax on city taxable income in excess of fifty thousand 22 dollars. 23 (b) The additional tax imposed pursuant to this section shall be 24 administered, collected and distributed by the commissioner of taxation 25 and finance in the same manner as the other taxes imposed pursuant to 26 this chapter, and all of the provisions of this chapter, including 27 sections 11-1706, 11-1721 and 11-1773, shall apply to the additional tax 28 imposed by this section. 29 § 11-1705 General provisions and definitions. (a) Accounting periods 30 and methods. (1) Accounting periods. A taxpayer's taxable year under 31 this chapter shall be the same as his or her taxable year for federal 32 income tax purposes. 33 (2) Change of accounting periods. If a taxpayer's taxable year is 34 changed for federal income tax purposes, his or her taxable year for 35 purposes of this chapter shall be similarly changed. If a taxable year 36 of less than twelve months results from a change of taxable year, the 37 city standard deduction and the city exemptions shall be prorated under 38 regulations of the tax commission. 39 (3) Accounting methods. A taxpayer's method of accounting under this 40 chapter shall be the same as his or her method of accounting for federal 41 income tax purposes. In the absence of any method of accounting for 42 federal income tax purposes, city taxable income shall be computed under 43 such method as in the opinion of the tax commission clearly reflects 44 income. 45 (4) Change of accounting methods. (A) If a taxpayer's method of 46 accounting is changed for federal income tax purposes, his or her method 47 of accounting for purposes of this chapter shall be similarly changed. 48 (B) If a taxpayer's method of accounting is changed, other than from 49 an accrual to an installment method, any additional tax which results 50 from adjustments determined to be necessary solely by reason of the 51 change shall not be greater than if such adjustments were ratably allo- 52 cated and included for the taxable year of the change and the preceding 53 taxable years, not in excess of two, during which the taxpayer used the 54 method of accounting from which the change is made. 55 (C) If a taxpayer's method of accounting is changed from an accrual to 56 an installment method, any additional tax for the year of such change of

S. 8578 877

1 method and for any subsequent year which is attributable to the receipt 2 of installment payments properly accrued in a prior year, shall be 3 reduced by the portion of tax for any prior taxable year attributable to 4 the accrual of such installment payments, in accordance with regulations 5 of the tax commission. 6 (b) City resident and city nonresident defined. (1) City resident 7 individual. A city resident individual means an individual: 8 (A) who is domiciled in this city, unless (i) the taxpayer maintains 9 no permanent place of abode in this city, maintains a permanent place of 10 abode elsewhere, and spends in the aggregate not more than thirty days 11 of the taxable year in this city, or (ii) (I) within any period of five 12 hundred forty-eight consecutive days the taxpayer is present in a 13 foreign country or countries for at least four hundred fifty days, and 14 (II) during the period of five hundred forty-eight consecutive days the 15 taxpayer, the taxpayer's spouse, unless such spouse is legally sepa- 16 rated, and the taxpayer's minor children are not present in this city 17 for more than ninety days, and (III) during any period of less than 18 twelve months, which would be treated as a separate taxable period 19 pursuant to section 11-1754 of this chapter, and which period is 20 contained within the period of five hundred forty-eight consecutive 21 days, the taxpayer is present in this city for a number of days which 22 does not exceed an amount which bears the same ratio to ninety as the 23 number of days contained in that period of less than twelve months bears 24 to five hundred forty-eight, or 25 (B) who maintains a permanent place of abode in this city and spends 26 in the aggregate more than one hundred eighty-three days of the taxable 27 year in this city, whether or not domiciled in this city for any portion 28 of the taxable year, unless such individual is in active service in the 29 armed forces of the United States. 30 (2) City nonresident individual. A city nonresident individual means 31 an individual who is not a city resident. 32 (3) City resident estate or trust. A city resident estate or trust 33 means: 34 (A) the estate of a decedent who at his or her death was domiciled in 35 this city, 36 (B) a trust, or a portion of a trust, consisting of property trans- 37 ferred by will of a decedent who at his or her death was domiciled in 38 this city, or 39 (C) a trust, or portion of a trust, consisting of the property of: 40 (i) a person domiciled in this city at the time such property was 41 transferred to the trust, if such trust or portion of a trust was then 42 irrevocable, or if it was then revocable and has not subsequently become 43 irrevocable; or 44 (ii) a person domiciled in this city at the time such trust, or 45 portion of a trust, became irrevocable, if it was revocable when such 46 property was transferred to the trust but has subsequently become irrev- 47 ocable. 48 For the purposes of this paragraph, a trust or portion of a trust is 49 revocable if it is subject to a power, exercisable immediately or at any 50 future time, to revest title in the person whose property constitutes 51 such trust or portion of a trust, and a trust or portion of a trust 52 becomes irrevocable when the possibility that such power may be exer- 53 cised has been terminated. 54 (D) (i) Provided, however, a resident trust is not subject to tax 55 under this article if all of the following conditions are satisfied: 56 (I) all the trustees are domiciled outside the city of New York; (II)

S. 8578 878

1 the entire corpus of the trusts, including real and tangible property, 2 is located outside the city of New York; and (III) all income and gains 3 of the trust are derived from or connected with sources outside of the 4 city of New York, determined as if the trust were a non-resident trust. 5 (ii) For purposes of item (II) of clause (i) of this subparagraph, 6 intangible property shall be located in this city if one or more of the 7 trustees are domiciled in the city of New York. 8 (iii) Provided further, that for the purposes of item (I) of clause 9 (i) of this subparagraph, a trustee which is a banking corporation as 10 defined in subdivision (a) of section 11-640 of this title and which is 11 domiciled outside the city of New York at the time it becomes a trustee 12 of the trust shall be deemed to continue to be a trustee domiciled 13 outside the city of New York notwithstanding that it thereafter other- 14 wise becomes a trustee domiciled in the city of New York by virtue of 15 being acquired by, or becoming an office or branch of, a corporate trus- 16 tee domiciled within the city of New York. 17 For the purposes of this subparagraph, a trust or portion of a trust 18 is revocable if it is subject to a power, exercisable immediately or at 19 any future time, to revest title in the person whose property consti- 20 tutes such trust or portion of a trust, and a trust or portion of a 21 trust becomes irrevocable when the possibility that such power may be 22 exercised has been terminated. 23 (4) City nonresident estate or trust. A city nonresident estate or 24 trust means an estate or trust which is not a city resident estate or 25 trust. 26 (5) Cross reference. For effect of a change of resident status, see 27 section 11-1754 of this chapter. 28 § 11-1706 Credits against tax. (a) Credit relating to net capital 29 gain. For taxable years beginning in nineteen hundred eighty-seven, a 30 credit against the tax imposed under section 11-1701 of this subchapter 31 shall be allowed. The amount of the credit shall be one-half of one 32 percent of net capital gain includible in city adjusted gross income for 33 the taxable year. The credit allowed by this subdivision shall not 34 exceed the tax imposed by section 11-1701 of this subchapter reduced by 35 the credits permitted under section 11-1721 of this chapter and subdivi- 36 sion (b) of this section. 37 (b) Household credit. (1) For taxable years beginning after nineteen 38 hundred eighty-six, a credit against the city personal income tax 39 imposed by section 11-1701 of this subchapter shall be allowed. The 40 credit, computed as described in paragraph two of this subdivision, 41 shall not exceed the tax imposed by section 11-1701 of this subchapter, 42 reduced by the credit permitted under section 11-1721 of this chapter. 43 (2) (A) For any individual who is not married nor the head of a house- 44 hold nor a surviving spouse, the amount of the credit shall be deter- 45 mined in accordance with the following table:

46 ------------------------------------------------------------------------ 47 If household gross The credit shall be: 48 income is: 49 For taxable years For taxable years 50 beginning after beginning after 51 1986 and before 1995 52 1996 53 ------------------------------------------------------------------------

S. 8578 879

1 Not over $7,500 $15 $15 2 Over $7,500 but not over 3 $10,000 $10 $15 4 Over $10,000 but not over 5 $12,500 $0 $10

6 (B) For any husband and wife, head of household or surviving spouse, 7 the amount of the credit shall be determined by multiplying the number 8 of exemptions for which the taxpayer, or in the case of a husband and 9 wife, taxpayers, is entitled to a deduction for the taxable year for 10 federal income tax purposes under subsections (b) and (c) of section one 11 hundred fifty-one of the internal revenue code by the credit factor for 12 the taxable year as specified in the following table:

13 ------------------------------------------------------------------------ 14 If household gross The credit factor is: 15 income is: 16 For taxable years 17 beginning in 18 1987 1988 19 1989 For taxable years 20 through beginning after 21 1995 1995 22 ------------------------------------------------------------------------

23 Not over $12,500 $30 $50 $50 $30 24 Over $12,500 but not 25 over $15,000 $20 $40 $50 $30 26 Over $15,000 but not 27 over $17,500 $10 $20 $25 $25 28 Over $17,500 but not 29 over $20,000 $0 $15 $15 $15 30 Over $20,000 but not 31 over $22,500 $0 $0 $0 $10

32 (3) For purposes of this subdivision: 33 (A) "Household gross income" shall mean the aggregate federal adjusted 34 gross income of a household, as the term household is defined in subpar- 35 agraph (B) of this paragraph, for the taxable year. 36 (B) "Household" means a husband and wife, a head of household, a 37 surviving spouse, or an individual who is not married nor the head of a 38 household nor a surviving spouse nor a taxpayer with respect to whom a 39 deduction under subsection (c) of section one hundred fifty-one of the 40 internal revenue code is allowable to another taxpayer for the taxable 41 year. 42 (C) "Household gross income of a husband and wife" shall be the aggre- 43 gate of their federal adjusted gross incomes for the taxable year irre- 44 spective of whether joint or separate city income tax returns are filed. 45 Provided, however, that a husband or wife who is required to file a 46 separate city income tax return shall be permitted one-half the credit 47 otherwise allowed his or her household, except as limited by paragraph 48 one of this subdivision. 49 (D) "Household gross income" shall be computed in all cases as if each 50 member of the household were a resident for the entire taxable year.

S. 8578 880

1 (E) If a taxpayer changes his or her status during his or her taxable 2 year from resident to nonresident, or from nonresident to resident, the 3 household credit shall be prorated according to the number of months in 4 the period of residence. In the case of a husband and wife, if either or 5 both changes his or her status from resident to nonresident or from 6 nonresident to resident and separate returns are filed, the credit 7 computed for the entire year shall be divided first as provided in 8 subparagraph (C) of this paragraph and then prorated according to the 9 number of months in the period of residence. 10 (c) State school tax reduction credit. 11 (1) For taxable years beginning after nineteen hundred ninety-seven 12 and ending before two thousand sixteen, a state school tax reduction 13 credit shall be allowed as provided in the following tables. The credit 14 shall be allowed against the taxes authorized by this article reduced by 15 the credits permitted by this article. If the credit exceeds the tax as 16 so reduced, the taxpayer may receive, and the comptroller, subject to a 17 certificate of the commissioner, shall pay as an overpayment, without 18 interest, the amount of such excess. For purposes of this subdivision, 19 no credit shall be granted to an individual with respect to whom a 20 deduction under subsection (c) of section one hundred fifty-one of the 21 internal revenue code is allowable to another taxpayer for the taxable 22 year. 23 (2) The amount of the credit under this paragraph shall be determined 24 based upon the taxpayer's income as defined in subparagraph (ii) of 25 paragraph (b) of subdivision four of section four hundred twenty-five of 26 the real property tax law. For purposes of this paragraph, any taxpayer 27 under subparagraphs (A) and (B) of this paragraph with income of more 28 than two hundred fifty thousand dollars shall not receive a credit. 29 Beginning in the two thousand ten tax year and each tax year thereaft- 30 er through two thousand fifteen, the "more than two hundred fifty thou- 31 sand dollar" income limitation shall be adjusted by applying the 32 inflation factor set forth herein, and rounding each result to the near- 33 est multiple of one hundred dollars. The department shall establish the 34 income limitation to be associated with each subsequent tax year by 35 applying the inflation factor set forth herein to the figures that 36 define the income limitation that were applicable to the preceding tax 37 year, as determined pursuant to this subdivision, and rounding each 38 result to the nearest multiple of one hundred dollars. Such determi- 39 nation shall be made no later than March first, two thousand ten and 40 each year thereafter. 41 (A) Married individuals filing joint returns and surviving spouses. In 42 the case of a husband and wife who make a single return jointly and of a 43 surviving spouse: 44 For taxable years beginning: The credit shall be: 45 in 2001-2005 $125 46 in 2006 $230 47 in 2007-2008 $290 48 in 2009-2015 $125 49 (B) All others. In the case of an unmarried individual, a head of a 50 household or a married individual filing a separate return: 51 For taxable years beginning: The credit shall be: 52 in 2001-2005 $62.50 53 in 2006 $115 54 in 2007-2008 $145 55 in 2009-2015 $62.50

S. 8578 881

1 (4) Husband and wife who make a joint return. If a husband and wife 2 make a single return jointly, the credit under this subdivision shall be 3 determined under paragraph two of this subdivision, if either of them 4 has attained the age of sixty-five on or before the close of the taxable 5 year. 6 (5) Part-year residents. If a taxpayer changes status during the taxa- 7 ble year from resident to nonresident, or from nonresident to resident, 8 the state school tax reduction credit shall be prorated according to the 9 number of months in the period of residence. 10 (c) Credit for unincorporated business taxes paid. (1) A city resident 11 individual, estate or trust whose city adjusted gross income includes 12 income, gain, loss or deductions from one or more unincorporated busi- 13 nesses conducted by such city resident individual, estate or trust that 14 are subject to the tax imposed by chapter five of this title, or a 15 distributive share of income, gain, loss and deductions of, or guaran- 16 teed payments from, one or more partnerships that are subject to the tax 17 imposed by such chapter, shall be allowed a credit as provided in para- 18 graph two of this subdivision against the tax otherwise due under 19 sections 11-1701, 11-1703, 11-1704 and 11-1704.1 of this subchapter. 20 (2) (A) Subject to the limitation set forth in subparagraph (B) of 21 this paragraph, the credit allowed to a taxpayer for a taxable year 22 under this subdivision shall be determined as follows: 23 (i) For taxable years beginning on or after January first, nineteen 24 hundred ninety-seven and before January first, two thousand seven: 25 (I) If the city taxable income is forty-two thousand dollars or less, 26 the credit shall be sixty-five percent of the amount determined in para- 27 graph three of this subdivision. 28 (II) If the city taxable income is greater than forty-two thousand 29 dollars but not greater than one hundred forty-two thousand dollars, the 30 amount of the credit shall be a percentage of the amount determined in 31 paragraph three of this subdivision, such percentage to be determined by 32 subtracting from sixty-five percent, one-tenth of a percentage point 33 (.001) for every increment of two hundred dollars, or fractional part 34 thereof, of city taxable income in excess of forty-two thousand dollars. 35 (III) If the city taxable income is greater than one hundred forty-two 36 thousand dollars, the credit shall be fifteen percent of the amount 37 determined in paragraph three of this subdivision. 38 (ii) For taxable years beginning on or after January first, two thou- 39 sand seven: 40 (I) If the city taxable income is forty-two thousand dollars or less, 41 the credit shall be one hundred percent of the amount determined in 42 paragraph three of this subdivision. 43 (II) If the city taxable income is greater than forty-two thousand 44 dollars but less than one hundred forty-two thousand dollars, the amount 45 of the credit shall be a percentage of the amount determined in para- 46 graph three of this subdivision, such percentage to be determined by 47 subtracting from one hundred percent, a percentage determined by 48 subtracting forty-two thousand dollars from city taxable income, divid- 49 ing the result by one hundred thousand dollars and multiplying by seven- 50 ty-seven percent. 51 (III) If the city taxable income is one hundred forty-two thousand 52 dollars or greater, the credit shall be twenty-three percent of the 53 amount determined in paragraph three of this subdivision. 54 (B) Notwithstanding anything to the contrary in subparagraph (A) of 55 this paragraph, the credit allowed to a taxpayer for a taxable year 56 under this subdivision shall not exceed the sum of the taxes that would

S. 8578 882

1 otherwise be imposed by sections 11-1701, 11-1703, 11-1704 and 11-1704.1 2 of this subchapter on such taxpayer for such taxable year after the 3 allowance of any other credits allowed by this section or section 4 11-1721 of this chapter. 5 (3) Subject to the provisions of subparagraph (C) of this paragraph, 6 the amount determined in this paragraph is the sum of: 7 (A) for each unincorporated business conducted by the taxpayer, the 8 tax imposed by chapter five of this title on such unincorporated busi- 9 ness for its taxable year ending with the taxable year of the taxpayer 10 and paid by the unincorporated business; and 11 (B) for each unincorporated business in which the taxpayer is a part- 12 ner, the product of: 13 (i) the sum of (I) the tax imposed by chapter five of this title on 14 such unincorporated business for its taxable year ending within or with 15 the taxable year of the partner and paid by the unincorporated business 16 and (II) the amount of any credit or credits taken by the unincorporated 17 business under subdivision (j) of section 11-503 of this title for its 18 taxable year ending within or with the taxable year of the partner; and 19 (ii) a fraction, the numerator of which is the net total of the part- 20 ner's distributive share of income, gain, loss and deductions of, and 21 guaranteed payments from, the unincorporated business for such taxable 22 year, and the denominator of which is the sum, for such taxable year, of 23 the net total distributive shares of income, gain, loss and deductions 24 of, and guaranteed payments to, all partners in the unincorporated busi- 25 ness for whom or which such net total, as separately determined for each 26 partner, is greater than zero. 27 (C) For a taxpayer that changes its status from a city resident to a 28 city nonresident or from a city nonresident to a city resident during 29 the taxable year: 30 (i) the amount determined in subparagraph (A) of this paragraph shall 31 be, with respect to each unincorporated business conducted by the 32 taxpayer, the tax imposed by chapter five of this title on such unincor- 33 porated business for its taxable year ending with the taxable year of 34 the taxpayer and paid by the unincorporated business, multiplied by a 35 fraction, the numerator of which is that portion of the income, gain, 36 loss and deductions of the unincorporated business included in the 37 taxpayer's adjusted gross income for the portion of the taxable year 38 during which the taxpayer was a city resident, and the denominator of 39 which is the total, for such taxable year, of the income, gain, loss and 40 deductions of the unincorporated business, and 41 (ii) the amount determined in clause (ii) of subparagraph (B) of this 42 paragraph shall be a fraction, the numerator of which is that portion of 43 the taxpayer's net total distributive share of income, gain, loss and 44 deductions of, and that portion of guaranteed payments from, the unin- 45 corporated business included in the taxpayer's city adjusted gross 46 income for the portion of the taxable year during which the taxpayer was 47 a city resident, and the denominator of which is the sum, for such taxa- 48 ble year, of the net total distributive shares of income, gain, loss and 49 deductions of, and guaranteed payments to, all partners in the unincor- 50 porated business, for whom or which such net total, as separately deter- 51 mined for each partner, is greater than zero. 52 (4) For purposes of subdivision (c) of section 11-1902 of this title, 53 in determining the amount of tax that a nonresident would be required to 54 pay if such nonresident were a resident of the city and subject to the 55 tax on personal income of residents, the credit allowed by this subdivi- 56 sion shall be taken into account.

S. 8578 883

1 (d) Earned income tax credit. (1) For taxable years beginning after 2 two thousand three, a credit against the city personal income tax shall 3 be allowed, equal to five percent of the earned income credit allowed 4 under section thirty-two of the internal revenue code for the same taxa- 5 ble year, and, for taxable years beginning after two thousand twenty- 6 one, a credit against the city personal income tax shall be allowed, 7 equal to a percentage determined pursuant to subparagraphs (A) through 8 (I) of this paragraph, of the earned income credit allowed under section 9 thirty-two of the internal revenue code for the same taxable year. For 10 purposes of this paragraph, "adjusted gross income" means New York 11 adjusted gross income as determined pursuant to article twenty-two of 12 the tax law. The percentage shall be: 13 (A) thirty percent, where the taxpayer's adjusted gross income for 14 such taxable year is less than five thousand dollars; 15 (B) thirty percent reduced by the product of two-tenths of a percent- 16 age point (0.002) and the amount of the taxpayer's adjusted gross income 17 for such taxable year in excess of four thousand nine hundred ninety- 18 nine dollars, where such taxpayer's adjusted gross income for such taxa- 19 ble year is equal to or greater than five thousand dollars and less than 20 seven thousand five hundred dollars; 21 (C) twenty-five percent, where the taxpayer's adjusted gross income 22 for such taxable year is equal to or greater than seven thousand five 23 hundred dollars and less than fifteen thousand dollars; 24 (D) twenty-five percent reduced by the product of two-tenths of a 25 percentage point (0.002) and the amount of the taxpayer's adjusted gross 26 income for such taxable year in excess of fourteen thousand nine hundred 27 ninety-nine dollars, where such taxpayer's adjusted gross income for 28 such taxable year is equal to or greater than fifteen thousand dollars 29 and less than seventeen thousand five hundred dollars; 30 (E) twenty percent, where the taxpayer's adjusted gross income for 31 such taxable year is equal to or greater than seventeen thousand five 32 hundred dollars and less than twenty thousand dollars; 33 (F) twenty percent reduced by the product of two-tenths of a percent- 34 age point (0.002) and the amount of such taxpayer's adjusted gross 35 income for such taxable year in excess of nineteen thousand nine hundred 36 ninety-nine dollars, where the taxpayer's adjusted gross income for such 37 taxable year is equal to or greater than twenty thousand dollars and 38 less than twenty-two thousand five hundred dollars; 39 (G) fifteen percent, where the taxpayer's adjusted gross income for 40 such taxable year is equal to or greater than twenty-two thousand five 41 hundred dollars and less than forty thousand dollars; 42 (H) fifteen percent reduced by the product of two-tenths of a percent- 43 age point (0.002) and the amount of the taxpayer's adjusted gross income 44 for such taxable year in excess of thirty-nine thousand nine hundred 45 ninety-nine dollars, where such taxpayer's adjusted gross income for 46 such taxable year is equal to or greater than forty thousand dollars and 47 less than forty-two thousand five hundred dollars; and 48 (I) ten percent where the taxpayer's adjusted gross income for such 49 taxable year is equal to or greater than forty-two thousand five hundred 50 dollars. 51 (2) In the case of a resident taxpayer, the credit provided by this 52 subdivision shall be allowed against the taxes authorized by this chap- 53 ter for the taxable year reduced by the credits permitted by this chap- 54 ter. If the credit exceeds the tax as so reduced, the taxpayer may 55 receive, and the state comptroller, subject to a certificate of the

S. 8578 884

1 commissioner of the state department of taxation and finance, shall pay 2 as an overpayment, without interest, the amount of such excess. 3 (3) If a taxpayer changes his or her status during the taxable year 4 from city resident to city nonresident, or from city nonresident to city 5 resident, the credit determined under this subdivision shall be limited 6 to the amount determined by multiplying the amount of such credit by a 7 fraction, the numerator of which is such taxpayer's city adjusted gross 8 income, for the period of residence, and the denominator of which is 9 such taxpayer's city adjusted gross income determined as if he or she 10 were a city resident for the entire taxable year. City adjusted gross 11 income shall be adjusted as provided in section 11-1754 of this chapter. 12 The credit as so limited shall be applied as provided in paragraph two 13 of this subdivision. 14 (4) Subject to the provisions of paragraph three of this subdivision, 15 in the case of a husband and wife who file a joint return, but who are 16 required to determine their city personal income taxes separately, the 17 credit authorized pursuant to this subdivision may be applied against 18 the tax of either or divided between them as they may elect. In the case 19 of a husband and wife who are not required to file a federal return, the 20 credit under this subsection shall be allowed only if such taxpayers 21 file a joint city personal income tax return. 22 (5) If the state commissioner of taxation and finance determines that 23 the taxpayer is eligible to receive the credit provided under this 24 subdivision but has not claimed such credit on his or her return, the 25 state commissioner of taxation and finance shall compute and issue any 26 refund for the allowable credit amount provided under this subdivision. 27 Any refund paid pursuant to this paragraph shall be deemed to be a 28 refund of an overpayment of tax as provided in section 11-1786 of this 29 chapter, provided, however, that no interest shall be paid thereon. 30 (e) Credit for certain household and dependent care services necessary 31 for gainful employment. (1) For taxable years beginning on or after 32 January first, two thousand seven, a taxpayer shall be allowed a credit 33 as provided herein equal to the applicable percentage of the credit 34 allowed under subsection (c) of section six hundred six of the tax law 35 with respect to qualifying individuals as defined in paragraph one of 36 subsection (b) of section twenty-one of the internal revenue code, with- 37 out regard to whether the taxpayer in fact claimed the credit under such 38 section twenty-one for the taxable year, who are dependents of the 39 taxpayer and who have not attained the age of four as of the end of the 40 taxable year. The applicable percentage shall be determined as follows: 41 (A) If household gross income as defined in subparagraph (A) of para- 42 graph three of subdivision (b) of this section is twenty-five thousand 43 dollars or less, the applicable percentage shall be seventy-five 44 percent. 45 (B) If such household gross income is greater than twenty-five thou- 46 sand dollars but not greater than thirty thousand dollars, the applica- 47 ble percentage shall be seventy-five percent multiplied by one minus a 48 fraction, the numerator of which is such household gross income less 49 twenty-five thousand dollars and the denominator of which is five thou- 50 sand dollars. 51 (C) If such household gross income is greater than thirty thousand 52 dollars, the applicable percentage shall be zero. 53 (2) The credit under this subdivision shall be allowed against the 54 taxes imposed by this chapter reduced by the credits permitted by this 55 chapter. If the credit exceeds the tax as so reduced, the taxpayer may 56 receive, and the state comptroller, subject to the certificate of the

S. 8578 885

1 state commissioner of taxation and finance, shall pay as an overpayment, 2 without interest, the amount of such excess, provided, however, in the 3 case of a taxpayer who is a part-year resident of New York city any such 4 overpayment under this paragraph shall be limited to the amount of such 5 excess multiplied by a fraction, the numerator of which is federal 6 adjusted gross income for the period of residence, computed as if the 7 taxable year for federal income tax purposes were limited to the period 8 of residence, and the denominator of which is federal adjusted gross 9 income for the taxable year. 10 (3) In the case of a husband and wife who filed a joint federal 11 return, but who are required to determine their New York city taxes 12 separately, the credit allowed pursuant to this subdivision may only be 13 applied against the tax imposed on the spouse with the lower taxable 14 income, computed without regard to such credit, provided, however, if 15 the spouse with the lower taxable income is a nonresident of the city, 16 no credit shall be allowed under this subdivision. In the case of a 17 husband and wife who are not required to file a federal return, the 18 credit under this subdivision shall be allowed only if such taxpayers 19 file a joint New York city income tax return. 20 (f) Credit for general corporation tax paid. (1) A city resident indi- 21 vidual, estate or trust whose city adjusted gross income includes a pro 22 rata share of income, loss and deductions described in paragraph one of 23 subsection (a) of section thirteen hundred sixty-six of the internal 24 revenue code, from one or more New York S corporations as defined in 25 subdivision one-A of section two hundred eight of the tax law, or from 26 one or more QSSSs as defined in subdivision one-B of section two hundred 27 eight of the tax law, that are exempt QSSSs by reason of clause (A) of 28 subparagraph one of paragraph (k) of subdivision nine of section two 29 hundred eight of the tax law, on which a tax is imposed by subchapter 30 two of chapter six of this title, shall be allowed a credit as provided 31 in paragraph two of this subdivision against the tax otherwise due under 32 sections 11-1701, 11-1703, 11-1704 and 11-1704.1 of this chapter. 33 (2) (A) Subject to the limitations set forth in subparagraphs (B) and 34 (C) of this paragraph, the credit allowed to a taxpayer for a taxable 35 year under this subdivision shall be determined as follows: 36 (i) For taxable years beginning on or after January first, two thou- 37 sand fourteen and before July first, two thousand nineteen: 38 (I) If the city taxable income is thirty-five thousand dollars or 39 less, the amount of the credit shall be one hundred percent of the 40 amount determined in paragraph three of this subdivision. 41 (II) If the city taxable income is greater than thirty-five thousand 42 dollars but less than one hundred thousand dollars, the amount of the 43 credit shall be a percentage of the amount determined in paragraph three 44 of this subdivision, such percentage to be determined by subtracting 45 from one hundred percent, a percentage determined by subtracting thir- 46 ty-five thousand dollars from city taxable income, dividing the result 47 by sixty-five thousand dollars and multiplying by one hundred percent. 48 (III) If the city taxable income is one hundred thousand dollars or 49 greater, no credit shall be allowed. 50 (IV) Provided further that for any taxable year of a taxpayer for 51 which this credit is effective that encompasses days occurring after 52 June thirtieth, two thousand nineteen, the amount of the credit deter- 53 mined in item (I) or (II) of this clause shall be multiplied by a frac- 54 tion, the numerator of which is the number of days in the taxpayer's 55 taxable year occurring on or before June thirtieth, two thousand nine-

S. 8578 886

1 teen, and the denominator of which is the number of days in the taxpay- 2 er's taxable year. 3 (B) Notwithstanding anything to the contrary in subparagraph (A) of 4 this paragraph, the credit allowed to a taxpayer for a taxable year 5 under this subdivision shall not exceed the sum of the taxes that would 6 otherwise be imposed by sections 11-1701, 11-1703, 11-1704 and 11-1704.1 7 of this subchapter on such taxpayer for such taxable year after the 8 allowance of any other credits allowed by subdivisions (a), (b) and (c) 9 of this section, and section 11-1721 of this chapter. 10 (C) Notwithstanding anything to the contrary in subparagraph (A) of 11 this paragraph, no credit shall be allowed for any amount of tax 12 imposed, or credit allowed, by subchapter two of chapter six of this 13 title on, or to, a combined group of corporations including a New York S 14 corporation or an exempt QSSS, except where the combined group consists 15 exclusively of one or more New York S corporations and one or more 16 exempt QSSSs of such corporations as described in paragraph one of this 17 subdivision, provided that each of the New York S corporations included 18 in the group is wholly owned by the same interests and in the same 19 proportions as each other New York S corporation included in the group. 20 (3) Subject to the provisions of subparagraph (B) of this paragraph 21 and subparagraph (C) of paragraph two of this subdivision, the amount 22 determined in this paragraph is the sum of the taxpayer's pro rata share 23 of the amounts determined in subparagraph (A) of this paragraph for each 24 New York S corporation, or exempt QSSS, described in paragraph one of 25 this subdivision, a pro rata share of whose income, loss and deductions 26 described in paragraph one of subsection (a) of section thirteen hundred 27 sixty-six of the internal revenue code, is included in the taxpayer's 28 city adjusted gross income. 29 (A) The amount determined in this subparagraph is the sum of: 30 (i) the taxes imposed by subchapter two of chapter six of this title 31 on such corporation, or a combined group including such corporation, for 32 its taxable year ending within or with the taxable year of the taxpayer 33 and paid by such corporation, or combined group; and 34 (ii) the amount of any credit or credits taken by such corporation, or 35 a combined group including such corporation, under subdivision eighteen 36 of section 11-604 of this title for its taxable year ending within or 37 with the taxable year of the taxpayer. 38 (B) For purposes of this subdivision, the taxpayer's pro rata share of 39 the amount in subparagraph (A) of this paragraph for the taxable year 40 shall be the amount determined with respect to the taxpayer: 41 (i) by assigning an equal portion of the amount in subparagraph (A) of 42 this paragraph to each day of the corporation's taxable year on which 43 the corporation has shares outstanding, 44 (ii) then by dividing that portion pro rata among the shares outstand- 45 ing on that day; provided, however, 46 (iii) if the taxable year of such corporation for purposes of chapter 47 six of this title is different from its New York S year or S short year 48 as defined in subdivision one-A of section two hundred eight of the tax 49 law, only those portions that are assigned to days of the taxable year 50 that are also days of the New York S year or S short year shall be taken 51 into account in determining the shareholder's pro rata share of the 52 amount determined in subparagraph (A) of this paragraph. 53 (g) Credit for city pass-through entity tax. (1) A taxpayer who is a 54 partner or member of an electing city partnership and a taxpayer share- 55 holder of an electing city resident S corporation subject to tax under 56 article twenty-four-B of the tax law shall be entitled to a credit

S. 8578 887

1 against the tax imposed by such article. For purposes of this subdivi- 2 sion, the terms "electing city partnership," "electing city resident S 3 corporation," "city pass-through entity tax," and "direct share of city 4 pass-through entity tax" shall have the same meanings as used in article 5 twenty-four-B of the tax law. 6 (2) The amount of the credit shall be equal to the partner's, member's 7 or shareholder's direct share of the city pass-through entity tax. 8 (3) If a taxpayer is a partner, member or shareholder in more than one 9 electing city partnership and/or electing city resident S corporation 10 that is subject to tax pursuant to article twenty-four-B of the tax law, 11 the amount of the credit of such taxpayer shall be equal to the sum of 12 the amounts of such credits calculated pursuant to paragraph two of this 13 subdivision with regard to each entity in which such taxpayer has a 14 direct ownership interest. 15 (4) If the amount of the credit allowable pursuant to this subdivision 16 for any taxable year exceeds the tax due for such year pursuant to arti- 17 cle twenty-four-B of the tax law, the excess amount shall be treated as 18 an overpayment, to be credited or refunded, without interest. 19 (5) Limitation on credit. No credit shall be allowed to a taxpayer 20 under this subdivision unless the electing city partnership or electing 21 city resident S corporation provided sufficient information to identify 22 such taxpayer on its city pass-through entity tax return as required 23 under paragraph two of subsection (c) of section eight hundred seventy- 24 two of the tax law for an electing city partnership or paragraph two of 25 subsection (d) of section eight hundred seventy-two of the tax law for 26 an electing city resident S corporation. The credit allowed to a taxpay- 27 er under this subdivision shall not exceed the direct share of city 28 pass-through entity tax reported by such electing city partnership or 29 electing city resident S corporation attributable to such taxpayer on 30 such electing city partnership's or such electing city resident S corpo- 31 ration's return filed pursuant to section eight hundred seventy-two of 32 the tax law. 33 § 11-1707 Meaning of terms. (a) General. Any term used in this chap- 34 ter shall have the same meaning as when used in a comparable context in 35 the laws of the United States relating to federal income taxes, unless a 36 different meaning is clearly required but such meaning shall be subject 37 to the exceptions or modifications prescribed in this chapter or by 38 statute. Any reference in this chapter to the laws of the United States 39 shall mean the provisions of the internal revenue code of nineteen 40 hundred eighty-six, unless a reference to the internal revenue code of 41 nineteen hundred fifty-four is clearly intended, and amendments thereto, 42 and other provisions of the laws of the United States relating to feder- 43 al income taxes, as the same may be or become effective at any time or 44 from time to time for the taxable year, as included and quoted in the 45 appendices, including any supplements and additions thereto, to this 46 chapter. Provided however, for taxable years beginning before January 47 first, two thousand twenty-two, any amendments made to the internal 48 revenue code of nineteen hundred eighty-six after March first, two thou- 49 sand twenty shall not apply to this chapter. Such quotation of the 50 aforesaid laws of the United States is intended to make them a part of 51 this chapter and to avoid constitutional uncertainties which might 52 result if such laws were merely incorporated by reference. The quotation 53 of a provision of the internal revenue code or of any other law of the 54 United States in such appendices shall not necessarily mean that it is 55 applicable or has relevance to this chapter.

S. 8578 888

1 (b) Marital or other status. An individual's marital or other status 2 under section 11-1701 of this chapter and section 11-1714 of this chap- 3 ter shall be the same as his or her marital or other status for purposes 4 of establishing the applicable federal income tax rates. 5 (c) "City" and "this city" as used in this chapter means the city of 6 Staten Island; "tax commission" as used in this chapter means the tax 7 commission of the state of New York; and "state" or "this state" as used 8 in this chapter means the state of New York.

9 SUBCHAPTER 2 10 RESIDENTS

11 § 11-1711 City taxable income of a city resident individual. (a) 12 General. The city taxable income of a city resident individual shall be 13 his or her city adjusted gross income less his or her city deduction and 14 city exemptions, as determined under this chapter. 15 (b) Husband and wife. 16 (1) If the federal taxable income of husband or wife, both of whom 17 are residents, is determined on a separate federal return, their city 18 taxable incomes shall be separately determined. 19 (2) If the federal taxable income of husband and wife, both of whom 20 are residents, is determined on a joint federal return, their city taxa- 21 ble income shall be determined jointly. 22 (3) If neither husband or wife, both of whom are residents, files a 23 federal return: 24 (A) their tax shall be determined on their joint city taxable income, 25 or 26 (B) separate taxes may be determined on their separate city taxable 27 incomes if they both so elect. 28 (4) If either husband or wife is a resident and the other is a nonres- 29 ident, a separate tax shall be determined on the city taxable income of 30 the resident spouse on a separate form unless such husband and wife 31 determine their federal taxable income jointly and both elect to deter- 32 mine their joint city taxable income as if both were residents. 33 § 11-1712 City adjusted gross income of a city resident individual. 34 (a) General. The city adjusted gross income of a city resident indi- 35 vidual means his or her federal adjusted gross income as defined in the 36 laws of the United States for the taxable year, with the modifications 37 specified in this section. 38 (b) Modifications increasing federal adjusted gross income. There 39 shall be added to federal adjusted gross income: (1) Interest income 40 on obligations of any state other than this state, or of a political 41 subdivision of any other such state unless created by compact or agree- 42 ment to which this state is a party, to the extent not properly includi- 43 ble in federal adjusted gross income; 44 (2) Interest or dividend income on obligations or securities of any 45 authority, commission, or instrumentality of the United States, which 46 the laws of the United States exempt from federal income tax but not 47 from state income taxes; 48 (3) Income taxes. (A) General. Income taxes imposed by this state or 49 any other taxing jurisdiction, to the extent deductible in determining 50 federal adjusted gross income and not credited against federal income 51 tax. 52 (B) Shareholders of S corporations. In the case of a shareholder of an 53 S corporation, with respect to taxes imposed upon or payable by the 54 corporation, the term "income taxes" in subparagraph (A) of this para-

S. 8578 889

1 graph shall also include the tax imposed under article nine-A of the tax 2 law, regardless of the measure of such tax, but shall not otherwise 3 include taxes imposed by this or any other state of the United States, 4 or any political subdivision of this or any other state, or the District 5 of Columbia. 6 (4) Interest on indebtedness incurred or continued to purchase or 7 carry obligations or securities the interest on which is exempt from tax 8 under this chapter, to the extent deductible in determining federal 9 adjusted gross income. 10 (5) Expenses paid or incurred during the taxable year for: (i) the 11 production or collection of income which is exempt from tax under this 12 chapter, or (ii) the management, conservation or maintenance of property 13 held for the production of such income, and the amortizable bond premium 14 for the taxable year on any bond the interest on which is exempt from 15 tax under this chapter, to the extent that such expenses and premiums 16 are deductible in determining federal adjusted gross income. 17 (6) In the case of a taxpayer who has exercised the election permit- 18 ted by subdivision (g) or (h) of this section, the amount or amounts 19 required by said subdivisions to be added to federal adjusted gross 20 income. 21 (7) In the case of a taxpayer who is a shareholder of a corporation 22 organized under article fifteen or authorized to do business in this 23 state under article fifteen-A of the business corporation law, for the 24 taxpayer's taxable years beginning before nineteen hundred eighty-eight, 25 the amount which is deductible by such corporation under paragraph one, 26 two or three of subsection (a) of section four hundred four of the 27 internal revenue code for its taxable year ending in or with such 28 taxpayer's taxable year for contributions paid on behalf of such taxpay- 29 er minus the lesser of fifteen thousand dollars or fifteen percent of 30 the earned income derived by such taxpayers from such corporation during 31 such taxpayer's taxable year. In the case of a taxpayer on whose behalf 32 contributions are paid under more than one plan to which this paragraph 33 applies or under a plan, contributions to which on his or her behalf are 34 subject to the limitations provided in subsection (e) of section four 35 hundred four of the internal revenue code, this paragraph shall apply 36 with respect to the aggregate of the contributions paid on his or her 37 behalf under all such plans. 38 (8) In the case of a taxpayer who is a shareholder of a corporation 39 organized under article fifteen or authorized to do business in this 40 state under article fifteen-A of the business corporation law, the 41 amount which is required to be paid as a tax by such corporation pursu- 42 ant to subsection (a) of section thirty-one hundred eleven of the inter- 43 nal revenue code with respect to the wages of such taxpayer for the 44 calendar year ending in or with such taxpayer's taxable year. 45 (10) The amount required to be added to federal adjusted gross income 46 pursuant to subdivision (i) of this section. 47 (14) The amount required to be added to federal adjusted gross income 48 pursuant to subdivision (1) of this section. 49 (15) The amount allowed as an exclusion or deduction for the special 50 additional mortgage recording taxes imposed by subdivision one-a of 51 section two hundred fifty-three of the tax law in determining federal 52 adjusted gross income for such taxable year. 53 (16) Unless the credit allowed pursuant to subsection (f) of section 54 six hundred six of the tax law is reflected in the computation of the 55 gain or loss so as to result in an increase in such gain or decrease in 56 such loss, for federal income tax purposes, from the sale or other

S. 8578 890

1 disposition of the property with respect to which the special additional 2 mortgage recording tax imposed pursuant to subdivision one-a of section 3 two hundred fifty-three of such law was paid, the amount of the special 4 additional mortgage recording tax imposed by subdivision one-a of 5 section two hundred fifty-three of such law which was paid and which is 6 reflected in the computation of the basis of the property so as to 7 result in a decrease in such gain or increase in such loss for federal 8 income tax purposes from the sale or other disposition of the property 9 with respect to which such tax was paid. 10 (17) The amount required to be added to federal adjusted gross income 11 pursuant to subdivision (r) of this section. 12 (18) In the case of a shareholder of an S corporation: (A) where the 13 election provided for in subsection (a) of section six hundred sixty of 14 the tax law is in effect with respect to such corporation, an amount 15 equal to his or her pro rata share of the corporation's reductions for 16 taxes described in paragraphs two and three of subsection (f) of section 17 thirteen hundred sixty-six of the internal revenue code, and 18 (B) in the case of a New York S termination year, subparagraph (A) of 19 this paragraph shall apply to the amount of reductions for taxes deter- 20 mined under subdivision (s) of this section. 21 (19) In the case of a shareholder of an S corporation: (A) where the 22 election provided for in subsection (a) of section six hundred sixty of 23 the tax law has not been made with respect to such corporation, any item 24 of loss or deduction of the corporation included in federal gross income 25 pursuant to section thirteen hundred sixty-six of the internal revenue 26 code, and 27 (B) in the case of a New York S termination year, subparagraph (A) of 28 this paragraph shall apply to the amounts of loss or deduction deter- 29 mined under subdivision (s) of this section. 30 (20) S corporation distributions to the extent not included in federal 31 gross income for the taxable year because of the application of section 32 thirteen hundred sixty-eight, subsection (e) of section thirteen hundred 33 seventy-one or subsection (c) of section thirteen hundred seventy-nine 34 of the internal revenue code which represent income not previously 35 subject to tax under this chapter because the election provided for in 36 subsection (a) of section six hundred sixty of the tax law had not been 37 made. Any such distribution treated in the manner described in paragraph 38 two of subsection (b) of section thirteen hundred sixty-eight of the 39 internal revenue code for federal income tax purposes shall be treated 40 as ordinary income for purposes of this chapter. 41 (21) In relation to the disposition of stock or indebtedness of a 42 corporation which elected under subchapter s of chapter one of the 43 internal revenue code for any taxable year of such corporation begin- 44 ning, in the case of a corporation taxable under article nine-A of the 45 tax law, after December thirty-first, nineteen hundred eighty, the 46 amount required to be added to federal adjusted gross income pursuant to 47 subdivision (n) of this section. 48 (22) The amounts required to be added to federal adjusted gross income 49 pursuant to subdivision (q) of this section. 50 (23) For taxable years beginning after December thirty-first, nineteen 51 hundred eighty-one, except with respect to property which is a qualified 52 mass commuting vehicle described in subparagraph (D) of paragraph eight 53 of subsection (f) of section one hundred sixty-eight of the internal 54 revenue code, relating to qualified mass commuting vehicles, any amount 55 which the taxpayer claimed as a deduction in computing its federal 56 adjusted gross income solely as a result of an election made pursuant to

S. 8578 891

1 the provisions of such paragraph eight as it was in effect for agree- 2 ments entered into prior to January first, nineteen hundred eighty-four; 3 (24) For taxable years beginning after December thirty-first, nineteen 4 hundred eighty-one, except with respect to property which is a qualified 5 mass commuting vehicle described in subparagraph (D) of paragraph eight 6 of subsection (f) of section one hundred sixty-eight of the internal 7 revenue code, relating to qualified mass commuting vehicles, any amount 8 which the taxpayer would have been required to include in the computa- 9 tion of its federal adjusted gross income had it not made the election 10 permitted pursuant to such paragraph eight as it was in effect for 11 agreements entered into prior to January first, nineteen hundred eight- 12 y-four; 13 (25) For taxable years beginning after December thirty-first, nineteen 14 hundred eighty-one, except with respect to recovery property subject to 15 the provisions of section two hundred eighty-F of the internal revenue 16 code and recovery property placed in service in this state in taxable 17 years beginning after December thirty-first, nineteen hundred eighty- 18 four, the amount allowable as a deduction under section one hundred 19 sixty-eight of the internal revenue code; 20 (25) In the case of property placed in service in taxable years begin- 21 ning before nineteen hundred ninety-four, for taxable years beginning 22 after December thirty-first, nineteen hundred eighty-one, except with 23 respect to property subject to the provisions of section two hundred 24 eighty-F of the internal revenue code and property subject to the 25 provisions of section one hundred sixty-eight of the internal revenue 26 code which is placed in service in this state in taxable years beginning 27 after December thirty-first, nineteen hundred eighty-four, the amount 28 allowable as a deduction determined under section one hundred sixty- 29 eight of the internal revenue code. 30 (26) The amount of member or employee contributions to a retirement 31 system or pension fund picked up or paid by the employer pursuant to 32 subdivision f of section five hundred seventeen or subdivision d of 33 section six hundred thirteen of the retirement and social security law 34 or section 13-225.1, 13-327.1, 13-125.1, 13-125.2 or 13-521.1 of title 35 thirteen of the code of the preceding municipality or subdivision nine- 36 teen of section twenty-five hundred seventy-five of the education law. 37 (26-a) The amount of member or employee contributions to a retirement 38 system or pension fund picked up or paid by the employer for members of 39 the Manhattan and Bronx surface transportation authority pension plan 40 and treated as employer contributions in determining income tax treat- 41 ment under subdivision (h) of section four hundred fourteen of the 42 Internal Revenue Code. 43 (27) Upon the disposition of recovery property to which paragraph 44 twenty-six of subdivision (c) of this section applies, the amount, if 45 any, by which the aggregate of the modifications described in such para- 46 graph twenty-six attributable to such property exceeds the aggregate of 47 the modifications described in paragraph twenty-five of this subdivision 48 attributable to such property; and 49 (27) Upon the disposition of property to which paragraph twenty-six of 50 subdivision (c) of this section applies, the amount, if any, by which 51 the aggregate of the modifications described in such paragraph twenty- 52 six attributable to such property exceeds the aggregate of the modifica- 53 tions described in paragraph twenty-five of this subdivision attribut- 54 able to such property. 55 (29) When gain from the sale or other disposition of property is 56 included in federal gross income, the amount of reduction in the basis

S. 8578 892

1 of such property attributable to credit for solar and wind energy 2 systems pursuant to paragraph nine of subsection (g) of section six 3 hundred six of the tax law; but for taxable years beginning before nine- 4 teen hundred eighty-seven, if such gain affects the determination of a 5 net capital gain for federal income tax purposes, forty percent of such 6 amount. 7 (31) The amount deducted or deferred from an employee's salary under a 8 flexible benefits program established pursuant to section twenty-three 9 of the general municipal law or section one thousand two hundred ten-a 10 of the public authorities law. 11 (32) The amount by which an employee's salary is reduced pursuant to 12 the provisions of subdivision b of section 12-126.1 and subdivision b of 13 section 12-126.2 of the code of the preceding municipality. 14 (33) Real property taxes paid on qualified agricultural property and 15 deducted in determining federal adjusted gross income, to the extent of 16 the amount of the agricultural property tax credit allowed under 17 subsection (n) or (i) of section six hundred six of the tax law. 18 (34) The amount of any deduction allowed pursuant to section one 19 hundred ninety-nine of the internal revenue code. 20 (35) The amount of any federal deduction for taxes imposed under arti- 21 cle twenty-three of the tax law. 22 (36) In the case of a beneficiary of a trust that, in any tax year 23 after its creation including its first tax year, was not subject to tax 24 pursuant to subparagraph (D) of paragraph three of subdivision (b) of 25 section 11-1705 of this chapter, except for an incomplete gift non-gran- 26 tor trust, as defined by paragraph thirty-seven of this subdivision, the 27 amount described in the first sentence of section six hundred sixty-sev- 28 en of the internal revenue code for the tax year to the extent not 29 already included in federal gross income for the tax year, except that, 30 in computing the amount to be added under this paragraph, such benefici- 31 ary shall disregard (i) subsection (c) of section six hundred sixty-five 32 of the internal revenue code; (ii) the income earned by such trust in 33 any tax year in which the trust was subject to tax under this article; 34 and (iii) the income earned by such trust in a taxable year prior to 35 when the beneficiary first became a resident of the city or in any taxa- 36 ble year starting before January first, two thousand fourteen. Except 37 as otherwise provided in this paragraph, all of the provisions of the 38 internal revenue code that are relevant to computing the amount 39 described in the first sentence of subsection (a) of section six hundred 40 sixty-seven of the internal revenue code shall apply to the provisions 41 of this paragraph with the same force and effect as if the language of 42 those internal revenue code provisions had been incorporated in full 43 into this paragraph, except to the extent that any such provision is 44 either inconsistent with or not relevant to this paragraph. 45 (37) In the case of a taxpayer who transferred property to an incom- 46 plete gift non-grantor trust, the income of the trust, less any 47 deductions of such trust, to the extent such income and deductions of 48 such trust would be taken into account in computing the taxpayer's 49 federal taxable income if such trust in its entirety were treated as a 50 grantor trust for federal tax purposes. For purposes of this paragraph, 51 an "incomplete gift non-grantor trust" means a resident trust that meets 52 the following conditions: (i) the trust does not qualify as a grantor 53 trust under section six hundred seventy-one through six hundred seven- 54 ty-nine of the internal revenue code, and (ii) the grantor's transfer of 55 assets to the trust is treated as an incomplete gift under section twen-

S. 8578 893

1 ty-five hundred eleven of the internal revenue code, and the regulations 2 thereunder. 3 (38) The amount contributed to any or all of the following accounts 4 within the charitable gifts trust fund set forth in section ninety-two- 5 gg of the state finance law, to the extent the amount is claimed as an 6 itemized deduction pursuant to section six hundred fifteen of the tax 7 law: the health charitable account established by paragraph a of subdi- 8 vision four of section ninety-two-gg of the state finance law, or the 9 elementary and secondary education charitable account established by 10 paragraph b of subdivision four of section ninety-two-gg of the state 11 finance law. 12 (39) The amount of any gain excluded from federal gross income for the 13 taxable year by subparagraph (A) of paragraph (1) of subsection (a) of 14 section one thousand four hundred-Z-two of the internal revenue code. 15 (c) Modifications reducing federal adjusted gross income. There 16 shall be subtracted from federal adjusted gross income: 17 (1) Interest income on obligations of the United States and its 18 possessions to the extent includible in gross income for federal income 19 tax purposes; such interest income shall include the amount received as 20 dividends from a regulated investment company, as defined in section 21 eight hundred fifty-one of the internal revenue code, which has been 22 designated as the amount of such interest income in a written notice to 23 shareholders not later than sixty days following the close of its taxa- 24 ble year; provided that, at the close of each quarter of the taxable 25 year of such regulated investment company, at least fifty percent of the 26 value of its total assets, as defined in subsection (c) of section eight 27 hundred fifty-one of the internal revenue code, consists of obligations 28 of the United States and its possessions. The aggregate amount so desig- 29 nated by the regulated investment company for its taxable year shall not 30 exceed the amount determined by multiplying the total distributions paid 31 by such regulated investment company to its shareholders with respect to 32 that taxable year, attributable to income earned in that year, including 33 any such distributions paid after the close of the taxable year, as 34 described in section eight hundred fifty-five of the internal revenue 35 code, by the ratio that the interest income received in that taxable 36 year on obligations of the United States and its possessions, after 37 reduction for the deductions and expenses directly or indirectly attrib- 38 utable thereto, bears to the investment company taxable income of such 39 regulated investment company for such taxable year, determined without 40 regard to subparagraph (D) of paragraph two of subsection (b) of section 41 eight hundred fifty-two of the internal revenue code; 42 (2) Interest or dividend income on obligations or securities of any 43 authority, commission or instrumentality of the United States to the 44 extent includible in gross income for federal income tax purposes but 45 exempt from state income taxes under the laws of the United States; 46 (3) (i) Pensions to officers and employees of this state, its subdivi- 47 sions and agencies, to the extent includible in gross income for federal 48 income tax purposes; 49 (ii) Pensions to officers and employees of the United States of Ameri- 50 ca, any territory or possession or political subdivision of such terri- 51 tory or possession, the District of Columbia, or any agency or instru- 52 mentality of such, to the extent includible in gross income for federal 53 income tax purposes; 54 (3-a) Pensions and annuities received by an individual who has 55 attained the age of fifty-nine and one-half, not otherwise excluded 56 pursuant to paragraph three of this subdivision, to the extent includi-

S. 8578 894

1 ble in gross income for federal income tax purposes, but not in excess 2 of twenty thousand dollars, which are periodic payments attributable to 3 personal services performed by such individual prior to his or her 4 retirement from employment, which arise: (i) from an employer-employee 5 relationship or (ii) from contributions to a retirement plan which are 6 deductible for federal income tax purposes. However, the term "pensions 7 and annuities" shall also include distributions received by an individ- 8 ual who has attained the age of fifty-nine and one-half from an individ- 9 ual retirement account or an individual retirement annuity, as defined 10 in section four hundred eight of the internal revenue code, and distrib- 11 utions received by an individual who has attained the age of fifty-nine 12 and one-half from self-employed individual and owner-employee retirement 13 plans which qualify under section four hundred one of the internal 14 revenue code, whether or not the payments are periodic in nature. Never- 15 theless, the term "pensions and annuities" shall not include any lump 16 sum distribution, as defined in subparagraph (A) of paragraph four of 17 subsection (e) of section four hundred two of the internal revenue code 18 and taxed under section six hundred three of the tax law. Where a 19 husband and wife file a joint city personal income tax return, the 20 modification provided for in this paragraph shall be computed as if they 21 were filing separate city personal income tax returns. Where a payment 22 would otherwise come within the meaning of the term "pensions and annui- 23 ties" as set forth in this paragraph except that such individual is 24 deceased, such payment shall, nevertheless, be treated as a pension or 25 annuity for purposes of this paragraph if such payment is received by 26 such individual's beneficiary. 27 (3-b) (i) Disability income included in federal gross income, to the 28 extent that such disability income would have been excluded from federal 29 gross income pursuant to the provisions of subsection (d) of section one 30 hundred five of the internal revenue code of nineteen hundred fifty-four 31 had such provisions continued in effect for taxable years commencing 32 after December thirty-first, nineteen hundred eighty-three as they were 33 in effect immediately prior to the repeal of such subsection. Notwith- 34 standing the provisions of this subparagraph, the sum of disability 35 income excluded pursuant to this paragraph, and pension and annuity 36 income excluded pursuant to paragraph three-a of this subdivision, shall 37 not exceed twenty thousand dollars. 38 (ii) Notwithstanding subdivision (f) of this section, if a husband and 39 wife determine their federal income tax on a joint return but are 40 required to determine their city income taxes separately, the amounts of 41 exclusion allowed under subparagraph (i) of this paragraph shall be 42 determined in the same joint manner as such amounts would have been 43 determined under the provisions of paragraph five of subsection (d) of 44 section one hundred five of the internal revenue code as such provisions 45 were in effect immediately prior to the repeal of such subsection, but 46 shall be attributed for city income tax purposes to the spouse who would 47 have been required to report any such amount as income if the spouses 48 had determined their federal income taxes separately. 49 (iii) Where a husband and wife file a joint city income tax return, 50 the twenty thousand dollar limitation provided in subparagraph (i) of 51 this paragraph shall be applied as if they were filing separate city 52 income tax returns. 53 (3-c) Social security benefits to the extent includible in gross 54 income for federal income tax purposes pursuant to section eighty-six of 55 the internal revenue code.

S. 8578 895

1 (4) The portion of any gain, from the sale or other disposition of 2 property having a higher adjusted basis for New York state income tax 3 purposes than for federal income tax purposes on the last day of the 4 last taxable year for which article sixteen of the tax law imposes tax, 5 that does not exceed such difference in basis. 6 (5) The amount necessary to prevent the taxation under this chapter 7 of any annuity or other amount of income or gain which was properly 8 included in income or gain and was taxable under article sixteen of the 9 tax law to the taxpayer, or to a decedent by reason of whose death the 10 taxpayer acquired the right to receive the income or gain, or to a trust 11 or estate from which the taxpayer received the income or gain. 12 (6) Interest or dividend income on obligations or securities to the 13 extent exempt from income tax under the laws of this state authorizing 14 the issuance of such obligations on securities but includible in gross 15 income for federal income tax purposes. 16 (7) The amount of any refund or credit for overpayment of income 17 taxes imposed by this city, any other taxing jurisdiction, or any taxes 18 imposed by article twenty-three of the tax law to the extent properly 19 included in gross income for federal income tax purposes. 20 (8) Compensation received for active service in the armed forces of 21 the United States on or after October first, nineteen hundred sixty-one, 22 and prior to September first, nineteen hundred sixty-two; provided, 23 however, that the amount of such compensation to be deducted shall not 24 exceed one hundred dollars for each month of the taxable year, subse- 25 quent to September, nineteen hundred sixty-one, during any part of which 26 month the taxpayer was engaged in such service. For the purposes of 27 this paragraph, the words "active service in the armed forces of the 28 United States" shall mean active duty, other than for training, in the 29 army, navy, including the marine corps, air force or coast guard of the 30 United States as defined in title ten of the United States Code. 31 (8-a) Compensation and bonuses received for active service in the 32 armed forces of the United States while a prisoner of war or missing in 33 action during the hostilities in Vietnam, to the extent includible in 34 gross income for federal income tax purposes. 35 (9) Interest on indebtedness incurred or continued to purchase or 36 carry obligations or securities the interest on which is subject to tax 37 under this chapter but exempt from federal income tax, to the extent 38 that such interest on indebtedness is not deductible in determining 39 federal adjusted gross income and is attributable to a trade or business 40 carried on by the taxpayer. 41 (10) Ordinary and necessary expenses paid or incurred during the 42 taxable year for: (i) the production or collection of income which is 43 subject to tax under this chapter but exempt from federal income tax, or 44 (ii) the management, conservation or maintenance of property held for 45 the production of such income, and the amortizable bond premium for the 46 taxable year on any bond the interest on which is subject to tax under 47 this chapter but exempt from federal income tax, to the extent that such 48 expenses and premiums are not deductible in determining federal adjusted 49 gross income and are attributable to a trade or business carried on by 50 the taxpayer. 51 (11) In the case of a taxpayer who has exercised the election permit- 52 ted by subdivision (g) or (h) of this section, the amount or amounts 53 required by said subdivisions to be subtracted from federal adjusted 54 gross income.

S. 8578 896

1 (12) The amount necessary to prevent the taxation of amounts properly 2 included in New York adjusted gross income in prior taxable years in 3 accordance with paragraph seven of subdivision (b) of this section. 4 (13) The amount required to be subtracted from federal adjusted gross 5 income pursuant to subdivision (i) of this section. 6 (14) The amount that may be subtracted from federal adjusted gross 7 income pursuant to subdivision (j) of this section. 8 (15) That portion of wages or salaries paid or incurred for the taxa- 9 ble year for which a deduction is not allowed pursuant to the provisions 10 of section two hundred eighty-C of the internal revenue code. 11 (19) The amount which may be subtracted from federal adjusted gross 12 income pursuant to subdivision (r) of this section. 13 (20) The amounts which may be subtracted from federal adjusted gross 14 income pursuant to subdivision (o) of this section. 15 (21) In relation to the disposition of stock or indebtedness of a 16 corporation which elected under subchapter s of chapter one of the 17 internal revenue code for any taxable year of such corporation begin- 18 ning, in the case of a corporation taxable under article nine-A of the 19 tax law, after December thirty-first, nineteen hundred eighty, the 20 amounts required to be subtracted from federal adjusted gross income 21 pursuant to subdivision (n) of this section. 22 (22) In the case of a shareholder of an S corporation: (A) where the 23 election provided for in subsection (a) of section six hundred sixty of 24 the tax law has not been made with respect to such corporation, any item 25 of income of the corporation included in federal gross income pursuant 26 to section thirteen hundred sixty-six of the internal revenue code, and 27 (B) in the case of a New York S termination year, subparagraph (A) of 28 this paragraph shall apply to the amounts of income determined under 29 subdivision (s) of this section. 30 (23) The amounts which may be subtracted from federal adjusted gross 31 income pursuant to subdivision (p) of this section. 32 (24) For taxable years beginning after December thirty-first, nineteen 33 hundred eighty-one, except with respect to property which is a qualified 34 mass commuting vehicle described in subparagraph (D) of paragraph eight 35 of subsection (f) of section one hundred sixty-eight of the internal 36 revenue code, relating to qualified mass commuting vehicles, any amount 37 which is included in the taxpayer's federal adjusted gross income solely 38 as a result of an election made pursuant to the provisions of such para- 39 graph eight as it was in effect for agreements entered into prior to 40 January first, nineteen hundred eighty-four; 41 (25) For taxable years beginning after December thirty-first, nineteen 42 hundred eighty-one, except with respect to property which is a qualified 43 mass commuting vehicle described in subparagraph (D) of paragraph eight 44 of subsection (f) of section one hundred sixty-eight of the internal 45 revenue code, relating to qualified mass commuting vehicles, any amount 46 which the taxpayer could have excluded from federal adjusted gross 47 income had it not made the election provided for in such paragraph eight 48 as it was in effect for agreements entered into prior to January first, 49 nineteen hundred eighty-four; 50 (26) For taxable years beginning after December thirty-first, nineteen 51 hundred eighty-one, except with respect to recovery property subject to 52 the provisions of section two hundred eighty-F of the internal revenue 53 code and recovery property placed in service in this state in taxable 54 years beginning after December thirty-first, nineteen hundred eighty- 55 four, the amount allowable as the depreciation deduction under section 56 one hundred sixty-seven of the internal revenue code as such section

S. 8578 897

1 would have applied to property placed in service on December thirty- 2 first, nineteen hundred eighty; 3 (26) In the case of property placed in service in taxable years begin- 4 ning before nineteen hundred ninety-four, for taxable years beginning 5 after December thirty-first, nineteen hundred eighty-one, except with 6 respect to property subject to the provisions of section two hundred 7 eighty-F of the internal revenue code and property subject to the 8 provisions of section one hundred sixty-eight of the internal revenue 9 code which is placed in service in this state in taxable years beginning 10 after December thirty-first, nineteen hundred eighty-four, an amount 11 with respect to property which is subject to the provisions of section 12 one hundred sixty-eight of the internal revenue code equal to the amount 13 allowable as the depreciation deduction under section one hundred 14 sixty-seven of the internal revenue code as such section would have 15 applied to property placed in service on December thirty-first, nineteen 16 hundred eighty. 17 (28) Upon the disposition of recovery property to which paragraph 18 twenty-six of this subdivision applies, the amount, if any, by which the 19 aggregate of the modifications described in paragraph twenty-five of 20 subdivision (b) of this section attributable to such property exceeds 21 the aggregate of the modifications described in paragraph twenty-six of 22 this subdivision attributable to such property. 23 (28) Upon the disposition of property to which paragraph twenty-six of 24 this subdivision applies, the amount, if any, by which the aggregate of 25 the modifications described in paragraph twenty-five of subdivision (b) 26 of this section attributable to such property exceeds the aggregate of 27 the modifications described in paragraph twenty-six of this subdivision 28 attributable to such property. 29 (29) Deduction for two-earner married couples. (A) For the taxable 30 year beginning in nineteen hundred eighty-seven, in the case of a 31 husband and wife who each have qualified earned income and who have 32 filed a joint return under subdivision (b) of section 11-1751 of this 33 chapter for the taxable year, an amount equal to ten percent of the 34 lesser of: 35 (i) thirty thousand dollars or 36 (ii) the qualified earned income of the spouse with the lower quali- 37 fied earned income for such taxable year. 38 (B) For purposes of this paragraph, eligibility for the deduction 39 provided for herein and the term qualified earned income shall be deter- 40 mined in the manner such eligibility and such qualified earned income 41 would have been determined pursuant to the provisions of section two 42 hundred twenty-one of the internal revenue code of nineteen hundred 43 fifty-four had such provisions continued in effect for taxable years 44 commencing after December thirty-first, nineteen hundred eighty-six as 45 they were in effect immediately prior to the repeal of such section. 46 Provided, however, the determination of such qualified earned income 47 shall be made with regard only to the items therein included in city 48 adjusted gross income, with such adjusted gross income determined with- 49 out regard to this paragraph, and only with regard to the deductions and 50 exclusions which are of the type properly allowable to or chargeable 51 against such qualified earned income in such taxable year. 52 (30) The amount received by any person as an accelerated payment or 53 payments of part or all of the death benefit or special surrender value 54 under a life insurance policy as a result of any of the diagnoses speci- 55 fied in subparagraph (A) or (B) of paragraph one of subsection (a) of 56 section one thousand one hundred thirteen of the insurance law, and the

S. 8578 898

1 amount received by any person as a viatical settlement pursuant to the 2 provisions of article seventy-eight of the insurance law, to the extent 3 includible in gross income for federal income tax purposes. 4 (32) The portion of the fees paid during the taxable year by a taxpay- 5 er who is a resident of a continuing care retirement community, issued a 6 certificate of authority pursuant to article forty-six of the public 7 health law, attributable to the cost of providing long term care bene- 8 fits pursuant to a continuing care contract. The portion of the fees so 9 attributable shall be determined in accordance with regulations promul- 10 gated by the superintendent of insurance. The deduction may not exceed 11 the limitation that would be applicable to the taxpayer for the taxable 12 year, with respect to eligible long term care premiums, determined under 13 paragraph ten of subsection (d) of section two hundred thirteen of the 14 internal revenue code. 15 (33) Distributions, to the extent includible in adjusted gross income 16 for federal income tax purposes, made to the taxpayer because of his or 17 her status as a victim of Nazi persecution, as defined in P.L. 103-286, 18 or as a spouse or a descendant in need of such victim. 19 (34) Items of income, to the extent includible in gross income for 20 federal income tax purposes, attributable to, derived from or in any way 21 related to assets stolen from, hidden from or otherwise lost to a victim 22 of Nazi persecution, as defined in P.L. 103-286, immediately prior to, 23 during and immediately after World War II, including, but not limited to 24 interest on the proceeds receivable as insurance under policies issued 25 to a victim of Nazi persecution, as defined in P.L. 103-286, by European 26 insurance companies immediately prior to and during World War II. 27 Provided, however, this subtraction from federal adjusted income does 28 not apply to assets acquired with such assets or with the proceeds from 29 the sale of such assets. Provided, further, this paragraph is only 30 applicable to a taxpayer who was the first recipient of such assets 31 after their recovery and who is a victim of Nazi persecution, as defined 32 in P.L. 103-286, or a spouse or a descendant of such victim. 33 (35) As provided in section thirty-eight of the tax law, any income or 34 gain, to the extent it is included in federal adjusted gross income of 35 an individual who is the sole proprietor of a qualified entity or a 36 member of a limited liability company, a partner in a partnership or a 37 shareholder in a New York subchapter S corporation that is a qualified 38 entity as defined in section sixteen-v of the New York state urban 39 development corporation act attributable to the operations of such qual- 40 ified entity at its location in or as part of a New York state inno- 41 vation hot spot, as defined in paragraph (a) of subdivision one of 42 section sixteen-v of the New York state urban development corporation 43 act. 44 (36) (A) In the case of a taxpayer who is a small business or a 45 taxpayer who is a member, partner, or shareholder of a limited liability 46 company, partnership, or New York S corporation, respectively, that is a 47 small business, who or which has business income and/or farm income as 48 defined in the laws of the United States, an amount equal to fifteen 49 percent of the net items of income, gain, loss and deduction attribut- 50 able to such business or farm entering into federal adjusted gross 51 income, but not less than zero. 52 (B) (i) For the purposes of this paragraph, the term small business 53 shall mean: (I) a sole proprietor who employs one or more persons during 54 the taxable year and who has net business income or net farm income of 55 greater than zero but less than two hundred fifty thousand dollars;

S. 8578 899

1 (II) a limited liability company, partnership, or New York S corpo- 2 ration that during the taxable year employs one or more persons and has 3 net farm income that is greater than zero but less than two hundred 4 fifty thousand dollars; or 5 (III) a limited liability company, partnership, or New York S corpo- 6 ration that during the taxable year employs one or more persons and has 7 New York gross business income attributable to a non-farm business that 8 is greater than zero but less than one million five hundred thousand 9 dollars. 10 (ii) For purposes of this paragraph, the term New York gross business 11 income shall mean: (I) in the case of a limited liability company or a 12 partnership, New York source gross income as defined in subparagraph (b) 13 or paragraph three of subsection (c) of section six hundred fifty-eight 14 of the tax law, and, (II) in the case of a New York S corporation, New 15 York receipts included in the numerator of the apportionment factor 16 determined under section two hundred ten-A of the tax law for the taxa- 17 ble year. 18 (C) To qualify for this modification in relation to a non-farm small 19 business that is a limited liability company, partnership, or New York S 20 corporation, the taxpayer's income attributable to the net business 21 income from its ownership interests in non-farm limited liability compa- 22 nies, partnerships, or New York S corporations must be less than two 23 hundred fifty thousand dollars. 24 (37) Any wages received by an individual as an employee of a business 25 located within a tax-free NY area during the first five years of such 26 business's ten year taxable period specified in subdivision (a) of 27 section thirty-nine of the tax law to the extent included in federal 28 adjusted gross income and allowed under section thirty-nine of the tax 29 law. During the second five years of such business's ten year taxable 30 period, the first two hundred thousand dollars of such wages in the case 31 of a taxpayer filing as a single individual, the first two hundred fifty 32 thousand dollars of such wages in the case of a taxpayer filing as a 33 head of household, and three hundred thousand dollars of such wages in 34 the case of a taxpayer filing a joint return, to the extent included in 35 federal adjusted gross income and allowed under section thirty-nine of 36 the tax law. 37 (38) The amount of any award paid to a volunteer firefighter or volun- 38 teer ambulance worker from a length of service defined contribution plan 39 or defined benefit plan as provided for in articles eleven-A, eleven-AA, 40 eleven-AAA and eleven-AAAA of the general municipal law, to the extent 41 that such award is includable in gross income for federal income tax 42 purposes; provided, however, that such award is not distributed in the 43 form of a lump sum distribution, as defined in subparagraph (D) of para- 44 graph four of subsection (e) of section four hundred two of the internal 45 revenue code and taxed under section six hundred three of the tax law; 46 and provided, further, that such award is not distributed to a taxpayer 47 who has not attained the age of fifty-nine and one-half years. 48 (39) The amount of any gain added back to federal adjusted gross 49 income in a previous taxable year pursuant to paragraph thirty-nine of 50 subdivision (b) of this section that is included in federal gross income 51 for the taxable year. 52 (d) Modification for city fiduciary adjustment. There shall be added 53 to or subtracted from federal adjusted gross income, as the case may be, 54 the taxpayer's share, as beneficiary of an estate or trust, of the city 55 fiduciary adjustment determined under section 11-1719 of this subchap- 56 ter.

S. 8578 900

1 (e) Modifications of partners and shareholders of S corporations. (1) 2 Partners and shareholders of S corporations which are not New York C 3 corporations. The amounts of modifications required to be made under 4 this section by a partner or by a shareholder of an S corporation, other 5 than an S corporation which is a New York C corporation, which relate to 6 partnership or S corporation items of income, gain, loss or deduction 7 shall be determined under section 11-1717 of this subchapter and, in the 8 case of a partner of a partnership doing an insurance business as 9 members of the New York insurance exchange described in section six 10 thousand two hundred one of the insurance law, under section 11-1717.1 11 of this subchapter. 12 (2) Shareholders of S corporations which are New York C corporations. 13 In the case of a shareholder of an S corporation which is a New York C 14 corporation, the modifications under this section which relate to the 15 corporation's items of income, loss and deduction shall not apply, 16 except for the modifications provided under paragraph nineteen of subdi- 17 vision (b) and paragraph twenty-two of subdivision (c) of this section. 18 (3) New York S termination year. In the case of a New York S termi- 19 nation year, the amounts of the modifications required under this 20 section which relate to the S corporation's items of income, loss, 21 deduction and reductions for taxes, as described in paragraphs two and 22 three of subsection (f) of section thirteen hundred sixty-six of the 23 internal revenue code, shall be adjusted in the same manner that the S 24 corporation's items are adjusted under subdivision (s) of this section. 25 (f) Husband and wife. If husband and wife determine their federal 26 income tax on a joint return but are required to determine their city 27 income taxes separately, they shall determine their city adjusted gross 28 incomes separately as if their federal adjusted gross incomes had been 29 determined separately. 30 (g) Optional modifications. Subject to the conditions provided in 31 paragraphs three and four of this subdivision, at the election of the 32 taxpayer there shall also be subtracted from federal adjusted gross 33 income either or both of the items set forth in paragraphs one and two 34 of this subdivision, except that only one of such items shall be 35 subtracted with respect to any one item of property, and except that a 36 subtraction of the item set forth in such paragraph two may not be taken 37 with respect to taxable years commencing on or after January first, 38 nineteen hundred eighty-nine. 39 (1) Depreciation with respect to any property such as described in 40 paragraph three or four of this subdivision, and subject to the condi- 41 tions provided therein, not exceeding twice the depreciation allowed 42 with respect to the same property for federal income tax purposes. Such 43 modification shall be allowed only upon condition that any depreciation 44 or amortization allowed with respect to the same property in determining 45 federal adjusted gross income shall be added to federal adjusted gross 46 income pursuant to paragraph six of subdivision (b) of this section. 47 The total of all deductions allowed pursuant to this paragraph in any 48 taxable year or years with respect to any property described in para- 49 graph three of this subdivision shall not exceed its cost or other basis 50 and, with respect to property described in paragraph four of this subdi- 51 vision, which is used in a business carried on both within and without 52 the state shall not exceed its cost or other basis multiplied by a 53 percentage of the excess of the taxpayer's business income over its 54 business deductions allocated to this state for the first year such 55 depreciation is deducted. Such percentage shall be determined by appor- 56 tionment and allocation under regulations of the tax commission.

S. 8578 901

1 (2) Expenditures paid or incurred during the taxable year for the 2 construction, reconstruction, erection or acquisition of any property 3 such as described in paragraph three or four of this subdivision, and 4 subject to the conditions provided therein, which is used or to be used 5 for purposes of research and development in the experimental or labora- 6 tory sense. Such purposes shall not be deemed to include the ordinary 7 testing or inspection of materials or products for quality control, 8 efficiency surveys, management studies, consumer surveys, advertising, 9 promotions or research in connection with literary, historical or simi- 10 lar projects. Such modification shall be allowed only on condition 11 that, with respect to property described in paragraph four of this 12 subdivision, which is used in a business carried on both within and 13 without the state the deduction shall not exceed the expenditures multi- 14 plied by a percentage of the excess of the taxpayer's business income 15 over its business deductions allocated to this state for the first year 16 such expenditures are deducted. Such percentage shall be determined by 17 apportionment and allocation under regulations of the tax commission, 18 and for the taxable year and all succeeding taxable years, any 19 deductions allowed for federal income tax purposes on account of such 20 expenditures or on account of depreciation of the same property, except 21 to the extent that its basis may be attributable to factors other than 22 such expenditures, shall be added to federal adjusted gross income 23 pursuant to paragraph six of subdivision (b) of this section, or in case 24 a modification is allowable pursuant to this paragraph for only a part 25 of such expenditures, on condition that a proportionate part of any such 26 deductions allowed for federal income tax purposes be added to federal 27 adjusted gross income. With respect to property which is used or to be 28 used for research and development only in part, or during only part of 29 its useful life, the modification allowable pursuant to this paragraph 30 shall be limited to a proportionate part of the expenditures relating 31 thereto. If a modification shall have been allowed pursuant to this 32 paragraph for all or part of such expenditures with respect to any prop- 33 erty, and such property is used for purposes other than research and 34 development to a greater extent than originally reported, the taxpayer 35 shall report such use in his or her return for the first taxable year 36 during which it occurs, and the tax commission may recompute the tax for 37 the year or years for which such deduction was allowed, and may assess 38 any additional tax resulting from such recomputation within the time 39 fixed by subdivision (c) of section 11-1783 of this chapter. 40 (3) For purposes of this paragraph, such modifications shall be 41 allowed only with respect to tangible property which is depreciable 42 pursuant to section one hundred sixty-seven of the internal revenue 43 code, having a situs in this state and used in the taxpayer's trade or 44 business: (A) constructed, reconstructed or erected after December thir- 45 ty-first, nineteen hundred sixty-three, pursuant to a contract which 46 was, on or before December thirty-first, nineteen hundred sixty-seven, 47 and at all times thereafter, binding on the taxpayer or, property, the 48 physical construction, reconstruction or erection of which began on or 49 before December thirty-first, nineteen hundred sixty-seven or which 50 began after such date pursuant to an order placed on or before December 51 thirty-first, nineteen hundred sixty-seven, and then only with respect 52 to that portion of the basis thereof or the expenditures relating there- 53 to which is properly attributable to such construction, reconstruction 54 or erection after December thirty-first, nineteen hundred sixty-three, 55 or (B) acquired after December thirty-first, nineteen hundred sixty- 56 three, pursuant to a contract which was, on or before December thirty-

S. 8578 902

1 first, nineteen hundred sixty-seven, and at all times thereafter, bind- 2 ing on the taxpayer or pursuant to an order placed on or before December 3 thirty-first, nineteen hundred sixty-seven, by purchase as defined in 4 subsection (d) of section one hundred seventy-nine of the internal 5 revenue code, if the original use of such property commenced with the 6 taxpayer, commenced in this state and commenced after December thirty- 7 first, nineteen hundred sixty-three, or (C) acquired, constructed, 8 reconstructed, or erected subsequent to December thirty-first, nineteen 9 hundred sixty-seven, if such acquisition, construction, reconstruction 10 or erection is pursuant to a plan of the taxpayer which was in existence 11 December thirty-first, nineteen hundred sixty-seven and not thereafter 12 substantially modified, and such acquisition, construction, recon- 13 struction or erection would qualify under the rules in paragraph four, 14 five or six of subdivision (h) of section forty-eight of the internal 15 revenue code provided all references in such paragraphs four, five and 16 six to the dates October nine, nineteen hundred sixty-six, and October 17 ten, nineteen hundred sixty-six, shall be read as December thirty-first, 18 nineteen hundred sixty-seven. A taxpayer shall be allowed a deduction 19 under clause (A), (B) or (C) of this paragraph only if the tangible 20 property shall be delivered or the construction, reconstruction or 21 erection shall be completed on or before December thirty-first, nineteen 22 hundred sixty-nine, except in the case of tangible property which is 23 acquired, constructed, reconstructed or erected pursuant to a contract 24 which was, on or before December thirty-first, nineteen hundred sixty- 25 seven, and at all times thereafter, binding on the taxpayer. However, 26 for any taxable year beginning on or after January first, nineteen 27 hundred sixty-eight, a taxpayer shall not be allowed a modification 28 under paragraph one of this subdivision with respect to tangible 29 personal property leased to any other person or corporation, provided, 30 any contract or agreement to lease or rent or for a license to use such 31 property shall be considered a lease. With respect to property which a 32 taxpayer uses for purposes other than leasing for part of a taxable year 33 and leases for a part of a taxable year, a modification under paragraph 34 one of this subdivision shall be allowed in proportion to the part of 35 the year such property is used by the taxpayer. 36 (4) For purposes of this paragraph, such modifications shall be 37 allowed only with respect to tangible property which is depreciable 38 pursuant to section one hundred sixty-seven of the internal revenue 39 code, having a situs in this state and used in the taxpayer's trade or 40 business. The modifications provided for in paragraph one of this 41 subdivision shall be allowed only with respect to tangible property 42 which is: (A) constructed, reconstructed or erected after December thir- 43 ty-first, nineteen hundred sixty-seven, pursuant to a contract which 44 was, on or before December thirty-first, nineteen hundred sixty-eight, 45 and at all times thereafter, binding on the taxpayer or, property, the 46 physical construction, reconstruction or erection of which began on or 47 before December thirty-first, nineteen hundred sixty-eight or which 48 began after such date pursuant to an order placed on or before December 49 thirty-first, nineteen hundred sixty-eight, and then only with respect 50 to that portion of the basis thereof or the expenditures relating there- 51 to which is properly attributable to such construction, reconstruction 52 or erection after December thirty-first, nineteen hundred sixty-three, 53 or (B) acquired after December thirty-first, nineteen hundred sixty-sev- 54 en, pursuant to a contract which was, on or before December thirty- 55 first, nineteen hundred sixty-eight, and at all times thereafter, bind- 56 ing on the taxpayer or pursuant to an order placed on or before December

S. 8578 903

1 thirty-first, nineteen hundred sixty-eight, by purchase as defined in 2 section one hundred seventy-nine (d) of the internal revenue code, if 3 the original use of such property commenced with the taxpayer, commenced 4 in this state and commenced after December thirty-first, nineteen 5 hundred sixty-seven, or (C) acquired, constructed, reconstructed, or 6 erected subsequent to December thirty-first, nineteen hundred sixty- 7 eight, if such acquisition, construction, reconstruction or erection is 8 pursuant to a plan of the taxpayer which was in existence December thir- 9 ty-first, nineteen hundred sixty-eight, and not thereafter substantially 10 modified, and such acquisition, construction, reconstruction or erection 11 would qualify under the rules in paragraph four, five or six of subdivi- 12 sion (h) of section forty-eight of the internal revenue code provided 13 all references in such paragraphs four, five and six to the dates Octo- 14 ber nine, nineteen hundred sixty-six, and October ten, nineteen hundred 15 sixty-six, shall be read as December thirty-first, nineteen hundred 16 sixty-eight. A taxpayer shall be allowed a deduction under clause (A), 17 (B) or (C) of the preceding sentence of this paragraph only if the 18 tangible property shall be delivered or the construction, reconstruction 19 or erection shall be completed on or before December thirty-first, nine- 20 teen hundred seventy, except in the case of tangible property which is 21 acquired, constructed, reconstructed or erected pursuant to a contract 22 which was, on or before December thirty-first, nineteen hundred sixty- 23 eight, and at all times thereafter binding on the taxpayer. The modifi- 24 cation provided for in paragraph two of this subdivision shall be 25 allowed only with respect to tangible property: (A) the construction, 26 reconstruction or erection of which is completed after December thirty- 27 first, nineteen hundred sixty-seven, and then only with respect to that 28 portion of the basis thereof or the expenditures relating thereto which 29 is properly attributable to such construction, reconstruction or 30 erection after December thirty-first, nineteen hundred sixty-three, or 31 (B) acquired after December thirty-first, nineteen hundred sixty-seven, 32 by purchase as defined in section one hundred seventy-nine (d) of the 33 internal revenue code, if the original use of such property commenced 34 with the taxpayer, commenced in this state and commenced after December 35 thirty-first, nineteen hundred sixty-three. Provided, however, a 36 modification under paragraph one of this subdivision shall be allowed 37 with respect to property described in this paragraph only on condition 38 that such property shall be principally used by the taxpayer in the 39 production of goods by manufacturing; processing; assembling; refining; 40 mining; extracting; farming; agriculture; horticulture; floriculture; 41 viticulture; or commercial fishing. Manufacturing shall mean the proc- 42 ess of working raw materials into wares suitable for use or which gives 43 new shapes, new qualities or new combinations to matter which already 44 has gone through some artificial process by the use of machinery, tools, 45 appliances and other similar equipment. Property used in the production 46 of goods shall include machinery, equipment or other tangible property 47 which is principally used in the repair and service of other machinery, 48 equipment or other tangible property used principally in the production 49 of goods and shall include all facilities used in the manufacturing 50 operation, including storage of material to be used in manufacturing and 51 of the products that are manufactured. At the option of the taxpayer, 52 air and water pollution control facilities which qualify for elective 53 deductions under subdivision (h) of this section may be treated, for 54 purposes of this paragraph, as tangible property principally used in the 55 production of goods by manufacturing; processing; assembling; refining; 56 mining; extracting; farming; agriculture; horticulture; floriculture;

S. 8578 904

1 viticulture; or commercial fishing, in which event, a deduction shall 2 not be allowed under such subdivision (h). However, for any taxable 3 year beginning on or after January first, nineteen hundred sixty-eight, 4 a taxpayer shall not be allowed a modification under paragraph one of 5 this subdivision with respect to tangible personal property leased to 6 any other person or corporation, provided, any contract or agreement to 7 lease or rent or for a license to use such property shall be considered 8 a lease. With respect to property which a taxpayer uses for purposes 9 other than leasing for part of a taxable year and leases for a part of a 10 taxable year, a modification under paragraph one of this subdivision 11 shall be allowed in proportion to the part of the year such property is 12 used by the taxpayer. 13 (5) If the modifications allowable for any taxable year pursuant to 14 this subdivision exceed the taxpayer's city adjusted gross income, 15 determined without the allowance of such modifications, the excess may 16 be carried over to the following taxable year or years and may be 17 subtracted from federal adjusted gross income for such year or years. 18 (6) In any taxable year when property is sold or otherwise disposed 19 of, with respect to which a modification has been allowed pursuant to 20 paragraph one or two of this subdivision, the basis of such property 21 shall be adjusted to reflect the modifications so allowed, and if the 22 basis as so adjusted is lower than the adjusted basis of the same prop- 23 erty for federal income tax purposes, there shall be added to federal 24 adjusted gross income the amount of the difference between such adjusted 25 bases. 26 (h) Optional modification for waste treatment facility expenditures. 27 For taxable years commencing prior to January first, nineteen hundred 28 eighty-nine, at the election of the taxpayer, there shall also be 29 subtracted from federal adjusted gross income expenditures paid or 30 incurred during the taxable year for the construction, reconstruction, 31 erection or improvement of industrial waste treatment facilities and air 32 pollution control facilities. 33 (1)(A) The term "industrial waste treatment facilities" shall mean 34 facilities for the treatment, neutralization, or stabilization of indus- 35 trial waste, as the term "industrial waste" is defined in section 36 17-0105 of the environmental conservation law, from a point immediately 37 preceding the point of such treatment, neutralization or stabilization 38 to the point of disposal, including the necessary pumping and transmit- 39 ting facilities, but excluding such facilities installed for the primary 40 purpose of salvaging materials which are usable in the manufacturing 41 process or are marketable. 42 (B) The term "air pollution control facilities" shall mean facilities 43 which remove, reduce, or render less noxious air contaminants emitted 44 from an air contamination source, as the terms "air contaminant" and 45 "air contamination source" are defined in section 19-0107 of the envi- 46 ronmental conservation law, from a point immediately preceding the point 47 of such removal, reduction or rendering to the point of discharge of 48 air, meeting emission standards as established by the air pollution 49 control board, but excluding such facilities installed for the primary 50 purpose of salvaging materials which are usable in the manufacturing 51 process or are marketable and excluding those facilities which rely for 52 their efficacy on dilution, dispersion or assimilation of air contam- 53 inants in the ambient air after emission. 54 (2) Such modifications shall be allowed only: 55 (A) with respect to tangible property which is depreciable, pursuant 56 to section one hundred sixty-seven of the internal revenue code, having

S. 8578 905

1 a situs in this state and used in the taxpayer's trade or business, the 2 construction, reconstruction, erection or improvement of which, in the 3 case of industrial waste treatment facilities, is initiated on or after 4 January first, nineteen hundred sixty-five, or which, in the case of air 5 pollution control facilities, is initiated on or after January first, 6 nineteen hundred sixty-six, and 7 (B) on condition that such facilities have been certified by the 8 commissioner of environmental conservation or his or her designated 9 representative, in the same manner as provided for in section 17-0707 or 10 19-0309 of the environmental conservation law, as applicable, as comply- 11 ing with the provisions of such environmental conservation law, the 12 state sanitary code and regulations, permits or orders promulgated 13 pursuant thereto, and 14 (C) on condition that for the taxable year and all succeeding taxable 15 years, any deductions allowed for federal income tax purposes for such 16 expenditures or for depreciation or amortization of the same property, 17 except to the extent that its basis may be attributable to factors other 18 than such expenditures, be added to federal adjusted gross income pursu- 19 ant to paragraph five of subdivision (b) of this section, or in case a 20 modification is allowable pursuant to this paragraph for only a part of 21 such expenditures, on condition that a proportionate amount of any such 22 deductions allowed for federal income tax purposes be added to federal 23 adjusted gross income, and 24 (D) where the election provided for in subdivision (g) of this 25 section has not been exercised in respect to the same property. 26 (3)(A) If expenditures in respect to an industrial waste treatment 27 facility or an air pollution control facility have been allowed as a 28 modification as provided herein and if within ten years from the end of 29 the taxable year in which such modification was allowed such property or 30 any part thereof is used for the primary purpose of salvaging materials 31 which are usable in the manufacturing process or are marketable, the 32 taxpayer shall report such change of use in its return for the first 33 taxable year during which it occurs, and the tax commission may recom- 34 pute the tax for the year or years for which such modification was 35 allowed, and may assess any additional tax resulting from such recompu- 36 tation within the time fixed by paragraph eight of subdivision (c) of 37 section 11-1783 of this chapter. 38 (B) If a modification is allowed as herein provided for expenditures 39 paid or incurred during any taxable year on the basis of a temporary 40 certificate of compliance issued pursuant to the environmental conserva- 41 tion law, and if the taxpayer fails to obtain a permanent certificate of 42 compliance upon completion of the facilities with respect to which such 43 temporary certificate was issued, the taxpayer shall report such failure 44 in its report for the taxable year during which such facilities are 45 completed, and the tax commission may recompute the tax for the year or 46 years for which such modification was allowed, and may assess any addi- 47 tional tax resulting from such recomputation within the time fixed by 48 paragraph eight of subdivision (c) of section 11-1783 of this chapter. 49 (C) If a modification is allowed as herein provided for expenditures 50 paid or incurred during any taxable year in respect to an air pollution 51 control facility on the basis of a certificate of compliance issued 52 pursuant to the environmental conservation law and the certificate is 53 revoked pursuant to section 19-0309 of the environmental conservation 54 law, the tax commission may recompute the tax for the year or years for 55 which the facility is not or was not in compliance with the applicable 56 provisions of the environmental conservation law, the state sanitary

S. 8578 906

1 code or codes, rules, regulations, permits or orders issued pursuant 2 thereto, and for which a modification was allowed, and may assess any 3 additional tax resulting from such recomputation within the time fixed 4 by paragraph eight of subdivision (c) of section 11-1783 of this chap- 5 ter. 6 (4) In any taxable year when property is sold or otherwise disposed 7 of, with respect to which a modification has been allowed pursuant to 8 this paragraph, such modification shall be disregarded in computing gain 9 or loss, and the gain or loss on the sale or other disposition of such 10 property shall be the gain or loss entering into the computation of 11 federal adjusted gross income for such taxable year. 12 (i) In the case of mines, oil and gas wells and other natural depos- 13 its, any allowance for percentage depletion pursuant to section six 14 hundred thirteen or section six hundred thirteen-A of the internal 15 revenue code, shall be added to federal adjusted gross income. However, 16 with respect to the property as to which such addition to federal 17 adjusted gross income is required, an allowance for depletion shall be 18 subtracted from federal adjusted gross income in the amount that would 19 be deductible under section six hundred eleven of such code if the 20 deduction for an allowance for depletion were computed without reference 21 to such section six hundred thirteen or section six hundred thirteen-A. 22 With respect to the computation of depletion pursuant to this subdivi- 23 sion, the basis for such computation shall be the basis for state income 24 tax purposes provided for in subsection (i) of section six hundred 25 twelve of the tax law. The portion of any gain from the sale or other 26 disposition of such property having a higher adjusted basis for city 27 income tax purposes than for federal income tax purposes, that does not 28 exceed such difference in basis, shall be subtracted from federal 29 adjusted gross income. 30 (j) Modification for nonpublic school tuition. (1) General. An indi- 31 vidual shall be entitled to subtract from his or her federal adjusted 32 gross income an amount shown in the table set forth in this paragraph 33 for his or her city adjusted gross income for the taxable year, computed 34 without the benefit of this modification, multiplied by the number of 35 his or her dependents, not exceeding three, attending a nonpublic school 36 on a full-time basis for at least four months during the regular school 37 year for the education of such dependent in grades one through twelve, 38 provided such individual is allowed an exemption under section 11-1716 39 of this chapter for such dependent. Provided, further, that the modifi- 40 cation under this paragraph may be taken only if such individual has 41 paid at least fifty dollars for each such dependent in tuition to such 42 nonpublic school for such education of such dependent. No taxpayer 43 shall be entitled to the modification provided for in this paragraph if 44 he or she claims a tuition reimbursement payment pursuant to article 45 twelve-A of the education law.

46 If city adjusted The amount allowable 47 gross income is: for each dependent is: 48 Less than $9,000 $1,000 49 9,000 -- 10,999 850 50 11,000 -- 12,999 700 51 13,000 -- 14,999 550 52 15,000 -- 16,999 400 53 17,000 -- 18,999 250 54 19,000 -- 20,999 150 55 21,000 -- 22,999 125

S. 8578 907

1 23,000 -- 24,999 100 2 25,000 and over -0-

3 (2) Husband and wife. In determining the applicable city adjusted 4 gross income of a husband and wife for purposes of the table set forth 5 in paragraph one of this subdivision, the city adjusted gross income of 6 a husband and wife shall be the aggregate of their city adjusted gross 7 incomes for the taxable year, determined without the benefit of the 8 modification provided for in this subdivision, and the number of depen- 9 dents with respect to which this modification may be claimed shall be no 10 more than three in the aggregate. 11 (3) Definitions. (A) "Tuition", as used in this subdivision, shall 12 mean the amount actually paid during the taxable year by the taxpayer 13 for the enrollment of a dependent during the regular school year at a 14 nonpublic school. 15 (B) "Nonpublic school", as used in this subdivision, shall mean any 16 non-profit elementary or secondary school in the state of New York, 17 other than a public school, which: (i) is providing instruction in 18 accordance with article seventeen and section thirty-two hundred four of 19 the education law, (ii) has not been found to be in violation of title 20 VI of the civil rights act of nineteen hundred sixty-four, 78 Stat. 252, 21 42 U.S.C. § 2000(d) and (iii) which is entitled to a tax exemption under 22 sections five hundred one (a) and five hundred one (c) (3) of the feder- 23 al internal revenue code of nineteen hundred fifty-four, as amended. 24 The commissioner of education shall furnish to the tax commission by 25 February first of each year, a certified list of nonpublic schools which 26 comply with clause (i) of this subparagraph for the preceding calendar 27 year and shall provide such other assistance with respect to whether 28 nonpublic schools come within clause (i) as the tax commission may 29 require. 30 (C) "Regular school year", as used in this subdivision, shall mean the 31 months of the taxable year exclusive of July and August. 32 (4) Additional information. Any claim for a modification under this 33 subdivision shall be accompanied by such information as the tax commis- 34 sion may require. 35 (k) Modification for contributions to a qualified higher education 36 fund. (1) A taxpayer may subtract from his or her federal adjusted 37 gross income amounts which during the taxable year are contributed by 38 him or her to a qualified higher education fund, as defined in paragraph 39 three of this subdivision, established by him or her, limited to the 40 product of seven hundred fifty dollars and the number of eligible bene- 41 ficiaries, as defined in subparagraph (C) of paragraph three of this 42 subdivision, as of the first or last day of the taxable year, whichever 43 yields the higher limit. Provided, however, that a taxpayer whose taxa- 44 ble year began on January first, nineteen hundred seventy-eight may 45 subtract from his or her federal adjusted gross income for such taxable 46 year, amounts contributed by him or her to a qualified higher education 47 fund during the fifteen month period beginning January first, nineteen 48 hundred seventy-eight and ending April fifteenth, nineteen hundred 49 seventy-nine. Contributions to a qualified higher education fund made 50 during the period beginning January first, nineteen hundred seventy-nine 51 and ending April fifteenth, nineteen hundred seventy-nine and subtracted 52 from a taxpayer's federal adjusted gross income for the taxable year 53 beginning January first, nineteen hundred seventy-eight shall be deemed 54 to have been made during such taxable year. However, such number of 55 eligible beneficiaries shall not include any individual who was a

S. 8578 908

1 student at an institution of higher education during the previous taxa- 2 ble year. For purposes of this paragraph, the term "student" shall have 3 the same meaning as that ascribed to it by paragraph four of subsection 4 (e) of section one hundred fifty-one of the internal revenue code, 5 except that the reference therein to "5 calendar months" shall be deemed 6 to be a reference to "3 calendar months." 7 (2) A taxpayer who establishes a qualified higher education fund may 8 subtract from his or her federal adjusted gross income amounts included 9 in gross income for federal income tax purposes by reason of any income 10 realized by the fund or because of any payment by the fund to, or on 11 behalf of, an eligible beneficiary for the purpose specified in clause 12 (i) of subparagraph (A) of paragraph three of this subdivision. 13 (3) For purposes of this subdivision, a qualified higher education 14 fund is a fund established pursuant to a written plan described in 15 subparagraph (A) of this paragraph, but only if the fund meets the 16 requirements of subparagraph (B) of this paragraph. 17 (A) For purposes of this subdivision a "plan" means a plan estab- 18 lished: 19 (i) solely for the purpose of defraying costs associated with attend- 20 ance subsequent to graduation or separation from secondary school at an 21 institution of higher education, as defined in subparagraph (F) of this 22 paragraph, of one or more eligible beneficiaries, as defined in subpara- 23 graph (C) of this paragraph, such costs to include: (I) applicable 24 tuition and fees, exclusive of fees levied as a penalty for laboratory 25 breakage, dormitory damage and similar fees, (II) room and board as 26 charged by the institution pursuant to a contract entered into by the 27 institution and a student or, if no such contract is entered into, an 28 amount not exceeding one thousand five hundred dollars per year, which 29 amount shall include any expenses of transportation, and (III) books, 30 supplies and equipment, 31 (ii) which provides that no distribution shall be made by the fund, 32 except upon termination thereof, other than to, or on behalf of, eligi- 33 ble beneficiaries for the purpose specified in clause (i) of this 34 subparagraph, 35 (iii) which provides that upon termination of the fund all assets of 36 the fund shall be distributed to the creator of the fund, to his or her 37 estate or to a trust established for the purpose of making contributions 38 to the fund, and 39 (iv) which prohibits contributions to the fund in excess of amounts 40 which may be subtracted from federal adjusted gross income under para- 41 graph one of this subdivision. 42 (B) A fund meets the requirements of this subparagraph only if: 43 (i) it constitutes a custodial account, the assets of which are held 44 by a bank, as defined in paragraph one of subsection (d) of section four 45 hundred one of the internal revenue code, an insurance company qualified 46 to do business in this state, or another person who demonstrates, to the 47 satisfaction of the tax commission, that the manner in which he or she 48 will hold the assets will be consistent with the requirements of this 49 subdivision, or 50 (ii) it is a trust. 51 In the case of a trust referred to in clause (ii) of this subpara- 52 graph, the assets may be held by a bank or other person who demonstrates 53 to the satisfaction of the tax commission that the manner in which he or 54 she will administer the trust will be consistent with the requirements 55 of this subdivision. Such a trust shall not be disqualified under this 56 subparagraph merely because a person other than the trustee so adminis-

S. 8578 909

1 tering the trust may be granted, under the trust instrument, the power 2 to control the investment of the trust funds either by directing invest- 3 ments, including reinvestments, disposals and exchanges, or by disap- 4 proving proposed investments, including reinvestments, disposals and 5 exchanges. Such a trust may use annuity, endowment or life insurance 6 contracts of a life insurance company exclusively as the funding media 7 of the trust, if so provided by regulations of the state tax commis- 8 sion, and if the life insurance company supplies annually such informa- 9 tion about trust transactions as the tax commission shall by regulations 10 prescribe. For purposes of this subdivision, the term "bank" shall have 11 the same meaning ascribed to it by the last sentence of paragraph one of 12 subsection (d) of section four hundred one of the internal revenue code. 13 (C) For purposes of this subdivision, the term "eligible beneficiary" 14 means a person: 15 (i) having a relationship to the creator of the fund specified in 16 paragraphs one, two, three or six of subsection (a) of section one 17 hundred fifty-two of the internal revenue code, 18 (ii) who is a dependent of the creator of the fund pursuant to section 19 one hundred fifty-two of the internal revenue code, or is a member of 20 the armed forces of the United States on active duty, is a volunteer in 21 the peace corps, or is a full-time volunteer under the domestic volun- 22 teer service act of 1973, and 23 (iii) who either: (I) has not attained the age of twenty-one, except 24 that where his or her twenty-first birthday falls within a taxable year 25 with respect to which a modification based on contributions to a quali- 26 fied higher education fund with respect to which he or she is a benefi- 27 ciary is allowed to a taxpayer, for purposes of this subclause such 28 beneficiary shall be deemed not to have attained the age of twenty-one 29 until the day next succeeding the last day of such taxable year, or (II) 30 is a student, as defined in paragraph four of subsection (e) of section 31 one hundred fifty-one of the internal revenue code or, for a period of 32 up to four years, is a member of the armed forces of the United States 33 on active duty, is a volunteer in the peace corps, or is a full-time 34 volunteer under the domestic volunteer service act of 1973. Where the 35 determination of an individual's status as a student is required for a 36 purpose other than determining the permissibility of a modification 37 under this subdivision, an individual shall be deemed not to be a 38 student as of the last day of any calendar year during which he or she 39 fails to satisfy the requirements of subparagraphs (A) and (B) of para- 40 graph four of subsection (e) of section one hundred fifty-one of the 41 internal revenue code during each of five calendar months during such 42 calendar year. 43 (D) A person who meets the requirements of subparagraph (C) of this 44 paragraph shall cease to be an eligible beneficiary: 45 (i) if payments by the fund to him or her, or on his or her behalf, 46 for the purpose specified in clause (i) of subparagraph (A) of this 47 paragraph do not commence within five years after the date on which such 48 person was graduated or separated from secondary school, excluding any 49 period of up to four years during which an otherwise eligible benefici- 50 ary was a member of the armed forces of the United States on active 51 duty, a volunteer in the peace corps, or in service as a full-time 52 volunteer under the domestic volunteer service act of 1973, or 53 (ii) after the expiration of ten years from the date of such gradu- 54 ation or separation, excluding any period of up to four years during 55 which an otherwise eligible beneficiary was a member of the armed forces 56 of the United States on active duty, a volunteer in the peace corps, or

S. 8578 910

1 in service as a full-time volunteer under the domestic volunteer service 2 act of 1973, or 3 (iii) if within six months after either his or her eighteenth birthday 4 or the date on which such fund is established, whichever is later, he or 5 she does not file with the tax commission, on a form and in the manner 6 prescribed by regulation, a notice of consent relating to the tax treat- 7 ment of payments from a qualified higher education fund imposed under 8 paragraph fourteen of subdivision (b) of this section. 9 (E) Where a fund is continued subsequent to its creator's death, an 10 individual shall not cease to be an eligible beneficiary by reason of 11 failure to fulfill the requirement set forth in clause (ii) of subpara- 12 graph (C) of this paragraph. 13 (F) For purposes of this subdivision, the term "institution of higher 14 education" means an educational organization described in clause (ii) of 15 subparagraph (A) of paragraph one of subsection (b) of section one 16 hundred seventy of the internal revenue code, 17 (i) which provides an educational program for which it awards an asso- 18 ciate, baccalaureate or higher degree or provides a program which is 19 acceptable for full credit toward such a degree, 20 (ii) contributions to or for the use of which constitute charitable 21 contributions within the meaning of section one hundred seventy (c) of 22 the internal revenue code, 23 (iii) which is legally authorized to provide and does provide a 24 program of postsecondary education, and 25 (iv) which is accredited by a nationally recognized accrediting agency 26 or association listed by the United States commissioner of education. 27 (4) A qualified higher education fund shall terminate: 28 (A) if a contribution is made to the fund in excess of the amount 29 allowable as a subtraction from federal adjusted gross income under 30 paragraph one of this subdivision, 31 (B) if a distribution is made by the fund other than to, or on behalf 32 of, an eligible beneficiary for the purpose specified in clause (i) of 33 subparagraph (A) of paragraph three of this subdivision, 34 (C) if the plan ceases to have an eligible beneficiary, or 35 (D) in the absence of a testamentary disposition or inter vivos trust 36 provision to the contrary, upon the death of the creator of the fund, or 37 (E) if the fund is otherwise terminated under the tax law. 38 (5) The tax commission may by regulation require the filing of a 39 report annually by the creator of a qualified higher education fund or 40 other person designated by such regulation, such report to set forth the 41 amounts contributed to a qualified higher education fund, as well as the 42 amount, purpose and beneficiary of each disbursement made therefrom. 43 The tax commission may also by regulation require written notification 44 annually to each beneficiary of such disbursements made on his or her 45 behalf. 46 (6) The provisions of subparagraph (B) of paragraph four of this 47 subdivision shall not apply in the case of a rollover. A rollover occurs 48 where the creator of a qualified higher education fund withdraws all of 49 the assets of such fund and not later than sixty days subsequent to such 50 withdrawal establishes a new qualified higher education fund and depos- 51 its therein an amount equal to the value of the assets so withdrawn. 52 Such deposit shall not constitute a contribution within the meaning of 53 this subdivision. This paragraph shall not apply if at any time during 54 the one year period ending on the date of such withdrawal from the qual- 55 ified higher education fund the creator had made a similar withdrawal 56 from another qualified higher education fund, both such funds having at

S. 8578 911

1 least one beneficiary in common, where such prior withdrawal was 2 followed by the establishment of a new qualified higher education fund 3 such that a rollover was effected pursuant to the provisions of this 4 paragraph. 5 (l) Qualified higher education fund. (1) Upon termination of a 6 qualified higher education fund under subparagraph (A), (B) or (E) of 7 paragraph four of subdivision (k) of this section, a taxpayer to whom 8 the assets of the fund are required to be distributed pursuant to clause 9 (iii) of subparagraph (A) of paragraph three of subdivision (k) of this 10 section shall add to his or her federal adjusted gross income for the 11 taxable year during which the terminating event occurs an amount equal 12 to one hundred ten per centum of an amount which bears the same ratio to 13 the value of the assets of such fund immediately prior to termination as 14 the total contributions made to such fund by a city resident individual, 15 estate or trust bears to the total contributions made to such fund. For 16 purposes of this subdivision the value of the assets of the fund imme- 17 diately prior to termination shall include the value of any distrib- 18 utions made to or on behalf of an eligible beneficiary who subsequently 19 ceased to be an eligible beneficiary pursuant to clause (iii) of subpar- 20 agraph (D) of paragraph three of subdivision (k) of this section. 21 (2) Payments made to or on behalf of an eligible beneficiary from a 22 qualified higher education fund for the purpose specified in clause (i) 23 of subparagraph (A) of paragraph three of subdivision (k) of this 24 section shall be added to the federal adjusted gross income of the indi- 25 vidual taxpayer to whom or on whose behalf the payment is made, in 26 accordance with the following. For the first taxable year of such 27 taxpayer in which no payment described in this paragraph is made with 28 respect to him or her and during which such taxpayer is not a student, 29 as defined in paragraph four of subsection (e) of section one hundred 30 fifty-one of the internal revenue code, treating the terms "individual" 31 and "taxpayer" therein as referring to such taxpayer, or, for a period 32 of up to four years, a member of the armed forces of the United States 33 on active duty, a volunteer in the peace corps, or a full-time volunteer 34 under the domestic volunteer service act of 1973, which taxable year 35 commences after the last day of the first calendar year in which such a 36 payment is made, one-fifth of the aggregate of all such payments there- 37 tofore made, such aggregate amount pro-rated, pursuant to regulations 38 promulgated by the tax commission, according to the portion of the total 39 contributions made to the fund prior to the first day of such taxable 40 year which constitute amounts contributed by a city resident individual, 41 estate or trust, shall be added to the federal adjusted gross income of 42 such taxpayer for such taxable year and for each of the four succeeding 43 taxable years in which no such payment is made and in which such taxpay- 44 er is not a student, as defined above, or, for a period of up to four 45 years, a member of the armed forces of the United States on active duty, 46 a volunteer in the peace corps, or a full-time volunteer under the 47 domestic volunteer service act of 1973. If in a taxable year subsequent 48 to a taxable year in which such addition to federal adjusted gross 49 income is required, a payment described in this paragraph is made, one- 50 fifth of the amount of such payment, pro-rated, pursuant to regulations 51 promulgated by the tax commission, according to the portion of the total 52 contributions made to the fund prior to the first day of such taxable 53 year which constitute amounts contributed by a city resident individual, 54 estate or trust, shall be added to the federal adjusted gross income of 55 such taxpayer for each of the five immediately succeeding taxable years 56 in which no such payment is made and in which such taxpayer is not a

S. 8578 912

1 student, as defined above, or, for a period of up to four years, a 2 member of the armed forces of the United States on active duty, a volun- 3 teer in the peace corps, or a full-time volunteer under the domestic 4 volunteer service act of 1973. 5 (n) Where gain or loss is recognized for federal income tax purposes 6 upon the disposition of stock or indebtedness of a corporation electing 7 under subchapter s of chapter one of the internal revenue code: 8 (1) There shall be added to federal adjusted gross income the amount 9 of increase in basis with respect to such stock or indebtedness pursuant 10 to subsection (a) of section thirteen hundred seventy-six of the inter- 11 nal revenue code as such section was in effect for taxable years begin- 12 ning before January first, nineteen hundred eighty-three and subpara- 13 graphs (A) and (B) of paragraph one of subsection (a) of section 14 thirteen hundred sixty-seven of such code, for each taxable year of the 15 corporation beginning, in the case of a corporation taxable under arti- 16 cle nine-A of the tax law, after December thirty-first, nineteen hundred 17 eighty, for which the election provided for in subsection (a) of section 18 six hundred sixty of the tax law was not in effect, and 19 (2) There shall be subtracted from federal adjusted gross income: 20 (A) the amount of reduction in basis with respect to such stock or 21 indebtedness pursuant to subsection (b) of section thirteen hundred 22 seventy-six of the internal revenue code as such section was in effect 23 for taxable years beginning before January first, nineteen hundred 24 eighty-three and subparagraphs (B) and (C) of paragraph two of 25 subsection (a) of section thirteen hundred sixty-seven of such code, for 26 each taxable year of the corporation beginning, in the case of a corpo- 27 ration taxable under article nine-A of the tax law, after December thir- 28 ty-first, nineteen hundred eighty, for which the election provided for 29 in subsection (a) of section six hundred sixty of the tax law was not in 30 effect and 31 (B) the amount of any modifications to federal gross income with 32 respect to such stock pursuant to paragraph twenty-one of subdivision 33 (b) of this section. 34 (o) Modifications for new business investment gains and certain new 35 business investments. 36 1. For purposes of this subdivision, the following definitions shall 37 apply: 38 (A) "New business investment gain" means gain from the sale of a new 39 business investment issued to the taxpayer before January first, nine- 40 teen hundred eighty-eight, if: 41 (i) such new business investment is, in the hands of the person sell- 42 ing the same, whether or not the taxpayer, a capital asset as defined in 43 section twelve hundred twenty-one of the internal revenue code of nine- 44 teen hundred fifty-four, as amended, and 45 (ii) such new business investment was held by such person for the 46 period specified in paragraph two of this subdivision. 47 (B) "New business" means a corporation or partnership organized or 48 formed under the laws of any state which: 49 (i) adopts a plan on or after July first, nineteen hundred eighty-one 50 and before January first, nineteen hundred eighty-eight, to conduct a 51 new business within the meaning and intent of this section and to issue 52 new business investments, as defined in this subdivision, and 53 (ii) is, at the date of adoption of such plan, subject to taxation, 54 whether or not any amount is owing, under section one hundred eighty- 55 three or one hundred eighty-four of article nine of the tax law, or 56 under article nine-A of the tax law or article twenty-three of the tax

S. 8578 913

1 law, or would have been subject to tax under article twenty-three of 2 such law, as such article was in effect on January first, nineteen 3 hundred eighty, if such article were still in effect, and the first 4 taxable period for which such new business became subject to such taxa- 5 tion commenced on or after July first, nineteen hundred eighty-one and 6 before January first, nineteen hundred eighty-eight, and such first 7 taxable period includes the date of adoption of such plan; if not so 8 subject to taxation, the new business must be subject to taxation under 9 such sections or articles for the first time within one year from the 10 date of adoption of such plan, and 11 (iii) is conducted, or will be conducted, as evidenced by such plan, 12 whereby at least ninety percent of the assets, valued at original cost, 13 are located and employed in this state and eighty percent of the employ- 14 ees, in addition, in the case of a partnership, excluding partners, are 15 principally employed in this state during each taxable period, or part 16 thereof, as required by clause (iv) of this subparagraph, and 17 (iv) within ninety days after adoption of such plan, or, if a return 18 is required, as part of such return, under such article nine, article 19 nine-A or article twenty-three of the tax law, whichever is sooner, 20 shall file a new business certificate with the tax commission attesting 21 to whether it meets, if subject to taxation under such articles, or 22 intends to meet, if not so subject, all of the conditions stated in 23 clauses (i), (ii) and (iii) of this subparagraph within the time set 24 forth therein. Thereafter, during the first four taxable years of such 25 new business, along with, and as part of, any return required under such 26 articles, such new business shall make and file a new business certif- 27 icate for the period covered by such return attesting to whether it has 28 met the conditions specified in this subparagraph during the taxable 29 period covered by such return. If no return is required under such arti- 30 cles, such certificate shall be filed annually on or before the 31 fifteenth day of March which shall cover the twelve consecutive calendar 32 month period ending on the last day of December immediately preceding 33 such March fifteenth. If such new business fails to meet such conditions 34 specified in this subparagraph, it shall, in addition, give notice of 35 this fact, within the time prescribed by the tax commission, to the 36 holders of its "new business investments." The tax commission shall 37 prescribe the form and content of such new business certification and 38 may require a new business to file such certificate for periods, even if 39 no return is filed or required, but for this section, covering up to 40 eight years from the date of adoption of such plan, as in its 41 discretion, it deems the same necessary for the enforcement of this 42 section, and 43 (v) Special rules: 44 (1) For any taxable period, in order to constitute a new business, a 45 business enterprise must have derived more than sixty percent of its 46 aggregate gross receipts from sources other than royalties, rents, divi- 47 dends, interest, annuities and sales or exchanges of stock or securi- 48 ties. 49 (2) A new business does not include: (i) any new business of which 50 twenty-five percent or more of the number of shares of stock that enti- 51 tle the holders thereof to vote for the election of directors or trus- 52 tees is owned, directly or indirectly, by a taxpayer subject to tax 53 under section one hundred eighty-three, one hundred eighty-four, former 54 section one hundred eighty-five or former section one hundred eighty-six 55 of article nine of the tax law, or under article nine-A, or thirty-three 56 of the tax law or (ii) any new business substantially similar in opera-

S. 8578 914

1 tion and in ownership, directly or indirectly, to a business entity, or 2 entities, taxable, or previously taxable, under such section, such arti- 3 cle, article twenty-three of the tax law or which would have been 4 subject to tax under such article twenty-three, as such article was in 5 effect on January first, nineteen hundred eighty, or the income, or 6 losses, of which is, or was, includible under article twenty-two of such 7 tax law whereby the intent and purpose of this section would be evaded. 8 (C) "New business investment" means and includes the following invest- 9 ments issued before January first, nineteen hundred eighty-eight by a 10 new business pursuant to a plan described in clause (i) of subparagraph 11 (B) of this paragraph for money or other property, other than stock or 12 securities, on or before the expiration of the third taxable year of 13 such new business, excluding any short period immediately preceding such 14 taxable year because the new business was not in existence for an entire 15 taxable year, or forty-two months from the adoption of such plan, which- 16 ever is sooner: (i) original issuance capital stock as part of a new 17 issue, (ii) other original issuance securities of a new issue of a like 18 nature as stocks which are designed as a means of investment and issued 19 for the purpose of financing corporate enterprises and providing for a 20 distribution of rights in such enterprises, (iii) debt obligations such 21 as bonds and debentures for a term of at least one year, whether 22 secured or unsecured, and (iv) certificates and other instruments 23 representing proprietary interests, whether limited or otherwise, in and 24 assumption of general liabilities, whether limited or otherwise, of a 25 partnership enterprise. 26 2. A taxpayer may subtract from his federal adjusted gross income a 27 portion of an amount constituting a new business investment gain, as 28 follows: 29 If new business The modification is equal to the 30 investment held for: following proportion of the gain 31 includible in federal 32 adjusted gross income: 33 At least four years, but 34 less than five years twenty-five percent 35 At least five years, but 36 less than six years fifty percent 37 At least six years one hundred percent 38 3. Where, within six months of the realization of a new business 39 investment gain allowable as the basis of a modification under paragraph 40 two of this subdivision, such modification is equal to less than one 41 hundred percent of the portion of the gain includible in federal 42 adjusted gross income and the taxpayer purchases a new business invest- 43 ment which is then held for a period of at least six months, the taxpay- 44 er may subtract from his or her federal adjusted gross income ten 45 percent, but not an amount that will reduce the portion of such gain 46 included in his or her New York income below zero, of the amount of such 47 gain where the purchase price of the new business investment is equal to 48 or greater than the proceeds of the sale giving rise to such gain. Where 49 the purchase price of the new business investment is less than an amount 50 equal to the proceeds of such sale, the modification allowable under 51 this paragraph shall be equal to ten percent of an amount equal to the 52 product of: (A) the amount of the gain and (B) a fraction the numerator 53 of which is the purchase price of the new investment and the denominator 54 of which is an amount equal to the proceeds of such sale. The modifica- 55 tion allowable under this paragraph may be utilized, at the option of 56 the taxpayer, with respect to the taxable year in which the new business

S. 8578 915

1 investment gain is realized or the year containing the last day of the 2 six-month retention period described in this paragraph. 3 4. The tax commission may prescribe such rules and regulations as may 4 be necessary to carry out the purposes of this subdivision. 5 (p) New business investment deferral. For taxable years beginning 6 before January first, nineteen hundred eighty-eight, at the option of 7 the taxpayer, there may be subtracted from federal adjusted gross income 8 a reinvested amount of long-term capital gain realized in a taxable year 9 from the sale of a capital asset, as such term is defined in section 10 twelve hundred twenty-one of the internal revenue code, which is not a 11 new business investment. A reinvested amount of long-term capital gain 12 shall mean an amount which bears the same ratio to the long-term capital 13 gain realized from the sale of a capital asset which was includible in 14 New York adjusted gross income as that portion of the sale proceeds 15 which is reinvested, within one year from date of sale, in a New York 16 new business bears to the total sale proceeds. For the purposes of this 17 subdivision, a New York new business is a business enterprise which: (1) 18 has been a taxpayer under article nine-A, twenty-two, or thirty-three of 19 the tax law for no more than three taxable years, including short taxa- 20 ble years, (2) over fifty percent of the number of shares of stock that 21 entitle the holders thereof to vote for the election of directors or 22 trustees is not owned, directly or indirectly, by a taxpayer subject to 23 tax under section one hundred eighty-three, one hundred eighty-four or 24 one hundred eighty-five of article nine of the tax law, or under article 25 nine-A, thirty-two or thirty-three of the tax law, (3) is not substan- 26 tially similar in operation or ownership, directly or indirectly, to a 27 business entity, or entities taxable, or previously taxable, under such 28 sections, such articles, article twenty-three of the tax law or which 29 would have been subject to tax under article twenty-three, as such arti- 30 cle was in effect on January first, nineteen hundred eighty, or the 31 income, or losses, of which is, or was, includible under article twen- 32 ty-two of the tax law whereby the intent and purpose of this subdivision 33 would be evaded, (4) locates and employs at least ninety percent of its 34 assets in the state, (5) employs principally in the state eighty percent 35 of its employees, and (6) derives less than forty percent of its gross 36 income from dividends, interest, royalties, other than mineral, oil, or 37 gas royalties or copyright royalties, annuities and (7) reports at least 38 twenty-five hundred dollars in gross income in any taxable year. The 39 reinvested amount must qualify as a capital asset as defined pursuant to 40 section twelve hundred twenty-one of the internal revenue code and must 41 be retained by the taxpayer for at least twelve months. The modification 42 allowable under this subdivision shall be utilized with respect to the 43 taxable year in which the twelve month retention period ends. 44 (q) An amount deferred under subdivision (p) of this section shall be 45 added to federal adjusted gross income when the reinvestment in the New 46 York new business which qualified a taxpayer for such deferral is sold. 47 (r) In the case of a sale or other disposition of property acquired 48 from a decedent and valued by the executor of the estate of such dece- 49 dent for the purposes of the tax under article twenty-six of the tax law 50 pursuant to paragraph two of subsection (b) of section nine hundred 51 fifty-four of the tax law, where such estate was insufficient to require 52 the filing of a federal estate tax return, the amount necessary to prop- 53 erly reflect the gain or loss from such sale or other disposition which 54 would have been realized under this chapter, had, in the case of clause 55 (i) of this subdivision, a federal estate tax return been filed similar- 56 ly valuing such property pursuant to section two thousand thirty-two of

S. 8578 916

1 the internal revenue code, or in the case of clause (ii) of this subdi- 2 vision, pursuant to section two thousand thirty-two-A of such code. 3 (s) New York S termination year. (1) General. In the case of a New 4 York S termination year, the amount of any item of S corporation income, 5 loss and deduction included in the shareholder's federal adjusted gross 6 income and any reductions for taxes, as described in paragraphs two and 7 three of subsection (f) of section thirteen hundred sixty-six of the 8 internal revenue code, shall be adjusted in accordance with the treat- 9 ment provided in paragraph two or three of this subdivision. 10 (2) Pro rata allocation. Unless paragraph three of this subdivision 11 applies, an equal portion of each S corporation item shall be assigned 12 to each day of the S corporation's taxable year for federal income tax 13 purposes. The portion of each such item thereby assigned to the S short 14 year shall be treated as an item of a New York S corporation, and the 15 portion of each such item thereby assigned to the C short year shall be 16 treated as an item of an S corporation which is a New York C corpo- 17 ration. 18 (3) Normal tax accounting. The portion of each S corporation item 19 assigned to the S short year and the C short year shall be determined 20 using normal tax accounting rules if: 21 (A) there is a sale or exchange of fifty percent or more of the stock 22 in such corporation during the New York S termination year or 23 (B) the corporation so elects, as provided in subparagraph (B) of 24 paragraph two of subsection (s) of section six hundred twelve of the tax 25 law. 26 (t) Related members expense add back. (1) Definitions. (A) Related 27 member. "Related member" means a related person as defined in subpara- 28 graph (c) of paragraph three of subsection (b) of section four hundred 29 sixty-five of the internal revenue code, except that "fifty percent" 30 shall be substituted for "ten percent". 31 (B) Effective rate of tax. "Effective rate of tax" means, as to any 32 city, the maximum statutory rate of tax imposed by the city on or meas- 33 ured by a related member's net income multiplied by the apportionment 34 percentage, if any, applicable to the related member under the laws of 35 said jurisdiction. For purposes of this definition, the effective rate 36 of tax as to any city is zero where the related member's net income tax 37 liability in said city is reported on a combined or consolidated return 38 including both the taxpayer and the related member where the reported 39 transactions between the taxpayer and the related member are eliminated 40 or offset. Also, for purposes of this definition, when computing the 41 effective rate of tax for a city in which a related member's net income 42 is eliminated or offset by a credit or similar adjustment that is 43 dependent upon the related member either maintaining or managing intan- 44 gible property or collecting interest income in that city, the maximum 45 statutory rate of tax imposed by said city shall be decreased to reflect 46 the statutory rate of tax that applies to the related member as effec- 47 tively reduced by such credit or similar adjustment. 48 (C) Royalty payments. Royalty payments are payments directly connected 49 to the acquisition, use, maintenance or management, ownership, sale, 50 exchange, or any other disposition of licenses, trademarks, copyrights, 51 trade names, trade dress, service marks, mask works, trade secrets, 52 patents and any other similar types of intangible assets as determined 53 by the state commissioner of taxation and finance, and include amounts 54 allowable as interest deductions under section one hundred sixty-three 55 of the internal revenue code to the extent such amounts are directly or 56 indirectly for, related to or in connection with the acquisition, use,

S. 8578 917

1 maintenance or management, ownership, sale, exchange or disposition of 2 such intangible assets. 3 (D) Valid business purpose. A valid business purpose is one or more 4 business purposes, other than the avoidance or reduction of taxation, 5 which alone or in combination constitute the primary motivation for some 6 business activity or transaction, which activity or transaction changes 7 in a meaningful way, apart from tax effects, the economic position of 8 the taxpayer. The economic position of the taxpayer includes an increase 9 in the market share of the taxpayer, or the entry by the taxpayer into 10 new business markets. 11 (2) Royalty expense add backs. (A) For the purpose of computing city 12 adjusted gross income, a taxpayer must add back royalty payments direct- 13 ly or indirectly paid, accrued, or incurred in connection with one or 14 more direct or indirect transactions with one or more related members 15 during the taxable year to the extent deductible in calculating federal 16 taxable income. 17 (B) Exceptions. (i) The adjustment required in this subdivision shall 18 not apply to the portion of the royalty payment that the taxpayer estab- 19 lishes, by clear and convincing evidence of the type and in the form 20 specified by the commissioner of finance, meets all of the following 21 requirements: (I) the related member was subject to tax in this city or 22 another city within the United States or a foreign nation or some combi- 23 nation thereof on a tax base that included the royalty payment paid, 24 accrued or incurred by the taxpayer; (II) the related member during the 25 same taxable year directly or indirectly paid, accrued or incurred such 26 portion to a person that is not a related member; and (III) the trans- 27 action giving rise to the royalty payment between the taxpayer and the 28 related member was undertaken for a valid business purpose. 29 (ii) The adjustment required in this subdivision shall not apply if 30 the taxpayer establishes, by clear and convincing evidence of the type 31 and in the form specified by the commissioner of finance, that: (I) the 32 related member was subject to tax on or measured by its net income in 33 this city or another city within the United States, or some combination 34 thereof; (II) the tax base for said tax included the royalty payment 35 paid, accrued or incurred by the taxpayer; and (III) the aggregate 36 effective rate of tax applied to the related member in those jurisdic- 37 tions is no less than eighty percent of the statutory rate of tax that 38 applied to the taxpayer under section 11-1701 of this chapter for the 39 taxable year. 40 (iii) The adjustment required in this subdivision shall not apply if 41 the taxpayer establishes, by clear and convincing evidence of the type 42 and in the form specified by the commissioner of finance, that: (I) the 43 royalty payment was paid, accrued or incurred to a related member organ- 44 ized under the laws of a country other than the United States; (II) the 45 related member's income from the transaction was subject to a comprehen- 46 sive income tax treaty between such country and the United States; (III) 47 the related member was subject to tax in a foreign nation on a tax base 48 that included the royalty payment paid, accrued or incurred by the 49 taxpayer; (IV) the related member's income from the transaction was 50 taxed in such country at an effective rate of tax at least equal to that 51 imposed by this city; and (V) the royalty payment was paid, accrued or 52 incurred pursuant to a transaction that was undertaken for a valid busi- 53 ness purpose and using terms that reflect an arm's length relationship. 54 (iv) The adjustment required in this subdivision shall not apply if 55 the taxpayer and the commissioner of finance agree in writing to the 56 application or use of alternative adjustments or computations. The

S. 8578 918

1 commissioner of finance may, in his or her discretion, agree to the 2 application or use of alternative adjustments or computations when he or 3 she concludes that in the absence of such agreement the income of the 4 taxpayer would not be properly reflected. 5 (u) Alimony modifications. (1) In the case of applicable alimony or 6 separate maintenance payments, the following modifications shall apply: 7 (A) There shall be subtracted from federal adjusted gross income any 8 applicable alimony or separate maintenance payments made by the taxpayer 9 during the taxable year. 10 (B) There shall be added to federal adjusted gross income any applica- 11 ble alimony or separate maintenance payments received by the taxpayer 12 during the taxable year. 13 (2) (A) The term "alimony or separate maintenance payments" means 14 payments as defined under section seventy-one of the internal revenue 15 code in effect immediately prior to the enactment of Public Law 115-97. 16 (B) The term "applicable alimony or separate maintenance payments" 17 means payments made under an alimony or separation instrument, as 18 defined in section seventy-one of the internal revenue code in effect 19 immediately prior to the enactment of Public Law 115-97, that was 20 executed after December thirty-first, two thousand eighteen, and any 21 divorce or separation instrument executed on or before such date and 22 modified after such date if the modification expressly provides that the 23 amendments made by this section apply to such modification. 24 (v) Qualified moving expense reimbursement and moving expenses. (1) In 25 the case of applicable qualified moving expense reimbursement and moving 26 expenses, the following modifications shall apply: 27 (A) There shall be subtracted from federal adjusted gross income any 28 applicable qualified moving expense reimbursement received by the 29 taxpayer during the taxable year. 30 (B) There shall be subtracted from federal adjusted gross income any 31 applicable moving expenses paid by the taxpayer during the taxable year. 32 (2) Applicable qualified moving expense reimbursement and moving 33 expenses are those deductions as allowed by paragraph (g) of section one 34 hundred thirty-two and section two hundred seventeen, respectfully, of 35 the internal revenue code immediately prior to the enactment of Public 36 Law 115-97. 37 § 11-1713 City deduction of a resident individual. The city 38 deduction of a city resident individual shall be his or her city stand- 39 ard deduction unless such resident individual elects to deduct his or 40 her city itemized deduction under the conditions set forth in section 41 11-1715 of this chapter. 42 § 11-1714 City standard deduction of a city resident individual. (a) 43 Unmarried individual. For taxable years beginning after nineteen hundred 44 ninety-five, the city standard deduction of a city resident individual 45 who is not married nor the head of a household nor a surviving spouse 46 nor an individual who is claimed as a dependent by another New York 47 state taxpayer shall be seven thousand five hundred dollars; for taxable 48 years beginning in nineteen hundred ninety-five, such standard deduction 49 shall be seven thousand four hundred dollars; for taxable years begin- 50 ning in nineteen hundred ninety-four, such standard deduction shall be 51 six thousand six hundred dollars; and for taxable years beginning after 52 nineteen hundred eighty-nine and before nineteen hundred ninety-four, 53 such standard deduction shall be six thousand dollars. 54 (b) Husband and wife filing jointly and surviving spouse. For taxable 55 years beginning after nineteen hundred ninety-five, the city standard 56 deduction of a husband and wife whose city taxable income is determined

S. 8578 919

1 jointly or a surviving spouse shall be thirteen thousand dollars; for 2 taxable years beginning in nineteen hundred ninety-five, such standard 3 deduction shall be twelve thousand three hundred fifty dollars; for 4 taxable years beginning in nineteen hundred ninety-four, such standard 5 deduction shall be ten thousand eight hundred dollars; and for taxable 6 years beginning after nineteen hundred eighty-nine and before nineteen 7 hundred ninety-four, such standard deduction shall be nine thousand five 8 hundred dollars. 9 (c) Head of household. For taxable years beginning after nineteen 10 hundred ninety-five, the city standard deduction of an individual who is 11 a head of household shall be ten thousand five hundred dollars; for 12 taxable years beginning in nineteen hundred ninety-five, such standard 13 deduction shall be ten thousand dollars; for taxable years beginning in 14 nineteen hundred ninety-four, such standard deduction shall be eight 15 thousand one hundred fifty dollars; and for taxable years beginning 16 after nineteen hundred eighty-nine and before nineteen hundred ninety- 17 four, such standard deduction shall be seven thousand dollars. 18 (d) Married individuals filing separately. For taxable years beginning 19 after nineteen hundred ninety-five, the city standard deduction of a 20 married individual filing a separate return shall be six thousand five 21 hundred dollars; for taxable years beginning in nineteen hundred nine- 22 ty-five, such standard deduction shall be six thousand one hundred 23 seventy-five dollars; for taxable years beginning in nineteen hundred 24 ninety-four, such standard deduction shall be five thousand four hundred 25 dollars; and for taxable years beginning after nineteen hundred eighty- 26 nine and before nineteen hundred ninety-four, such standard deduction 27 shall be four thousand seven hundred fifty dollars. 28 (e) Standard deduction of a dependent individual. For taxable years 29 beginning after nineteen hundred ninety-five, the city standard 30 deduction of a city resident individual whose federal exemption amount 31 is zero shall be three thousand dollars; for taxable years beginning in 32 nineteen hundred ninety-five, such standard deduction shall be two thou- 33 sand nine hundred dollars; and for taxable years beginning after nine- 34 teen hundred eighty-nine and before nineteen hundred ninety-five, such 35 standard deduction shall be two thousand eight hundred dollars. 36 (f) For taxable years beginning on or after January first, two thou- 37 sand thirteen, the amounts of standard deductions set forth in this 38 section shall be adjusted in the same manner as the amounts of standard 39 deductions set forth in section six hundred fourteen of the tax law. 40 § 11-1715 City itemized deduction of a city resident individual. 41 (a) General. If federal taxable income of a city resident individual 42 is determined by itemizing deductions or claiming the federal standard 43 deduction from his or her federal adjusted gross income, such resident 44 individual may elect to deduct his or her city itemized deduction or 45 claim his or her city standard deduction. 46 The city itemized deduction of a city resident individual means the 47 total amount of his or her deductions from federal adjusted gross income 48 allowed, other than federal deductions for personal exemptions, as 49 provided in the laws of the United States for the taxable year, as such 50 deductions existed immediately prior to the enactment of Public Law 51 115-97 with the modifications specified in this section, except as 52 provided for under subdivision (f) of this section. 53 (b) Husband and wife. 54 (1) A husband and wife, both of whom are required to file returns 55 under this chapter, shall be allowed city itemized deductions only if 56 both elect to take city itemized deductions.

S. 8578 920

1 (2) The total of the city itemized deductions of a husband and wife 2 whose federal taxable income is determined on a joint return, but whose 3 city taxable incomes are required to be determined separately, shall be 4 divided between them as if their federal taxable incomes had been deter- 5 mined separately. 6 (c) Modifications reducing federal itemized deductions. The total 7 amount of deductions from federal adjusted gross income shall be reduced 8 by the amount of such federal deductions for: 9 (1) state and local general sales taxes as defined in subsection (b) 10 of section one hundred sixty-four of the internal revenue code, to the 11 extent included in federal itemized deductions or income taxes imposed 12 by this city or any other taxing jurisdiction, except city earnings 13 taxes on nonresidents that are imposed upon and paid by taxpayers for 14 taxable years beginning after December thirty-first, nineteen hundred 15 seventy and before January first, two thousand, to the extent that the 16 amount of such tax exceeds the tax computed as if the rates were one- 17 fourth of one percent of wages subject to tax and three-eighths of one 18 percent of net earnings from self-employment subject to tax; 19 (2) interest on indebtedness incurred or continued to purchase or 20 carry obligations or securities the interest on which is exempt from tax 21 under this chapter; and 22 (3) ordinary and necessary expenses paid or incurred during the taxa- 23 ble year for: (i) the production or collection of income which is exempt 24 from tax under this chapter, or (ii) the management, conservation or 25 maintenance of property held for the production of such income, and the 26 amortizable bond premium for the taxable year on any bond the interest 27 on which is exempt from tax under this chapter, to the extent that such 28 expenses and premiums are deductible in determining federal taxable 29 income. 30 (4) premiums paid for long-term care insurance to the extent that such 31 premiums are deductible in determining federal taxable income. 32 (6) in the case of a shareholder of an S corporation: 33 (A) where the election provided for in subsection (a) of section six 34 hundred sixty of the tax law has not been made, S corporation items of 35 deduction included in federal itemized deductions, and 36 (B) in the case of a New York S termination year, the portion of such 37 items assigned to the period beginning on the day the election ceases to 38 be effective, as determined under subdivision (s) of section 11-1712 of 39 this subchapter. 40 (d) Modifications increasing federal itemized deductions. The total 41 amount of deductions from federal adjusted gross income shall be 42 increased by: 43 (1) (Reserved.) 44 (2) interest on indebtedness incurred or continued to purchase or 45 carry obligations or securities the interest on which is subject to tax 46 under this chapter but exempt from federal income tax, to the extent 47 that such interest on indebtedness is not deductible for federal income 48 tax purposes and is not subtracted from federal adjusted gross income 49 pursuant to paragraph nine of subdivision (c) of section 11-1712 of this 50 subchapter; and 51 (3) ordinary and necessary expenses paid or incurred during the taxa- 52 ble year for: (i) the production or collection of income which is 53 subject to tax under this chapter but exempt from federal income tax, or 54 (ii) the management, conservation or maintenance of property held for 55 the production of such income, and the amortizable bond premium for the 56 taxable year on any bond the interest on which is subject to tax under

S. 8578 921

1 this chapter but exempt from federal income tax, to the extent that such 2 expenses and premiums are not deductible in determining federal adjusted 3 gross income and are not subtracted from federal adjusted gross income 4 pursuant to paragraph ten of subdivision (c) of section 11-1712 of this 5 subchapter. 6 (4) allowable college tuition expenses, as defined in paragraph two of 7 subsection (t) of section six hundred six of the tax law, multiplied by 8 the applicable percentage. Such applicable percentage shall be twenty- 9 five percent for taxable years beginning in two thousand one, fifty 10 percent for taxable years beginning in two thousand two, seventy-five 11 percent for taxable years beginning in two thousand three and one 12 hundred percent for taxable years beginning after two thousand three. 13 Provided, however, no deduction shall be allowed under this paragraph to 14 a taxpayer who claims the credit provided under subsection (t) of 15 section six hundred six of the tax law. 16 (e) Modification of partners and shareholders of S corporations. (1) 17 Partners and shareholders of S corporations which are not New York C 18 corporations. The amounts of modifications under subdivision (c) or 19 under paragraph two or three of subdivision (d) required to be made by a 20 partner or by a shareholder of an S corporation, other than an S corpo- 21 ration which is a New York C corporation, with respect to items of 22 deduction of a partnership or S corporation shall be determined under 23 section 11-1717 of this subchapter. 24 (2) Shareholders of S corporations which are New York C corporations. 25 In the case of a shareholder of an S corporation which is a New York C 26 corporation, the modifications under this section which relate to the 27 corporation's items of deduction shall not apply, except for the modifi- 28 cation provided under paragraph six of subdivision (c) of this section. 29 (3) New York S termination year. In the case of a New York S termi- 30 nation year, the amounts of the modifications required under this 31 section which relate to the S corporation's items of deduction shall be 32 adjusted in the same manner that the S corporation's items are adjusted 33 under subdivision (s) of section 11-1712 of this subchapter. 34 (f) Except as otherwise provided under subdivision (g) of this 35 section, the city itemized deduction otherwise allowable under this 36 section shall be reduced by the sum of the amounts determined under 37 paragraphs one and two of this subdivision. 38 (1) An amount equal to the city itemized deduction otherwise allowable 39 under subdivision (a) of this section, multiplied by a percentage, such 40 percentage to be determined by multiplying, for taxable years beginning 41 in nineteen hundred eighty-eight, ten percent, and for taxable years 42 beginning after nineteen hundred eighty-eight, twenty-five percent, by a 43 fraction, 44 (A) in the case of an unmarried individual or married individual 45 filing a separate return, the numerator of which is the lesser of fifty 46 thousand dollars or the excess of such individual's city adjusted gross 47 income over one hundred thousand dollars and the denominator of which is 48 fifty thousand dollars; 49 (B) in the case of a married individual filing a joint return or a 50 surviving spouse, the numerator of which is the lesser of fifty thousand 51 dollars or the excess of such individual's city adjusted gross income 52 over two hundred thousand dollars and the denominator of which is fifty 53 thousand dollars; 54 (C) in the case of a head of household, the numerator of which is the 55 lesser of fifty thousand dollars or the excess of such individual's city

S. 8578 922

1 adjusted gross income over one hundred fifty thousand dollars and the 2 denominator of which is fifty thousand dollars. 3 (2) An amount equal to the city itemized deduction of an individual 4 otherwise allowable under subdivision (a) of this section, multiplied by 5 a percentage, such percentage to be determined by multiplying, for taxa- 6 ble years beginning in nineteen hundred eighty-eight, ten percent, and 7 for taxable years beginning after nineteen hundred eighty-eight, twen- 8 ty-five percent, by a fraction, the numerator of which is the lesser of 9 fifty thousand dollars or the excess of such individual's city adjusted 10 gross income over four hundred seventy-five thousand dollars and the 11 denominator of which is fifty thousand dollars. 12 (g) Notwithstanding subdivision (a) of this section, the city itemized 13 deduction for charitable contributions shall be the amount allowed under 14 section one hundred seventy of the internal revenue code, as limited by 15 this subdivision. (1) With respect to an individual whose New York 16 adjusted gross income is over one million dollars but no more than ten 17 million dollars, the New York itemized deduction shall be an amount 18 equal to fifty percent of any charitable contribution deduction allowed 19 under section one hundred seventy of the internal revenue code for taxa- 20 ble years beginning after two thousand nine and before two thousand 21 twenty-five. With respect to an individual whose New York adjusted gross 22 income is over one million dollars, the New York itemized deduction 23 shall be an amount equal to fifty percent of any charitable contribution 24 deduction allowed under section one hundred seventy of the internal 25 revenue code for taxable years beginning in two thousand nine or after 26 two thousand twenty-four. 27 (2) With respect to an individual whose New York adjusted gross income 28 is over ten million dollars, the New York itemized deduction shall be an 29 amount equal to twenty-five percent of any charitable contribution 30 deduction allowed under section one hundred seventy of the internal 31 revenue code for taxable years beginning after two thousand nine and 32 ending before two thousand twenty-five. 33 § 11-1716 City exemptions of a city resident individual. (a) Gener- 34 al. For taxable years beginning after nineteen hundred eighty-seven, a 35 city resident individual shall be allowed a city exemption of one thou- 36 sand dollars for each exemption for which such resident individual is 37 entitled to a deduction for the taxable year under subsection (c) of 38 section one hundred fifty-one of the internal revenue code; and for 39 taxable years beginning in nineteen hundred eighty-seven, a city resi- 40 dent individual other than a taxpayer whose federal exemption amount is 41 zero shall be allowed a city exemption of nine hundred dollars for each 42 exemption for which he or she is entitled to a deduction for the taxable 43 year for federal income tax purposes. 44 (b) Husband and wife. If the city income taxes of a husband and wife 45 are required to be separately determined but their federal income tax is 46 determined on a joint return, each of them shall be separately entitled 47 to the city exemptions under subdivision (a) of this section to which 48 each would be separately entitled for the taxable year if their federal 49 income taxes had been determined on separate returns. 50 § 11-1717 Resident partners and shareholders of S corporations. (a) 51 Partner's and shareholder's modifications. In determining city adjusted 52 gross income and city taxable income of a city resident partner or a 53 city resident shareholder of an S corporation, other than an S corpo- 54 ration which is a New York C corporation, any modification described in 55 subdivision (b), (c) or (d) of section 11-1712 of this subchapter, or 56 subdivision (c) of section 11-1715 of this subchapter or paragraph two

S. 8578 923

1 or three of subdivision (d) of such section, which relates to an item of 2 partnership or S corporation income, gain, loss or deduction shall be 3 made in accordance with the partner's distributive share or the share- 4 holder's pro rata share, for federal income tax purposes, of the item to 5 which the modification relates. Where a partner's distributive share or 6 a shareholder's pro rata share of any such item is not required to be 7 taken into account separately for federal income tax purposes, the part- 8 ner's or shareholder's share of such item shall be determined in accord- 9 ance with his or her share, for federal income tax purposes, of partner- 10 ship or S corporation taxable income or loss generally. In the case of 11 a New York S termination year, his or her pro rata share of any such 12 item shall be determined under subdivision (s) of section 11-1712 of 13 this subchapter. 14 (b) Character of items. Each item of partnership and S corporation 15 income, gain, loss, or deduction shall have the same character for a 16 partner or shareholder under this subchapter as for federal income tax 17 purposes. Where an item is not characterized for federal income tax 18 purposes, it shall have the same character for a partner or shareholder 19 as if realized directly from the source from which realized by the part- 20 nership or S corporation or incurred in the same manner as incurred by 21 the partnership or S corporation. 22 (c) City tax avoidance or evasion. Where a partner's distributive 23 share of an item of partnership income, gain, loss or deduction is 24 determined for federal income tax purposes by special provision in the 25 partnership agreement with respect to such item, and where the principal 26 purpose of such provision is the avoidance or evasion of tax under this 27 chapter, the partner's distributive share of such item, and any modifi- 28 cation required with respect thereto, shall be determined as if the 29 partnership agreement made no special provision with respect to such 30 item. 31 § 11-1717.1 Residents; special provisions. Notwithstanding any other 32 provisions of this chapter, the city adjusted gross income and the city 33 taxable income of a resident individual or partner of a partnership 34 doing an insurance business as a member of the New York insurance 35 exchange described in section six thousand two hundred one of the insur- 36 ance law, shall not include any item of income, gain, loss or deduction 37 of such business, which is the individual's distributive or pro rata 38 share for federal income tax purposes or which the individual is 39 required to take into account separately for federal income tax 40 purposes. Provided however, such individual's city adjusted gross 41 income shall include his or her distributive or pro rata share of the 42 allocated entire net income as determined by such business under 43 sections fifteen hundred three and fifteen hundred four of the tax law. 44 In the event such allocated entire net income is a loss, there shall not 45 be subtracted from federal adjusted gross income in computing city 46 adjusted gross income such individual's distributive share of such loss. 47 § 11-1718 City taxable income of a city resident estate or trust. 48 The city taxable income of a city resident estate or trust means its 49 federal taxable income as defined in the laws of the United States for 50 the taxable year, with the following modifications: 51 (2) There shall be subtracted the modifications described in para- 52 graphs four and five of subdivision (c) of section 11-1712 of this 53 subchapter, with respect to gains from the sale or other disposition of 54 property, to the extent such gains are excluded from federal distribut- 55 able net income of the estate or trust.

S. 8578 924

1 (3) There shall be added or subtracted, as the case may be, the share 2 of the estate or trust in the city fiduciary adjustment determined under 3 section 11-1719 of this subchapter. 4 (4) There shall be added or subtracted, as the case may be, the 5 modifications described in paragraphs six, ten, seventeen, eighteen, 6 nineteen, twenty, twenty-one, twenty-two, twenty-three, twenty-four, 7 twenty-five, twenty-six, twenty-seven, twenty-nine, thirty-four and 8 thirty-five of subdivision (b) and in paragraphs eleven, thirteen, 9 fifteen, nineteen, twenty, twenty-one, twenty-two, twenty-three, twen- 10 ty-four, twenty-five, twenty-six and twenty-eight of subdivision (c) of 11 section 11-1712 of this subchapter. 12 (5) In the case of a trust, there shall be added the amount of any 13 includible gain, reduced by any deductions properly allocable thereto, 14 upon which tax is imposed for the taxable year pursuant to section six 15 hundred forty-four of the internal revenue code. 16 § 11-1719 Share of a resident estate, trust or beneficiary in city 17 fiduciary adjustment. (a) General. An adjustment shall be made in 18 determining city taxable income of a city resident estate or trust under 19 section 11-1718 of this subchapter, or city adjusted gross income of a 20 city resident beneficiary of any estate or trust under subdivision (d) 21 of section 11-1712 of this subchapter, in the amount of the share of 22 each in the city fiduciary adjustment as determined in this section. 23 (b) Definition. The city fiduciary adjustment shall be the net 24 amount of the modifications described in section 11-1712 of this 25 subchapter, including subdivision (d) if the estate or trust is a bene- 26 ficiary of another estate or trust, in subdivision (c) and paragraphs 27 two and three of subdivision (d) of section 11-1715 of this subchapter, 28 and in subdivision (e) of this section, which relate to items of income, 29 gain, loss or deduction of an estate or trust. The net amount of such 30 modifications shall not include: 31 (1) Any modification described in paragraphs one and two of subdivi- 32 sion (b) and paragraphs one, two, four, five, six, and seven of subdivi- 33 sion (c) of section 11-1712 of this subchapter with respect to any 34 amount which, pursuant to the terms of the governing instrument, is paid 35 or permanently set aside for a charitable purpose during the taxable 36 year, and 37 (2) Any modification described in paragraph four or five of subdivi- 38 sion (c) of section 11-1712 of this subchapter, with respect to gains 39 from the sale or other disposition of property, to the extent such gains 40 are excluded from federal distributable net income of the estate or 41 trust. 42 (c) Shares of city fiduciary adjustment. 43 (1) The respective shares of an estate or trust and its benefici- 44 aries, including, solely for the purpose of this allocation, nonresident 45 beneficiaries, in the city fiduciary adjustment shall be in proportion 46 to their respective shares of federal distributable net income of the 47 estate or trust. 48 (2) If the estate or trust has no federal distributable net income 49 for the taxable year, the share of each beneficiary in the city fiduci- 50 ary adjustment shall be in proportion to his or her share of the estate 51 or trust income for such year, under local law or the governing instru- 52 ment, which is required to be distributed currently and any other 53 amounts of such income distributed in such year. Any balance of the 54 city fiduciary adjustment shall be allocated to the estate or trust. 55 (d) Alternate attribution of modifications. The tax commission may 56 by regulation establish such other method or methods of determining to

S. 8578 925

1 whom the items comprising the fiduciary adjustment shall be attributed, 2 as may be appropriate and equitable. Such method may be used by the 3 fiduciary in his or her discretion whenever the allocation of the fidu- 4 ciary adjustment pursuant to subdivision (c) of this section would 5 result in an inequity which is substantial both in amount and in 6 relation to the amount of the fiduciary adjustment. 7 (e) Additional modifications. (1) For any taxable year beginning after 8 December thirty-first, two thousand seventeen, and before January first, 9 two thousand twenty-six, to the extent that the estate or trust claimed 10 a deduction for taxes under section one hundred sixty-four of the inter- 11 nal revenue code that was limited to ten thousand dollars as provided in 12 subparagraph (B) of paragraph six of subdivision (b) of such section one 13 hundred sixty-four or was denied as a result of subparagraph (A) of 14 paragraph six of subdivision (b) of such section one hundred sixty-four, 15 there shall be subtracted the taxes paid or accrued in that taxable year 16 by an estate or trust that the estate or trust was not able to deduct 17 for federal income tax purposes because of such limitation or denial, 18 other than state and local sales taxes and income taxes described in 19 paragraph one of subdivision (c) of section 11-1715 of this subchapter. 20 In determining the makeup of the ten thousand dollars of deduction 21 claimed by the estate or trust under section one hundred sixty-four of 22 the internal revenue code, it shall be presumed that the ten thousand 23 dollars of deduction first comprises the state and local sales taxes or 24 income taxes the estate or trust accrued or paid during the taxable 25 year. 26 (2) For any taxable year beginning after December thirty-first, two 27 thousand seventeen, and before January first, two thousand twenty-six, 28 there shall be subtracted the miscellaneous itemized deductions as 29 described in and limited by section sixty-seven of the internal revenue 30 code, but excluding the deductions described in subsection (e) of 31 section sixty-seven of such code, but determined without regard to 32 subsection (g) of such section. 33 (3) For any taxable year, there shall be added the amount of any 34 deduction allowed pursuant to section one hundred ninety-nine-A of the 35 internal revenue code. 36 § 11-1721 Credits to trust beneficiary receiving accumulation distrib- 37 ution. (a) General. A city resident beneficiary of a trust whose city 38 adjusted gross income includes all or part of an accumulation distrib- 39 ution by such trust, as defined in section six hundred sixty-five of the 40 internal revenue code, including a beneficiary who is required to make 41 the modification required by paragraph thirty-six of subdivision (b) of 42 section 11-1712 of this subchapter, shall be allowed (1) a credit 43 against the tax otherwise due under this chapter for all or a propor- 44 tionate part of any tax paid by the trust under this chapter or under 45 former title T of chapter forty-six of the code of the preceding munici- 46 pality, as it was in effect prior to September first, nineteen hundred 47 eighty-six, for any preceding taxable year which would not have been 48 payable if the trust had in fact made distributions to its beneficiaries 49 at the times and in the amounts specified in section six hundred sixty- 50 six of the internal revenue code; and (2) a credit against the taxes 51 imposed by this chapter for the taxable year for any income tax imposed 52 for the taxable year or any prior taxable year by another state of the 53 United States, a political subdivision thereof, or the District of 54 Columbia, upon income both derived therefrom and subject to tax under 55 this chapter, provided that the amount of the credit shall not exceed 56 the percentage of the tax otherwise due under this chapter determined by

S. 8578 926

1 dividing the portion of the income that is both taxable to the trust in 2 such other jurisdiction and taxable to the beneficiary under this chap- 3 ter by the total amount of the beneficiary's New York city income. 4 (b) Limitation. The credits under this section shall not reduce the 5 tax otherwise due from the beneficiary under this chapter to an amount 6 less than would have been due if the accumulation distribution or his or 7 her part thereof were excluded from his or her city adjusted gross 8 income. 9 § 11-1724 Computation of separate tax on the ordinary income portion 10 of lump sum distributions received by city resident individuals, estates 11 and trusts. (a) Amount of separate tax. The amount of tax imposed under 12 section 11-1703 of this chapter for any taxable year, with respect to 13 the ordinary income portion of a lump sum distribution received by a 14 city resident individual, estate or trust is an amount equal to five 15 times the tax which would be imposed by section 11-1701 of this chapter 16 at the rate set forth in paragraph three of subdivision (a) or (b), 17 whichever may be applicable, if the recipient of such lump sum distrib- 18 ution were an individual referred to in such subdivision and the city 19 taxable income were an amount equal to one-fifth of the excess of: 20 (1) the total taxable amount of the lump sum distribution for the 21 taxable year, over 22 (2) the minimum distribution allowance. 23 (b) Minimum distribution allowance. For purposes of this section, the 24 minimum distribution allowance shall be that which is calculated accord- 25 ing to subparagraph (C) of paragraph one of subsection (e) of section 26 four hundred two of the internal revenue code. 27 (c) Multiple distributions and distributions of annuity contracts. 28 For purposes of this section, the rules concerning multiple distrib- 29 utions and distributions of annuity contracts as specified by paragraph 30 two of subsection (e) of section four hundred two of the internal reven- 31 ue code shall be applicable, except that references to "paragraph one 32 (A)" shall be deemed to be references to this section, and except that 33 only lump sum distributions, or portions thereof, and distributions of 34 annuity contracts subject to tax under this chapter shall be included, 35 and except that references to the secretary shall be deemed to be refer- 36 ences to the tax commission. 37 (d) Definitions and special rules. For purposes of this section, the 38 following provisions shall apply, to the extent applicable to the 39 taxpayer's federal tax on lump sum distributions: (1) the definitions 40 and special rules as specified in paragraph four of subsection (e) of 41 section four hundred two of the internal revenue code; and (2) the 42 special rules relating to (A) individuals who have attained the age of 43 fifty before January first, nineteen hundred eighty-six and (B) capital 44 gains, as specified in paragraphs three, four, five and six of 45 subsection (h) of section eleven hundred twenty-two of the tax reform 46 act of nineteen hundred eighty-six as enacted by public law 99-514, but 47 (i) in the event that paragraph three of such subsection is applicable, 48 clause (ii) of subparagraph (B) of such paragraph shall be applied using 49 a rate of one and seventy-two hundredths percent, and (ii) in the event 50 that paragraph five of such subsection is applicable, the words "five" 51 and "one-fifth" in subdivision (a) of this section shall be read as 52 "ten" and "one-tenth", respectively, and subdivision (a) of this section 53 shall be applied by using the rate of tax specified in subdivision (a) 54 of section 11-1702 of this chapter as such subdivision was in effect for 55 taxable years beginning in nineteen hundred eighty-six.

S. 8578 927

1 SUBCHAPTER 3 2 RETURNS AND PAYMENT OF TAX

3 § 11-1751 Returns and liabilities. (a) General. On or before the 4 fifteenth day of the fourth month following the close of a taxable year, 5 an income tax return under this chapter shall be made and filed by or 6 for every city resident individual, estate or trust required to file a 7 New York state personal income tax, including a separate tax on the 8 ordinary income portion of lump sum distributions, return for the taxa- 9 ble year. 10 (b) Husband and wife. (1) If the New York state personal income tax 11 liability of husband and wife is determined on a separate return, their 12 city personal income tax liabilities and returns shall be separate. 13 (2) If the New York state personal income tax liabilities of husband 14 and wife, other than a husband and wife described in paragraph three of 15 this subdivision, are determined on a joint return, they shall file a 16 joint city personal income tax return, and their tax liabilities shall 17 be joint and several except as provided in paragraphs four and five of 18 this subdivision and in subsection (e) of section six hundred eighty- 19 five of the tax law. 20 (3) If the New York state personal income tax liabilities of husband 21 and wife, other than a husband and wife described in paragraph three of 22 this subdivision are determined on a joint return, they shall file a 23 joint city personal income tax return, and their tax liabilities shall 24 be joint and several except as provided in paragraph five of this subdi- 25 vision, section 11-1755 of this subchapter and subsection (e) of section 26 six hundred eighty-five of the tax law. 27 (4) If either husband or wife is a city resident and the other is a 28 city nonresident, and their New York state personal income tax liabil- 29 ities are determined on a joint return: 30 (A) they may elect to file a joint city personal income tax return as 31 if both were residents, in which case their city personal income tax 32 liabilities shall be joint and several except as provided in paragraphs 33 four and five of this subdivision and in subsection (e) of section six 34 hundred eighty-five of the tax law, or 35 (B) they may elect to file a joint city personal income tax return as 36 if both were residents, in which case their city personal income tax 37 liabilities shall be joint and several except as provided in paragraph 38 five of this subdivision, section 11-1755 of this subchapter and 39 subsection (e) of section six hundred eighty-five of the tax law, or 40 (C) the resident spouse may elect to file a separate city personal 41 income tax return, in which case his or her city personal income tax 42 liability shall be determined as if he or she were filing a separate New 43 York state personal income tax return. 44 (5) If a joint return has been made under this subdivision for a taxa- 45 ble year and only one spouse is liable for past-due support, or a past- 46 due legally enforceable debt, or a city of New York tax warrant judgment 47 debt, or an amount of a default in repayment of a guaranteed student, 48 state university or city university loan of which the state commissioner 49 of taxation and finance has been notified pursuant to section one 50 hundred seventy-one-c, one hundred seventy-one-d, one hundred seventy- 51 one-e, one hundred seventy-one-f or one hundred seventy-one-1 of the tax 52 law, as the case may be, then an overpayment and interest thereon shall 53 be credited against such past-due support, or a past-due legally 54 enforceable debt, or a city of New York tax warrant judgment debt, or 55 such amount of a default in repayment of a guaranteed student, state

S. 8578 928

1 university or city university loan, unless the spouse not liable for 2 such past-due support, or a past-due legally enforceable debt, or a city 3 of New York tax warrant judgment debt, or such amount of a default in 4 repayment of a guaranteed student, state university or city university 5 loan demands, on a declaration made in accordance with regulations or 6 instructions prescribed by the state commissioner of taxation and 7 finance, that the portion of the overpayment and interest attributable 8 to such spouse not be credited against the past-due support, or a past- 9 due legally enforceable debt, or a city of New York tax warrant judgment 10 debt, or amount of a default in repayment of a guaranteed student, state 11 university or city university loan owed by the other spouse. Upon such 12 demand, the state commissioner of taxation and finance shall determine 13 the amount of the overpayment attributable to each spouse in accordance 14 with regulations prescribed by the state commissioner of taxation and 15 finance and credit only that portion of the overpayment and interest 16 thereon attributable to the spouse liable for past-due support, or a 17 past-due legally enforceable debt, or a city of New York tax warrant 18 judgment debt, or amount of a default in repayment of a guaranteed 19 student, state university or city university loan against such past-due 20 support, or a past-due legally enforceable debt, or a city of New York 21 tax warrant judgment debt, or such amount of a default in repayment of a 22 guaranteed student, state university or city university loan. Such 23 demand may be filed (A) with the return of the spouse not liable for 24 past-due support or past-due legally enforceable debt, or a city of New 25 York tax warrant judgment debt, or default in repayment of a guaranteed 26 student, state university, or city university loan or (B) with the 27 commissioner of taxation and finance within ten days after notification 28 is provided such spouse by the commissioner of taxation and finance 29 pursuant to subdivision seven of section one hundred seventy-one-c, 30 subdivision six of section one hundred seventy-one-d, subdivision seven 31 of section one hundred seventy-one-e, subdivision seven of section one 32 hundred seventy-one-f or subdivision six of section one hundred seven- 33 ty-one-1 of the tax law. 34 (6) The state commissioner of taxation and finance shall clearly alert 35 married taxpayers, on all appropriate publications and instructions, 36 that their liability for tax will be joint and several if they file 37 joint income tax returns. The state commissioner of taxation and finance 38 shall include notice of an individual's right to relief from joint and 39 several liability pursuant to section six hundred fifty-four of the tax 40 law in the disclosure of rights statement required by section three 41 thousand four of the tax law and in any notice regarding collection of 42 tax due with respect to a liability on a joint return. 43 (c) Decedents. The return for any deceased individual shall be made 44 and filed by his or her executor, administrator, or other person charged 45 with his or her property. If a final return of a decedent is for a 46 fractional part of a year, the due date of such return shall be the 47 fifteenth day of the fourth month following the close of the twelve- 48 month period which began with the first day of such fractional part of 49 the year. 50 (d) Individuals under a disability. The return for an individual who 51 is unable to make a return by reason of minority or other disability 52 shall be made and filed by his or her guardian, committee, fiduciary or 53 other person charged with the care of his or her person or property 54 other than a receiver in possession of only a part of his or her proper- 55 ty, or by his or her duly authorized agent.

S. 8578 929

1 (e) Estates and trusts. The return for an estate or trust shall be 2 made and filed by the fiduciary. 3 (f) Joint fiduciaries. If two or more fiduciaries are acting jointly, 4 the return may be made by any one of them. 5 (h) Tax a debt. Any tax under this chapter, and any increase, interest 6 or penalty thereon, shall, from the time it is due and payable, be a 7 personal debt of the person liable to pay the same, to the city of New 8 York. 9 (i) Cross reference. For provisions as to information returns by part- 10 nerships, employers and other persons, see section 11-1758 of this 11 subchapter. 12 § 11-1752 Time and place for filing returns and paying tax. (a) 13 Except as provided in subdivision (b) of this section, a person required 14 to make and file a return under this chapter shall, without assessment, 15 notice or demand, pay any tax due thereon to the commissioner of taxa- 16 tion and finance on or before the date fixed for filing such return, 17 determined without regard to any extension of time for filing the 18 return. The commissioner shall prescribe by regulation the place for 19 filing any return, statement, or other document required pursuant to 20 this chapter and for payment of any tax. 21 (b) The commissioner of taxation and finance may allow individuals who 22 have income only from wages, salaries, tips and like remuneration for 23 services performed as an employee, interest, dividends and unemployment 24 compensation to elect to have the commissioner compute the tax due. To 25 provide for expeditious and uniform administration of the tax computa- 26 tions which involve numerous variables, the commissioner may further 27 qualify, with regard to period of residency, deductions, credits, 28 exemptions, amount and character of gross income, and any other appro- 29 priate factors relative to calculation of tax, those individuals who may 30 elect to have their taxes computed by the commissioner. Any such 31 election shall be made on the form prescribed by the commissioner for 32 this purpose. If a qualified taxpayer elects to have the commissioner 33 compute the tax, the amount determined by the commissioner shall be paid 34 (i) within ten days from the date of the issuance of a notice and demand 35 therefor or (ii) on the date fixed for filing such return, determined 36 without regard to any extension of time for filing, whichever is later. 37 § 11-1753 Signing of returns and other documents. (a) General. Any 38 return, statement or other document required to be made pursuant to this 39 chapter shall be signed in accordance with regulations or instructions 40 prescribed by the tax commission. The fact that an individual's name is 41 signed to a return, statement, or other document, shall be prima facie 42 evidence for all purposes that the return, statement or other document 43 was actually signed by such individual. 44 (b) Partnerships. Any return, statement or other document required of 45 a partnership shall be signed by one or more partners. The fact that a 46 partner's name is signed to a return, statement, or other document, 47 shall be prima facie evidence for all purposes that such partner is 48 authorized to sign on behalf of the partnership. 49 (c) Certifications. The making or filing of any return, statement or 50 other document or copy thereof required to be made or filed pursuant to 51 this chapter, including a copy of a federal return, shall constitute a 52 certification by the person making or filing such return, statement or 53 other document or copy thereof that the statements contained therein are 54 true and that any copy filed is a true copy. 55 § 11-1754 Change of resident status during year. (a) General. If an 56 individual changes his or her status during his or her taxable year from

S. 8578 930

1 city resident to city nonresident, or from city nonresident to city 2 resident, such individual shall file one return as a resident for the 3 portion of the year during which he or she is a city resident, and a 4 return under chapter nineteen of this title, for the portion of the year 5 during which he or she is a city nonresident, subject to such exceptions 6 as the tax commission may prescribe by regulation. 7 (b) City taxable income as city resident. The city taxable income for 8 the portion of the year during which he or she is a city resident shall 9 be determined, except as provided in subdivision (c) of this section, as 10 if his or her taxable year for federal income tax purposes were limited 11 to the period of his or her city resident status. 12 (c) Special accruals. 13 (1) If an individual changes his or her status from city resident to 14 city nonresident, he or she shall, regardless of his or her method of 15 accounting, accrue for the portion of the taxable year prior to such 16 change of status any items of income, gain, loss or deduction accruing 17 prior to the change of status, if not otherwise properly includible, 18 whether or not because of an election to report on an installment basis, 19 or allowable for city income tax purposes for such portion of the taxa- 20 ble year or for a prior taxable year. The amounts of such accrued items 21 shall be determined with the applicable modifications described in 22 sections 11-1712 and 11-1715 of this chapter as if such accrued items 23 were includible or allowable for federal income tax purposes. 24 (2) If an individual changes his or her status from city nonresident 25 to city resident, he or she shall, regardless of his or her method of 26 accounting, accrue for the portion of the taxable year prior to such 27 change of status any items of income, gain, loss or deduction accruing 28 prior to the change of status, other than items derived from or 29 connected with New York state sources, if not otherwise properly inclu- 30 dible, whether or not because of an election to report on an installment 31 basis, or allowable for federal income tax purposes for such portion of 32 the taxable year or for a prior taxable year. The amounts of such 33 accrued items shall be determined with the applicable modifications 34 described in sections 11-1712 and 11-1715 of this chapter as if such 35 accrued items were includible or allowable for federal income tax 36 purposes. 37 (3) No item of income, gain, loss or deduction which is accrued under 38 this subdivision shall be taken into account in determining city 39 adjusted gross income or the city itemized deduction for any subsequent 40 taxable period. 41 (4) The accruals under this subdivision shall not be required if the 42 individual files with the tax commission a bond or other security 43 acceptable to the tax commission, conditioned upon the inclusion of 44 amounts accruable under this subdivision in city adjusted gross income 45 for one or more subsequent taxable years as if the individual had not 46 changed his or her resident status. 47 (5) The provisions of subdivisions (a), (b) and paragraphs one through 48 four of this subdivision shall apply if an individual changes his or her 49 status from a city resident to city nonresident or from a city nonresi- 50 dent to a city resident during a taxable year, or at the beginning of a 51 taxable year, as a result of a change of domicile or as a result of 52 becoming a city resident or city nonresident based on the definition 53 contained in subparagraph (B) of paragraph one of subdivision (b) of 54 section 11-1705 of this chapter. 55 (6) Except as provided in this paragraph, where an individual who is a 56 member of a partnership or shareholder of an S corporation changes

S. 8578 931

1 status from city resident to city nonresident, or from city nonresident 2 to city resident, the portion of the distributive or pro rata share of 3 income, gain and loss, less deductions attributable thereto, from a 4 partnership or S corporation shall be allocated to the resident and 5 nonresident periods of the partner or shareholder on a proportionate 6 basis throughout the taxable year of the partnership or S corporation. 7 In such event, the portion of the distributive or pro rata share allo- 8 cated to the period of residency shall be determined based on the number 9 of days of residency within the reporting period of the partnership or S 10 corporation over the total number of days in the reporting period of the 11 partnership or S corporation. Provided, however, that the commissioner 12 may require, or the individual may elect, to accrue to the period of 13 residence, and the period of nonresidence, the portion of the distribu- 14 tive or pro rata share of partnership or S corporation income, gain and 15 loss, less deductions attributable thereto, accruing during the individ- 16 ual's respective resident and nonresident periods in a manner that 17 reflects the date of accrual of said income, gain and loss by the part- 18 nership or S corporation. 19 (7) Except as provided in this paragraph, where an individual who is a 20 beneficiary of an estate or trust changes status from city resident to 21 city nonresident, or from city nonresident to city resident, the portion 22 of any estate or trust income credited, distributable, payable or 23 required to be distributed to such beneficiary shall be allocated to the 24 resident and nonresident periods of the beneficiary on a proportionate 25 basis throughout the taxable year of the estate or trust. In such event, 26 the portion of such estate or trust income allocated to the period of 27 residency shall be determined based on the number of days of residency 28 within the reporting period of the estate or trust over the total number 29 of days in the reporting period of the estate or trust. Provided, howev- 30 er, that the commissioner may require, or the beneficiary may elect, to 31 accrue to the period of residence, and the period of nonresidence, the 32 portion of such estate or trust income accruing during the beneficiary's 33 respective resident and nonresident periods in a manner that reflects 34 the date of accrual of said estate or trust income by the estate or 35 trust. 36 (d) City minimum tax. Where two returns are required under this 37 section, the total of the taxes due thereon shall not be less than would 38 be due if the city taxable incomes reportable on the two returns were 39 included in one return. 40 (e) Proration. Where a return is required under this section, the 41 city personal exemptions allowable under section 11-1716 of this chapter 42 shall be prorated, under regulations of the tax commission, to reflect 43 the portions of the entire taxable year during which the individual was 44 a resident. 45 (f) Standard deduction. Where a return is required under this 46 section, the city standard deduction allowable on such return shall be 47 the amount allowed pursuant to the provisions of section 11-1714 of this 48 chapter, prorated according to the period covered by the return. 49 (g) Trusts. If the status of a trust changes during its taxable year 50 from city resident to city nonresident, or from city nonresident to city 51 resident, the fiduciary shall file one return as a city resident trust 52 for the portion of the year during which the trust is a city resident 53 trust, and one return under chapter nineteen of this title for the 54 portion of the year during which the trust is a city nonresident trust, 55 subject to such exceptions as the tax commission may prescribe by regu- 56 lations. The provisions of subdivisions (b), (c), (d) and (e) of this

S. 8578 932

1 section shall apply for the purposes of this subdivision, except to the 2 extent that any of such provisions may be inconsistent with the 3 provisions of section 11-1718 of this chapter, and except that the term 4 "individual" shall be read as "trust", the term "city adjusted gross 5 income" shall be read as "city taxable income", reference to "gain" 6 shall include any modification for includible gain under subdivision 7 five of section 11-1718 of this chapter, and the phrase "personal 8 exemptions allowable under section 11-1716 of this chapter" shall be 9 read as "city exemptions allowable under section 11-1718 of this chap- 10 ter." 11 (h) Lump sum distributions. If the status of a taxpayer changes 12 during his or her taxable year from city resident to city nonresident, 13 or from city nonresident to city resident, the taxpayer shall, regard- 14 less of his method of accounting, accrue for the portion of the taxable 15 year prior to such change of status the total taxable amount of a lump 16 sum distribution accruing prior to the change of status, if the ordinary 17 income portion thereof is not otherwise subject to tax under section 18 11-1703 of this chapter for such portion of the taxable year or for a 19 prior taxable year. No ordinary income portion of a lump sum distrib- 20 ution the total taxable amount of which is accrued under this subdivi- 21 sion shall be subject to tax under section 11-1703 of this chapter for 22 any subsequent taxable period. The accrual under this subdivision shall 23 not be required if the taxpayer files with the tax commission a bond or 24 other security acceptable to the tax commission, conditioned upon the 25 payment of tax under section 11-1703 of this chapter, with respect to 26 such amount accruable under this subdivision, for a subsequent taxable 27 year as if the taxpayer had not changed its resident status. 28 (i) Deduction for two-earner married couples. Where a return is 29 required under this section, the amount of deduction under paragraph 30 twenty-nine of subdivision (c) of section 11-1712 of this chapter shall 31 be equal to ten percent of the lesser of: 32 (1) thirty thousand dollars, pro rated according to the period covered 33 by the return or 34 (2) the qualified earned income of the spouse with the lower qualified 35 earned income for the period covered by the return. 36 § 11-1755 Relief from joint and several liability on joint return. 37 (a) General. The provisions of section six thousand fifteen of the 38 internal revenue code applicable to the liability of individuals who 39 file joint income tax returns shall apply to the same extent as if such 40 section of such code were contained in and made part of this section, 41 except to the extent that any provision of such section is either incon- 42 sistent with or not relevant to this chapter and except as modified in 43 subdivision (b) of this section, or with such other modifications as may 44 be necessary to adapt the language of such provisions to the provisions 45 of this chapter. 46 (b) Modifications. Section six thousand fifteen of the internal reven- 47 ue code shall be read as modified by this subdivision. 48 (1) "Secretary" shall be read as "state commissioner of taxation and 49 finance". 50 (2) "Internal revenue service" shall be read as "department of taxa- 51 tion and finance". 52 (3) "Tax court" shall be read as "division of tax appeals". 53 (4) In the heading of subsection (a) and in clause (ii) of subpara- 54 graph (A) of paragraph three of subsection (c), the phrase "section 55 6013(d)(3)" shall be read as "paragraphs two and three of subdivision 56 (b) of section 11-1751 of this chapter".

S. 8578 933

1 (5) In paragraph three of subsection (b), the phrase "section 2 6662(d)(2)(A)" shall be read as "subdivision (p) of section 11-1785 of 3 this chapter". 4 (6) In subparagraph (B) of paragraph two of subsection (d), the phrase 5 "section 1 or 55" shall be read as "section 11-1701 of this chapter". 6 (7) In clause (i) of subparagraph (B) of paragraph one of subsection 7 (e), the phrase "section 6851 or 6861" shall be read as "section 11-1794 8 of this chapter" and "section 7485" shall be read as "subdivision (c) of 9 section 11-1790 of this chapter". 10 (8) In paragraph two of subsection (e), the phrase "section 6502" 11 shall be read as "section one hundred seventy-four-a of the tax law and 12 section 11-1792 of this chapter". 13 (9) In subparagraph (A) of paragraph three of subsection (e), the 14 phrase "section 6512(b), 7121, or 7122" shall be read as "subdivision 15 fifteenth, eighteenth, eighteenth-a or eighteenth-d of section one 16 hundred seventy-one of the tax law and subdivision (b) of section 17 11-1789 of this chapter". 18 (10) The following provisions of such section six thousand fifteen 19 shall be disregarded: (A) The phrase "notwithstanding the provisions of 20 section 7421(a)" contained in clause (ii) of subparagraph (B) of para- 21 graph one of subsection (e); and (B) subparagraph (C) of paragraph three 22 of subsection (e). 23 (c) Federal determination. If an individual is relieved of a federal 24 income tax liability pursuant to subsection (b) of section six thousand 25 fifteen of the internal revenue code, there shall be a rebuttable 26 presumption that such individual shall also be entitled to equivalent 27 relief from liability under this section, to the extent that such indi- 28 vidual has an understatement of tax under this chapter for the same 29 taxable year that is attributable to the same erroneous item or items to 30 which the individual's federal income tax liability was attributable. 31 § 11-1757 Extensions of time. (a) General. The commissioner of taxa- 32 tion and finance may grant a reasonable extension of time for payment of 33 tax or estimated tax, or any installment, or for filing any return, 34 statement, or other document required pursuant to this chapter, on such 35 terms and conditions as it may require. Except for a taxpayer who is 36 outside the United States or who intends to claim nonresident status 37 pursuant to clause (ii) of subparagraph (A) of paragraph one of subdivi- 38 sion (b) of section 11-1705 of this chapter, no such extension for 39 filing any return, statement or other document, shall exceed six months. 40 (b) Furnishing of security. If any extension of time is granted for 41 payment of any amount of tax, the tax commission may require the taxpay- 42 er to furnish a bond or other security in an amount not exceeding twice 43 the amount for which the extension of time for payment is granted on 44 such terms and conditions as the tax commission may require. 45 § 11-1758 Requirements concerning returns, notices, records and state- 46 ments. (a) General. The tax commission may prescribe regulations as to 47 the keeping of records, the content and form of returns and statements, 48 and the filing of copies of federal income tax returns and determi- 49 nations. The tax commission may require any person, by regulation or 50 notice served upon such person, to make such returns, render such state- 51 ments, or keep such records, as the tax commission may deem sufficient 52 to show whether or not such person is liable under this chapter for tax 53 or for collection of tax. 54 (b) Identifying numbers. (1) When required by regulations prescribed 55 by the tax commission:

S. 8578 934

1 (A) Inclusion in returns. Any person required under the authority of 2 this chapter to make a return, statement, or other document shall 3 include in such return, statement or other document such identifying 4 number as may be prescribed for securing proper identification of such 5 person. 6 (B) Furnishing number to other persons. Any person with respect to 7 whom a return, statement or other document is required under the author- 8 ity of this chapter to be made by another person shall furnish to such 9 other person such identifying number as may be prescribed for securing 10 his or her proper identification. 11 (C) Furnishing number of another person. Any person required under the 12 authority of this chapter to make a return, statement, or other document 13 with respect to another person shall request from such other person, and 14 shall include in any such return, statement, or other document, such 15 identifying number as may be prescribed for securing proper identifica- 16 tion of such other person. 17 (2) Limitation. 18 (A) Except as provided in subparagraph (B) of this paragraph, a return 19 of any person with respect to his or her liability for tax, or any 20 statement or other document in support thereof, shall not be considered 21 for purposes of subparagraphs (B) and (C) of paragraph one of this 22 subdivision as a return, statement or other document with respect to 23 another person. 24 (B) For purposes of subparagraphs (B) and (C) of paragraph one of this 25 subdivision, a return of an estate or trust with respect to its liabil- 26 ity for tax, and any statement or other document in support thereof, 27 shall be considered as a return, statement, or other document with 28 respect to each beneficiary of such estate or trust. 29 (3) Requirement of information. For purposes of this section, the tax 30 commission is authorized to require such information as may be necessary 31 to assign an identifying number to any person. 32 (c) Partnerships and S corporations. 33 (1) Partnerships. Every partnership having a city resident partner 34 shall make a return for the taxable year setting forth all items of 35 income, gain, loss and deduction and such other pertinent information as 36 the tax commission may by regulations and instructions prescribe. Such 37 return shall be filed on or before the fifteenth day of the fourth month 38 following the close of each taxable year except that the due date for 39 the return of a partnership consisting entirely of nonresident aliens 40 shall be the date prescribed for the filing of its federal partnership 41 return for the taxable year. For purposes of this paragraph, "taxable 42 year" means a year or a period which would be a taxable year of the 43 partnership if it were subject to tax under this chapter. 44 (2) S corporations. Every S corporation for which the election 45 provided for in subsection (a) of section six hundred sixty of the tax 46 law is in effect shall make a return setting forth all items of income, 47 loss and deduction and such other pertinent information as the tax 48 commission may by regulations and instructions prescribe. Such return 49 shall be filed on or before the fifteenth day of the third month follow- 50 ing the close of each taxable year. 51 (d) Information at source. The tax commission may prescribe regu- 52 lations and instructions requiring returns of information to be made and 53 filed on or before February twenty-eighth of each year as to the payment 54 or crediting in any calendar year of amounts of six hundred dollars or 55 more to any taxpayer under this chapter. Such returns may be required of 56 any persons, including lessees or mortgagors of real or personal proper-

S. 8578 935

1 ty, fiduciaries, employers, and all officers and employees of this 2 state, or of any municipal corporation or political subdivision of this 3 state, having the control, receipt, custody, disposal or payment of 4 interest, rents, salaries, wages, premiums, annuities, compensations, 5 remunerations, emoluments or other fixed or determinable gains, profits 6 or income, except interest coupons payable to bearer. A duplicate of the 7 statement as to tax withheld on wages, required to be furnished by an 8 employer to an employee, shall constitute the return of information 9 required to be made under this section with respect to such wages. 10 (e) Notice of qualification as receiver, etc. Every receiver, trustee 11 in bankruptcy, assignee for benefit of creditors, or other like fiduci- 12 ary shall give notice of his or her qualification as such to the tax 13 commission, as may be required by regulation. 14 (g) Requirements applicable to tax return preparer. 15 (1) Signature of tax return preparer. Any individual who is a tax 16 return preparer and prepares any return or claim for refund, shall sign 17 such return or claim for refund in accordance with regulations or 18 instructions prescribed by the commissioner of taxation and finance. 19 (2) Furnishing identifying numbers. Any return or claim for refund 20 which is prepared by a tax return preparer shall include the identifying 21 number of the preparer required by paragraph one of this subdivision to 22 sign such return or claim for refund. In addition, where such individual 23 preparer is an employee of an employer which is a tax return preparer 24 with respect to such return or claim for refund, or where such preparer 25 is a partner in a partnership which is a tax return preparer with 26 respect to such return or claim for refund, then such return or claim 27 for refund shall also include the identifying number of such employer or 28 partnership. Such identifying numbers shall be as prescribed by the 29 commissioner of taxation and finance in order to secure the proper iden- 30 tification of such individual preparer, partnership or employer. The 31 responsibility for the inclusion of such identifying numbers shall be as 32 set forth in paragraph two of subdivision (t) of section 11-1785 of this 33 chapter. 34 (3) Furnishing copy to taxpayer. Any person who is a tax return 35 preparer with respect to any return or claim for refund shall furnish a 36 completed copy of such return or claim for refund to the taxpayer not 37 later than the time such return or claim for refund is presented for 38 such taxpayer's signature. 39 (4) Copy or list to be retained by tax return preparer. Any person who 40 is a tax return preparer with respect to any return or claim for refund 41 shall for a three year retention period described in paragraph nine of 42 this subdivision: 43 (A) retain a completed copy of such return or claim for refund, or 44 retain, on a list, the name and identification number of the taxpayer 45 for whom such return or claim was prepared, and 46 (B) make such copy or list available for inspection upon request by 47 the commissioner of taxation and finance. 48 (5) Tax return preparer defined. For purposes of this chapter, the 49 term "tax return preparer" means any person who prepares for compen- 50 sation, or who employs or engages one or more persons to prepare for 51 compensation any return or claim for refund. The preparation of a 52 substantial portion of a return or claim for refund shall be treated as 53 if it were the preparation of such return or claim for refund. Where an 54 employer and one or more employees of such employer are tax return 55 preparers with respect to the same return or claim for refund, or where 56 a partnership and one or more partners in such partnership are tax

S. 8578 936

1 return preparers with respect to the same return or claim for refund, 2 for purposes of paragraphs three and four of this subdivision, such 3 employer or such partnership shall be deemed to be the sole tax return 4 preparer. A person shall not be a "tax return preparer" merely because 5 such person: 6 (A) furnishes typing, reproducing, or other mechanical assistance, 7 (B) prepares a return or claim for refund of the employer, or of an 8 officer or employee of the employer, by whom he or she is regularly and 9 continuously employed, or 10 (C) prepares as a fiduciary a return or claim for refund for any 11 person. 12 (6) Person defined. For purposes of this subdivision, the term 13 "person" includes an individual, corporation, including a dissolved 14 corporation, or partnership. 15 (7) Return defined. For purposes of this subdivision, the term 16 "return" shall mean any return required under this chapter. 17 (8) Claim for refund defined. For purposes of this subdivision, the 18 term "claim for refund" shall mean a claim for refund of or credit 19 against any tax imposed under this chapter, and shall include any claim 20 for refund of any credit treated as an overpayment of tax under this 21 chapter. 22 (9) Retention period defined. For purposes of this subdivision, the 23 term "retention period" shall mean: 24 (A) in the case of a tax return, the period ending the later of three 25 years after the due date of such return, without regard to extensions, 26 or three years after the date such return was presented to the taxpayer 27 for such taxpayer's signature, and 28 (B) in the case of a claim for refund, the period ending three years 29 after such claim for refund was presented to the taxpayer for such 30 taxpayer's signature. 31 (10) Mandatory electronic filing by certain tax return preparers. 32 (A)(i) If a tax return preparer prepared more than two hundred original 33 returns during the calendar year beginning on January first, two thou- 34 sand five, and if, in the calendar year beginning on January first, two 35 thousand six, such tax return preparer prepares one or more authorized 36 returns using tax software, then, for such calendar year two thousand 37 six and for each subsequent calendar year thereafter, all authorized 38 returns prepared by such tax return preparer shall be filed electron- 39 ically, in accordance with instructions prescribed by the commissioner 40 of taxation and finance. 41 (ii) If a tax return preparer prepared more than one hundred original 42 returns during any calendar year beginning on or after January first, 43 two thousand six, and if, in any succeeding calendar year such tax 44 return preparer prepares one or more authorized returns using tax soft- 45 ware, then, for such succeeding calendar year and for each subsequent 46 calendar year thereafter, all authorized returns prepared by such tax 47 return preparer shall be filed electronically, in accordance with 48 instructions prescribed by the commissioner of taxation and finance. 49 (B) For purposes of this paragraph: (i) "Electronic" means computer 50 technology; provided, however, that the commissioner of taxation and 51 finance may, in instructions, provide that use of barcode technology 52 will also satisfy the mandatory electronic filing requirements of this 53 section. 54 (ii) "Authorized return" means any return required under this article 55 which the commissioner of taxation and finance has authorized to be 56 filed electronically.

S. 8578 937

1 (iii) "Original return" means a return required under this article 2 that is filed, without regard to extensions, during the calendar year 3 for which that return is required to be filed. 4 (iv) "Tax software" means any computer software program intended for 5 tax return preparation purposes. 6 § 11-1759 Report of federal changes, corrections or disallowances. If 7 the amount of a taxpayer's federal taxable income, total taxable amount 8 or ordinary income portion of a lump sum distribution or includible gain 9 of a trust reported on his federal income tax return for any taxable 10 year, or the amount of any claim of right adjustment, is changed or 11 corrected by the United States internal revenue service or other compe- 12 tent authority, or as the result of a renegotiation of a contract or 13 subcontract with the United States or the amount an employer is required 14 to deduct and withhold from wages for federal income tax withholding 15 purposes is changed or corrected by such service or authority or if a 16 taxpayer's claim for credit or refund of federal income tax is disal- 17 lowed in whole or in part, the taxpayer or employer shall report such 18 change or correction or disallowance within ninety days after the final 19 determination of such change, correction, renegotiation, or disallow- 20 ance, or as otherwise required by the commissioner, and shall concede 21 the accuracy of such determination or state wherein it is erroneous. The 22 allowance of a tentative carryback adjustment based upon a net operating 23 loss carryback pursuant to section sixty-four hundred eleven of the 24 internal revenue code shall be treated as a final determination for 25 purposes of this section. Any taxpayer filing an amended federal income 26 tax return and any employer filing an amended federal return of income 27 tax withheld shall also file within ninety days thereafter an amended 28 return under this chapter, and shall give such information as the 29 commissioner may require. The commissioner may by regulation prescribe 30 such exceptions to the requirements of this section as he or she deems 31 appropriate. For purposes of this section, (i) the term "taxpayer" shall 32 include a partnership having a resident partner or having any income 33 derived from New York sources, and a corporation with respect to which 34 the taxable year of such change, correction, disallowance or amendment 35 is a year with respect to which the election provided for in subsection 36 (a) of section six hundred sixty of the tax law is in effect, and (ii) 37 the term "federal income tax return" shall include the returns of income 38 required under sections six thousand thirty-one and six thousand thir- 39 ty-seven of the internal revenue code. In the case of such a corpo- 40 ration, such report shall also include any change or correction of the 41 taxes described in paragraphs two and three of subsection (f) of section 42 thirteen hundred sixty-six of the internal revenue code. Reports made 43 under this section by a partnership or corporation shall indicate the 44 portion of the change in each item of income, gain, loss or deduction, 45 and, in the case of a corporation, of each change in, or disallowance of 46 a claim for credit or refund of such tax, allocable to each partner or 47 shareholder and shall set forth such identifying information with 48 respect to such partner or shareholder as may be prescribed by the 49 commissioner. 50 § 11-1761 Change of election. Any election expressly authorized by 51 this chapter may be changed on such terms and conditions as the tax 52 commission may prescribe by regulation. 53 § 11-1762 Computation of tax where taxpayer restores substantial 54 amount held under claim of right. (a) General. If:

S. 8578 938

1 (1) an item was included in city adjusted gross income for a prior 2 taxable year, or years, because it appeared that the taxpayer had an 3 unrestricted right to such item, and 4 (2) for the current taxable year the provisions of paragraph five of 5 subsection (a) of section thirteen hundred forty-one of the internal 6 revenue code apply to such item, then the tax imposed by this chapter 7 for the taxable year shall be an amount equal to 8 (3) the tax for the taxable year computed without regard to this 9 section, minus 10 (4) the decrease in tax under this chapter for the prior taxable year, 11 or years, which would result solely from the exclusion of such item, or 12 portion thereof, from city adjusted gross income for such prior taxable 13 year, or years. 14 (b) Special rules. If the decrease in tax ascertained under paragraph 15 four of subdivision (a) of this section exceeds the tax imposed by this 16 chapter for the taxable year, such excess shall be considered a payment 17 of tax on the last day prescribed by law for the payment of tax for the 18 taxable year, and shall be refunded or credited in the same manner as if 19 it were an overpayment for such taxable year.

20 SUBCHAPTER 4 21 WITHHOLDING OF TAX

22 § 11-1771 Requirement of withholding tax from wages. (a) General. (1) 23 Every employer maintaining an office or transacting business within this 24 city or state and making payment on and after January first, nineteen 25 hundred seventy-seven of any wages taxable under this chapter, or under 26 section two of chapter eight hundred eighty-two of the laws of nineteen 27 hundred seventy-five, as amended by chapter eight hundred eighty-six of 28 the laws of nineteen hundred seventy-five, shall deduct and withhold 29 from such wages for each payroll period a tax computed in such manner as 30 to result, so far as practicable, in withholding from the employee's 31 wages during each calendar year an amount substantially equivalent to 32 the tax reasonably estimated to be due under this chapter or such 33 section two resulting from the inclusion in the employee's city adjusted 34 gross income of his or her wages received during such calendar year. 35 The method of determining the amount to be withheld shall be prescribed 36 by regulations of the tax commission, with due regard to the city with- 37 holding exemptions of the employee and the sum of any credits allowable 38 against his or her tax. The section shall not apply to payments by the 39 United States for service in the armed forces of the United States so 40 long as the right to require deduction and withholding of tax from such 41 payments is prohibited by the laws of the United States. Service in the 42 armed forces of the United States shall have the same meaning as when 43 used in a comparable context in the laws of the United States relating 44 to withholding of city income taxes. 45 (2) The tax commission may provide, by regulations, for withholding: 46 (A) from remuneration for services performed by an employee for his or 47 her employer which does not constitute wages, and 48 (B) from remuneration for services performed by an employee for his or 49 her employer which does not constitute wages, and (B) from any other 50 type of payment, with respect to which the tax commission finds that 51 withholding would be appropriate under the provisions of this chapter, 52 if the employer and the employee, or in the case of any other type of 53 payment the person making and the person receiving the payment, agree to 54 such withholding. Such agreement shall be made in such form and manner

S. 8578 939

1 as the tax commission may by regulations provide. For purposes of this 2 chapter, remuneration or other payments with respect to which such 3 agreement is made shall be treated as if they were wages paid by an 4 employer to an employee to the extent that such remuneration is paid or 5 other payments are made during the period for which the agreement is in 6 effect. 7 (3) The tax commission shall provide by regulation for an exemption 8 from withholding for: (i) employees under eighteen years of age, (ii) 9 employees under twenty-five years of age who are full-time students and 10 (iii) employees over sixty-five years of age, provided such employees 11 had no income tax liability in the prior year and can reasonably antic- 12 ipate none in the current year. 13 (b) Extension of withholding to certain periodic payments and gambling 14 winnings. 15 (1) For purposes of this chapter, any payment subject to withholding, 16 within the meaning of paragraph two of this subdivision, shall be treat- 17 ed as if it were wages paid by an employer to an employee. 18 (2) Payments subject to withholding. For purposes of paragraph one of 19 this subdivision, a payment subject to withholding means: 20 (A) Any supplemental unemployment compensation benefit paid to an 21 individual to the extent includible in such individual's city adjusted 22 gross income. 23 (B) Any member or employee contributions to a retirement system or 24 pension fund picked up by the employer pursuant to subdivision f of 25 section five hundred seventeen or subdivision d of section six hundred 26 thirteen of the retirement and social security law or section 13-225.1, 27 13-327.1, 13-125.1, 13-125.2 or 13-521.1 of the code of the preceding 28 municipality or subdivision nineteen of section twenty-five hundred 29 seventy-five of the education law. 30 (C) Any payment of an annuity to an individual to the extent includi- 31 ble in such individual's city adjusted gross income, if at the time the 32 payment is made a request that such annuity be subject to withholding 33 under this chapter is in effect. 34 (D) Any payment of winnings from a wager placed in a lottery conducted 35 by the division of the lottery, if the proceeds from such wager exceed 36 five thousand dollars and such proceeds are payable pursuant to a prize 37 claim made by an individual who was a resident of the city at the time 38 of the selection of the prize winning lottery ticket. 39 (F) Any amount deducted or deferred from an employee's salary under a 40 flexible benefits program established pursuant to section twenty-three 41 of the general municipal law or section one thousand two hundred ten-a 42 of the public authorities law. 43 (G) Any amount by which an employee's salary is reduced pursuant to 44 the provisions of subdivision b of section 12-126.1 and subdivision b of 45 section 12-126.2 of the code of the preceding municipality. 46 (3) Additional provisions applicable to this subdivision. 47 (A) Request for annuity withholding. A request that an annuity be 48 subject to withholding under this chapter shall be made by the payee in 49 writing to the person making the annuity payments. 50 Such a request may, notwithstanding any provision of law to the 51 contrary, be terminated by furnishing to the person making the payments 52 a written statement of termination. Such a request for withholding or 53 statement of termination shall take effect in such manner as the commis- 54 sioner of taxation and finance shall prescribe. 55 (B) Withholding on lottery winnings upon change of residence. If a 56 payee of lottery winnings subject to the provisions of subparagraph (D)

S. 8578 940

1 of paragraph two of this subdivision changes status from resident to 2 nonresident, withholding in accordance with such subparagraph shall 3 constitute other security acceptable to the commissioner of taxation and 4 finance within the meaning of paragraph four of subdivision (c) of 5 section 11-1754 of this chapter, unless such payee elects, in such 6 manner as the commissioner of taxation and finance shall prescribe, to 7 apply the provisions of paragraph one of such subdivision (c) to the 8 proceeds, in which case withholding under this subdivision shall no 9 longer apply to such proceeds. 10 (C) Proceeds. For purposes of subparagraphs (D) and (E) of paragraph 11 two of this subdivision, proceeds from a wager shall be determined by 12 reducing the amount received by the amount of the wager. 13 (D) Taxes withheld at maximum rate. The tax withheld on any payment 14 subject to withholding under subparagraph (D) or (E) of paragraph two of 15 this subdivision shall be withheld at the highest rate of tax on city 16 taxable income, without any allowance for deductions or exemptions, in 17 effect under this chapter for the taxable year in which the payment is 18 made. 19 (E) Determination of residence. For purposes of applying the 20 provisions of subparagraphs (D) and (E) of paragraph two of this subdi- 21 vision, any payor of proceeds shall determine the residence of the payee 22 of such proceeds in accordance with regulations or instructions of the 23 commissioner of taxation and finance or, in the absence of any such 24 regulations or instructions, in accordance with the address of the payee 25 required under the provisions of paragraph six of subsection (q) of 26 section thirty-four hundred two of the internal revenue code. 27 (b) Extension of withholding to unemployment compensation benefits, 28 annuity payments, and lottery winnings. 29 (1) For purposes of this chapter: 30 (A) any supplemental unemployment compensation benefit paid to an 31 individual to the extent includible in such individual's city adjusted 32 gross income, 33 (B) any payment of an annuity to an individual to the extent includi- 34 ble in such individual's city adjusted gross income, if at the time the 35 payment is made a request that such annuity be subject to withholding 36 under this chapter is in effect, and 37 (C) any periodic payment (but only where such payment is part of a 38 series of payments extending over a period greater than one year), of 39 lottery winnings by the division of the lottery, if at the time the 40 payment is made a request that such lottery winnings be subject to with- 41 holding under this chapter is in effect, shall be treated as if it were 42 a payment of wages by an employer to an employee for a payroll period. 43 (D) any member or employee contributions to a retirement system or 44 pension fund picked up or paid by the employer for members of the 45 Manhattan and Bronx surface transportation authority pension plan and 46 treated as employer contributions in determining income tax treatment 47 under subdivision (h) of section four hundred fourteen of the Internal 48 Revenue Code. 49 (2) Request for withholding. A request that an annuity be subject to 50 withholding under this chapter shall be made by the payee in writing to 51 the person making the annuity payments, and a request that lottery 52 winnings be subject to withholding under this chapter shall be made by 53 the payee in writing to the division of the lottery, in the manner 54 prescribed by the commissioner of taxation and finance. A request that 55 an annuity be subject to withholding may, notwithstanding any provision 56 of law to the contrary, be terminated by furnishing to the person making

S. 8578 941

1 the payments a written statement of termination. A request that lottery 2 winnings be subject to withholding under this chapter shall not be revo- 3 cable while the payee is a nonresident, and shall constitute other secu- 4 rity acceptable to the tax commission within the meaning of paragraph 5 four of subdivision (c) of section 11-1754 of this chapter. 6 Such a request for withholding or statement of termination shall take 7 effect in such manner as the commissioner of taxation and finance shall 8 provide by regulation. 9 (c) Withholding exemptions. For purposes of this section: 10 (1) The number of city withholding exemptions which an employee 11 receiving wages taxable under this chapter may claim shall not exceed 12 the number of city exemptions allowed pursuant to the provisions of 13 section 11-1716 of this chapter and such additional city withholding 14 exemptions as may be prescribed by regulations or instructions of the 15 commissioner of taxation and finance, taking into account the applicable 16 standard deduction and such other factors as he or she finds appropri- 17 ate. 18 (2) The amount of each city withholding exemption shall be the amount 19 of the city exemption allowed pursuant to the provisions of section 20 11-1716 of this chapter. 21 (3) Withholding exemption certificate. An employee shall be required 22 to file with his or her employer a withholding exemption certificate in 23 accordance with regulations or instructions prescribed by the commis- 24 sioner of taxation and finance. 25 § 11-1772 Information statement for employee. Every employer required 26 to deduct and withhold tax under this chapter from the wages of an 27 employee, or who would have been required so to deduct and withhold tax 28 if the employee had claimed no more than one withholding exemption, 29 shall furnish to each such employee in respect of the wages paid by such 30 employer to such employee during the calendar year on or before February 31 fifteenth of the succeeding year, or, if his or her employment is termi- 32 nated before the close of such calendar year, within thirty days from 33 the date on which the last payment of the wages is made, a written 34 statement as prescribed by the tax commission showing the amount of 35 wages paid by the employer to the employee, the amount deducted and 36 withheld as tax, and such other information as the tax commission shall 37 prescribe. 38 § 11-1773 Credit for tax withheld. Wages upon which tax is required 39 to be withheld shall be taxable under this chapter as if no withholding 40 were required, but any amount of tax actually deducted and withheld 41 under this chapter in any calendar year shall be deemed to have been 42 paid to the tax commission on behalf of the person from whom withheld, 43 and such person shall be credited with having paid that amount of tax 44 for the taxable year beginning in such calendar year. 45 For a taxable year of less than twelve months, the credit shall be 46 made under regulations of the tax commission. 47 § 11-1774 Employer's return and payment of withheld taxes. (a) Gener- 48 al. Every employer required to deduct and withhold tax under this chap- 49 ter shall file a withholding return and pay over to the tax commission 50 or to a depository designated by the tax commission, the taxes so 51 required to be deducted and withheld, as hereafter prescribed. 52 (1) If, after having made a payroll, an employer has been required to 53 deduct and withhold, but has not paid over, a cumulative aggregate 54 amount of seven hundred dollars or more of tax during a calendar quar- 55 ter, such employer shall file a return and pay over the tax. If an 56 employer was required to remit a cumulative aggregate amount of less

S. 8578 942

1 than fifteen thousand dollars in withholding tax during the calendar 2 year which precedes the previous calendar year, the tax shall be paid 3 over on or before the fifth business day following the date of making 4 such a payroll. If an employer was required to remit a cumulative aggre- 5 gate amount more than or equal to fifteen thousand dollars in withhold- 6 ing tax during the calendar year which precedes the previous calendar 7 year, the tax shall be paid over on or before the third business day 8 following the date of making such a payroll. In the case of an "educa- 9 tional organization" as defined in paragraph two of subsection (a) of 10 section nine of the tax law or a "health care provider" as defined in 11 paragraph four of subsection (a) of section nine of the tax law, the tax 12 shall be paid over on or before the fifth business day following the 13 date of making such a payroll. 14 (2) If, at the close of any calendar quarter, an employer has been 15 required to deduct and withhold, but has not paid over, a cumulative 16 aggregate amount of less than seven hundred dollars of tax during such 17 calendar quarter, such employer shall pay over the tax with the quarter- 18 ly combined withholding, wage reporting and unemployment insurance 19 return required to be filed for such quarter by paragraph four of this 20 subdivision, on or before the last date prescribed by such paragraph for 21 filing such return. 22 (3) If an employer makes more than one payroll per week, then such 23 employer shall determine the applicability of the rules described in 24 paragraphs one and two of this subdivision measured by the last payroll 25 made within the week by such employer; provided, however, that in any 26 week in which the end of a quarter occurs between the making of payrolls 27 by an employer, any tax required to be deducted and withheld in a 28 payroll or payrolls made during such week prior to or on the end of the 29 quarter shall be paid over. If an employer was required to remit a cumu- 30 lative aggregate amount of less than fifteen thousand dollars in with- 31 holding tax during the calendar year preceding the previous calendar 32 year, the tax shall be paid over on or before the fifth business day 33 following the date of making the last payroll in such quarter. If an 34 employer was required to remit a cumulative aggregate amount more than 35 or equal to fifteen thousand dollars in withholding tax during the 36 calendar year preceding the previous calendar year, the tax shall be 37 paid over on or before the third business day following the date of 38 making the last payroll in such quarter. In the case of an "educational 39 organization" as defined in paragraph two of subsection (a) of section 40 nine of the tax law or a "health care provider" as defined in paragraph 41 four of subsection (a) of section nine of the tax law, the tax shall be 42 paid over on or before the fifth business day following the date of 43 making such a payroll. For purposes of this paragraph, the term "week" 44 shall mean the period Sunday through Saturday. 45 (4)(A) All employers described in paragraph one of subdivision (a) of 46 section 11-1771 of this subchapter, including those whose wages paid are 47 not sufficient to require the withholding of tax from the wages of any 48 of their employees, all employers required to provide the wage reporting 49 information for the employees described in subdivision one of section 50 one hundred seventy-one-a of the tax law, and all employers liable for 51 unemployment insurance contributions or for payments in lieu of such 52 contributions pursuant to article eighteen of the labor law, shall file 53 a quarterly combined withholding, wage reporting and unemployment insur- 54 ance return with the department of taxation and finance detailing the 55 preceding calendar quarter's withholding tax transactions, such quar- 56 ter's wage reporting information, such quarter's unemployment insurance

S. 8578 943

1 contributions, and such other related information as the commissioner of 2 taxation and finance or the commissioner of labor, as applicable, may 3 prescribe. In addition, the return covering the last calendar quarter of 4 each year shall also include withholding reconciliation information for 5 such calendar year. Such returns shall be filed no later than the last 6 day of the month following the last day of each calendar quarter; 7 provided, however, that an employer may provide the wage reporting 8 information covering the last calendar quarter of each year, and the 9 withholding reconciliation information for such year no later than 10 February twenty-eighth of the succeeding year. 11 (B) An employer shall, at the time prescribed by subparagraph (A) of 12 this paragraph for filing each quarterly combined withholding, wage 13 reporting and unemployment insurance return, pay over, in a single 14 remittance, the unemployment insurance contributions and aggregate with- 15 holding taxes required to be paid over with such return. 16 Notwithstanding any provision of law to the contrary, an overpayment 17 of unemployment insurance contributions or of aggregate withholding 18 taxes made by an employer with the quarterly combined withholding, wage 19 reporting and unemployment insurance return for a calendar quarter may 20 be only credited by such employer against such employer's liability for 21 unemployment insurance contributions or aggregate withholding taxes, 22 respectively. 23 (5) The tax commission may, if it believes such action necessary for 24 the protection of the revenues, require any employer to make such return 25 and pay to it the tax deducted and withheld at any time, or from time to 26 time. 27 (6) "Aggregate amount" as used in paragraphs one, two and three of 28 this subdivision means the aggregate of the aggregate amounts of New 29 York state personal income tax, city personal income tax on residents 30 and city earnings tax on nonresidents authorized to be deducted and 31 withheld. 32 (b) Deposit in trust for tax commission. Whenever any employer fails 33 to collect, truthfully account for, pay over the tax, or make returns of 34 the tax as required in this section, the tax commission may serve a 35 notice requiring such employer to collect the taxes which become collec- 36 tible after service of such notice, to deposit such taxes in a bank 37 approved by the tax commission, in a separate account, in trust for and 38 payable to the tax commission, and to keep the amount of such tax in 39 such account until payment over to the tax commission. Such notice 40 shall remain in effect until a notice of cancellation is served by the 41 tax commission. 42 § 11-1775 Employer's liability for withheld taxes. Every employer 43 required to deduct and withhold tax under this chapter is hereby made 44 liable for such tax. For purposes of assessment and collection, any 45 amount required to be withheld and paid over to the tax commission, and 46 any additions to tax, penalties and interest with respect thereto, shall 47 be considered the tax of the employer. Any amount of tax actually 48 deducted and withheld under this chapter shall be held to be a special 49 fund in trust for the tax commission. No employee shall have any right 50 of action against his or her employer in respect to any moneys deducted 51 and withheld from his or her wages and paid over to the tax commission 52 in compliance or in intended compliance with this chapter. 53 § 11-1776 Employer's failure to withhold. If an employer fails to 54 deduct and withhold tax as required, and thereafter the tax against 55 which such tax may be credited is paid, the tax so required to be 56 deducted and withheld shall not be collected from the employer, but the

S. 8578 944

1 employer shall not be relieved from liability for any penalties, inter- 2 est, or additions to the tax otherwise applicable in respect of such 3 failure to deduct and withhold. 4 § 11-1777 Designation of third parties to perform acts required of 5 employers. In case a fiduciary, agent, or other person has the control, 6 receipt, custody, or disposal of, or pays the wages of an employee or 7 group of employees, employed by one or more employers, the tax commis- 8 sion, under regulations promulgated by it, is authorized to designate 9 such fiduciary, agent, or other person to perform such acts as are 10 required of employers under this chapter and as the tax commission may 11 specify. Except as may be otherwise prescribed by the tax commission, 12 all provisions of law, including penalties, applicable in respect of an 13 employer shall be applicable to a fiduciary, agent, or other person so 14 designated but, except as so provided, the employer for whom such fidu- 15 ciary, agent, or other person acts shall remain subject to the 16 provisions of law, including penalties, applicable in respect of employ- 17 ers. 18 § 11-1778 Liability of third parties paying or providing for wages. 19 (a) Direct payment by third party. If a lender, surety or other person, 20 who is not an employer with respect to an employee or group of employ- 21 ees, pays wages directly to such an employee or group of employees, 22 employed by one or more employers, or to an agent on behalf of such 23 employee or employees, such lender, surety or other person shall be 24 liable for the amount of taxes, together with interest, required to be 25 deducted and withheld from such wages by the employer. 26 (b) Funds supplied to employer by third parties. If a lender, surety 27 or other person supplies funds to or for the account of an employer for 28 the specific purpose of paying wages of the employees of such employer, 29 with actual notice or knowledge that such employer does not intend to or 30 will not be able to make timely payment or deposit of the amounts of tax 31 required by this chapter to be deducted and withheld by such employer 32 from such wages, such lender, surety or other person shall be liable for 33 the amount of the taxes, together with interest, which are not paid over 34 to the tax commission by such employer with respect to such wages. 35 However, the liability of such lender, surety or other person shall be 36 limited to an amount equal to twenty-five percent of the amount so 37 supplied to or for the account of such employer for such purpose. 38 (c) Effect of payment. Any amounts paid to the tax commission pursuant 39 to this section shall be credited against the liability of the employer. 40 SUBCHAPTER 5 41 PROCEDURE AND ADMINISTRATION 42 § 11-1781 Notice of deficiency. (a) General. If upon examination of a 43 taxpayer's return under this chapter the tax commission determines that 44 there is a deficiency of income tax, it may mail a notice of deficiency 45 to the taxpayer. If a taxpayer fails to file an income tax return 46 required under this chapter, the tax commission is authorized to esti- 47 mate the taxpayer's city taxable income and tax thereon, from any infor- 48 mation in its possession, and to mail a notice of deficiency to the 49 taxpayer. A notice of deficiency shall be mailed by certified or regis- 50 tered mail to the taxpayer at his or her last known address in or out of 51 this state. If a husband and wife are jointly liable for tax, a notice 52 of deficiency may be a single joint notice, except that if the tax 53 commission has been notified by either spouse that separate residences 54 have been established, then, in lieu of the single joint notice, a 55 duplicate original of the joint notice shall be mailed to each spouse at 56 his or her last known address in or out of this state. If the taxpayer

S. 8578 945

1 is deceased or under a legal disability, a notice of deficiency may be 2 mailed to his or her last known address in or out of this state, unless 3 the tax commission has received notice of the existence of a fiduciary 4 relationship with respect to the taxpayer. 5 (b) Notice of deficiency as assessment. After ninety days from the 6 mailing of a notice of deficiency, such notice shall be an assessment of 7 the amount of tax specified in such notice, together with the interest, 8 additions to tax and penalties stated in such notice, except only for 9 any such tax or other amounts as to which the taxpayer has within such 10 ninety day period filed with the tax commission a petition under section 11 11-1789 of this subchapter. If the notice of deficiency is addressed to 12 a person outside of the United States, such period shall be one hundred 13 fifty days instead of ninety days. 14 (c) Restrictions on assessment and levy. No assessment of a deficiency 15 in tax and no levy or proceeding in court for its collection shall be 16 made, begun or prosecuted, except as otherwise provided in section 17 11-1794 of this subchapter, until a notice of deficiency has been mailed 18 to the taxpayer, nor until the expiration of the time for filing a peti- 19 tion contesting such notice, nor, if a petition with respect to the 20 taxable year has been filed with the tax commission, until the decision 21 of the tax commission has become final. For exception in the case of 22 judicial review of the decision of the tax commission, see subdivision 23 (c) of section 11-1790 of this subchapter. 24 (d) Exceptions for mathematical errors. If a mathematical error 25 appears on a return, including an overstatement of the credit for income 26 tax withheld at the source, or of the amount paid as estimated income 27 tax, the tax commission shall notify the taxpayer that an amount of tax 28 in excess of that shown upon the return is due, and that such excess has 29 been assessed. Such notice shall not be considered as a notice of defi- 30 ciency for the purposes of this section, subdivision (f) of section 31 11-1787 of this subchapter, limiting credits or refunds after petition 32 to the tax commission, or subdivision (b) of section 11-1789 of this 33 subchapter, authorizing the filing of a petition with the tax commission 34 based on a notice of deficiency, nor shall such assessment or collection 35 be prohibited by the provisions of subdivision (c) of this section. 36 (e) Exceptions where federal changes, corrections or disallowances are 37 not reported. (1) If the taxpayer or employer fails to comply with 38 section 11-1759 of this chapter, instead of the mode and time of assess- 39 ment provided for in subdivision (b) of this section, the tax commission 40 may assess a deficiency based upon such federal change, correction or 41 disallowance by mailing to the taxpayer a notice of additional tax due 42 specifying the amount of the deficiency, and such deficiency, together 43 with the interest, additions to tax and penalties stated in such notice, 44 shall be deemed assessed on the date such notice is mailed unless within 45 thirty days after the mailing of such notice a report of the federal 46 change, correction or disallowance or an amended return, where such 47 return was required by section 11-1759 of this chapter, is filed accom- 48 panied by a statement showing wherein such federal determination and 49 such notice of additional tax due are erroneous. 50 (2) Such notice shall not be considered as a notice of deficiency for 51 the purposes of this section, subdivision (f) of section 11-1787 of this 52 subchapter, limiting credits or refunds after petition to the tax 53 commission, or subdivision (b) of section 11-1789 of this subchapter, 54 authorizing the filing of a petition with the tax commission based on a 55 notice of deficiency, nor shall such assessment or the collection there- 56 of be prohibited by the provisions of subdivision (c) of this section.

S. 8578 946

1 (3) If a husband and wife are jointly liable for tax, a notice of 2 additional tax due may be a single joint notice, except that if the tax 3 commission has been notified by either spouse that separate residences 4 have been established, then, in lieu of the joint notice, a duplicate 5 original of the joint notice shall be mailed to each spouse at his or 6 her last known address in or out of this state. If the taxpayer is 7 deceased or under a legal disability, a notice of additional tax due may 8 be mailed to his or her last known address in or out of this state, 9 unless the tax commission has received notice of the existence of a 10 fiduciary relationship with respect to the taxpayer. 11 (f) Waiver of restrictions. The taxpayer shall at any time, whether or 12 not a notice of deficiency has been issued, have the right to waive the 13 restrictions on assessment and collection of the whole or any part of 14 the deficiency by a signed notice in writing filed with the tax commis- 15 sion. 16 (g) Deficiency defined. For purposes of this chapter, a deficiency 17 means the amount of the tax imposed by this chapter, less (i) the amount 18 shown as the tax upon the taxpayer's return, whether the return was made 19 or the tax computed by such taxpayer or by the tax commission, and less 20 (ii) the amounts previously assessed, or collected without assessment, 21 as a deficiency and plus (iii) the amount of any rebates. For the 22 purpose of this definition, the tax imposed by this chapter and the tax 23 shown on the return shall both be determined without regard to payments 24 on account of estimated tax or the credit for withholding tax; and a 25 rebate means so much of an abatement, credit, refund or other repayment, 26 whether or not erroneous, made on the ground that the amounts entering 27 into the definition of a deficiency showed a balance in favor of the 28 taxpayer. 29 § 11-1782 Assessment. (a) Assessment date. The amount of tax which a 30 return shows to be due, or the amount of tax which a return would have 31 shown to be due but for a mathematical error, shall be deemed to be 32 assessed on the date of filing of the return, including any amended 33 return showing an increase of tax. In the case of a return properly 34 filed without computation of tax, the tax computed by the tax commission 35 shall be deemed to be assessed on the date on which payment is due. If 36 a notice of deficiency has been mailed, the amount of the deficiency 37 shall be deemed to be assessed on the date specified in subdivision (b) 38 of section 11-1781 of this subchapter if no petition to the tax commis- 39 sion is filed, or if a petition is filed, then upon the date when a 40 decision of the tax commission establishing the amount of the deficiency 41 becomes final. If an amended return or report filed pursuant to section 42 11-1759 of this chapter concedes the accuracy of a federal change or 43 correction, any deficiency in tax under this chapter resulting therefrom 44 shall be deemed to be assessed on the date of filing such report or 45 amended return, and such assessment shall be timely notwithstanding 46 section 11-1783 of this subchapter. If a notice of additional tax due, 47 as prescribed in subdivision (e) of section 11-1781 of this subchapter, 48 has been mailed, the amount of the deficiency shall be deemed to be 49 assessed on the date specified in such subdivision unless within thirty 50 days after the mailing of such notice a report of the federal change or 51 correction or an amended return, where such return was required by 52 section 11-1759 of this chapter, is filed accompanied by a statement 53 showing wherein such federal determination and such notice of additional 54 tax due are erroneous. Any amount paid as a tax or in respect of a tax, 55 other than amounts withheld at the source or paid as estimated income

S. 8578 947

1 tax, shall be deemed to be assessed upon the date of receipt of payment, 2 notwithstanding any other provisions. 3 (b) Other assessment powers. If the mode or time for the assessment of 4 any tax under this chapter, including interest, additions to tax and 5 assessable penalties, is not otherwise provided for, the tax commission 6 may establish the same by regulations. 7 (c) Estimated income tax. No unpaid amount of estimated tax shall be 8 assessed. 9 (d) Omission of income, item of tax preference, total taxable amount 10 or ordinary income portion of a lump sum distribution on return. The tax 11 may be assessed at any time within six years after the return was filed 12 if: (1) an individual omits from his city adjusted gross income, the 13 sum of his items of tax preference, or the total taxable amount or ordi- 14 nary income portion of a lump sum distribution an amount properly inclu- 15 dible therein which is in excess of twenty-five percent of the amount of 16 city adjusted gross income, the sum of the items of tax preference or 17 the total taxable amount or ordinary income portion of a lump sum 18 distribution stated in the return, or (2) an estate or trust omits from 19 its city adjusted gross income, the sum of its items of tax preference, 20 or the total taxable amount or ordinary income portion of a lump sum 21 distribution an amount properly includible therein which is in excess of 22 twenty-five percent of the amount stated in the return of city adjusted 23 gross income, or the sum of the items of tax preference, or the total 24 taxable amount or ordinary income portion of a lump sum distribution, 25 respectively. For purposes of this paragraph, city adjusted gross income 26 means New York adjusted gross income as determined under paragraph four 27 of subsection (e) of section six hundred one of the tax law. 28 For purposes of this subdivision there shall not be taken into account 29 any amount which is omitted in the return if such amount is disclosed in 30 the return, or in a statement attached to the return, in a manner 31 adequate to apprise the commissioner of the nature and amount of the 32 item of income, tax preference, the total taxable amount or ordinary 33 income portion of a lump sum distribution. 34 (e) Cross reference. For assessment in case of jeopardy, see section 35 11-1794 of this subchapter. 36 § 11-1783 Limitations on assessment. (a) General. Except as otherwise 37 provided in this section, any tax under this chapter shall be assessed 38 within three years after the return was filed, whether or not such 39 return was filed on or after the date prescribed. 40 (b) Time return deemed filed. 41 (1) Early return. For purposes of this section a return of income tax, 42 except withholding tax, filed before the last day prescribed by law or 43 by regulations promulgated pursuant to law for the filing thereof, shall 44 be deemed to be filed on such last day. 45 (2) Return of withholding tax. For purposes of this section, if a 46 return of withholding tax for any period ending with or within a calen- 47 dar year is filed before April fifteenth of the succeeding calendar 48 year, such return shall be deemed to be filed on April fifteenth of such 49 succeeding calendar year. 50 (c) Exceptions. 51 (1) Assessment at any time. The tax may be assessed at any time if: 52 (A) no return is filed, 53 (B) a false or fraudulent return is filed with intent to evade tax, or 54 (C) the taxpayer or employer fails to comply with section 11-1759 of 55 this chapter.

S. 8578 948

1 (2) Extension by agreement. Where, before the expiration of the time 2 prescribed in this section for the assessment of tax, both the tax 3 commission and the taxpayer have consented in writing to its assessment 4 after such time, the tax may be assessed at any time prior to the expi- 5 ration of the period agreed upon. The period so agreed upon may be 6 extended by subsequent agreements in writing made before the expiration 7 of the period previously agreed upon. 8 (3) Report of federal changes, corrections or disallowances. If the 9 taxpayer or employer complies with section 11-1759 of this chapter, the 10 assessment, if not deemed to have been made upon the filing of the 11 report or amended return, may be made at any time within two years after 12 such report or amended return was filed. The amount of such assessment 13 of tax shall not exceed the amount of the increase in city tax attribut- 14 able to such federal change or correction. The provisions of this para- 15 graph shall not affect the time within which or the amount for which an 16 assessment may otherwise be made. 17 (4) Deficiency attributable to net operating loss carryback. If a 18 deficiency is attributable to the application to the taxpayer of a net 19 operating loss carryback, it may be assessed at any time that a defi- 20 ciency for the taxable year of the loss may be assessed. 21 (5) Recovery of erroneous refund. An erroneous refund shall be consid- 22 ered an underpayment of tax on the date made, and an assessment of a 23 deficiency arising out of an erroneous refund may be made at any time 24 within two years from the making of the refund, except that the assess- 25 ment may be made within five years from the making of the refund if it 26 appears that any part of the refund was induced by fraud or misrepresen- 27 tation of a material fact. 28 (6) Request for prompt assessment. If a return is required for a dece- 29 dent or for a decedent's estate during the period of administration, the 30 tax shall be assessed within eighteen months after written request 31 therefor, made after the return is filed, by the executor, administrator 32 or other person representing the estate of such decedent, but not more 33 than three years after the return was filed, except as otherwise 34 provided in this subdivision and subdivision (d) of this section. 35 (7) Report on use of certain property. Under the circumstances 36 described in paragraph two of subdivision (g) of section 11-1712 of this 37 chapter, the tax may be assessed within three years after the filing of 38 a return reporting that property has been used for purposes other than 39 research and development to a greater extent than originally reported. 40 (8) Report concerning waste treatment facility, air pollution control 41 facility or eligible business facility. Under the circumstances 42 described in paragraph three of subdivision (h) of section 11-1712 of 43 this chapter, the tax may be assessed within three years after filing of 44 the return containing the information required by such paragraph, or, if 45 a certificate of compliance in respect to an air pollution control 46 facility shall be revoked, within three years after the tax commission 47 shall receive notice of such revocation from the taxpayer or as required 48 by section 19-0309 of the environmental conservation law, whichever 49 notice is received earlier. 50 (9) Except as otherwise provided in paragraph three of this subdivi- 51 sion, or as otherwise provided in this section where a longer period of 52 time may apply, if a taxpayer files an amended return, an assessment of 53 tax, if not deemed to have been made upon the filing of the amended 54 return, including recovery of a previously paid refund, attributable to 55 a change or correction on the amended return from a prior return may be 56 made at any time within one year after such amended return is filed.

S. 8578 949

1 (d) Omission of income, total taxable amount or ordinary income 2 portion of a lump sum distribution on return. The tax may be assessed at 3 any time within six years after the return was filed if: 4 (1) an individual omits from his city adjusted gross income the total 5 taxable amount or ordinary income portion of a lump sum distribution an 6 amount properly includible therein which is in excess of twenty-five 7 percent of the amount of city adjusted gross income or the total taxable 8 amount or ordinary income portion of a lump sum distribution stated in 9 the return, or 10 (2) an estate or trust omits from its city adjusted gross income, or 11 the total taxable amount or ordinary income portion of a lump sum 12 distribution an amount properly includible therein which is in excess of 13 twenty-five percent of the amount stated in the return of city adjusted 14 gross income, or the total taxable amount or ordinary income portion of 15 a lump sum distribution, respectively. For purposes of this paragraph, 16 city adjusted gross income means New York adjusted gross income as 17 determined under paragraph four of subsection (e) of section six hundred 18 one of the tax law. 19 For purposes of this subdivision there shall not be taken into account 20 any amount which is omitted in the return if such amount is disclosed in 21 the return, or in a statement attached to the return, in a manner 22 adequate to apprise the commissioner of the nature and amount of the 23 item of income, the total taxable amount or ordinary income portion of a 24 lump sum distribution. 25 (e) Suspension of running of period of limitation. The running of the 26 period of limitations on assessment or collection of tax or other 27 amount, or of a transferee's liability, shall, after the mailing of a 28 notice of deficiency, be suspended for the period during which the tax 29 commission is prohibited under subdivision (c) of section 11-1781 of 30 this subchapter from making the assessment or from collecting by levy. 31 § 11-1784 Interest on underpayment. (a) General. If any amount of 32 income tax is not paid on or before the last date prescribed in this 33 chapter for payment, interest on such amount at the underpayment rate 34 set by the commissioner of taxation and finance pursuant to section 35 11-1797 of this subchapter, or if no rate is set, at the rate of seven 36 and one-half percent per annum shall be paid for the period from such 37 last date to the date paid, whether or not any extension of time for 38 payment was granted. Interest under this subdivision shall not be paid 39 if the amount thereof is less than one dollar. If the time for filing of 40 a return of tax withheld by an employer is extended, the employer shall 41 pay interest for the period for which the extension is granted and may 42 not charge such interest to the employee. 43 (b) Exception as to estimated tax. This section shall not apply to any 44 failure to pay estimated tax. 45 (c) Exception for mathematical error. No interest shall be imposed on 46 any underpayment of tax due solely to mathematical error if the taxpayer 47 files a return within the time prescribed in this chapter, including any 48 extension of time, and pays the amount of underpayment within three 49 months after the due date of such return, as it may be extended. 50 (d) Suspension of interest on deficiencies. If a waiver of 51 restrictions on assessment of a deficiency has been filed by the taxpay- 52 er, and if notice and demand by the tax commission for payment of such 53 deficiency is not made within thirty days after the filing of such waiv- 54 er, interest shall not be imposed on such deficiency for the period 55 beginning immediately after such thirtieth day and ending with the date 56 of notice and demand.

S. 8578 950

1 (e) Tax reduced by carryback. If the amount of tax for any taxable 2 year is reduced by reason of a carryback of a net operating loss, such 3 reduction in tax shall not affect the computation of interest under this 4 section for the period ending with the filing date for the taxable year 5 in which the net operating loss arises. Such filing date shall be deter- 6 mined without regard to extensions of time to file. 7 (f) Interest treated as tax. Interest under this section shall be paid 8 upon notice and demand and shall be assessed, collected and paid in the 9 same manner as income tax. Any reference in this chapter to the tax 10 imposed by this chapter shall be deemed also to refer to interest 11 imposed by this section on such tax. 12 (g) Interest on penalties or additions to tax. Interest shall be 13 imposed under subdivision (a) of this section in respect of any assessa- 14 ble penalty or addition to tax only if such assessable penalty or addi- 15 tion to tax is not paid within twenty-one calendar days from the date of 16 the notice and demand therefor under subdivision (b) of section 11-1792 17 of this subchapter, ten business days if the amount for which such 18 notice and demand is made equals or exceeds one hundred thousand 19 dollars, and in such case interest shall be imposed only for the period 20 from such date of the notice and demand to the date of payment. 21 (h) Payment within specified period after notice and demand. If notice 22 and demand is made for payment of any amount under subdivision (b) of 23 section 11-1792 of this subchapter, and if such amount is paid within 24 twenty-one calendar days, ten business days if the amount for which such 25 notice and demand is made equals or exceeds one hundred thousand 26 dollars, after the date of such notice and demand, interest under this 27 section on the amount so paid shall not be imposed for the period after 28 the date of such notice and demand. 29 (i) Limitation on assessment and collection. Interest prescribed under 30 this section may be assessed and collected, at any time during the peri- 31 od within which the tax or other amount to which such interest relates 32 may be assessed and collected, respectively. 33 (j) Interest on erroneous refund. Any portion of tax or other amount 34 which has been erroneously refunded, and which is recoverable by the 35 commissioner of taxation and finance, shall bear interest at the under- 36 payment rate set by such commissioner pursuant to section 11-1797 of 37 this subchapter, or if no rate is set, at the rate of seven and one-half 38 percent per annum from the date of the payment of the refund, but only 39 if it appears that any part of the refund was induced by fraud or a 40 misrepresentation of a material fact. 41 (k) Satisfaction by credits. If any portion of a tax is satisfied by 42 credit of an overpayment, then no interest shall be imposed under this 43 section on the portion of the tax so satisfied for any period during 44 which, if the credit had not been made, interest would have been allow- 45 able with respect to such overpayment. 46 § 11-1785 Additions to tax and civil penalties. (a) (1) Failure to 47 file tax return. (A) In case of failure to file a tax return under this 48 chapter on or before the prescribed date, determined with regard to any 49 extension of time for filing, unless it is shown that such failure is 50 due to reasonable cause and not due to willful neglect, there shall be 51 added to the amount required to be shown as tax on such return five 52 percent of the amount of such tax if the failure is for not more than 53 one month, with an additional five percent for each additional month or 54 fraction thereof during which such failure continues, not exceeding 55 twenty-five percent in the aggregate.

S. 8578 951

1 (B) In the case of a failure to file a return of tax within sixty days 2 of the date prescribed for filing of such return, determined with regard 3 to any extension of time for filing, unless it is shown that such fail- 4 ure is due to reasonable cause and not due to willful neglect, the addi- 5 tion to tax hereunder shall not be less than the lesser of one hundred 6 dollars or one hundred percent of the amount required to be shown as tax 7 on such return. 8 (C) For purposes of this paragraph, the amount of tax required to be 9 shown on the return shall be reduced by the amount of any part of the 10 tax which is paid on or before the date prescribed for payment of the 11 tax and by the amount of any credit against the tax which may be claimed 12 upon the return. 13 (2) Failure to pay tax shown on return. In case of failure to pay the 14 amounts shown as tax on any return required to be filed under this chap- 15 ter on or before the prescribed date, determined with regard to any 16 extension of time for payment, unless it is shown that such failure is 17 due to reasonable cause and not due to willful neglect, there shall be 18 added to the amount shown as tax on such return one-half of one percent 19 of the amount of such tax if the failure is not for more than one month, 20 with an additional one-half of one percent for each additional month or 21 fraction thereof during which such failure continues, not exceeding 22 twenty-five percent in the aggregate. For the purpose of computing the 23 addition for any month, the amount of tax shown on the return shall be 24 reduced by the amount of any part of the tax which is paid on or before 25 the beginning of such month and by the amount of any credit against the 26 tax which may be claimed upon the return. If the amount of tax required 27 to be shown on a return is less than the amount shown as tax on such 28 return, this paragraph shall be applied by substituting such lower 29 amount. 30 (3) Failure to pay tax required to be shown on return. In case of 31 failure to pay any amount in respect of any tax required to be shown on 32 a return required to be filed under this chapter which is not so shown, 33 including an assessment made pursuant to subdivision (a) of section 34 11-1782 of this subchapter, within twenty-one calendar days of the date 35 of a notice and demand therefor, ten business days if the amount for 36 which such notice and demand is made equals or exceeds one hundred thou- 37 sand dollars, unless it is shown that such failure is due to reasonable 38 cause and not due to willful neglect, there shall be added to the amount 39 of tax stated in such notice and demand one-half of one percent of such 40 tax if the failure is not for more than one month, with an additional 41 one-half of one percent for each additional month or fraction thereof 42 during which such failure continues, not exceeding twenty-five percent 43 in the aggregate. For the purpose of computing the addition for any 44 month, the amount of tax stated in the notice and demand shall be 45 reduced by the amount of any part of the tax which is paid before the 46 beginning of such month. 47 (4) Limitations on additions. (A) With respect to any return, the 48 amount of the addition under paragraph one of this subdivision shall be 49 reduced by the amount of the addition under paragraph two of this subdi- 50 vision for any month to which an addition applies under both paragraphs 51 one and two of this subdivision. In any case described in subparagraph 52 (B) of such paragraph one of this subdivision, the amount of the addi- 53 tion under such paragraph one shall not be reduced below the amount 54 provided in such subparagraph. 55 (B) With respect to any return, the maximum amount of the addition 56 permitted under paragraph three of this subdivision shall be reduced by

S. 8578 952

1 the amount of the addition under paragraph one of this subdivision, 2 determined without regard to subparagraph (B) of such paragraph, which 3 is attributable to the tax for which the notice and demand is made and 4 which is not paid within ten days of such notice and demand. 5 (b) Deficiency due to negligence. (1) If any part of a deficiency is 6 due to negligence or intentional disregard of this chapter or rules or 7 regulations established pursuant to such chapter, but without intent to 8 defraud, there shall be added to the tax an amount equal to five percent 9 of the deficiency. 10 (2) There shall be added to the tax, in addition to the amount deter- 11 mined under paragraph one of this subdivision, an amount equal to fifty 12 percent of the interest payable under section 11-1784 of this subchapter 13 with respect to the portion of the underpayment described in such para- 14 graph one which is attributable to the negligence or intentional disre- 15 gard referred to in such paragraph, for the period beginning on the last 16 date prescribed by law for payment of such underpayment, determined 17 without regard to any extension, and ending on the date of the assess- 18 ment of the tax, or, if earlier, the date of the payment of the tax. 19 (3) If any payment is shown on a return made by a payor with respect 20 to dividends, patronage dividends and interest under subsection (a) of 21 section six thousand forty-two, subsection (a) of section six thousand 22 forty-four or subsection (a) of section six thousand forty-nine of the 23 internal revenue code, respectively, and the payee fails to include any 24 portion of such payment in city adjusted gross income, any portion of an 25 underpayment attributable to such failure shall be treated, for purposes 26 of this subdivision, as due to negligence in the absence of clear and 27 convincing evidence to the contrary. If any penalty is imposed under 28 this subdivision by reason of this paragraph, the amount of the penalty 29 imposed by paragraph one of this subdivision shall be five percent of 30 the portion of the underpayment which is attributable to the failure 31 described in this paragraph. 32 (c) Failure by individual to pay estimated income tax. (1) Addition 33 to the tax. Except as otherwise provided in this subdivision and subdi- 34 vision (d) of this section, in the case of any underpayment of estimated 35 tax by an individual, there shall be added to the tax under this chapter 36 for the taxable year an amount determined by applying the underpayment 37 rate established under section 11-1797 of this subchapter, or if no rate 38 is set, at the rate of seven and one-half percent per annum, to the 39 amount of the underpayment for the period of the underpayment. Such 40 period shall run from the due date for the required installment to the 41 earlier of the fifteenth day of the fourth month following the close of 42 the taxable year or, with respect to any portion of the underpayment, 43 the date on which such portion is paid. For purposes of determining such 44 date, a payment of estimated tax shall be credited against unpaid 45 required installments in the order in which such installments are 46 required to be paid. There shall be four required installments for each 47 taxable year, due on April fifteenth, June fifteenth and September 48 fifteenth of such taxable year and on January fifteenth of the following 49 taxable year. 50 (2) Amount of underpayment. For purposes of paragraph one of this 51 subdivision, the amount of the underpayment shall be the excess of the 52 required installment over the amount, if any, of the installment paid on 53 or before the due date for the installment. 54 (3) Required installment. (A) Except as provided in paragraph four of 55 this subdivision, the amount of any required installment shall be twen- 56 ty-five percent of the required annual payment.

S. 8578 953

1 (B) The required annual payment is the lesser of 2 (i) ninety percent of the tax shown on the return for the taxable 3 year, or, if no return is filed, ninety percent of the tax for such 4 year, or 5 (ii) one hundred percent of the tax shown on the return of the indi- 6 vidual for the preceding taxable year. Provided, however, that the tax 7 shown on such return for taxable years beginning in two thousand eight 8 shall be calculated as if paragraph three of subdivision (f) of section 9 11-1715 of this chapter was in effect for taxable years beginning in two 10 thousand eight. Provided, however, that the tax shown on such return for 11 taxable years beginning in two thousand nine shall be calculated as if 12 paragraph two of subdivision (g) of section 11-1715 of this chapter was 13 in effect for taxable years beginning in two thousand nine. 14 Clause (ii) of this subparagraph shall not apply if the preceding 15 taxable year was not a taxable year of twelve months or if the individ- 16 ual did not file a return for such preceding taxable year. 17 (C) Limitation on use of preceding year's tax. 18 (i) General. If the city adjusted gross income shown on the return of 19 the individual for the preceding taxable year exceeds one hundred fifty 20 thousand dollars, clause (ii) of subparagraph (B) of this paragraph 21 shall be applied by substituting "one hundred ten percent" for "one 22 hundred percent". 23 (ii) Separate returns. In the case of a husband and wife who file 24 separate returns pursuant to subdivision (b) of section 11-1751 of this 25 chapter for the taxable year for which the amount of the installment is 26 being determined, clause (i) of this subparagraph shall be applied by 27 substituting "seventy-five thousand dollars" for "one hundred fifty 28 thousand dollars". 29 (4) Annualized income installment. (A) In general. In the case of 30 any required installment, if the individual establishes that the annual- 31 ized income installment determined under subparagraph (B) of this para- 32 graph is less than the amount determined under paragraph three of this 33 subdivision, the annualized income installment shall be the required 34 installment. Any reduction in a required installment resulting from the 35 application of this subparagraph shall be recaptured by increasing the 36 amount of the next required installment determined under paragraph three 37 of this subdivision by the amount of such reduction, and by increasing 38 successive required installments as necessary to effect full recapture. 39 (B) Determination of annualized income installment. In the case of 40 any required installment, the annualized income installment is the 41 excess, if any, of an amount equal to the applicable percentage of the 42 tax for the taxable year computed by placing on an annualized basis the 43 taxable income for months in the taxable year ending before the due date 44 for the installment, over the aggregate amount of any prior required 45 installments for the taxable year. The applicable percentage of the tax 46 shall be twenty-two and one-half percent in the case of the first 47 installment, forty-five percent in the case of the second installment, 48 sixty-seven and one-half percent in the case of the third installment 49 and ninety percent in the case of the fourth installment, and shall be 50 computed without regard to any increase in the rates applicable to the 51 taxable year unless such increase was enacted at least thirty days prior 52 to the due date of the installment. 53 (5) Definitions and special rules. (A) Definition of the term tax 54 and application of credits against tax. For purposes of this subdivi- 55 sion and subdivision (d) of this section, the term "tax" means the tax 56 imposed under this chapter minus the credits against tax allowed under

S. 8578 954

1 this chapter, other than the credit under section 11-1773 of this chap- 2 ter, relating to tax withheld on wages. The credit allowed under 3 section 11-1773 of this chapter for the taxable year shall be deemed a 4 payment of estimated tax, and an equal part of such amount shall be 5 deemed paid on each installment due date for such taxable year, unless 6 the taxpayer establishes the dates on which all amounts were actually 7 withheld, in which case the amounts so withheld shall be deemed payments 8 of estimated tax on the dates on which such amounts were actually with- 9 held. 10 (B) Special rule where return filed on or before January thirty-first. 11 If, on or before January thirty-first of the following taxable year, 12 the taxpayer files a return for the taxable year and pays in full the 13 amount computed on the return as payable, then no addition to tax shall 14 be imposed under paragraph one of this subdivision with respect to any 15 underpayment of the fourth required installment for the taxable year. 16 (C) Special rules for farmers and fishermen. For purposes of this 17 subdivision, if an individual is a farmer or fisherman for any taxable 18 year there shall be only one required installment for the taxable year, 19 due on January fifteenth of the following taxable year in an amount 20 equal to the required annual payment determined under paragraph three of 21 this subdivision by substituting sixty-six and two-thirds percent for 22 ninety percent and without regard to subparagraph (C) of paragraph three 23 of this subdivision. Subparagraph (B) of this paragraph shall be applied 24 by substituting March first for January thirty-first and by treating the 25 required installment under this subparagraph as the fourth required 26 installment. An individual is a farmer or fisherman for any taxable year 27 if the individual's federal gross income from farming or fishing, 28 including oyster farming, for the taxable year is at least two-thirds of 29 the total federal gross income from all sources for the taxable year or 30 if such individual's federal gross income from farming or fishing, 31 including oyster farming, shown on the return of the individual for the 32 preceding taxable year is at least two-thirds of the total federal gross 33 income from all sources shown on such return. 34 (D) Fiscal years. In applying this subdivision to a taxable year 35 beginning on any date other than January first, there shall be substi- 36 tuted, for the months specified in this subdivision, the months which 37 correspond thereto. 38 (E) Short taxable year. This subdivision shall be applied to taxable 39 years of less than twelve months in accordance with regulations 40 prescribed by the tax commission. 41 (F) Joint estimated tax of husband and wife. A husband and wife may 42 make the required annual payment determined under paragraph three of 43 this subdivision as if they were one taxpayer, in which case the liabil- 44 ity under paragraph one of this subdivision with respect to the esti- 45 mated tax shall be joint and several. No such joint payment may be made 46 if husband and wife are separated under a decree of divorce or separate 47 maintenance, or if they have different taxable years. If a joint 48 payment is made but husband and wife determine their taxes under this 49 chapter separately, the estimated tax for such year may be treated as 50 the estimated tax of either husband or wife, or may be divided between 51 them, as they may elect. 52 (6) Trusts and certain estates. (A) General. This subdivision shall 53 apply to any trust or estate except as provided in subparagraphs (B) and 54 (C) of this paragraph. 55 (B) Exception for estates and certain trusts. This subdivision shall 56 not apply with respect to any taxable year ending before the date two

S. 8578 955

1 years after the date of the decedent's death to (i) the estate of such 2 decedent or (ii) any trust all of which was treated, under subpart E of 3 part I of subchapter J of chapter one of the internal revenue code, as 4 owned by the decedent and to which the residue of the decedent's estate 5 will pass under his will, or, if no will is admitted to probate, which 6 is the trust primarily responsible for paying debts, taxes and expenses 7 of administration. 8 (C) Special rule for annualizations. In the case of any estate or 9 trust, subparagraph (B) of paragraph four of this subdivision shall be 10 applied by substituting "ending before the date one month before the due 11 date for the installment" for "ending before the due date for the 12 installment". 13 (D) In the case of a trust, the trustee may elect to treat any portion 14 of a payment of estimated tax made by such trust for any taxable year of 15 the trust as a payment made by a beneficiary of such trust. Any amount 16 so treated shall be treated as paid or credited to the beneficiary on 17 the last day of such taxable year, and for purposes of this subdivision, 18 the amount so treated shall not be treated as a payment of estimated tax 19 made by the trust, but shall be treated as a payment of estimated tax 20 made by such beneficiary on the January fifteenth following the end of 21 the trust's taxable year. 22 (E) An election under subparagraph (D) of this paragraph shall be made 23 on or before the sixty-fifth day after the close of the taxable year and 24 in such manner as the commissioner of taxation and finance may 25 prescribe. 26 (F) Extension to last year of estate. In the case of a taxable year 27 reasonably expected to be the last taxable year of an estate, any refer- 28 ence in subparagraph (D) of this paragraph to a trust shall be treated 29 as including a reference to an estate, and the fiduciary of the estate 30 shall be treated as the trustee. 31 (d) Exceptions to addition to tax for failure to pay estimated income 32 tax. 33 (1) Where tax is small amount. No addition to tax shall be imposed 34 under subdivision (c) of this section for any taxable year if the tax 35 shown on the return for such taxable year, or, if no return is filed, 36 the tax, reduced by the credit allowable under section 11-1773 of this 37 chapter, is less than one hundred dollars. 38 (2) Where no tax liability for preceding taxable year. No addition to 39 tax shall be imposed under subdivision (c) of this section for any taxa- 40 ble year if the preceding taxable year was a taxable year of twelve 41 months, the individual did not have any liability for tax under this 42 chapter for the preceding taxable year and throughout the preceding 43 taxable year the individual was a resident of this city or a nonresident 44 who had city adjusted gross income. 45 (3) Installment due on or after individual's death. No addition to 46 tax shall be imposed under subdivision (c) of this section with respect 47 to any installment due on or after the individual's death. 48 (4) Waiver in certain cases. (A) In general. No addition to tax 49 shall be imposed under subdivision (c) of this section with respect to 50 any underpayment to the extent the tax commission determines that by 51 reason of casualty, disaster or other unusual circumstances the imposi- 52 tion of such addition to tax would be against equity and good 53 conscience. 54 (B) Newly retired or disabled individuals. No addition to tax shall 55 be imposed under subdivision (c) of this section with respect to any 56 underpayment if the tax commission determines that in the taxable year

S. 8578 956

1 for which estimated payments were required to be made or in the taxable 2 year preceding such taxable year the taxpayer retired after having 3 attained age sixty-two or became disabled, and that such underpayment 4 was due to reasonable cause and not to willful neglect. 5 (e) Deficiency due to fraud. (1) If any part of a deficiency is due 6 to fraud, there shall be added to the tax an amount equal to fifty 7 percent of the deficiency. 8 (2) There shall be added to the tax, in addition to the amount deter- 9 mined under paragraph one of this subdivision, an amount equal to fifty 10 percent of the interest payable under section 11-1784 of this subchapter 11 with respect to the portion of the underpayment described in such para- 12 graph one which is attributable to fraud, for the period beginning on 13 the last day prescribed by law for payment of such underpayment, deter- 14 mined without regard to any extension, and ending on the date of the 15 assessment of the tax, or, if earlier, the date of the payment of the 16 tax. 17 (3) The addition to tax under this subdivision shall be in lieu of any 18 other addition to tax imposed by subdivision (a) or (b) of this section. 19 (4) In the case of a joint return under section 11-1751 of this chap- 20 ter, this subdivision shall not apply with respect to the tax of a 21 spouse unless some part of the underpayment is due to the fraud of such 22 spouse. 23 (f) Non-willful failure to pay withholding tax. If any employer, 24 without intent to evade or defeat any tax imposed by this chapter or the 25 payment thereof, shall fail to make a return and pay a tax withheld by 26 him or her at the time required by or under the provisions of section 27 11-1774 of this chapter, such employer shall be liable for such tax and 28 shall pay the same together with interest thereon and the addition to 29 tax provided in subdivision (a) of this section, and such interest and 30 addition to tax shall not be charged to or collected from the employee 31 by the employer. The tax commission shall have the same rights and 32 powers for the collection of such tax, interest and addition to tax 33 against such employer as are now prescribed by this chapter for the 34 collection of tax against an individual taxpayer. 35 (g) Willful failure to collect and pay over tax. Any person required 36 to collect, truthfully account for, and pay over the tax imposed by this 37 chapter who willfully fails to collect such tax or truthfully account 38 for and pay over such tax or willfully attempts in any manner to evade 39 or defeat the tax or the payment thereof, shall, in addition to other 40 penalties provided by law, be liable to a penalty equal to the total 41 amount of the tax evaded, or not collected, or not accounted for and 42 paid over. No addition to tax under subdivision (b) or (e) of this 43 section shall be imposed for any offense to which this subdivision 44 applies. The tax commission shall have the power, in its discretion, to 45 waive, reduce or compromise any penalty under this subdivision. 46 (h) Failure to file certain information returns. (1) Except as other- 47 wise provided in this paragraph, in case of each failure to file a 48 statement of a payment to another person, required under authority of 49 subdivision (d) of section 11-1758 of this chapter, relating to informa- 50 tion at source, including the duplicate statement of tax withheld on 51 wages, on the date prescribed therefor, determined with regard to any 52 extension of time for filing, unless it is shown that such failure is 53 due to reasonable cause and not to willful neglect, there shall, upon 54 notice and demand by the tax commission and in the same manner as tax, 55 be paid by the person so failing to file the statement, a penalty of 56 fifty dollars for each statement not so filed, but the total amount

S. 8578 957

1 imposed on the delinquent person for all such failures during any calen- 2 dar year shall not exceed ten thousand dollars. 3 (2) If any partnership or S corporation required to file a return or 4 report under subdivision (c) of section 11-1758 of this chapter or under 5 section 11-1759 of this chapter for any taxable year fails to file such 6 return or report at the time prescribed therefor, determined with regard 7 to any extension of time for filing, or files a return or report which 8 fails to show the information required under such subdivision (c) or 9 section 11-1759 of this chapter, unless it is shown that such failure is 10 due to reasonable cause and not due to willful neglect, there shall, 11 upon notice and demand by the commissioner and in the same manner as 12 tax, be paid by the partnership or S corporation a penalty for each 13 month, or fraction thereof, during which such failure continues, but not 14 to exceed five months. The amount of such penalty for any month is the 15 product of fifty dollars, multiplied by the number of partners in the 16 partnership or shareholders in the S corporation during any part of the 17 taxable year who were subject to tax under this chapter during any part 18 of such taxable year. 19 (i) Additional penalty. Any person who with fraudulent intent shall 20 fail to pay, or to deduct or withhold and pay, any tax, or to make, 21 render, sign or certify any return, or to supply any information within 22 the time required by or under this chapter, shall be liable to penalty 23 of not more than one thousand dollars, in addition to any other amounts 24 required under this chapter, to be imposed, assessed and collected by 25 the tax commission. The tax commission shall have the power, in its 26 discretion, to waive, reduce or compromise any penalty under this subdi- 27 vision. 28 (j) Fraudulent statement or failure to furnish statement to employee. 29 In addition to any criminal penalties provided by law, any person 30 required under the provisions of section 11-1772 of this chapter to 31 furnish a statement to an employee, who willfully furnishes a false or 32 fraudulent statement, or who willfully fails to furnish a statement in 33 the manner, at the time, and showing the information required under 34 section 11-1772 of this chapter, or regulations prescribed thereunder, 35 shall for each such failure be subject to a penalty under this chapter 36 of fifty dollars. 37 (k) Failure to supply identifying numbers. If any person who is 38 required by regulations prescribed under subdivision (b) of section 39 11-1758 of this chapter: 40 (1) to include his or her identifying number in any return, state- 41 ment, or other document; 42 (2) to furnish his or her identifying number to another person; or 43 (3) to include in any return, statement or other document made with 44 respect to another person the identifying number of such other person, 45 fails to comply with such requirement at the time prescribed by such 46 regulations, such person shall, unless it is shown that such failure is 47 due to reasonable cause and not due to willful neglect, pay a penalty of 48 five dollars for each such failure described in paragraph one of this 49 subdivision and fifty dollars for each such failure described in para- 50 graph two of this subdivision, and this paragraph, except that the total 51 amount imposed on such person for all such failures during any calendar 52 year shall not exceed ten thousand dollars; except that for failure to 53 include his or her own identification number in any return, statement or 54 other document, such penalty shall not be imposed unless such person 55 shall have failed to supply his or her identification number to the tax 56 commission within thirty days after demand therefor.

S. 8578 958

1 (1) Additions treated as tax. The additions to tax and penalties 2 provided by this section shall be paid upon notice and demand and shall 3 be assessed, collected and paid in the same manner as taxes, and any 4 reference in this chapter to income tax or tax imposed by this chapter, 5 shall be deemed also to refer to the additions to tax and penalties 6 provided by this section. For purposes of section 11-1781 of this 7 subchapter, this subdivision shall not apply to: 8 (1) any addition to tax under subdivision (a) of this section except 9 as to that portion attributable to a deficiency; 10 (2) any addition to tax under subdivision (c) of this section; 11 (3) any penalty under subdivision (h) of this section and any addi- 12 tional penalty under subdivision (i) of this section; and 13 (4) any penalties under subdivisions (j), (k), (q), (r), (s) and (t) 14 of this section. 15 (m) Determination of deficiency. For purposes of subdivisions (b) and 16 (e) of this section, the amount shown as the tax by the taxpayer upon 17 his or her return shall be taken into account in determining the amount 18 of the deficiency only if such return was filed on or before the last 19 day prescribed for the filing of such return, determined with regard to 20 any extension of time for such filing. 21 (n) Person defined. For purposes of subdivisions (g), (i), (o), (q) 22 and (r) of this section, the term person includes an individual, corpo- 23 ration, partnership or limited liability company or an officer or 24 employee of any corporation, including a dissolved corporation, or a 25 member or employee of any partnership, or a member, manager or employee 26 of a limited liability company, who as such officer, employee, manager 27 or member is under a duty to perform the act in respect of which the 28 violation occurs. 29 (o) Failure to make deposits of taxes. In case of failure by any 30 person required by this chapter, or by regulations of the tax commission 31 under this chapter, to deposit on the date prescribed therefor any 32 amount of tax imposed by this chapter in a depository authorized pursu- 33 ant to subdivision (a) of section 11-1792 of this subchapter to receive 34 such deposits, unless it is shown that such failure is due to reasonable 35 cause and not due to willful neglect, there shall be imposed on such 36 person a penalty of five percent of the amount of the underpayment. For 37 purposes of this subdivision the term "underpayment" means the excess of 38 the amount of the tax required to be so deposited over the amount, if 39 any, thereof, deposited on or before the date prescribed therefor. 40 (p) Substantial understatement of liability. If there is a substantial 41 understatement of income tax for any taxable year, there shall be added 42 to the tax an amount equal to ten percent of the amount of any underpay- 43 ment attributable to such understatement. For purposes of this subdivi- 44 sion, there is a substantial understatement of income tax for any taxa- 45 ble year if the amount of the understatement for the taxable year 46 exceeds the greater of ten percent of the tax required to be shown on 47 the return for the taxable year, or two thousand dollars. For purposes 48 of this subdivision, the term "understatement" means the excess of the 49 amount of the tax required to be shown on the return for the taxable 50 year, over the amount of the tax imposed which is shown on the return 51 reduced by any rebate, within the meaning of subdivision (g) of section 52 11-1781 of this subchapter. The amount of such understatement shall be 53 reduced by that portion of the understatement which is attributable to 54 the tax treatment of any item by the taxpayer if there is or was 55 substantial authority for such treatment, or any item with respect to 56 which the relevant facts affecting the item's tax treatment are

S. 8578 959

1 adequately disclosed in the return or in a statement attached to the 2 return. The tax commission may waive all or any part of the addition to 3 tax provided by this subdivision on a showing by the taxpayer that there 4 was reasonable cause for the understatement, or part thereof, and that 5 the taxpayer acted in good faith. 6 (q) Frivolous tax returns. If any individual files what purports to 7 be a return of any tax imposed by this chapter but which does not 8 contain information on which the substantial correctness of the self-as- 9 sessment may be judged, or contains information that on its face indi- 10 cates that the self-assessment is substantially incorrect; and such 11 conduct is due to a position which is frivolous, or an intent, which 12 appears on the purported return, to delay or impede the administration 13 of this chapter, then such individual shall pay a penalty not exceeding 14 five hundred dollars. This penalty shall be in addition to any other 15 penalty provided by law. 16 (r) Aiding or assisting in the giving of fraudulent returns, reports, 17 statements or other documents. (1) Any person who, with the intent that 18 tax be evaded, shall, for a fee or other compensation or as an incident 19 to the performance of other services for which such person receives 20 compensation, aid or assist in, or procure, counsel, or advise the prep- 21 aration or presentation under, or in connection with any matter arising 22 under this chapter of any return, report, declaration, statement or 23 other document which is fraudulent or false as to any material matter, 24 or supply any false or fraudulent information, whether or not such 25 falsity of fraud is with the knowledge or consent of the person author- 26 ized or required to present such return, report, declaration, statement 27 or other document shall pay a penalty not exceeding one thousand 28 dollars. 29 (2) For purposes of paragraph one of this subdivision, the term 30 "procures" includes ordering, or otherwise causing, a subordinate to do 31 an act, and knowing of, and not attempting to prevent, participation by 32 a subordinate in an act. The term "subordinate" means any other person, 33 whether or not a director, officer, employee, or agent of the taxpayer 34 involved, over whose activities the person has direction, supervision or 35 control. 36 (3) For purposes of paragraph one of this subdivision, a person 37 furnishing typing, reproducing, or other mechanical assistance with 38 respect to a document shall not be treated as having aided or assisted 39 in the preparation of such document by reason of such assistance. 40 (4) The penalty imposed by this subdivision shall be in addition to 41 any other penalty provided by law. 42 (s) False information with respect to withholding. In addition to any 43 criminal penalty provided by law, if any individual makes a statement 44 under section 11-1771 of this chapter which results in a decrease in the 45 amounts deducted and withheld under this chapter, and as of the time 46 such statement was made, there was no reasonable basis for such state- 47 ment, such individual shall pay a penalty of five hundred dollars for 48 such statement. The tax commission shall waive the penalty imposed 49 under this subdivision if the taxes imposed with respect to the individ- 50 ual under this chapter for the taxable year are equal to or less than 51 the sum of the credits against such taxes allowed by this chapter, and 52 the payments of estimated tax which are considered payments on account 53 of such taxes. 54 (t) Failure of tax return preparer to conform to certain requirements. 55 (1) Failure to sign return or claim for refund. Any individual who is a 56 tax return preparer with respect to any return or claim for refund, who

S. 8578 960

1 is required pursuant to paragraph one of subdivision (g) of section 2 11-1758 of this chapter to sign such return or claim for refund, and who 3 fails to comply with such requirement with respect to such return or 4 claim for refund, shall be subject to a penalty of fifty dollars for 5 each such failure, unless it is shown that such failure is due to 6 reasonable cause and not due to willful neglect. The maximum penalty 7 imposed under this paragraph on any person with respect to returns or 8 claims for refund filed during any calendar year shall not exceed twen- 9 ty-five thousand dollars. 10 (2) Failure to furnish identifying number. If any identifying number 11 required to be included on any return or claim for refund pursuant to 12 paragraph two of subdivision (g) of section 11-1758 of this chapter is 13 not so included, the person who is the tax return preparer with respect 14 to such return or claim for refund shall be subject to a penalty of 15 fifty dollars with respect to such return or claim for refund unless it 16 is shown that such failure is due to reasonable cause and not willful 17 neglect. For purposes of this paragraph, where an employer and one or 18 more employees of such employer are tax return preparers with respect to 19 the same return or claim for refund or where a partnership and one or 20 more partners in such partnership are tax return preparers with respect 21 to the same return or claim for refund, such employer or such partner- 22 ship shall be deemed to be the sole tax return preparer with respect to 23 such return or claim for refund. The maximum penalty imposed under this 24 paragraph on any person with respect to returns or claims for refund 25 filed during any calendar year shall not exceed twenty-five thousand 26 dollars. 27 (3) Failure to furnish copy to taxpayer. Any person who is a tax 28 return preparer with respect to any return or claim for refund, who is 29 required under paragraph three of subdivision (g) of section 11-1758 of 30 this chapter to furnish a copy of such return or claim for refund to the 31 taxpayer, and who fails to comply with such provision with respect to 32 such return or claim for refund shall be subject to a penalty of fifty 33 dollars for each such failure, unless it is shown that such failure is 34 due to reasonable cause and not due to willful neglect. The maximum 35 penalty imposed under this paragraph on any person with respect to 36 returns or claims for refund filed during any calendar year shall not 37 exceed twenty-five thousand dollars. 38 (4) Failure to retain copy or list. Any person who is a tax return 39 preparer with respect to any return or claim for refund, who is required 40 under paragraph four of subdivision (g) of section 11-1758 of this chap- 41 ter to: (i) retain a copy of such return or claim for refund or retain 42 on a list the name and taxpayer identifying number of the taxpayer for 43 whom such return or claim for refund was prepared and (ii) make such 44 copy or list available for inspection upon request by the commissioner 45 of taxation and finance, and who fails to comply with the retention 46 requirement or who complies with the retention requirement but fails to 47 comply with such request by the commissioner, shall be subject to a 48 penalty of fifty dollars for each such failure, unless it is shown that 49 such failure is due to reasonable cause and not due to willful neglect. 50 The maximum penalty imposed under this paragraph on any person with 51 respect to any calendar year shall not exceed twenty-five thousand 52 dollars. 53 (5) Failure to electronically file. If a tax return preparer is 54 required to file returns electronically pursuant to paragraph ten of 55 subdivision (g) of section 11-1758 of this chapter, and such preparer 56 fails to file one or more of such returns electronically, then such

S. 8578 961

1 preparer shall be subject to a penalty of fifty dollars for each such 2 failure to electronically file a return, unless it is shown that such 3 failure is due to reasonable cause and not due to willful neglect. For 4 purposes of this paragraph, reasonable cause shall include, but not be 5 limited to, a taxpayer's election not to electronically file his or her 6 return. 7 § 11-1786 Overpayment. (a) General. The state commissioner of taxa- 8 tion and finance, within the applicable period of limitations, may cred- 9 it an overpayment of income tax and interest on such overpayment against 10 any liability in respect of any tax imposed by this chapter or by chap- 11 ter nineteen of this title on the person who made the overpayment or any 12 other tax imposed on such person pursuant to the authority of the tax 13 law or any other law if such tax is administered by the state commis- 14 sioner of taxation and finance, against any liability in respect of any 15 tax imposed on such person by the tax law and, as provided in sections 16 one hundred seventy-one-c, one hundred seventy-one-d, one hundred seven- 17 ty-one-e, one hundred seventy-one-f and one hundred seventy-one-l of the 18 tax law, against past-due support, against a past-due legally enforcea- 19 ble debt, against a city of New York tax warrant judgment debt and 20 against the amount of a default in repayment of a guaranteed student, 21 state university or city university loan. The balance shall be refunded 22 by the state comptroller out of the proceeds of the tax retained by him 23 or her for such general purpose. Any refund under this section shall be 24 made only upon the filing of a return and upon a certificate of the 25 state commissioner of taxation and finance approved by the state comp- 26 troller. The state comptroller, as a condition precedent to the approval 27 of such a certificate, may examine into the facts as disclosed by the 28 return of the person who made the overpayment and other information and 29 data available in the files of the state commissioner of taxation and 30 finance. 31 (b) Excessive withholding. If the amount allowable as a credit for 32 tax withheld from the taxpayer exceeds his or her tax to which the cred- 33 it relates, the excess shall be considered an overpayment. 34 (c) Overpayment by employer. If there has been an overpayment of tax 35 required to be deducted and withheld under section 11-1771 of this chap- 36 ter, refund shall be made to the employer only to the extent that the 37 amount of the overpayment was not deducted and withheld by the employer. 38 (d) Overpayment by a deceased person. Notwithstanding section thir- 39 teen hundred ten of the surrogate's court procedure act, any overpayment 40 by a decedent not in excess of one thousand dollars may be refunded to 41 the decedent's surviving spouse unless the return for the decedent was 42 filed by his or her executor or administrator. 43 (e) Credits against estimated tax. The commissioner of taxation and 44 finance may prescribe regulations providing for the crediting against 45 the estimated income tax for any taxable year of the amount determined 46 to be an overpayment of the income tax for a preceding taxable year. If 47 any overpayment of income tax is so claimed as a credit against esti- 48 mated tax for the succeeding taxable year, such amount shall be consid- 49 ered as a payment of the income tax for the succeeding taxable year, and 50 no claim for credit or refund of such overpayment shall be allowed for 51 the taxable year for which the overpayment arises, except upon request 52 to the commissioner of taxation and finance on or before the last day 53 prescribed for the filing of the return for the succeeding taxable year, 54 determined with regard to any extension of time granted. If good cause 55 is shown for reversing the credit, the commissioner of taxation and 56 finance may, in his or her discretion, credit the overpayment against a

S. 8578 962

1 liability or refund the overpayment without interest. Provided, the 2 person who made the overpayment will not be relieved of liability for 3 any penalty imposed for a consequent underpayment of estimated tax for 4 the succeeding taxable year. The decision of the commissioner of taxa- 5 tion and finance to grant or deny the request is final and not subject 6 to further administrative or judicial review. 7 (f) Rule where no tax liability. If there is no tax liability for a 8 period in respect of which an amount is paid as income tax, such amount 9 shall be considered an overpayment. 10 (g) Assessment and collection after limitation period. If any amount 11 of income tax is assessed or collected after the expiration of the peri- 12 od of limitations properly applicable thereto, such amount shall be 13 considered an overpayment. 14 (h) Cross reference. For provision barring application of article 15 fifty-two of the civil practice law and rules to any amount to be 16 refunded or credited to a taxpayer, see section seven of the tax law. 17 § 11-1787 Limitations on credit or refund. (a) General. Claim for 18 credit or refund of an overpayment of income tax shall be filed by the 19 taxpayer within three years from the time the return was filed or two 20 years from the time the tax was paid, whichever of such periods expires 21 the later, or if no return was filed, within two years from the time the 22 tax was paid. If the claim is filed within the three year period, the 23 amount of the credit or refund shall not exceed the portion of the tax 24 paid within the three years immediately preceding the filing of the 25 claim plus the period of any extension of time for filing the return. 26 If the claim is not filed within the three year period, but is filed 27 within the two year period, the amount of the credit or refund shall not 28 exceed the portion of the tax paid during the two years immediately 29 preceding the filing of the claim. Except as otherwise provided in this 30 section, if no claim is filed, the amount of a credit or refund shall 31 not exceed the amount which would be allowable if a claim had been filed 32 on the date the credit or refund is allowed. 33 (b) Extension of time by agreement. If an agreement under the 34 provisions of paragraph two of subdivision (c) of section 11-1783 of 35 this subchapter, extending the period for assessment of income tax, is 36 made within the period prescribed in subdivision (a) of this section 37 for the filing of a claim for credit or refund, the period for filing a 38 claim for credit or refund, or for making credit or refund if no claim 39 is filed, shall not expire prior to six months after the expiration of 40 the period within which an assessment may be made pursuant to the agree- 41 ment or any extension thereof. The amount of such credit or refund 42 shall not exceed the portion of the tax paid after the execution of the 43 agreement and before the filing of the claim or the making of the credit 44 or refund, as the case may be, plus the portion of the tax paid within 45 the period which would be applicable under subdivision (a) of this 46 section if a claim had been filed on the date the agreement was 47 executed. 48 (c) Notice of federal change or correction. A claim for credit or 49 refund of any overpayment of tax attributable to a federal change or 50 correction required to be reported pursuant to section 11-1759 of this 51 chapter shall be filed by the taxpayer within two years from the time 52 the notice of such change or correction or such amended return was 53 required to be filed with the commissioner of taxation and finance. If 54 the report or amended return required by section 11-1759 of this chapter 55 is not filed within the ninety day period therein specified, no interest 56 shall be payable on any claim for credit or refund of the overpayment

S. 8578 963

1 attributable to the federal change or correction. The amount of such 2 credit or refund shall not exceed the amount of the reduction in tax 3 attributable to such federal change, correction or items amended on the 4 taxpayer's amended federal income tax return. This subdivision shall 5 not affect the time within which or the amount for which a claim for 6 credit or refund may be filed apart from this subdivision. 7 (d) Overpayment attributable to net operating loss carryback. A claim 8 for credit or refund of so much of an overpayment as is attributable to 9 the application to the taxpayer of a net operating loss carryback shall 10 be filed within three years from the time the return was due, including 11 extensions thereof, for the taxable year of the loss, or within the 12 period prescribed in subdivision (b) of this section in respect of such 13 taxable year, or within the period prescribed in subdivision (c) of this 14 section, where applicable, in respect of the taxable year to which the 15 net operating loss is carried back, whichever expires the latest. 16 (e) Failure to file claim within prescribed period. No credit or 17 refund shall be allowed or made, except as provided in subdivision (f) 18 of this section or subdivision (d) of section 11-1790 of this subchap- 19 ter, after the expiration of the applicable period of limitation speci- 20 fied in this chapter, unless a claim for credit or refund is filed by 21 the taxpayer within such period. Any later credit shall be void and any 22 later refund erroneous. No period of limitations specified in any other 23 law shall apply to the recovery by a taxpayer of moneys paid in respect 24 of taxes under this chapter. 25 (f) Effect of petition to tax commission. If a notice of deficiency 26 for a taxable year has been mailed to the taxpayer under section 11-1781 27 of this subchapter and if the taxpayer files a timely petition with the 28 tax commission under section 11-1789 of this subchapter, it may deter- 29 mine that the taxpayer has made an overpayment for such year, whether or 30 not it also determines a deficiency for such a year. No separate claim 31 for credit or refund for such year shall be filed, and no credit or 32 refund for such year shall be allowed or made, except: 33 (1) as to overpayments determined by a decision of the tax commission 34 which has become final; and 35 (2) as to any amount collected in excess of an amount computed in 36 accordance with the decision of the tax commission which has become 37 final; and 38 (3) as to any amount collected after the period of limitation upon the 39 making of levy for collection has expired; and 40 (4) as to any amount claimed as a result of a change or correction 41 described in subdivision (c) of this section. 42 (g) Limit on amount of credit or refund. The amount of overpayment 43 determined under subdivision (f) of this section shall, when the deci- 44 sion of the tax commission has become final, be credited or refunded in 45 accordance with subdivision (a) of section 11-1786 of this subchapter 46 and shall not exceed the amount of tax which the tax commission deter- 47 mines as part of its decision was paid: 48 (1) after the mailing of the notice of deficiency, or 49 (2) within the period which would be applicable under subdivision (a), 50 (b) or (c) of this section, if on the date of the mailing of the notice 51 of deficiency a claim had been filed, whether or not filed, stating the 52 grounds upon which the tax commission finds that there is an overpay- 53 ment. 54 (h) Early return. For purposes of this section, any return filed 55 before the last day prescribed for the filing thereof shall be consid-

S. 8578 964

1 ered as filed on such last day, determined without regard to any exten- 2 sion of time granted the taxpayer. 3 (i) Prepaid income tax. For purposes of this section, any tax paid by 4 the taxpayer before the last day prescribed for its payment, any income 5 tax withheld from the taxpayer during any calendar year, and any amount 6 paid by the taxpayer as estimated income tax for a taxable year shall be 7 deemed to have been paid by him or her on the fifteenth day of the 8 fourth month following the close of his or her taxable year with respect 9 to which such amount constitutes a credit or payment. 10 (j) Return and payment of withholding tax. Notwithstanding subdivi- 11 sion (h) of this section, for purposes of this section with respect to 12 any withholding tax: 13 (1) if a return for any period ending with or within a calendar year 14 is filed before April fifteenth of the succeeding calendar year, such 15 return shall be considered filed on April fifteenth of such succeeding 16 calendar year; and 17 (2) if a tax with respect to remuneration paid during any period 18 ending with or within a calendar year is paid before April fifteenth of 19 the succeeding calendar year, such tax shall be considered paid on April 20 fifteenth of such succeeding calendar year. 21 (k) Running of periods of limitation suspended while taxpayer is 22 unable to manage financial affairs due to disability. (1) In the case of 23 an individual taxpayer, the running of the periods specified in subdivi- 24 sions (a), (b), and (c) of this section shall be suspended during any 25 period of such individual's life that such individual is financially 26 disabled. For purposes of this subdivision, an individual taxpayer is an 27 individual who is subject to the tax imposed under this chapter. 28 (2) For purposes of paragraph one of this subdivision, an individual 29 taxpayer is financially disabled if such individual is unable to manage 30 his or her financial affairs by reason of a medically determinable phys- 31 ical or mental impairment of that individual which can be expected to 32 result in death or which has lasted or can be expected to last for a 33 continuous period of not less than twelve months. An individual shall 34 not be considered to have such impairment unless proof of the existence 35 thereof is furnished in such form and manner as the commissioner of 36 taxation and finance may require. 37 (3) An individual taxpayer shall not be treated as financially disa- 38 bled during any period that such individual's spouse or any other person 39 is authorized to act on behalf of such individual in financial matters. 40 (l) Cross reference. For provision barring refund of overpayment 41 credited against tax of a succeeding year, see subdivision (e) of 42 section 11-1786 of this subchapter. 43 § 11-1788 Interest on overpayment. (a) General. Notwithstanding the 44 provisions of section sixteen of the state finance law, interest shall 45 be allowed and paid as follows at the overpayment rate set by the 46 commissioner of taxation and finance pursuant to section 11-1797 of this 47 subchapter, or if no rate is set, at the rate of six percent per annum 48 upon any overpayment in respect of the tax imposed by this chapter: 49 (1) from the date of the overpayment to the due date of an amount 50 against which a credit is taken; 51 (2) from the date of the overpayment to a date, to be determined by 52 the commissioner of taxation and finance, preceding the date of a refund 53 check by not more than thirty days, whether or not such refund check is 54 accepted by the taxpayer after tender of such check to the taxpayer. The 55 acceptance of such check shall be without prejudice to any right of the 56 taxpayer to claim any additional overpayment and interest thereon.

S. 8578 965

1 (3) Late and amended returns and claims for credit or refund. 2 Notwithstanding paragraph one or two of this subdivision, in the case of 3 an overpayment claimed on a return of tax which is filed after the last 4 date prescribed for filing such return, determined with regard to exten- 5 sions, or claimed on an amended return of tax or claimed on a claim for 6 credit or refund, no interest shall be allowed or paid for any day 7 before the date on which such return or claim is filed. 8 (4) Interest on certain refunds. To the extent provided for in regu- 9 lations promulgated by the commissioner of taxation and finance, if an 10 item of income, gain, loss, deduction or credit is changed from the 11 taxable year or period in which it is reported to the taxable year or 12 period in which it belongs and the change results in an underpayment in 13 a taxable year or period and an overpayment in some other taxable year 14 or period, the provisions of paragraph three of this subdivision with 15 respect to an overpayment shall not be applicable to the extent that the 16 limitation in such paragraph on the right to interest would result in a 17 taxpayer not being allowed interest for a length of time with respect to 18 an overpayment while being required to pay interest on an equivalent 19 amount of the related underpayment. However, this paragraph shall not be 20 construed as limiting or mitigating the effect of any statute of limita- 21 tions or any other provision of law relating to the authority of such 22 commissioner to issue a notice of deficiency or to allow a credit or 23 refund on an overpayment. 24 (5) Amounts of less than one dollar. No interest shall be allowed or 25 paid if the amount thereof is less than one dollar. 26 (b) Advance payment of tax, payment of estimated tax, and credit for 27 income tax withholding. The provisions of subdivisions (h) and (i) of 28 section 11-1787 of this subchapter applicable in determining the date of 29 payment of tax for purposes of determining the period of limitations on 30 credit or refund, shall be applicable in determining the date of payment 31 for purposes of this section. 32 (c) Income tax refund within forty-five days of claim for overpayment. 33 If any overpayment of tax imposed by this chapter is credited or 34 refunded within forty-five days after the last date prescribed, or 35 permitted by extension of time, for filing the return of such tax on 36 which such overpayment was claimed or within forty-five days after such 37 return was filed, whichever is later, or within forty-five days after an 38 amended return was filed claiming such overpayment or within forty-five 39 days after a claim for credit or refund was filed on which such overpay- 40 ment was claimed, within six months after a demand is filed pursuant to 41 paragraph six of subsection (b) of section six hundred fifty-one of the 42 tax law, no interest shall be allowed under this section on any such 43 overpayment. For purposes of this subdivision, any amended return or 44 claim for credit or refund filed before the last day prescribed, or 45 permitted by extension of time, for the filing of the return of tax for 46 such year shall be considered as filed on such last day. 47 (d) Refund of income tax caused by carryback. For purposes of this 48 section, if any overpayment of tax imposed by this chapter results from 49 a carryback of a net operating loss, such overpayment shall be deemed 50 not to have been made prior to the filing date for the taxable year in 51 which such net operating loss arises. Such filing date shall be deter- 52 mined without regard to extensions of time to file. For purposes of 53 subdivision (c) of this section any overpayment described herein shall 54 be treated as an overpayment for the loss year and such subdivision 55 shall be applied with respect to such overpayment by treating the return 56 for the loss year as not filed before claim for such overpayment is

S. 8578 966

1 filed. The term "loss year" means the taxable year in which such loss 2 arises. 3 (e) No interest until return in processible form. 4 (1) For purposes of subdivisions (a) and (c) of this section, a return 5 shall not be treated as filed until it is filed in processible form. 6 (2) For purposes of paragraph one of this subdivision, a return is in 7 a processible form if: 8 (A) such return is filed on a permitted form, and 9 (B) such return contains: 10 (i) the taxpayer's name, address, and identifying number and the 11 required signatures, and 12 (ii) sufficient required information, whether on the return or on 13 required attachments, to permit the mathematical verification of tax 14 liability shown on the return. 15 (f) Overpayment credited against past-due support, or against a past- 16 due legally enforceable debt, or a city of New York tax warrant judgment 17 debt, or defaulted guaranteed student, state university or city univer- 18 sity loans. If interest is payable pursuant to this section on that 19 portion of an overpayment of tax imposed by this chapter which is certi- 20 fied by the state commissioner of taxation and finance to the state 21 comptroller as the amount to be credited against past-due support, or 22 against a past-due legally enforceable debt, or a city of New York tax 23 warrant judgment debt, or the amount of a default in repayment of a 24 guaranteed student, state university or city university loan, as the 25 case may be, pursuant to the provisions of sections one hundred seven- 26 ty-one-c, one hundred seventy-one-d, one hundred seventy-one-e, one 27 hundred seventy-one-f and one hundred seventy-one-l of the tax law, such 28 portion of such an overpayment shall cease to bear interest on the date 29 of such certification. 30 (g) Cross-reference. For provision with respect to interest after 31 failure to file notice of federal change under section 11-1759 of this 32 chapter, see subdivision (c) of section 11-1787 of this subchapter. 33 § 11-1789 Petition to tax commission. (a) General. The form of a 34 petition to the tax commission, and further proceedings before the tax 35 commission in any case initiated by the filing of a petition, shall be 36 governed by such rules as the tax commission shall prescribe. No peti- 37 tion shall be denied in whole or in part without opportunity for a hear- 38 ing on reasonable prior notice. Such hearing shall be conducted by one 39 or more members of the tax commission, or by a hearing officer desig- 40 nated by the tax commission to take evidence and report to the tax 41 commission. The tax commissioners shall, acting as a body, jointly 42 decide the case as quickly as practicable. Notice of the decision shall 43 be mailed promptly to the taxpayer by certified or registered mail at 44 his or her last known address, and such notice shall set forth the tax 45 commission's findings of fact and a brief statement of the grounds of 46 decision in each case decided in whole or in part adversely to the 47 taxpayer. 48 (b) Petition for redetermination of a deficiency. Within ninety days, 49 or one hundred fifty days if the notice is addressed to a person outside 50 of the United States, after the mailing of the notice of deficiency 51 authorized by section 11-1781 of this subchapter, the taxpayer may file 52 a petition with the tax commission for a redetermination of the defi- 53 ciency. Such petition may also assert a claim for refund for the same 54 taxable year or years, subject to the limitations of subdivision (g) of 55 section 11-1787 of this subchapter.

S. 8578 967

1 (c) Petition for refund. A taxpayer may file a petition with the tax 2 commission for the amounts asserted in a claim for refund if: 3 (1) the taxpayer has filed a timely claim for refund with the tax 4 commission, 5 (2) the taxpayer has not previously filed with the tax commission a 6 timely petition under subdivision (b) of this section for the same 7 taxable year unless the petition under this subdivision relates to a 8 separate claim for credit or refund properly filed under subdivision (f) 9 of section 11-1787 of this subchapter, and 10 (3) either: (A) six months have expired since the claim was filed, or 11 (B) the tax commission has mailed to the taxpayer, by registered or 12 certified mail, a notice of disallowance of such claim in whole or in 13 part. 14 No petition under this subdivision shall be filed more than two years 15 after the date of mailing of a notice of disallowance, unless prior to 16 the expiration of such two year period it has been extended by written 17 agreement between the taxpayer and the tax commission. If a taxpayer 18 files a written waiver of the requirement that he or she be mailed a 19 notice of disallowance, the two year period prescribed by this subdivi- 20 sion for filing a petition for refund shall begin on the date such waiv- 21 er is filed. 22 (d) Assertion of deficiency after filing petition. 23 (1) Petition for redetermination of deficiency. If a taxpayer files 24 with the tax commission, a petition for redetermination of a deficiency, 25 the tax commission shall have power to determine a greater deficiency 26 than asserted in the notice of deficiency and to determine if there 27 should be assessed any addition to tax or penalty provided in section 28 11-1785 of this subchapter, if claim therefor is asserted at or before 29 the hearing under rules of the tax commission. 30 (2) Petition for refund. If the taxpayer files with the tax commis- 31 sion a petition for credit or refund for a taxable year, the tax commis- 32 sion may: 33 (A) determine a deficiency for such year as to any amount of defi- 34 ciency asserted at or before the hearing under rules of the tax commis- 35 sion, and within the period in which an assessment would be timely under 36 section 11-1783 of this subchapter, or 37 (B) deny so much of the amount for which credit or refund is sought 38 in the petition, as is offset by other issues pertaining to the same 39 taxable year which are asserted at or before the hearing under rules of 40 the tax commission. 41 (3) Opportunity to respond. A taxpayer shall be given a reasonable 42 opportunity to respond to any matters asserted by the tax commission 43 under this subdivision. 44 (4) Restriction on further notices of deficiency. If the taxpayer 45 files a petition with the tax commission under this section, no notice 46 of deficiency under section 11-1781 of this subchapter may thereafter be 47 issued by the tax commission for the same taxable year, except in case 48 of fraud or with respect to a change or correction required to be 49 reported under section 11-1759 of this chapter. 50 (e) Burden of proof. In any case before the tax commission under this 51 chapter, the burden of proof shall be upon the petitioner except for the 52 following issues, as to which the burden of proof shall be upon the tax 53 commission: 54 (1) whether the petitioner has been guilty of fraud with intent to 55 evade tax;

S. 8578 968

1 (2) whether the petitioner is liable as the transferee of property of 2 a taxpayer, but not to show that the taxpayer was liable for the tax; 3 (3) whether the petitioner is liable for any increase in a deficiency 4 where such increase is asserted initially after a notice of deficiency 5 was mailed and a petition under this section filed, unless such increase 6 in deficiency is the result of a change or correction required to be 7 reported under section 11-1759 of this chapter, and of which change or 8 correction the tax commission had no notice at the time it mailed the 9 notice of deficiency; and 10 (4) whether any person is liable for a penalty under subdivision (q) 11 or (r) of section 11-1785 of this subchapter. 12 (f) Evidence of related federal determination. Evidence of a federal 13 determination relating to issues raised in a case before the tax commis- 14 sion under this section shall be admissible, under rules established by 15 the tax commission. 16 (g) Jurisdiction over other years. The tax commission shall consider 17 such facts with relation to the taxes for other years as may be neces- 18 sary correctly to determine the tax for the taxable year, but in so 19 doing shall have no jurisdiction to determine whether or not the tax for 20 any other year has been overpaid or underpaid. 21 § 11-1790 Review of tax commission decision. (a) General. A decision 22 of the tax commission shall be subject to judicial review at the 23 instance of any taxpayer effected thereby in the manner provided by law 24 for the review of a final decision or action of administrative agencies 25 of the state. An application by a taxpayer for such review must be made 26 within four months after notice of the decision is sent by certified or 27 registered mail to the taxpayer. 28 (b) Judicial review exclusive remedy of taxpayer. The review of a 29 decision of the tax commission provided by this section shall be the 30 exclusive remedy available to any taxpayer for the judicial determi- 31 nation of the liability of the taxpayer for the taxes imposed by this 32 chapter. 33 (c) Assessment pending review; review bond. Irrespective of any 34 restrictions on the assessment and collection of deficiencies, the tax 35 commission may assess a deficiency after the expiration of the period 36 specified in subdivision (a) of this section, notwithstanding that an 37 application for judicial review in respect of such deficiency has been 38 duly made by the taxpayer, unless the taxpayer, at or before the time 39 his or her application for review is made, has paid the deficiency, has 40 deposited with the tax commission the amount of the deficiency, or has 41 filed with the tax commission a bond, which may be a jeopardy bond under 42 subdivision (h) of section 11-1794 of this subchapter, in the amount of 43 the portion of the deficiency, including interest and other amounts, in 44 respect of which the application for review is made and all costs and 45 charges which may accrue against him or her in the prosecution of the 46 proceeding, including costs of all appeals, and with surety approved by 47 a justice of the supreme court of the state of New York, conditioned 48 upon the payment of the deficiency, including interest and other 49 amounts, as finally determined and such costs and charges. If as a 50 result of a waiver of the restrictions on the assessment and collection 51 of a deficiency any part of the amount determined by the tax commission 52 is paid after the filing of the review bond, such bond shall, at the 53 request of the taxpayer, be proportionately reduced. 54 (d) Credit, refund or abatement after review. If the amount of a 55 deficiency determined by the tax commission is disallowed in whole or in 56 part by the court of review, the amount so disallowed shall be credited

S. 8578 969

1 or refunded to the taxpayer, without the making of claim therefor, or, 2 if payment has not been made, shall be abated. 3 (e) Date of finality of tax commission decision. A decision of the 4 tax commission shall become final upon the expiration of the period 5 specified in subdivision (a) of this section for making an application 6 for review, if no such application has been duly made within such time, 7 or if such application has been duly made, upon expiration of the time 8 for all further judicial review, or upon the rendering by the tax 9 commission of a decision in accordance with the mandate of the court on 10 review, provided, however, for the purpose of making an application for 11 review, the decision of the tax commission shall be deemed final on the 12 date the notice of decision is sent by certified or registered mail to 13 the taxpayer. 14 § 11-1791 Mailing rules; holidays; miscellaneous. (a) Timely mail- 15 ing. (1) If any return, claim, statement, notice, petition, or other 16 document required to be filed, or any payment required to be made, with- 17 in a prescribed period or on or before a prescribed date under authority 18 of any provision of this chapter is, after such period or such date, 19 delivered by United States mail to the tax commission, bureau, office, 20 officer or person with which or with whom such document is required to 21 be filed, or to which or to whom such payment is required to be made, 22 the date of the United States postmark stamped on the envelope shall be 23 deemed to be the date of delivery. This subdivision shall apply only if 24 the postmark date falls within the prescribed period or on or before the 25 prescribed date for the filing of such document, or for making the 26 payment, including any extension granted for such filing or payment, and 27 only if such document or payment was deposited in the mail, postage 28 prepaid, properly addressed to the tax commission, bureau, office, offi- 29 cer or person with which or with whom the document is required to be 30 filed or to which or to whom such payment is required to be made. If any 31 document or payment is sent by United States registered mail, such 32 registration shall be prima facie evidence that such document or payment 33 was delivered to the tax commission, bureau, office, officer or person 34 to which or to whom addressed. To the extent that the tax commission 35 shall prescribe by regulation, certified mail may be used in lieu of 36 registered mail under this section. This subdivision shall apply in the 37 case of postmarks not made by the United States post office only if and 38 to the extent provided by regulations of the tax commission. 39 (2)(A) Any reference in paragraph one of this subdivision to the 40 United States mail shall be treated as including a reference to any 41 delivery service designated by the secretary of the treasury of the 42 United States pursuant to section seventy-five hundred two of the Inter- 43 nal Revenue Code and any reference in paragraph one of this subdivision 44 to a postmark by the United States mail shall be treated as including a 45 reference to any date recorded or marked in the manner described in 46 section seventy-five hundred two of the Internal Revenue Code by a 47 designated delivery service. If the commissioner of taxation and finance 48 finds that any delivery service designated by such secretary is inade- 49 quate for the needs of the state, such commissioner may withdraw such 50 designation for purposes of this article. Such commissioner may also 51 designate additional delivery services meeting the criteria of section 52 seventy-five hundred two of the Internal Revenue Code for purposes of 53 this article, or may withdraw any such designation if such commissioner 54 finds that a delivery service so designated is inadequate for the needs 55 of the state. Any reference in paragraph one of this subdivision to the 56 United States mail shall be treated as including a reference to any

S. 8578 970

1 delivery service designated by such commissioner and any reference in 2 paragraph one of this subdivision to a postmark by the United States 3 mail shall be treated as including a reference to any date recorded or 4 marked in the manner described in section seventy-five hundred two of 5 the Internal Revenue Code by a delivery service designated by the 6 commissioner. 7 (B) Any equivalent of registered or certified mail designated by the 8 United States secretary of the treasury, or as may be designated by the 9 commissioner of taxation and finance pursuant to the same criteria used 10 by the secretary for such designation pursuant to section seventy-five 11 hundred two of the Internal Revenue Code, shall be included within the 12 meaning of registered or certified mail as used in paragraph one of this 13 subdivision. If such commissioner finds that any equivalent of regis- 14 tered or certified mail designated by such secretary or such commission- 15 er is inadequate for the needs of the state, such commissioner may with- 16 draw such designation for purposes of this article. 17 (b) Last known address. For purposes of this chapter, a taxpayer's 18 last known address shall be the address given in the last return filed 19 by such taxpayer, unless subsequent to the filing of such return the 20 taxpayer shall have notified the tax commission of a change of address. 21 (c) Last day a Saturday, Sunday or legal holiday. When the last day 22 prescribed under authority of this chapter, including any extension of 23 time, for performing any act falls on Saturday, Sunday, or a legal holi- 24 day in the state of New York, the performance of such act shall be 25 considered timely if it is performed on the next succeeding day which is 26 not a Saturday, Sunday or a legal holiday. 27 (d) Certificate; unfiled return. For purposes of this chapter, the 28 certificate of the tax commission to the effect that a tax has not been 29 paid, that a return has not been filed, or that information has not been 30 supplied, as required by or under the provisions of this chapter, shall 31 be prima facie evidence that such tax has not been paid, that such 32 return has not been filed, or that such information has not been 33 supplied. 34 (e) Attorney general; jurisdiction. The attorney general shall have 35 concurrent jurisdiction with any district attorney in the prosecution of 36 any offenses arising under article thirty-seven of the tax law with 37 respect to the tax imposed under this chapter. 38 § 11-1792 Collection, levy and liens. (a) Collection procedures. The 39 taxes imposed by this chapter shall be collected by the tax commission, 40 and it may establish the mode or time for the collection of any amount 41 due it under this chapter if not otherwise specified. The tax commis- 42 sion shall, upon request, give a receipt for any sum collected under 43 this chapter. The tax commission may authorize banks or trust companies 44 which are depositaries or financial agents of the state to receive and 45 give a receipt for any tax imposed under this chapter in such manner, at 46 such times, and under such conditions as the tax commission may 47 prescribe; and the tax commission shall prescribe the manner, times and 48 conditions under which the receipt of such tax by such banks and trust 49 companies is to be treated as payment of such tax to the tax commission. 50 (b) Notice and demand for tax. The tax commission shall as soon as 51 practicable give notice to each person liable for any amount of tax, 52 addition to tax, penalty or interest, which has been assessed but 53 remains unpaid, stating the amount and demanding payment thereof. Such 54 notice shall be left at the dwelling or usual place of business of such 55 person or shall be sent by mail to such person's last known address. 56 Except where the tax commission determines that collection would be

S. 8578 971

1 jeopardized by delay, if any tax is assessed prior to the last date, 2 including any date fixed by extension, prescribed for payment of such 3 tax, payment of such tax shall not be demanded until after such date. 4 (c) Issuance of warrant after notice and demand. If any person liable 5 under this chapter for the payment of any tax, addition to tax, penalty 6 or interest neglects or refuses to pay the same within twenty-one calen- 7 dar days after notice and demand therefor is given to such person under 8 subdivision (b) of this section, ten business days if the amount for 9 which such notice and demand is made equals or exceeds one hundred thou- 10 sand dollars, the commissioner of taxation and finance may within six 11 years after the date of such assessment issue a warrant under such 12 commissioner's official seal directed to the sheriff of any county of 13 the state, or to any officer or employee of the department of taxation 14 and finance, commanding him or her to levy upon and sell such person's 15 real and personal property for the payment of the amount assessed, with 16 the cost of executing the warrant, and to return such warrant to such 17 commissioner and pay to him or her the money collected by virtue thereof 18 within sixty days after the receipt of the warrant. If such commissioner 19 finds that the collection of the tax or other amount is in jeopardy, 20 notice and demand for immediate payment of such tax may be made by such 21 commissioner and upon failure or refusal to pay such tax or other amount 22 such commissioner may issue a warrant without regard to the twenty-one 23 day period, or ten-day period if applicable, provided in this subdivi- 24 sion. 25 (d) Copy of warrant to be filed and lien to be created. Any sheriff 26 or officer or employee who receives a warrant under subdivision (c) of 27 this section shall within five days thereafter file a copy with the 28 clerk of the appropriate county. The clerk shall thereupon enter in the 29 judgment docket, in the column for judgment debtors, the name of the 30 taxpayer mentioned in the warrant, and in appropriate columns the tax or 31 other amounts for which the warrant is issued and the date when such 32 copy is filed; and such amount shall thereupon be a lien upon the title 33 to and interest in real, personal and other property of the taxpayer. 34 Such lien shall not apply to personal property unless such warrant is 35 filed in the department of state. 36 (e) Judgment. When a warrant has been filed with the county clerk 37 the tax commission shall, in the right of the city, be deemed to have 38 obtained judgment against the taxpayer for the tax or other amounts. 39 (f) Execution. The sheriff or officer or employee shall thereupon 40 proceed upon the warrant in all respects, with like effect, and in the 41 same manner prescribed by law in respect to executions issued against 42 property upon judgments of a court of record, and a sheriff shall be 43 entitled to the same fees for his or her services in executing the 44 warrant, to be collected in the same manner. An officer or employee of 45 the department of taxation and finance may proceed in any county or 46 counties of this state and shall have all the powers of execution 47 conferred by law upon sheriffs, but shall be entitled to no fee or 48 compensation in excess of actual expenses paid in connection with the 49 execution of the warrant. 50 (g) Taxpayer not a resident. Where a notice and demand under subdi- 51 vision (b) of this section shall have been given to a taxpayer who is 52 not then a resident, and it appears to the tax commission that it is not 53 practicable to find in this state property of the taxpayer sufficient to 54 pay the entire balance of tax or other amount owing by such taxpayer who 55 is not then a resident, the tax commission may, in accordance with 56 subdivision (c) of this section, issue a warrant directed to an officer

S. 8578 972

1 or employee of the department of taxation and finance, a copy of which 2 warrant shall be mailed by certified or registered mail to the taxpayer 3 at his or her last known address, subject to the rules for mailing 4 provided in subdivision (a) of section 11-1781 of this subchapter. Such 5 warrant shall command the officer or employee to proceed in Albany coun- 6 ty, and he or she shall, within five days after receipt of the warrant, 7 file the warrant and obtain a judgment in accordance with this section. 8 Thereupon the tax commission may authorize the institution of any action 9 or proceeding to collect or enforce the judgment in any place and by any 10 procedure that a civil judgment of the supreme court of the state of New 11 York could be collected or enforced. The tax commission may also, in 12 its discretion, designate agents or retain counsel for the purpose of 13 collecting, outside the state of New York, any unpaid taxes, additions 14 to tax, penalties or interest which have been assessed under this chap- 15 ter against taxpayers who are not residents of this state, may fix the 16 compensation of such agents and counsel to be paid out of money appro- 17 priated or otherwise lawfully available for payment thereof, and may 18 require of them bonds or other security for the faithful performance of 19 their duties, in such form and in such amount as the tax commission 20 shall deem proper and sufficient. 21 (h) Action by state for recovery of taxes. Action may be brought by 22 the attorney general at the instance of the tax commission in the name 23 of the city or both to recover the amount of any unpaid taxes, additions 24 to tax, penalties or interest which have been assessed under this chap- 25 ter within six years prior to the date the action is commenced. 26 (i) Release of lien. The tax commission, if it finds that the inter- 27 ests of the city will not thereby be jeopardized, and upon such condi- 28 tions as it may require, may release any property from the lien of any 29 warrant for unpaid taxes, additions to tax, penalties and interest filed 30 pursuant to this section, and such release may be recorded in the office 31 of any recording officer in which such warrant has been filed. 32 § 11-1793 Transferees. (a) General. The liability, at law or in 33 equity, of a transferee of property of a taxpayer for any tax, additions 34 to tax, penalty or interest due under this chapter, shall be assessed, 35 paid, and collected in the same manner and subject to the same 36 provisions and limitations as in the case of the tax to which the 37 liability relates, except that the period of limitations for assessment 38 against the transferee shall be extended by one year for each successive 39 transfer, in order, from the original taxpayer to the transferee 40 involved, but not by more than three years in the aggregate. The term 41 transferee includes donee, heir, legatee, devisee and distributee. 42 (b) Exceptions. 43 (1) If before the expiration of the period of limitations for assess- 44 ment of liability of the transferee, a claim has been filed by the tax 45 commission in any court against the original taxpayer or the last 46 preceding transferee based upon the liability of the original taxpayer, 47 then the period of limitation for assessment of liability of the trans- 48 feree shall in no event expire prior to one year after such claim has 49 been finally allowed, disallowed or otherwise disposed of. 50 (2) If, before the expiration of the time prescribed in subdivision 51 (a) or the immediately preceding paragraph of this subdivision for the 52 assessment of the liability, the tax commission and the transferee have 53 both consented in writing to its assessment after such time, the liabil- 54 ity may be assessed at any time prior to the expiration of the period 55 agreed upon. The period so agreed upon may be extended by subsequent 56 agreements in writing made before the expiration of the period previous-

S. 8578 973

1 ly agreed upon. For the purpose of determining the period of limitation 2 on credit or refund to the transferee of overpayments of tax made by 3 such transferee or overpayments of tax made by the transferor as to 4 which the transferee is legally entitled to credit or refund, such 5 agreement and any extension thereof shall be deemed an agreement and 6 extension thereof referred to in subdivision (b) of section 11-1787 of 7 this subchapter. If the agreement is executed after the expiration of 8 the period of limitation for assessment against the original taxpayer, 9 then in applying the limitations under subdivision (b) of section 10 11-1787 of this subchapter on the amount of the credit or refund, the 11 periods specified in subdivision (a) of section 11-1787 of this subchap- 12 ter shall be increased by the period from the date of such expiration to 13 the date of the agreement. 14 (c) Deceased transferor. If any person is deceased, the period of 15 limitation for assessment against such person shall be the period that 16 would be in effect if he or she had lived. 17 (d) Evidence. Notwithstanding the provisions of subdivision (e) of 18 section 11-1797 of this subchapter the tax commission shall use its 19 powers to make available to the transferee evidence necessary to enable 20 the transferee to determine the liability of the original taxpayer and 21 of any preceding transferees, but without undue hardship to the original 22 taxpayer or preceding transferee. See subdivision (e) of section 23 11-1789 of this subchapter for rule as to burden of proof. 24 § 11-1794 Jeopardy assessment. (a) Authority for making. If the tax 25 commission believes that the assessment or collection of a deficiency 26 will be jeopardized by delay, it shall, notwithstanding the provisions 27 of sections 11-1781 and 11-1796 of this subchapter, immediately assess 28 such deficiency, together with all interest, penalties and additions to 29 tax provided for by law, and notice and demand shall be made by the tax 30 commission for the payment thereof. 31 (b) Notice of deficiency. If the jeopardy assessment is made before 32 any notice in respect of the tax to which the jeopardy assessment 33 relates has been mailed under section 11-1781 of this subchapter, then 34 the tax commission shall mail a notice under such section within sixty 35 days after the making of the assessment. 36 (c) Amount assessable before decision of tax commission. The jeopardy 37 assessment may be made in respect of a deficiency greater or less than 38 that of which notice is mailed to the taxpayer and whether or not the 39 taxpayer has theretofore filed a petition with the tax commission. The 40 tax commission may, at any time before rendering its decision, abate 41 such assessment, or any unpaid portion thereof, to the extent that it 42 believes the assessment to be excessive in amount. The tax commission 43 may in its decision redetermine the entire amount of the deficiency and 44 of all amounts assessed at the same time in connection therewith. 45 (d) Amount assessable after decision of tax commission. If the 46 jeopardy assessment is made after the decision of the tax commission is 47 rendered, such assessment may be made only in respect of the deficiency 48 determined by the tax commission in its decision. 49 (e) Expiration of right to assess. A jeopardy assessment may not be 50 made after the decision of the tax commission has become final or after 51 the taxpayer has made an application for review of the decision of the 52 tax commission. 53 (f) Collection of unpaid amounts. When a petition has been filed with 54 the tax commission and when the amount which should have been assessed 55 has been determined by a decision of the tax commission which has become 56 final, then any unpaid portion, the collection of which has been stayed

S. 8578 974

1 by bond, shall be collected as part of the tax upon notice and demand 2 from the tax commission, and any remaining portion of the assessment 3 shall be abated. If the amount already collected exceeds the amount 4 determined as the amount which should have been assessed, such excess 5 shall be credited or refunded to the taxpayer as provided in section 6 11-1786 of this subchapter without the filing of claim therefor. If the 7 amount determined as the amount which should have been assessed is 8 greater than the amount actually assessed, then the difference shall be 9 assessed and shall be collected as part of the tax upon notice and 10 demand from the tax commission. 11 (g) Abatement if jeopardy does not exist. The tax commission may 12 abate the jeopardy assessment if it finds that jeopardy does not exist. 13 Such abatement may not be made after a decision of the tax commission in 14 respect of the deficiency has been rendered or, if no petition is filed 15 with the tax commission, after the expiration of the period for filing 16 such petition. The period of limitation on the making of assessments 17 and levy or a proceeding for collection, in respect of any deficiency, 18 shall be determined as if the jeopardy assessment so abated had not been 19 made, except that the running of such period shall in any event be 20 suspended for the period from the date of such jeopardy assessment until 21 the expiration of the tenth day after the day on which such jeopardy 22 assessment is abated. 23 (h) Bond to stay collection. The collection of the whole or any 24 amount of any jeopardy assessment may be stayed by filing with the tax 25 commission, within such time as may be fixed by regulation, a bond in an 26 amount equal to the amount as to which the stay is desired, conditioned 27 upon the payment of the amount, together with interest thereon, the 28 collection of which is stayed at the time at which, but for the making 29 of the jeopardy assessment, such amount would be due. Upon the filing 30 of the bond the collection of so much of the amount assessed as is 31 covered by the bond shall be stayed. The taxpayer shall have the right 32 to waive such stay at any time in respect of the whole or any part of 33 the amount covered by the bond, and if as a result of such waiver any 34 part of the amount covered by the bond is paid, then the bond shall at 35 the request of the taxpayer, be proportionately reduced. If any portion 36 of the jeopardy assessment is abated, or if a notice of deficiency under 37 section 11-1781 of this subchapter is mailed to the taxpayer in a lesser 38 amount, the bond shall, at the request of the taxpayer, be proportion- 39 ately reduced. 40 (i) Petition to tax commission. If the bond is given before the 41 taxpayer has filed his or her petition under section 11-1789 of this 42 subchapter, the bond shall contain a further condition that if a peti- 43 tion is not filed within the period provided in such section, then the 44 amount, the collection of which is stayed by the bond, will be paid on 45 notice and demand at any time after the expiration of such period, 46 together with interest thereon from the date of the jeopardy notice and 47 demand to the date of notice and demand under this subdivision. The 48 bond shall be conditioned upon the payment of so much of such assess- 49 ment, collection of which is stayed by the bond, as is not abated by a 50 decision of the tax commission which has become final. If the tax 51 commission determines that the amount assessed is greater than the 52 amount which should have been assessed, then the bond shall, at the 53 request of the taxpayer, be proportionately reduced when the decision of 54 the tax commission is rendered.

S. 8578 975

1 (j) Stay of sale of seized property pending tax commission decision. 2 Where a jeopardy assessment is made, the property seized for the 3 collection of the tax shall not be sold: 4 (1) if subdivision (b) of this section is applicable, prior to the 5 issuance of the notice of deficiency and the expiration of the time 6 provided in section 11-1789 of this subchapter for filing a petition 7 with the tax commission, and 8 (2) if a petition is filed with the tax commission, whether before or 9 after the making of such jeopardy assessment, prior to the expiration of 10 the period during which the assessment of the deficiency would be 11 prohibited if subdivision (a) of this section were not applicable. 12 Such property may be sold if the taxpayer consents to the sale, or if 13 the tax commission determines that the expenses of conservation and 14 maintenance will greatly reduce the net proceeds, or if the property is 15 perishable. 16 (k) Interest. For the purpose of subdivision (a) of section 11-1784 17 of this subchapter, the last date prescribed for payment shall be deter- 18 mined without regard to any notice and demand for payment issued under 19 this section prior to the last date otherwise prescribed for such 20 payment. 21 (l) Early termination of taxable year. If the tax commission finds 22 that a taxpayer designs quickly to depart from this state or to remove 23 his or her property therefrom, or to conceal himself or herself or his 24 or her property therein, or to do any other act tending to prejudice or 25 to render wholly or partly ineffectual proceedings to collect the city 26 personal income tax for the current or the preceding taxable year unless 27 such proceedings be brought without delay, the tax commission shall 28 declare the taxable period for such taxpayer immediately terminated, and 29 shall cause notice of such finding and declaration to be given the 30 taxpayer, together with a demand for immediate payment of the tax for 31 the taxable period so declared terminated and of the tax for the preced- 32 ing taxable year or so much of such tax as is unpaid, whether or not the 33 time otherwise allowed by law for filing return and paying the tax has 34 expired; and such taxes shall thereupon become immediately due and paya- 35 ble. In any proceeding brought to enforce payment of taxes made due and 36 payable by virtue of the provisions of this subdivision, the finding of 37 the tax commission made as herein provided, whether made after notice to 38 the taxpayer or not, shall be for all purposes presumptive evidence of 39 jeopardy. 40 (m) Reopening of taxable period. Notwithstanding the termination of 41 the taxable period of the taxpayer by the tax commission, as provided in 42 subdivision (1) of this section, the tax commission may reopen such 43 taxable period each time the taxpayer is found by the tax commission to 44 have received income, within the current taxable year, since the termi- 45 nation of such period. A taxable period so terminated by the tax 46 commission may be reopened by the taxpayer if he or she files with the 47 tax commission a true and accurate return of taxable income and credits 48 allowed under this chapter for such taxable period, together with such 49 other information as the tax commission may by regulations prescribe. 50 (n) Furnishing of bond where taxable year is closed by the tax 51 commission. Payment of taxes shall not be enforced by any proceedings 52 under the provisions of subdivision (1) of this section prior to the 53 expiration of the time otherwise allowed for paying such taxes if the 54 taxpayer furnishes, under regulations prescribed by the tax commission, 55 a bond to insure the timely making of returns with respect to, and

S. 8578 976

1 payment of, such taxes or any city personal income taxes for prior 2 years. 3 § 11-1795 Criminal penalties; cross-reference. For criminal penal- 4 ties, see article thirty-seven of the tax law. 5 § 11-1796 Income taxes of members of armed forces and victims of 6 certain terrorist attacks. (a) Time to be disregarded. In the case of 7 an individual serving in the armed forces of the United States, or serv- 8 ing in support of such armed forces, in an area designated by the presi- 9 dent of the United States by executive order as a "combat zone" at any 10 time during the period designated by the president by executive order as 11 the period of combatant activities in such zone, or hospitalized inside 12 or outside the state as a result of injury received while serving in 13 such an area during such time, the period of service in such area, plus 14 the period of continuous hospitalization inside or outside the state 15 attributable to such injury, and the next one hundred eighty days there- 16 after, shall be disregarded in determining, under this chapter, in 17 respect of the city personal income tax liability, including any inter- 18 est, penalty, or addition to the tax, of such individual: 19 (1) Whether any of the following acts was performed within the time 20 prescribed therefor: 21 (A) filing any return of income tax, except withholding tax; 22 (B) payment of any income tax, except withholding tax, or any install- 23 ment thereof or of any other liability in respect thereof; 24 (C) filing a petition with the tax commission for credit or refund or 25 for redetermination of a deficiency, or application for review of a 26 decision rendered by the tax commission; 27 (D) allowance of a credit or refund of city personal income tax; 28 (E) filing a claim for credit or refund of city personal income tax; 29 (F) assessment of city personal income tax; 30 (G) giving or making any notice or demand for the payment of any city 31 personal income tax, or with respect to any liability to the city in 32 respect of such income tax; 33 (H) collection, by the tax commission, by levy or otherwise of the 34 amount of any liability in respect of such income tax; 35 (I) bringing suit by the city, the state, or any officer, on their 36 behalf, in respect of any liability in respect of such income tax; and 37 (J) any other act required or permitted under this chapter or speci- 38 fied in regulations prescribed under this section by the tax commission. 39 (2) The amount of any credit or refund. 40 (b) Special rule for overpayments. (1) Subdivision (a) of this section 41 shall not apply for purposes of determining the amount of interest on 42 any overpayment of tax. 43 (2) If an individual is entitled to the benefits of subdivision (a) of 44 this section with respect to any return, amended return, or claim for 45 credit or refund, and such return, amended return or claim is timely 46 filed, determined after the application of such subdivision, paragraph 47 three of subdivision (a) and subdivision (c) of section 11-1788 of this 48 subchapter of this title shall not apply. 49 (c) Action taken before ascertainment of right to benefits. The 50 assessment or collection of the tax imposed by this chapter or of any 51 liability in respect of such tax, or any action or proceeding by or on 52 behalf of the city in connection therewith, may be made, taken, begun, 53 or prosecuted in accordance with law, without regard to the provisions 54 of subdivision (a) of this section, unless prior to such assessment, 55 collection, action, or proceeding it is ascertained that the person

S. 8578 977

1 concerned is entitled to the benefits of subdivision (a) of this 2 section. 3 (d) Members of armed forces dying in action. In the case of any person 4 who dies while in active service as a member of the armed forces of the 5 United States, if such death occurred while serving in a combat zone 6 during a period of combatant activities in such zone, as described in 7 subdivision (a) of this section, or as a result of wounds, disease or 8 injury incurred while so serving, the tax imposed by this chapter shall 9 not apply with respect to the taxable year in which falls the date of 10 his or her death, or with respect to any prior taxable year ending on or 11 after the first day so served in a combat zone, and no returns shall be 12 required in behalf of such person or his or her estate for such year; 13 and the tax for any such taxable year which is unpaid at the date of 14 death, including interest, additions to tax and penalties, if any, shall 15 not be assessed and, if assessed, the assessment shall be abated and, if 16 collected, shall be refunded to the legal representative of such estate 17 if one has been appointed and has qualified, or, if no legal represen- 18 tative has been appointed or has qualified, to the surviving spouse. 19 (e) Treatment of individuals performing Desert Shield services. (1) 20 Any individual who performed Desert Shield services shall be entitled to 21 the benefits of subdivisions (a) and (b) of this section in the same 22 manner as if such services were services referred to in subdivision (a) 23 of this section. 24 (2) For purposes of this subdivision, the term "Desert Shield 25 services" means any services in the armed forces of the United States or 26 in support of such armed forces if 27 (A) such services are performed in the area designated by the presi- 28 dent of the United States as the "Persian Gulf Desert Shield area", and 29 (B) such services are performed during the period beginning on August 30 second, nineteen hundred ninety, and ending on the date on which any 31 portion of the area referred to in subparagraph (A) of this paragraph is 32 designated by the president as a combat zone pursuant to section one 33 hundred twelve of the internal revenue code. 34 (f) Relief for personnel under hostile fire. For purposes of this 35 section, members of the armed forces of the United States who perform 36 military service in an area outside an area designated by the president 37 of the United States by executive order as a "combat zone", which 38 service is in direct support of military operations in such zone and is 39 performed under conditions which qualify such members for hostile fire 40 pay, as authorized under subdivision (a) of section nine of the federal 41 uniformed services pay act of nineteen hundred sixty-three, shall, 42 during the period of such qualifying service, be deemed to have served 43 in such combat zone. 44 (g) Application to spouse. The provisions of subdivisions (a), (b), 45 (c), (e) and (f) of this section shall apply to the spouse of any indi- 46 vidual entitled to the benefits of subdivision (a) of this section; 47 provided, however, that such subdivisions shall not apply for any spouse 48 for any taxable year beginning more than two years after the date desig- 49 nated under section one hundred twelve of the internal revenue code as 50 the date of termination of combatant activities in a combat zone. 51 (h) Individuals dying as a result of certain attacks. (1) General. In 52 the case of a specified terrorist victim, any tax imposed by this chap- 53 ter shall not apply: (A) with respect to the taxable year in which 54 falls the date of death; and (B) with respect to any prior taxable year 55 in the period beginning with the last taxable year ending before the

S. 8578 978

1 taxable year in which the wounds or injury referred to in paragraph 2 three of this subdivision were incurred. 3 (2) Taxation of certain benefits. Paragraph one of this subdivision 4 shall not apply to the amount of any tax imposed by this chapter which 5 would be computed by only taking into account the items of income, gain, 6 or other amounts determined by the United States secretary of the treas- 7 ury to be taxable pursuant to paragraph three of subdivision (d) of 8 section six hundred ninety-two of the internal revenue code. 9 (3) Specified terrorist victim. For purposes of this subdivision, the 10 term "specified terrorist victim" means any decedent who dies as a 11 result of wounds or injury incurred as a result of the terrorist attacks 12 against the United States on September eleventh, two thousand one, 13 provided, however, such term shall not include any individual identified 14 by the attorney general of the United States to have been a participant 15 or conspirator in any such attack or a representative of such an indi- 16 vidual. 17 § 11-1797 General powers of tax commission. (a) General. The tax 18 commission shall administer and enforce the tax imposed by this chapter 19 and it is authorized to make such rules and regulations, and to require 20 such facts and information to be reported, as it may deem necessary to 21 enforce the provisions of this chapter. 22 (b) Examination of books and witnesses. (1) The tax commission for the 23 purpose of ascertaining the correctness of any return, or for the 24 purpose of making an estimate of taxable income of any person, shall 25 have power to examine or to cause to have examined, by any agent or 26 representative designated by it for that purpose, any books, papers, 27 records or memoranda bearing upon the matters required to be included in 28 the return, and may require the attendance of the person rendering the 29 return or any officer or employee of such person, or the attendance of 30 any other person having knowledge in the premises, and may take testimo- 31 ny and require proof material for its information, with power to admin- 32 ister oaths to such person or persons. 33 (2) The tax commission may take any action under paragraph one of this 34 subdivision to inquire into the commission of any offense connected with 35 the administration or enforcement of this chapter, provided, however, 36 that notwithstanding the provisions of section 11-1774 of this chapter 37 no such action shall be taken after a referral by the department or the 38 tax commission to the attorney general, a district attorney or any other 39 prosecutorial agency is in effect. 40 (c) Abatement authority. The tax commission, of its own motion, may 41 abate any small unpaid balance of an assessment of city personal income 42 tax, or any liability in respect thereof, if the tax commission deter- 43 mines under uniform rules prescribed by it that the administration and 44 collection costs involved would not warrant collection of the amount 45 due. It may also abate, of its own motion, the unpaid portion of the 46 assessment of any tax or any liability in respect thereof, which is 47 excessive in amount, or is assessed after the expiration of the period 48 of limitation properly applicable thereto, or is erroneously or illegal- 49 ly assessed. No claim for abatement under this subdivision shall be 50 filed by a taxpayer. 51 (d) Special refund authority. Where no questions of fact or law are 52 involved and it appears from the records of the tax commission that any 53 moneys have been erroneously or illegally collected from any taxpayer or 54 other person, or paid by such taxpayer or other person under a mistake 55 of facts, pursuant to the provisions of this chapter, the tax commission 56 at any time, without regard to any period of limitations, shall have the

S. 8578 979

1 power, upon making a record of its reasons therefor in writing, to cause 2 such moneys so paid and being erroneously and illegally held to be 3 refunded and to issue therefor its certificate to the comptroller. 4 (e) Secrecy requirement and penalties for violation. (1) Except in 5 accordance with proper judicial order or as otherwise provided by law, 6 it shall be unlawful for the tax commission, any tax commissioner, any 7 officer or employee of the department of taxation and finance, any 8 person engaged or retained by such department on an independent contract 9 basis, any depositary to which any return may be delivered as provided 10 in subdivision (h) or (i) of this section, any officer or employee of 11 such depositary, or any person who, pursuant to this section, is permit- 12 ted to inspect any report or return or to whom a copy, an abstract or a 13 portion of any report or return is furnished, or to whom any information 14 contained in any report or return is furnished, to divulge or make known 15 in any manner the amount of income or any particulars set forth or 16 disclosed in any report or return required under this chapter. 17 (2) The officers charged with the custody of such reports and returns 18 shall not be required to produce any of them or evidence of anything 19 contained in them in any action or proceeding in any court, except on 20 behalf of the tax commission in an action or proceeding under the 21 provisions of this chapter, the tax law or in any other action or 22 proceeding involving the collection of a tax due under this chapter or 23 such tax law to which the city, state or the tax commission is a party 24 or a claimant, or on behalf of any party to any action or proceeding 25 under the provisions of this chapter when the reports, returns or facts 26 shown thereby are directly involved in such action or proceeding, in any 27 of which events the court may require the production of, and may admit 28 in evidence, so much of said reports, returns or of the facts shown 29 thereby, as are pertinent to the action or proceeding and no more. The 30 tax commission may, nevertheless, publish a copy or a summary of any 31 decision rendered after the hearing required under section 11-1789 of 32 this subchapter. 33 (3) Nothing in this section shall be construed to prohibit the deliv- 34 ery by the state commissioner of taxation and finance to the county 35 clerk of a county within the city of New York of a mailing list of indi- 36 viduals to whom income tax forms are mailed by the state commissioner of 37 taxation and finance for the sole purpose of compiling a list of 38 prospective jurors as provided in article sixteen of the judiciary law. 39 Provided, however, such delivery shall only be made pursuant to an order 40 of the chief administrator of the courts, appointed pursuant to section 41 two hundred ten of such law. No such order may be issued unless such 42 chief administrator is satisfied that such mailing list is needed to 43 compile a proper list of prospective jurors for the county for which 44 such order is sought and that, in view of the responsibilities imposed 45 by the various laws of the state on the department of taxation and 46 finance, it is reasonable to require the state commissioner of taxation 47 and finance to furnish such list. Such order shall provide that such 48 list shall be used for the sole purpose of compiling a list of prospec- 49 tive jurors and that such county clerk shall take all necessary steps to 50 insure that the list is kept confidential and that there is no unauthor- 51 ized use or disclosure of such list. Furthermore, nothing in this 52 section shall be construed to prohibit the delivery to a taxpayer or his 53 or her duly authorized representative of a certified copy of any return 54 or report filed in connection with his or her tax or to prohibit the 55 publication of statistics so classified as to prevent the identification 56 of particular reports or returns and the items thereof, or the

S. 8578 980

1 inspection by the attorney general or other legal representatives of the 2 state or city of the report or return of any taxpayer who shall bring 3 action to set aside or review the tax based thereon, or against whom an 4 action or proceeding under this chapter has been recommended by the 5 commissioner of taxation and finance, the corporation counsel or the 6 attorney general or has been instituted, or the inspection of the 7 reports or returns required under this chapter by the comptroller or 8 duly designated officer or employee of the state department of audit and 9 control, for purposes of the audit of a refund of any tax paid by a 10 taxpayer under this chapter, or the furnishing to the state department 11 of social services of the amount of an overpayment of tax and interest 12 thereon certified to the comptroller to be credited against past-due 13 support pursuant to section one hundred seventy-one-c of the tax law and 14 of the name and social security number of the taxpayer who made such 15 overpayment or the furnishing to the New York state higher education 16 services corporation of the amount of an overpayment of tax and interest 17 thereon certified to the comptroller to be credited against the amount 18 of a default in repayment of a guaranteed student loan pursuant to 19 section one hundred seventy-one-d of the tax law and of the name and 20 social security number of the taxpayer who made such overpayment or the 21 furnishing to the state university of New York or the city university of 22 New York or the attorney general on behalf of such state or city univer- 23 sity the amount of an overpayment of tax and interest thereon certified 24 to the comptroller to be credited against the amount of a default in 25 repayment of a state university loan or city university loan pursuant to 26 section one hundred seventy-one-e of the tax law and of the name and 27 social security number of the taxpayer who made such overpayment, or the 28 disclosing to a state agency, pursuant to section one hundred seventy- 29 one-f of the tax law, of the amount of an overpayment and interest ther- 30 eon certified to the comptroller to be credited against a past-due 31 legally enforceable debt owed to such agency and of the name and social 32 security number of the taxpayer who made such overpayment, or the 33 disclosing to the commissioner of finance of the city of New York, 34 pursuant to section one hundred seventy-one-1 of the tax law, of the 35 amount of an overpayment and interest thereon certified to the comp- 36 troller to be credited against a city of New York tax warrant judgment 37 debt and of the name and social security number of the taxpayer who made 38 such overpayment. Reports and returns shall be preserved for three years 39 and thereafter until the state commissioner of taxation and finance 40 orders them to be destroyed. 41 (3-a) Notwithstanding the provisions of paragraph one of this subdivi- 42 sion, the state commissioner of taxation and finance or the commissioner 43 of finance may disclose to a taxpayer or a taxpayer's related member, as 44 defined in subdivision (t) of section 11-1712 of this chapter, informa- 45 tion relating to any royalty paid, incurred or received by such taxpayer 46 or related member to or from the other, including the treatment of such 47 payments by the taxpayer or the related member in any report or return 48 transmitted to the state commissioner of taxation and finance under this 49 chapter or the New York state tax law or the commissioner of finance 50 under this title. 51 (4) (A) Any officer or employee of the state, who willfully violates 52 the provisions of this subdivision shall be dismissed from office and be 53 incapable of holding any public office in this state for a period of 54 five years thereafter. 55 (B) Cross-reference: For criminal penalties, see article thirty-seven 56 of the tax law.

S. 8578 981

1 (f) Cooperation with the United States and other states. Notwith- 2 standing the provisions of subdivision (e) of this section, the tax 3 commission may permit the secretary of the treasury of the United States 4 or his or her delegates, or the proper tax officer of any state imposing 5 an income tax upon the incomes of individuals, or the authorized repre- 6 sentative of either such officer, to inspect any return filed under this 7 chapter, or may furnish to such officer or his or her authorized repre- 8 sentative an abstract of any such return or supply him or her with 9 information concerning an item contained in any such return, or 10 disclosed by any investigation of tax liability under this chapter, but 11 such permission shall be granted or such information furnished to such 12 officer or his or her representative only if the laws of the United 13 States or of such other state, as the case may be, grant substantially 14 similar privileges to the commission or officer of this state charged 15 with the administration of the tax imposed by this chapter and such 16 information is to be used for tax purposes only; and provided further 17 the commissioner of taxation and finance may furnish to the commissioner 18 of internal revenue or his or her authorized representative such returns 19 filed under this chapter and other tax information, as he or she may 20 consider proper, for use in court actions or proceedings under the 21 internal revenue code, whether civil or criminal, where a written 22 request therefor has been made to the commissioner of taxation and 23 finance by the secretary of the treasury of the United States or his or 24 her delegates, provided the laws of the United States grant substantial- 25 ly similar powers to the secretary of the treasury of the United States 26 or his or her delegates. Where the commissioner of taxation and finance 27 has so authorized use of returns and other information in such actions 28 or proceedings, officers and employees of the department of taxation and 29 finance may testify in such actions or proceedings in respect to such 30 returns or other information. 31 (g) Cooperation with the cities of the state of New York. Notwith- 32 standing the provisions of subdivision (e) of this section, the tax 33 commission may permit the proper city officer of any city of the state 34 of New York imposing a personal income tax upon the incomes of resi- 35 dents, or an unincorporated business income tax, or an earnings tax on 36 nonresidents, or the authorized representative of any such officer, to 37 inspect any return filed under this chapter, or may furnish to such 38 officer or his or her authorized representative an abstract of any such 39 return or supply him or her with information concerning an item 40 contained in any such return, or disclosed by any investigation of tax 41 liability under this chapter, but such permission shall be granted or 42 such information furnished to such officer or his or her representative 43 only if the local laws of such city grant substantially similar privi- 44 leges to the commission or officer of this state charged with the admin- 45 istration of the tax imposed by this chapter and such information is to 46 be used for tax purposes only; and provided further the commissioner of 47 taxation and finance may furnish to such city officer or the legal 48 representative of such city such returns filed under this chapter and 49 other tax information, as he or she may consider proper, for use in 50 court actions or proceedings under such local law, whether civil or 51 criminal, where a written request therefor has been made to the commis- 52 sioner of taxation and finance by such city officer or his or her dele- 53 gate, provided the local law of such city grants substantially similar 54 powers to such city officer or his or her delegate. Where the commis- 55 sioner of taxation and finance has so authorized use of returns and 56 other information in such actions or proceedings, officers and employees

S. 8578 982

1 of the department of taxation and finance may testify in such actions or 2 proceedings in respect to such returns or other information. 3 (h) Withholding returns. Notwithstanding the provisions of subdivision 4 (e) of this section the tax commission in its discretion, when making 5 deposits, pursuant to section 11-1798 of this subchapter, of taxes with- 6 held by employers, may deliver to the depositary the withholding returns 7 filed by such employers as provided in section 11-1774 of this chapter, 8 for the purpose of insuring that all money so deposited shall be 9 correctly credited to taxpayers' accounts. 10 (i) Filing returns and making payments to depository banks. Notwith- 11 standing the provisions of subdivision (e) of this section, the tax 12 commission, in its discretion, may require or permit any or all individ- 13 uals, estates or trusts liable for any tax imposed by this chapter, to 14 make payments on account of estimated tax and payment of any tax, penal- 15 ty or interest imposed by this chapter to banks, banking houses or trust 16 companies designated by the tax commission and to file reports and 17 returns with such banks, banking houses or trust companies as agents of 18 the tax commission, in lieu of making any such payment to the tax 19 commission. However, the tax commission shall designate only such banks, 20 banking houses or trust companies as are or shall be designated by the 21 comptroller as depositories pursuant to section 11-1798 of this subchap- 22 ter. 23 (j) (1) Authority to set interest rates. The commissioner of taxation 24 and finance shall set the overpayment and underpayment rates of interest 25 to be paid pursuant to sections 11-1784, 11-1785 and 11-1788 of this 26 subchapter, but if no such rates of interest are set, such overpayment 27 rate shall be deemed to be set at six percent per annum and the under- 28 payment rate shall be deemed to be set at seven and one-half per annum. 29 Such rates shall be the rates prescribed by paragraphs two and four of 30 this subdivision, but shall not be less than seven and one-half percent 31 per annum. Any such rates set by such commissioner shall apply to taxes, 32 or any portion thereof, which remain or become due or overpaid on or 33 after the date on which such rates become effective and shall apply only 34 with respect to interest computed or computable for periods or portions 35 of periods occurring in the period during which such rates are in 36 effect. 37 (1) Authority to set interest rates. The commissioner of taxation and 38 finance shall set the overpayment and underpayment rates of interest to 39 be paid pursuant to sections 11-1784, 11-1785 and 11-1788 of this 40 subchapter, but if no such rates of interest are set, such rates shall 41 be deemed to be set at six percent per annum. Such rates shall be the 42 rates prescribed by paragraphs two and four of this subdivision, but the 43 underpayment rate shall not be less than six percent per annum. Any such 44 rates set by such commissioner shall apply to taxes, or any portion 45 thereof, which remain or become due or overpaid on or after the date on 46 which such rates become effective and shall apply only with respect to 47 interest computed or computable for periods or portions of periods 48 occurring in the period during which such rates are in effect. 49 (2) Rates of interest. (A) Overpayment rate. The overpayment rate of 50 interest set under this subdivision shall be the sum of (i) the federal 51 short-term rate as provided under paragraph three of this subdivision, 52 plus (ii) two percentage points. 53 (B) Underpayment rate. The underpayment rate of interest set under 54 this subdivision shall be the sum of (i) the federal short-term rate as 55 provided under paragraph three of this subdivision, plus (ii) five and 56 one-half percentage points.

S. 8578 983

1 (3) Federal short-term rate. For the purposes of this subdivision: 2 (A) The federal short-term rate for any month shall be the federal 3 short-term rate determined by the United States secretary of the treas- 4 ury during such month in accordance with subsection (d) of section 5 twelve hundred seventy-four of the internal revenue code for use in 6 connection with section six thousand six hundred twenty-one of the 7 internal revenue code. Any such rate shall be rounded to the nearest 8 full percent, or, if a multiple of one-half of one percent, such rate 9 shall be increased to the next highest full percent. 10 (B) Period during which rate applies. 11 (i) In general. Except as provided in clauses (ii) and (iii) of this 12 subparagraph, the federal short-term rate for the first month in each 13 calendar quarter shall apply during the first calendar quarter beginning 14 after such month. 15 (ii) Special rule for individual estimated tax. In determining the 16 addition to tax under subdivision (c) of section 11-1785 of this 17 subchapter for failure to pay estimated tax for any taxable year, the 18 federal short-term rate which applies during the third month following 19 the taxable year shall also apply during the first fifteen days of the 20 fourth month following such taxable year. 21 (iii) Special rule for the month of September, nineteen hundred eight- 22 y-nine. The federal short-term rate for the month of April, nineteen 23 hundred eighty-nine shall apply with respect to setting the rate of 24 interest for the month of September, nineteen hundred eighty-nine. 25 (4) Notwithstanding the provisions of paragraph two of this subdivi- 26 sion to the contrary, in the case of interest payable by an employer 27 with respect to income taxes required to be withheld and paid over by 28 him or her pursuant to the provisions of subchapter four of this chapter 29 and with respect to interest payable to an employer pursuant to subdivi- 30 sion (c) of section 11-1786 of this subchapter, the rates of interest 31 prescribed by this section shall be the overpayment and underpayment 32 rates of interest prescribed in paragraph two of subsection (e) of 33 section one thousand ninety-six of the tax law. 34 (5) In computing the amount of any interest required to be paid under 35 this article by the commissioner of taxation and finance or by the 36 taxpayer, or any other amount determined by reference to such amount of 37 interest, such interest and such amount shall be compounded daily. The 38 provisions of this paragraph shall not apply for purposes of computing 39 the amount of any addition to tax for failure to pay estimated tax under 40 subdivision (c) of section 11-1785 of this subchapter. 41 (6) Publication of interest rates. The commissioner of taxation and 42 finance shall cause to be published in the section for miscellaneous 43 notices in the state register, and give other appropriate general notice 44 of, the interest rates to be set under this subdivision no later than 45 twenty days preceding the first day of the calendar quarter during which 46 such interest rates apply. The setting and publication of such interest 47 rates shall not be included within paragraph (a) of subdivision two of 48 section one hundred two of the state administrative procedure act relat- 49 ing to the definition of a rule. 50 (7) Cross-reference. For provisions relating to the power of the 51 commissioner of taxation and finance to abate small amounts of interest, 52 see subdivision (c) of this section. 53 (k) Disclosure of collection activities with respect to joint return. 54 Notwithstanding the provisions of subdivision (e) of this section, if 55 any deficiency of tax with respect to a joint return is assessed and the 56 individuals filing such return are no longer married or no longer reside

S. 8578 984

1 in the same household, upon request in writing by either of such indi- 2 viduals, the commissioner of taxation and finance shall disclose in 3 writing to the individual making the request whether such commissioner 4 has attempted to collect such deficiency from such other individual, the 5 general nature of such collection activities, and the amount collected. 6 The opening paragraph of this subdivision shall not apply to any defi- 7 ciency which may not be collected by reason of expiration of time within 8 which to issue a warrant under subdivision (c) of section 11-1792 of 9 this subchapter or within which to collect such tax by execution and 10 levy or by court proceeding. 11 (l) Disclosure of certain information where more than one person is 12 subject to penalty. If the commissioner of taxation and finance deter- 13 mines that a person is liable for a penalty under subdivision (g) of 14 section 11-1785 of this subchapter with respect to any failure, upon 15 request in writing of such person, such commissioner shall disclose in 16 writing to such person (1) the name of any other person whom such 17 commissioner has determined to be liable for such penalty with respect 18 to such failure, and (2) whether such commissioner has attempted to 19 collect such penalty from such other person, the general nature of such 20 collection activities, and the amount collected. 21 (m) (1) Notwithstanding the provisions of subdivision (e) of this 22 section, upon written request from the chairperson of the committee on 23 ways and means of the United States House of Representatives, the chair- 24 person of the committee on finance of the United States Senate, or the 25 chairperson of the joint committee on taxation of the United States 26 Congress, the commissioner of taxation and finance shall furnish such 27 committee with any current or prior year returns specified in such 28 request that were filed under this article by the president of the 29 United States, vice-president of the United States, member of the United 30 States Congress representing New York state, or any person who served in 31 or was employed by the executive branch of the government of the United 32 States on the executive staff of the president, in the executive office 33 of the president, or in an acting or confirmed capacity in a position 34 subject to confirmation by the United States senate; or, in New York 35 state: a statewide elected official, as defined in paragraph (a) of 36 subdivision one of section seventy-three-a of the public officers law; a 37 state officer or employee, as defined in subparagraph (i) of paragraph 38 (c) of subdivision one of such section seventy-three-a; a political 39 party chairperson, as defined in paragraph (h) of subdivision one of 40 such section seventy-three-a; a local elected official, as defined in 41 subdivisions one and two of section eight hundred ten of the general 42 municipal law; a person appointed, pursuant to law, to serve due to 43 vacancy or otherwise in the position of a local elected official, as 44 defined in subdivisions one and two of section eight hundred ten of the 45 general municipal law; a member of the state legislature; or a judge or 46 justice of the unified court system; provided however that, prior to 47 furnishing any return, the commissioner shall redact any copy of a 48 federal return, or portion thereof, attached to, or any information on a 49 federal return that is reflected on, such return, and any social securi- 50 ty numbers, account numbers and residential address information. 51 (2) No returns shall be furnished pursuant to this subdivision unless 52 the chairperson of the requesting committee certifies in writing that 53 such returns have been requested related to, and in furtherance of, a 54 legitimate task of the Congress, that the requesting committee has made 55 a written request to the United States secretary of the treasury for 56 related federal reports or returns or report or return information,

S. 8578 985

1 pursuant to 26 U.S.C. Section 6103(f), and that if such requested 2 returns are inspected by and/or submitted to another committee, to the 3 United States House of Representatives, or to the United States Senate, 4 then such inspection and/or submission shall occur in a manner consist- 5 ent with federal law as informed by the requirements and procedures 6 established in 26 U.S.C. Section 6103(f). 7 § 11-1798 Deposit and disposition of revenues. All revenue collected 8 by the state commissioner of taxation and finance from the taxes imposed 9 pursuant to this chapter or chapter nineteen of this title shall be 10 deposited daily with such responsible banks, banking houses or trust 11 companies, as may be designated by the state comptroller, to the credit 12 of the comptroller, in trust for the city. Such deposits shall be kept 13 in trust and separate and apart from all other moneys in the possession 14 of the comptroller. The state comptroller shall require adequate securi- 15 ty from all such depositories of such revenue collected by the state 16 commissioner of taxation and finance. The state comptroller shall retain 17 in his or her hands such amounts as the commissioner of taxation and 18 finance may determine to be necessary for refunds in respect to the 19 taxes imposed by this chapter and such chapter nineteen and for reason- 20 able costs of the state commissioner of taxation and finance in adminis- 21 tering, collecting and distributing such taxes, out of which the comp- 22 troller shall pay any refunds of such taxes to which taxpayers shall be 23 entitled under this chapter and such chapter nineteen and except further 24 that he or she shall pay to a non-obligated spouse that amount of over- 25 payment of tax imposed pursuant to the authority of article thirty of 26 the tax law or former article two-E of the general city law and the 27 interest on such amount which has been credited pursuant to section one 28 hundred seventy-one-c, one hundred seventy-one-d, one hundred seventy- 29 one-e, one hundred seventy-one-f or one hundred seventy-one-l of the tax 30 law and which is certified to him or her by the commissioner of taxation 31 and finance as the amount due such non-obligated spouse pursuant to 32 paragraph six of subsection (b) of section six hundred fifty-one of the 33 tax law, and he or she shall deduct a like amount which he shall pay 34 into the treasury to the credit of the general fund from amounts subse- 35 quently payable to the department of social services, the state univer- 36 sity of New York, the city university of New York, the higher education 37 services corporation, or to the revenue arrearage account or special 38 offset fiduciary account pursuant to section ninety-one-a or 39 ninety-one-c of the state finance law, as the case may be, whichever had 40 been credited the amount originally withheld from such overpayment and, 41 with respect to amounts originally withheld from such overpayment pursu- 42 ant to section one hundred seventy-one-l of the tax law and paid to the 43 city of New York, the comptroller shall collect a like amount from the 44 city of New York. The state comptroller, after reserving such refund 45 fund and such costs shall, on or before the fifteenth day of each month, 46 pay to the chief fiscal officer of the city the balance of such taxes 47 collected, to be paid into the treasury of the city to the credit of the 48 general fund except that he or she shall pay to the state department of 49 social services that amount of overpayments of the taxes imposed pursu- 50 ant to this chapter or chapter nineteen of this title and the interest 51 on such amount which is certified to him or her by the state commission- 52 er of taxation and finance as the amount to be credited against past-due 53 support pursuant to subdivision six of section one hundred seventy-one-c 54 of the tax law and except that he or she shall pay to the New York state 55 higher education services corporation that amount of overpayments of the 56 taxes imposed pursuant to this chapter or chapter nineteen of this title

S. 8578 986

1 and the interest on such amount which is certified to him or her by the 2 state commissioner of taxation and finance as the amount to be credited 3 against the amount of defaults in repayment of guaranteed student loans 4 pursuant to subdivision five of section one hundred seventy-one-d of the 5 tax law and except that he or she shall pay to the state university of 6 New York or the city university of New York, respectively, that amount 7 of overpayments of the taxes imposed pursuant to this chapter or chapter 8 nineteen of this title and the interest on such amount which is certi- 9 fied to him or her by the state commissioner of taxation and finance as 10 the amount to be credited against the amount of defaults in repayment of 11 state university or city university loans pursuant to subdivision six of 12 section one hundred seventy-one-e of the tax law, and except further 13 that, notwithstanding any other provision of law, he or she shall credit 14 to the revenue arrearage account, pursuant to section ninety-one-a of 15 the state finance law, that amount of overpayments of the taxes imposed 16 pursuant to this chapter or chapter nineteen of this title and the 17 interest on such amount which is certified to him or her by the state 18 commissioner of taxation and finance as the amount to be credited 19 against a past-due legally enforceable debt owed to a state agency 20 pursuant to paragraph (a) of subdivision six of section one hundred 21 seventy-one-f of the tax law, provided, however, he or she shall credit 22 to the special offset fiduciary account, pursuant to section 23 ninety-one-c of the state finance law, any such amount creditable as a 24 liability as set forth in paragraph (b) of subdivision six of section 25 one hundred seventy-one-f of the tax law, and except further that he or 26 she shall pay to the city of New York that amount of overpayments of tax 27 imposed pursuant to this chapter or chapter nineteen of this title and 28 the interest on such amount which is certified to him or her by the 29 state commissioner of taxation and finance as the amount to be credited 30 against city of New York tax warrant judgment debt pursuant to section 31 one hundred seventy-one-l of the tax law. The amount deducted for admin- 32 istering, collecting and distributing such taxes during such monthly 33 period shall be paid by the state comptroller into the general fund of 34 the state treasury to the credit of the state purposes fund therein. The 35 first payment to such chief fiscal officer shall be made on or before 36 March fifteenth, nineteen hundred seventy-six, which payment shall 37 represent the balance of revenue after provision for refund and such 38 reasonable costs, with respect to taxes collected from January first, 39 nineteen hundred seventy-six through February twenty-ninth, nineteen 40 hundred seventy-six. Subsequent payments shall be made on or before 41 April fifteenth, nineteen hundred seventy-six and on or before the 42 fifteenth day of each succeeding month thereafter, and shall represent 43 the balance of revenue with respect to taxes collected the preceding 44 calendar month. The amounts so payable shall be certified to the state 45 comptroller by the state commissioner of taxation and finance or his or 46 her delegate, either of whom shall not be held liable for any inaccuracy 47 in such certificate. Where the amount so paid over to such chief fiscal 48 officer is more or less than the amount then due such city, the amount 49 of overpayment or underpayment shall be certified to the state comp- 50 troller by the state commissioner of taxation and finance or his or her 51 delegate, either of whom shall not be held liable for any inaccuracy in 52 such certificate. The amount of overpayment or underpayment shall be so 53 certified to the state comptroller as soon after the discovery of the 54 overpayment or underpayment as reasonably possible and subsequent 55 payments by the state comptroller to such chief fiscal officer shall be 56 adjusted by subtracting the amount of any such overpayment from, or by

S. 8578 987

1 adding the amount of any such underpayment to such number of subsequent 2 payments and distributions as the state comptroller and the state 3 commissioner of taxation and finance shall consider reasonable in view 4 of the amount of the overpayment or underpayment and all other facts and 5 circumstances. 6 § 11-1800 Enforcement with other taxes. (a) If there is assessed a 7 tax under this chapter and there is also assessed a tax or taxes against 8 the same taxpayer pursuant to article twenty-two of the tax law or under 9 chapter nineteen of this title and if the tax commission takes action 10 under such article twenty-two or under such chapter nineteen with 11 respect to the enforcement and collection of the tax or taxes assessed 12 under such articles or chapter, the tax commission shall, wherever 13 possible, accompany such action with a similar action under similar 14 enforcement and collection provisions of this chapter. 15 (b) Any moneys collected as a result of such joint action shall be 16 deemed to have been collected in proportion to the amounts due, includ- 17 ing tax, penalties, interest and additions to tax, under article twen- 18 ty-two of the tax law and this city income tax. 19 (c) Whenever the tax commission takes any action with respect to a 20 deficiency of income tax under article twenty-two of the tax law or 21 under chapter nineteen of this title, other than the action set forth in 22 subdivision (a) of this section, it may in its discretion accompany such 23 action with a similar action under such city income tax. 24 § 11-1801 Administration, collection and review. (a) Except as other- 25 wise provided in this chapter, any tax imposed by this chapter shall be 26 administered and collected by the tax commission in the same manner as 27 the tax imposed by article twenty-two of the tax law is administered and 28 collected by such commission. Whenever there is joint collection of 29 state and city personal income taxes, it shall be deemed that such 30 collections shall represent proportionately the applicable state and 31 city personal income taxes in determining the amount to be remitted to 32 the city. 33 (b) The tax commission, in its discretion, may require or permit any 34 or all persons liable for any tax imposed by this chapter to make 35 payments on account of estimated tax and payment of any tax, penalty or 36 interest to such banks, banking houses or trust companies designated by 37 the tax commission and to file returns with such banks, banking houses 38 or trust companies, as agent of the tax commission, in lieu of paying a 39 tax imposed by this chapter directly to the tax commission. However, 40 the tax commission shall designate only such banks, banking houses or 41 trust companies which are designated by the comptroller as depositories 42 of the state. 43 (c) Notwithstanding any other provisions of this chapter, the tax 44 commission may require: 45 (1) the filing of any or all of the following: 46 (A) a combined return which, in addition to the return provided for in 47 section 11-1751 of this chapter, may also include any or both of the 48 returns required to be filed by a resident individual of New York state 49 pursuant to the provisions of section six hundred fifty-one of the tax 50 law and which may be required to be filed by such individual pursuant to 51 chapter nineteen of this title and 52 (B) a combined employer's return which, in addition to the employer's 53 return provided for by this chapter, may also include any or both of the 54 employer's returns required to be filed by the same employer pursuant to 55 the provisions of section six hundred seventy-four of such law and

S. 8578 988

1 required to be filed by such employer pursuant to such chapter nineteen 2 of this title and 3 (2) where a combined return or employer's return is required, and with 4 respect to the payment of estimated tax, the tax commission may also 5 require the payment to it of a single amount which shall equal the total 6 of the amounts which would have been required to be paid with the 7 returns or employer's returns or in payment of estimated tax pursuant to 8 the provisions of article twenty-two of the tax law, and the provisions 9 of this chapter as if no combined return or employer's return were 10 required. 11 § 11-1802 Construction. This chapter shall be construed and enforced 12 in conformity with article thirty of the tax law, as added to such law 13 by chapter eight hundred eighty-one of the laws of nineteen hundred 14 seventy-five, pursuant to which article it is enacted.

15 CHAPTER 19 16 EARNINGS TAX ON NONRESIDENTS 17 SUBCHAPTER 1 18 GENERAL

19 § 11-1901 Meaning of terms. As used in this chapter, the following 20 terms shall mean and include: 21 (a) "Commissioner" means the commissioner of finance of the city 22 except that with respect to taxes imposed for any taxable year beginning 23 on or after January first, nineteen hundred seventy-six, such term shall 24 mean state tax commission. 25 (b) "Payroll period" and "employer" mean the same as payroll period 26 and employer as defined in subsections (b) and (d) of section thirty- 27 four hundred one of the internal revenue code, and "employee" shall also 28 include all those included as employees in subsection (c) of such 29 section of such code. 30 (c) "Commissioner of finance" means the commissioner of finance of the 31 city. 32 (d) "This state" means the state of New York. 33 (e) "Wages" means wages as defined in subsection (a) of section thir- 34 ty-four hundred one of the internal revenue code, except that (1) wages 35 shall not include payments for active service as a member of the armed 36 forces of the United States and shall not include, in the case of a 37 nonresident individual or partner of a partnership doing an insurance 38 business as a member of the New York insurance exchange described in 39 section six thousand two hundred one of the insurance law, any item of 40 income, gain, loss or deduction of such business which is such individ- 41 ual's distributive or pro rata share for federal income tax purposes or 42 which such individual is required to take into account separately for 43 federal income tax purposes, and (2) wages shall include (i) the amount 44 of member or employee contributions to a retirement system or pension 45 fund picked up by the employer pursuant to subdivision f of section five 46 hundred seventeen or subdivision d of section six hundred thirteen of 47 the retirement and social security law or section 13-225.1, 13-327.1, 48 13-125.1, 13-125.2 or 13-521.1 of title thirteen of the code of the 49 preceding municipality or subdivision nineteen of section twenty-five 50 hundred seventy-five of the education law, (ii) the amount deducted or 51 deferred from an employee's salary under a flexible benefits program 52 established pursuant to section twenty-three of the general municipal 53 law or section twelve hundred ten-a of the public authorities law, (iii) 54 the amount by which an employee's salary is reduced pursuant to the

S. 8578 989

1 provisions of subdivision b of section 12-126.1 and subdivision b of 2 section 12-126.2 of title twelve of the code of the preceding munici- 3 pality, and (iv) the amount of member or employee contributions to a 4 retirement system or pension fund picked up or paid by the employer for 5 members of the Manhattan and Bronx surface transportation authority 6 pension plan and treated as employer contributions in determining income 7 tax treatment under subdivision (h) of section four hundred fourteen of 8 the Internal Revenue Code. 9 (f) "Net earnings from self-employment" means the same as net earnings 10 from self-employment as defined in subsection (a) of section fourteen 11 hundred two of the internal revenue code, except that the deduction for 12 wages and salaries paid or incurred for the taxable year which is not 13 allowed pursuant to section two hundred eighty-c of such code shall be 14 allowed, and except that an estate or trust shall be deemed to have net 15 earnings from self-employment determined in the same manner as if it 16 were an individual subject to the tax on self-employment income imposed 17 by section fourteen hundred one of the internal revenue code diminished 18 by: (1) the amount of any deduction allowed by subsection (c) of 19 section six hundred forty-two of the internal revenue code and (2) the 20 deductions allowed by sections six hundred fifty-one and six hundred 21 sixty-one of such code to the extent that they represent distributions 22 or payments to a resident of the city. However, "trade or business" as 23 used in subsection (a) of section fourteen hundred two of such code 24 shall mean the same as trade or business as defined in subsection (c) of 25 section fourteen hundred two of such code, except that paragraphs four, 26 five and six of such subsection shall not apply in determining net earn- 27 ings from self-employment taxable under this chapter. Provided, however, 28 in the case of a nonresident individual or partner of a partnership 29 doing an insurance business described in section six thousand two 30 hundred one of the insurance law, any item of income, gain, loss or 31 deduction of such business which is the individual's distributive or pro 32 rata share for federal income tax purposes or which the individual is 33 required to take into account separately for federal income tax purposes 34 shall not be considered to be "net earnings from self-employment". 35 (g) "Taxable year" means the taxpayer's taxable year for federal 36 income tax purposes. 37 (h) Resident individual. A resident individual means an individual: 38 (1) who is domiciled in the city, unless (A) he or she maintains no 39 permanent place of abode in the city, maintains a permanent place of 40 abode elsewhere, and spends in the aggregate not more than thirty days 41 of the taxable year in the city, or (B) (i) within any period of five 42 hundred forty-eight consecutive days he or she is present in a foreign 43 country or countries for at least four hundred fifty days, and (ii) 44 during such period of five hundred forty-eight consecutive days he or 45 she is not present in the city for more than ninety days and does not 46 maintain a permanent place of abode in the city at which his or her 47 spouse, unless such spouse is legally separated, or minor children are 48 present for more than ninety days, and (iii) during any period of less 49 than twelve months which would be treated as a separate taxable period 50 pursuant to section 11-1919 of this chapter, and which period is 51 contained within such period of five hundred forty-eight consecutive 52 days, he or she is present in the city for a number of days which does 53 not exceed an amount which bears the same ratio to ninety as the number 54 of days contained in such period of less than twelve months bears to 55 five hundred forty-eight, or

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1 (2) who is not domiciled in the city but maintains a permanent place 2 of abode in the city and spends in the aggregate more than one hundred 3 eighty-three days of the taxable year in the city, unless such individ- 4 ual is in active service in the armed forces of the United States. 5 (i) Nonresident individual. A nonresident individual means an individ- 6 ual who is not a resident. 7 (j) Resident estate or trust. A resident estate or trust means: 8 (1) the estate of a decedent who at his or her death was domiciled in 9 the city, 10 (2) a trust, or a portion of a trust, consisting of property trans- 11 ferred by will of a decedent who at his or her death was domiciled in 12 the city, or 13 (3) a trust, or portion of a trust, consisting of the property of: 14 (A) a person domiciled in the city at the time such property was 15 transferred to the trust, if such trust or portion of a trust was then 16 irrevocable, or if it was then revocable and has not subsequently become 17 irrevocable; or 18 (B) a person domiciled in the city at the time such trust, or portion 19 of a trust, became irrevocable, if it was revocable when such property 20 was transferred to the trust but has subsequently become irrevocable. 21 For the purposes of this subdivision, a trust or portion of a trust is 22 revocable if it is subject to a power, exercisable immediately or at any 23 future time, to revest title in the person whose property constitutes 24 such trust or portion of a trust, and a trust or portion of a trust 25 becomes irrevocable when the possibility that such power may be exer- 26 cised has been terminated. 27 (k) Nonresident estate or trust. A nonresident estate or trust means 28 an estate or trust which is not a resident. 29 (l) Unless a different meaning is clearly required, any terms used in 30 this chapter shall have the same meaning as when used in a comparable 31 context in the laws of the United States relating to federal taxes but 32 such meaning shall be subject to the exceptions or modifications 33 prescribed in or pursuant to article two-E of the general city law or by 34 the laws of this state. Any reference in this chapter to the internal 35 revenue code, the internal revenue code of nineteen hundred eighty-six 36 or to the laws of the United States shall mean the provisions of the 37 internal revenue code of nineteen hundred eighty-six, unless a reference 38 to the internal revenue code of nineteen hundred fifty-four is clearly 39 intended, and amendments thereto, and other provisions of the laws of 40 the United States relating to federal taxes, as the same are included in 41 the appendix and supplement to the appendix to this chapter. The quota- 42 tion of such laws of the United States is intended to make them a part 43 of this chapter and to avoid constitutional uncertainties which might 44 result if such laws were merely incorporated by reference. The quota- 45 tion of a provision of the federal internal revenue code or of any other 46 law of the United States shall not necessarily mean that it is applica- 47 ble to or has relevance to this chapter. 48 (m) With respect to any taxable year beginning in nineteen hundred 49 seventy, until and including the thirty-first day of December, nineteen 50 hundred seventy-one, "administrator" shall be read as "state tax commis- 51 sion"; "administrative agencies of the city" shall be read as "adminis- 52 trative agencies of the state"; "depositories or financial agents of the 53 city" shall be read as "depositories or financial agents of the state"; 54 "officers or employees of the department of finance of the city" shall 55 be read as "officers or employees of the state department of taxation 56 and finance"; in sections 11-1934, 11-1936, 11-1939, and 11-1942 of this

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1 chapter "city" shall be read as "state"; "corporation counsel or other 2 appropriate officer of the city" or "corporation counsel of the city" 3 shall be read as "state attorney general"; and the words "it" or "its" 4 shall apply instead of the pronouns used where the reference is to tax 5 commission. Provided, however, with respect to declarations of estimated 6 tax and payments of such tax and the withholding tax requirements, until 7 and including the thirty-first day of December, nineteen hundred seven- 8 ty-one, any such terms shall be so read with respect to any taxable year 9 or other period beginning in nineteen hundred seventy-one. 10 (n) The term "partnership" shall include, unless a different meaning 11 is clearly required, a subchapter K limited liability company. The term 12 "subchapter K limited liability company" shall mean a limited liability 13 company classified as a partnership for federal income tax purposes. The 14 term "limited liability company" means a domestic limited liability 15 company or a foreign limited liability company, as defined in section 16 one hundred two of the limited liability company law, a limited liabil- 17 ity investment company formed pursuant to section five hundred seven of 18 the banking law, or a limited liability trust company formed pursuant to 19 section one hundred two-a of the banking law. 20 § 11-1902 Persons subject to tax. (a) Imposition of tax. (1) A tax is 21 hereby imposed for each taxable year ending on or after July first, 22 nineteen hundred sixty-six and on or before December thirty-first, nine- 23 teen hundred seventy and for each taxable year beginning after December 24 thirty-first, nineteen hundred ninety-nine, on the wages earned and net 25 earnings from self-employment, within the city, of every nonresident 26 individual, estate and trust which shall comprise: (i) A tax at the 27 rate of one-fourth of one percent on all wages. 28 (ii) A tax at the rate of three-eighths of one percent on all net 29 earnings from self-employment. 30 (2) For each taxable year beginning on or after January first, nine- 31 teen hundred seventy-one and ending on or before December thirty-first, 32 nineteen hundred ninety-nine, a tax is hereby imposed on the wages 33 earned, and net earnings from self-employment, within the city, of every 34 nonresident individual, estate and trust which shall comprise: (i) A 35 tax at the rate of forty-five hundredths of one percent on all wages. 36 (ii) A tax at the rate of sixty-five hundredths of one percent on all 37 net earnings from self-employment. 38 (3) For each taxable year beginning in nineteen hundred seventy and 39 ending in nineteen hundred seventy-one, two tentative taxes shall be 40 computed, the first as provided in paragraph one of this subdivision and 41 the second as provided in paragraph two of this subdivision, and the tax 42 for each such year shall be the sum of that proportion of each tentative 43 tax which the number of days in nineteen hundred seventy and the number 44 of days in nineteen hundred seventy-one, respectively, bears to the 45 number of days in the entire taxable year. 46 (4) For each taxable year beginning in nineteen hundred ninety-nine 47 and ending in two thousand, two tentative taxes shall be computed, the 48 first as provided in paragraph two of this subdivision and the second as 49 provided in paragraph one of this subdivision, and the tax for each such 50 year shall be the sum of that proportion of each tentative tax which the 51 number of days in nineteen hundred ninety-nine and the number of days in 52 two thousand, respectively, bears to the number of days in the entire 53 taxable year. 54 (b) Exclusion. (1) In computing the amount of wages and net earnings 55 from self-employment taxable under subdivision (a) of this section,

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1 there shall be allowed an exclusion against the total of wages and net 2 earnings from self-employment in accordance with the following table:

3 Total of wages and net earnings 4 from self-employment Exclusion allowable 5 Not over $10,000 $3,000 6 Over $10,000 but not over $20,000 $2,000 7 Over $20,000 but not over $30,000 $1,000 8 Over $30,000 None

9 (2) The exclusion allowable shall be applied pro rata against wages 10 and net earnings from self-employment. 11 (3) For taxable periods of less than one year, the exclusion allowable 12 shall be prorated pursuant to regulations of the commissioner. 13 (c) Limitation. In no event shall a taxpayer be subject to the tax 14 under this chapter in an amount greater than such taxpayer would be 15 required to pay if such taxpayer were a resident of the city and subject 16 to a tax on personal income of residents of the city adopted by the city 17 pursuant to authority granted by the general city law or the tax law. 18 § 11-1903 Taxable years to which tax imposed by this chapter applies; 19 tax for taxable years beginning prior to and ending after July first, 20 nineteen hundred sixty-six. (a) General. The tax imposed by this chapter 21 is imposed for each taxable year beginning with taxable years ending on 22 or after July first, nineteen hundred sixty-six. 23 (b) Alternate methods for determining tax for taxable years ending on 24 or after July first, nineteen hundred sixty-six. (1) The tax for any 25 taxable year ending on or after July first, nineteen hundred sixty-six 26 and on or before June thirtieth, nineteen hundred sixty-seven, shall be 27 the same part of the tax which would have been imposed had this chapter 28 been in effect for the entire taxable year as the number of months, or 29 major portions thereof, of the taxable year occurring after July first, 30 nineteen hundred sixty-six is of the number of months, or major portions 31 thereof, in the taxable year. 32 (2)(i) In lieu of the method of computation of tax prescribed in para- 33 graph one of this subdivision, if the taxpayer maintains adequate 34 records for any taxable year ending on or after July first, nineteen 35 hundred sixty-six and on or before June thirtieth, nineteen hundred 36 sixty-seven, the tax for such taxable year, at the election of the 37 taxpayer, may be computed on the basis of the wages which the taxpayer 38 would have reported had he or she filed a federal income tax return for 39 a taxable year beginning July first, nineteen hundred sixty-six, and 40 ending with the close of such taxable year ending on or before June 41 thirtieth, nineteen hundred sixty-seven, and the net earnings from self- 42 employment which the taxpayer would have reported for federal income tax 43 purposes had he or she filed a self-employment tax return for a taxable 44 year beginning July first, nineteen hundred sixty-six and ending with 45 the close of such taxable year ending on or before June thirtieth, nine- 46 teen hundred sixty-seven. 47 (ii) For purposes of this paragraph, the exclusions allowable under 48 section 11-1902 of this subchapter shall be reduced by a fraction, the 49 numerator of which is the number of months, or major portions thereof, 50 of the taxable year occurring before July first, nineteen hundred 51 sixty-six, and the denominator of which is the number of months, or 52 major portions thereof, in the taxable year. Except as provided in this 53 paragraph, the tax for such period ending on or before June thirtieth,

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1 nineteen hundred sixty-seven, shall be computed in accordance with the 2 other provisions of this chapter. 3 § 11-1904 Allocation to the city. (a) General. If net earnings from 4 self-employment are derived from services performed, or from sources, 5 within and without the city, there shall be allocated to the city a fair 6 and equitable portion of such earnings. 7 (b) Allocation of net earnings from self-employment. 8 (1) Place of business. If a taxpayer has no regular place of business 9 outside the city all of his or her net earnings from self-employment 10 shall be allocated to the city. 11 (2) Allocation by taxpayer's books. The portion of net earnings from 12 self-employment allocable to the city may be determined from the books 13 and records of a taxpayer's trade or business, if the methods used in 14 keeping such books and the accuracy thereof are approved by the commis- 15 sioner as fairly and equitably reflecting net earnings from self-employ- 16 ment within the city. 17 (3) Allocation by formula. If paragraph two of this subdivision does 18 not apply to the taxpayer, the portion of net earnings from self-employ- 19 ment allocable to the city shall be determined by multiplying (A) net 20 earnings from self-employment within and without the city, by (B) the 21 average of the following three percentages: 22 (i) Property percentage. The percentage computed by dividing (A) the 23 average of the value, at the beginning and end of the taxable year, of 24 real and tangible personal property connected with net earnings from 25 self-employment and located within the city, by (B) the average of the 26 value, at the beginning and end of the taxable year, of all real and 27 tangible personal property connected with the net earnings from self-em- 28 ployment and located both within and without the city. For this 29 purpose, real property shall include real property whether owned or 30 rented. 31 (ii) Payroll percentage. The percentage computed by dividing (A) the 32 total wages, salaries and other personal service compensation paid or 33 incurred during the taxable year to employees in connection with the net 34 earnings from self-employment derived from a trade or business carried 35 on within the city, by (B) the total of all wages, salaries and other 36 personal service compensation paid or incurred during the taxable year 37 to employees in connection with the net earnings from self-employment 38 derived from a trade or business carried on both within and without the 39 city. 40 (iii) Gross income percentage. The percentage computed by dividing 41 (A) the gross sales or charges for services performed by or through an 42 agency located within the city, by (B) the total of all gross sales or 43 charges for services performed within and without the city. The sales 44 or charges to be allocated to the city shall include all sales negoti- 45 ated or consummated, and charges for services performed, by an employee, 46 agent, agency or independent contractor chiefly situated at, connected 47 by contract or otherwise with, or sent out from, offices or other agen- 48 cies of the trade or business from which a taxpayer is deriving net 49 earnings from self-employment, situated within the city. 50 (c) Other allocation methods. The portion of net earnings from self- 51 employment allocable to the city shall be determined in accordance with 52 rules and regulations of the commissioner if it shall appear to the 53 commissioner that the net earnings from self-employment are not fairly 54 and equitably reflected under the provisions of subdivision (b) of this 55 section.

S. 8578 994

1 (d) Special rules for real estate. Income and deductions from the 2 rental of real property and gain and loss from the sale, exchange or 3 other disposition of real property, shall not be subject to allocation 4 under subdivision (b) or (c) of this section, but shall be considered as 5 entirely derived from or connected with the place in which such property 6 is located. 7 § 11-1905 Accounting periods and methods. (a) Accounting periods. A 8 taxpayer's taxable year under this chapter shall be the same as his or 9 her taxable year for federal income tax purposes. 10 (b) Change of accounting periods. If a taxpayer's taxable year is 11 changed for federal income tax purposes, his or her taxable year for 12 purposes of this chapter shall be similarly changed. If a taxable peri- 13 od of less than twelve months results from a change of taxable year, the 14 exclusion allowable under section 11-1902 of this subchapter shall be 15 prorated under regulations of the commissioner. 16 (c) Accounting methods. A taxpayer's method of accounting under this 17 chapter shall be the same as his or her method of accounting for federal 18 income tax purposes. In the absence of any method of accounting for 19 federal income tax purposes, net earnings from self-employment within 20 the city shall be computed under such method as in the opinion of the 21 commissioner clearly reflects net earnings from self-employment within 22 the city. 23 (d) Change of accounting methods. (1) If a taxpayer's method of 24 accounting is changed for federal income tax purposes, his or her method 25 of accounting for purposes of this chapter shall be similarly changed. 26 (2) If a taxpayer's method of accounting is changed, other than from 27 an accrual to an installment method, any additional tax which results 28 from adjustments determined to be necessary solely by reason of the 29 change shall not be greater than if such adjustments were ratably allo- 30 cated and included for the taxable year of the change and the preceding 31 taxable years, beginning after July first, nineteen hundred sixty-six, 32 not in excess of two, during which the taxpayer used the method of 33 accounting from which the change is made. 34 (3) If a taxpayer's method of accounting is changed from an accrual to 35 an installment method, any additional tax for the year of such change of 36 method and for any subsequent year which is attributable to the receipt 37 of installment payments properly accrued in a prior year, shall be 38 reduced by the portion of tax for any prior taxable year attributable to 39 the accrual of such installment payments, in accordance with regulations 40 of the commissioner. 41 § 11-1908 Withholding of tax on wages. On or after the first payroll 42 period beginning August twenty-seventh, nineteen hundred sixty-six, 43 every employer maintaining an office or transacting business within this 44 state and making payment of any wages taxable under this chapter shall 45 deduct and withhold from such wages for each payroll period a tax 46 computed in such manner as to result, so far as practicable, in with- 47 holding from the employee's wages during each calendar year an amount 48 substantially equivalent to the tax reasonably estimated to be due from 49 the employee under this chapter. The method of determining the amount to 50 be withheld shall be prescribed by regulations of the commissioner. 51 § 11-1909 Withholding of tax on wages for taxable periods commencing 52 on or after January first, nineteen hundred seventy-six. The provisions 53 contained in sections 11-1908, 11-1910, 11-1911, 11-1912, 11-1913 and 54 11-1914 of this subchapter shall not be applicable to taxes imposed for 55 taxable periods commencing on or after January first, nineteen hundred 56 seventy-six provided however, with respect to such periods, the

S. 8578 995

1 provisions contained in part V of article twenty-two of the tax law 2 shall be applicable with the same force and effect as if those 3 provisions had been incorporated in full in this section except that the 4 term "aggregate amount" contained in paragraphs one, two and three of 5 subsection (a) of section six hundred seventy-four of the tax law shall 6 mean the aggregate amounts of New York state personal income tax, city 7 earnings tax on nonresidents and city personal income tax on residents 8 authorized pursuant to article thirty of the tax law required to be 9 deducted and withheld and provided, however, that the provisions of such 10 paragraphs shall not be applicable to employer's returns required to be 11 filed with respect to taxes required to be deducted and withheld during 12 the calendar year nineteen hundred seventy-six, but such returns shall 13 be required to be filed with the tax commission at the times and in the 14 manner provided for in subdivision (a) of section 11-1912 of this 15 subchapter, except the term "commission" in such subdivision shall be 16 read as "tax commission." This section shall not apply to payments by 17 the United States for service in the armed forces of the United States 18 so long as the right to require deduction and withholding of tax from 19 such payments is prohibited by the laws of the United States. Service in 20 the armed forces of the United States shall have the same meaning as 21 when used in a comparable context in the laws of the United States 22 relating to withholding of city income taxes. 23 § 11-1910 Information statement for employee. Every employer required 24 to deduct and withhold tax under this chapter from the wages of an 25 employee, shall furnish to each such employee in respect of the wages 26 paid by such employer to such employee during the calendar year on or 27 before February fifteenth of the succeeding year, or, if his or her 28 employment is terminated before the close of such calendar year, within 29 thirty days from the date on which the last payment of the wages is 30 made, a written statement as prescribed by the commissioner showing the 31 total amount of wages paid by the employer to the employee, the amount 32 of wages paid for services performed within the city, the amount 33 deducted and withheld as tax, and such other information as the commis- 34 sioner may prescribe. The written statement required under this 35 section may be furnished to such employee in an electronic format. 36 § 11-1911 Credit for tax withheld. Wages upon which tax is required to 37 be withheld shall be taxable under this chapter as if no withholding 38 were required, but any amount of tax actually deducted and withheld 39 under this chapter in any calendar year shall be deemed to have been 40 paid on behalf of the employee from whom withheld, and such employee 41 shall be credited with having paid that amount of tax in such calendar 42 year. For a taxable year of less than twelve months, the credit shall be 43 made under regulations of the commissioner. 44 § 11-1912 Employer's return and payment of withheld taxes. (a) Gener- 45 al. On or after the first payroll period beginning August twenty-sev- 46 enth, nineteen hundred sixty-six, every employer required to deduct and 47 withhold tax under this chapter shall, for each calendar month, on or 48 before the fifteenth day of the month following the close of such calen- 49 dar month file a withholding return as prescribed by the commissioner 50 and pay over to the commissioner or to the depository designated by the 51 commissioner, the taxes so required to be deducted and withheld, except 52 that for the month of December in any year the returns shall be filed 53 and the taxes paid on or before January thirty-first of the succeeding 54 year. Where the aggregate amount required to be deducted and withheld 55 by any employer under this chapter and under chapter seventeen of this 56 title is less than twenty-five dollars in a calendar month and the

S. 8578 996

1 aggregate of such taxes for the semi-annual period ending on June thir- 2 tieth and December thirty-first can reasonably be expected to be less 3 than one hundred fifty dollars, the commissioner may, by regulation, 4 permit an employer to file a return on or before July thirty-first for 5 the semi-annual period ending on June thirtieth and on or before January 6 thirty-first for the semi-annual period ending on December thirty-first. 7 The commissioner may, if he or she believes such action necessary for 8 the protection of the revenues, require any employer to make a return 9 and pay to him or her the tax deducted and withheld at any time, or from 10 time to time. Where the amount of wages paid by an employer is not 11 sufficient under this chapter and under chapter seventeen of this title 12 to require the withholding of tax from the wages of any of his or her 13 employees, the commissioner may, by regulation, permit such employer to 14 file an annual return on or before February twenty-eighth of the follow- 15 ing calendar year. 16 (b) Combined returns. The commissioner may by regulation provide for 17 the filing of one return which shall include the return required to be 18 filed under this section, together with the employer's return required 19 to be filed under chapter seventeen of this title. 20 (c) Deposit in trust for city. Whenever any employer fails to collect, 21 truthfully account for, pay over the tax, or make returns of the tax as 22 required in this section, the commissioner may serve a notice requiring 23 such employer to collect the taxes which become collectible after 24 service of such notice, to deposit such taxes in a bank approved by the 25 commissioner, in a separate account, in trust for the city and payable 26 to the commissioner, and to keep the amount of such tax in such account 27 until payment over to the commissioner. Such notice shall remain in 28 effect until a notice of cancellation is served by the commissioner. 29 § 11-1913 Employer's liability for withheld taxes. Every employer 30 required to deduct and withhold the tax under this chapter is hereby 31 made liable for such tax. For purposes of assessment and collection, 32 any amount required to be withheld and paid over to the commissioner, 33 and any additions to tax, penalties and interest with respect thereto 34 shall be considered the tax of the employer. Any amount of tax actually 35 deducted and withheld under this chapter shall be held to be a special 36 fund in trust for the city. No employee shall have any right of action 37 against his or her employer in respect to any monies deducted and with- 38 held from his or her wages and paid over to the commissioner in compli- 39 ance or in intended compliance with this chapter. 40 § 11-1914 Employer's failure to withhold. If an employer fails to 41 deduct and withhold the tax, as required, and thereafter the tax against 42 which such tax may be credited is paid, the tax so required to be 43 deducted and withheld shall not be collected from the employer, but the 44 employer shall not be relieved from liability for any penalties, inter- 45 est or additions to the tax otherwise applicable in respect of such 46 failure to deduct and withhold. 47 § 11-1915 Combined returns, employer's returns and payments. The 48 state tax commission may require: 49 (1) The filing of any or all of the following: 50 (A) A combined return which in addition to the return provided for in 51 this chapter may also include returns required to be filed under a law 52 authorized by article thirty of the tax law and under article twenty-two 53 of the tax law. 54 (B) A combined employer's return which in addition to the employer's 55 return provided for by this chapter may also include employer's returns

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1 required to be filed under a law authorized by article thirty of the tax 2 law and under article twenty-two of the tax law. 3 (2) Where a combined return or employer's return is required, and 4 with respect to the payment of estimated tax, the state tax commission 5 may also require payment of a single amount which shall be the total of 6 the amounts, total taxes less any credits or refunds, required to be 7 paid with the returns or employer's returns or in payment of estimated 8 tax pursuant to the provisions of this chapter, a law authorized by 9 article thirty of the tax law and pursuant to the provisions of article 10 twenty-two of the tax law.

11 SUBCHAPTER 2 12 RETURNS AND PAYMENT OF TAX

13 § 11-1916 Returns and payment of tax. (a) General. On or before the 14 fifteenth day of the fourth month following the close of the taxable 15 year, every person subject to the tax shall make and file a return and 16 any balance of the tax shown due on the face of such return shall be 17 paid therewith. The commissioner may, by regulation, provide for the 18 filing of returns and payment of the tax at such other times as he or 19 she deems necessary for the proper enforcement of this chapter. The 20 commissioner may also provide by regulation that any return otherwise 21 required to be made and filed under this chapter by any nonresident 22 individual need not be made and filed if such nonresident individual 23 had, during the taxable year to which the return would relate, no net 24 earnings from self-employment within the city. Any regulation allowing 25 such waiver of return may provide for additional limitations on and 26 conditions and prerequisites to the privilege of not filing a return. 27 (b) Decedents. The return for any deceased individual shall be made 28 and filed by his or her executor, administrator, or other person charged 29 with his or her property. If a final return of a decedent is for a 30 fractional part of a year, the due date of such return shall be the 31 fifteenth day of the fourth month following the close of the twelve- 32 month period which began with the first day of such fractional part of 33 the year. 34 (c) Individuals under a disability. The return for an individual who 35 is unable to make a return by reason of minority or other disability 36 shall be made and filed by his or her guardian, committee, fiduciary or 37 other person charged with the care of his or her person or property, 38 other than a receiver in possession of only a part of his or her proper- 39 ty, or by his or her duly authorized agent. 40 (d) Estates and trust. The return for an estate or trust shall be made 41 and filed by the fiduciary. 42 (e) Joint fiduciaries. If two or more fiduciaries are acting jointly, 43 the return may be made by any one of them. 44 (f) Cross reference. For provisions as to information returns by part- 45 nerships, employers and other persons, see section 11-1921 of this 46 subchapter. 47 § 11-1917 Time and place for filing returns and paying tax. A person 48 required to make and file a return under this chapter shall, without 49 assessment, notice or demand, pay any tax due thereon to the commission- 50 er on or before the date fixed for filing such return, determined with- 51 out regard to any extension of time for filing the return. The commis- 52 sioner shall prescribe by regulation the place for filing any return, 53 statement, or other document required pursuant to this chapter and for 54 payment of any tax.

S. 8578 998

1 § 11-1918 Signing of returns and other documents. (a) General. Any 2 return, statement or other document required to be made pursuant to this 3 chapter shall be signed in accordance with regulations or instructions 4 prescribed by the commissioner. The fact that an individual's name is 5 signed to a return, statement, or other document, shall be prima facie 6 evidence for all purposes that the return, statement or other document 7 was actually signed by such individual. 8 (b) Partnerships. Any return, statement or other document required of 9 a partnership shall be signed by one or more partners. The fact that a 10 partner's name is signed to a return, statement, or other document, 11 shall be prima facie evidence for all purposes that such partner is 12 authorized to sign on behalf of the partnership. 13 (c) Certifications. The making or filing of any return, statement or 14 other document or copy thereof required to be made or filed pursuant to 15 this chapter, including a copy of a federal return, shall constitute a 16 certification by the person making or filing such return, statement or 17 other document or copy thereof that the statements contained therein are 18 true and that any copy filed is a true copy. 19 § 11-1919 Change of residence status during year. (a) General. If an 20 individual changes his or her status during his or her taxable year from 21 resident to nonresident, or from nonresident to resident, he or she 22 shall file a return as a nonresident for the portion of the year during 23 which he or she is a nonresident if he or she is subject to the tax 24 imposed by this chapter or, if not subject to such tax, an information 25 return for the portion of the year during which he or she is a nonresi- 26 dent, subject to such exceptions as the commissioner may prescribe by 27 regulation. Such information return shall be due at the same time as 28 the return required by chapter seventeen of this title for the portion 29 of the year during which such individual is a resident. 30 (b) City taxable wages and net earnings from self-employment for 31 portion of year individual is a nonresident. The city taxable wages and 32 net earnings from self-employment for the portion of the year during 33 which he or she is a nonresident shall be determined, except as provided 34 in subdivision (c) of this section, under this chapter as if his or her 35 taxable year for federal income tax purposes were limited to the period 36 of his or her nonresident status. 37 (c) Special accruals. (1) If an individual changes his or her status 38 from resident to nonresident, he or she shall, regardless of his or her 39 method of accounting, accrue for the portion of the taxable year prior 40 to such change of status any items of income, gain, loss or deduction 41 accruing prior to the change of status, if not otherwise properly inclu- 42 dible, whether or not because of an election to report on an installment 43 basis, or allowable for city earnings tax purposes for such portion of 44 the taxable year for a prior taxable year. The amounts of such accrued 45 items shall be determined as if such accrued items were includible or 46 allowable for federal self-employment tax purposes. 47 (2) If an individual changes his or her status from nonresident to 48 resident, he or she shall, regardless of his or her method of account- 49 ing, accrue for the portion of the taxable year prior to such change of 50 status any items of income, gain, loss or deduction accruing prior to 51 the change of status, if not otherwise properly includible, whether or 52 not because of an election to report on an installment basis, or allow- 53 able for federal self-employment tax purposes for such portion of the 54 taxable year or for prior taxable year. The amounts of such accrued 55 items shall be determined if such accrued items were includible or 56 allowable for federal self-employment tax purposes.

S. 8578 999

1 (3) No item of income, gain, loss or deduction which is accrued under 2 this subdivision shall be taken into account in determining city 3 adjusted wages earned, or net earnings from self-employment, within the 4 city, for any subsequent taxable period. 5 (4) Where an individual changes his or her status from resident to 6 nonresident, the accruals under this subdivision shall not be required 7 if the individual files with the commissioner a bond or other security 8 acceptable to the commissioner, conditioned upon the inclusion of 9 amounts accruable under this subdivision in city adjusted gross income 10 under chapter seventeen of this title for one or more subsequent taxable 11 years as if the individual has not changed his or her resident status. 12 In such event, the tax under this chapter shall not apply to such 13 amounts. 14 (d) Prorations. Where an individual changes his or her status during 15 his or her taxable year from resident to nonresident or from nonresident 16 to resident, the exclusion allowable under subdivision (b) of section 17 11-1902 of this chapter shall be prorated, under regulations of the 18 commissioner, to reflect the portions of the entire taxable year during 19 which the individual was a resident and a nonresident. 20 § 11-1920 Extension of time. (a) General. The commissioner may grant a 21 reasonable extension of time for payment of tax or estimated tax, or any 22 installment, or for filing any return, statement, or other document 23 required pursuant to this chapter, on such terms and conditions as he or 24 she may require. Except for a taxpayer who is outside the United States 25 or who intends to claim nonresident status pursuant to subparagraphs 26 (i), (ii) and (iii) of paragraph one of subdivision (h) of section 27 11-1901 of this chapter, no such extension for filing any return, state- 28 ment or other document, shall exceed six months. 29 (b) Furnishing of security. If any extension of time is granted for 30 payment of any amount of tax, the commissioner may require the taxpayer 31 to furnish a bond or other security in an amount not exceeding twice the 32 amount for which the extension of time for payment is granted, on such 33 terms and conditions as the commissioner may require. 34 § 11-1921 Requirements concerning returns, notices, records and state- 35 ments. (a) General. The commissioner may prescribe regulations as to the 36 keeping of records, the content and form of returns and statements, and 37 the filing of copies of federal income tax returns and determinations. 38 The commissioner may require any person, by regulation or notice served 39 upon such person, to make such returns, render such statements, or keep 40 such records, as the commissioner may deem sufficient to show whether or 41 not such person is liable under this chapter for tax or for collection 42 of tax. 43 (b) Partnerships. Every partnership doing business in the city and 44 having no partners who are residents shall make a return for the taxable 45 year setting forth all items of income, gain, loss and deduction and 46 such other pertinent information as the commissioner may by regulations 47 and instructions prescribe. Such return shall be filed on or before the 48 fifteenth day of the fourth month following the close of each taxable 49 year. For purposes of this subdivision, "taxable year" means year or 50 period which would be a taxable year of the partnership if it were 51 subject to tax under this chapter. 52 (c) Information at source. The commissioner may prescribe regulations 53 and instructions requiring returns of information to be made and filed 54 on or before February twenty-eighth of each year as to the payment or 55 crediting in any calendar year of amounts of six hundred dollars or more 56 to any taxpayer under this chapter. Such returns may be required of any

S. 8578 1000

1 person, including lessees or mortgagors of real or personal property, 2 fiduciaries, employers, and all officers and employees of this state, or 3 any municipal corporation or political subdivision of this state, having 4 the control, receipt, custody, disposal or payment of interest, rents, 5 salaries, wages, premiums, annuities, compensations, remunerations, 6 emoluments or other fixed or determinable gains, profits or income, 7 except interest coupons payable to bearer. A duplicate of the statement 8 as to tax withheld on wages, required to be furnished by an employer to 9 an employee, shall constitute the return of information required to be 10 made under this section with respect to such wages. 11 (d) Notice of qualification as receiver, etc. Every receiver, trustee 12 in bankruptcy, assignee for benefit of creditors, or other like fiduci- 13 ary shall give notice of his or her qualifications as such to the 14 commissioner, as may be required by regulation. 15 § 11-1922 Report of change in federal or New York state taxable 16 income. If the amount of a taxpayer's federal or New York state taxable 17 income or self-employment income reported on his or her federal or New 18 York state tax return for any taxable year is changed or corrected by 19 the United States internal revenue service or the New York state commis- 20 sioner of taxation and finance or other competent authority, or as the 21 result of a renegotiation of a contract or subcontract with the United 22 States or New York state or if a taxpayer, pursuant to subsection (d) of 23 section six thousand two hundred thirteen of the internal revenue code, 24 executes a notice of waiver of the restrictions provided in subsection 25 (a) of said section or if a taxpayer, pursuant to subdivision (f) of 26 section six hundred eighty-one of the tax law executes a notice of waiv- 27 er of the restrictions provided in subdivision (c) of said section, or 28 if any tax on self-employment income in addition to that shown on his or 29 her return is assessed, the taxpayer shall report such change or 30 correction in federal or New York state taxable income or such execution 31 of such notice of waiver or such assessment and the changes or 32 corrections of his or her federal or New York state taxable income or 33 self-employment income on which it is based, within ninety days after 34 the final determination of such change, correction, or renegotiation, or 35 such execution of such notice of waiver or the making of such assessment 36 as otherwise required by the commissioner, and shall concede the accura- 37 cy of such determination or state wherein it is erroneous. Any taxpayer 38 filing an amended federal or New York state income or self-employment 39 income tax return shall also file within ninety days thereafter an 40 amended return under this chapter, and shall give such information as 41 the commissioner may require. The commissioner may by regulation 42 prescribe such exceptions to the requirements of this section as he or 43 she deems appropriate. For purposes of this section, (i) the term 44 "taxpayer" shall include a partnership having any income derived from 45 city sources, and (ii) the term "federal income tax return" shall 46 include the returns of income required under section six thousand thir- 47 ty-one of the internal revenue code. Reports made under this section by 48 a partnership shall indicate the portion of the change in each item of 49 income, gain, loss or deduction allocable to each partner and shall set 50 forth such identifying information with respect to such partner as may 51 be prescribed by the commissioner.

52 SUBCHAPTER 3 53 PROCEDURE AND ADMINISTRATION

S. 8578 1001

1 § 11-1923 Notice of deficiency. (a) General. If upon examination of a 2 taxpayer's return under this chapter the commissioner determines that 3 there is a deficiency of tax, he or she may mail a notice of deficiency 4 to the taxpayer. If a taxpayer fails to file a return required under 5 this chapter, the commissioner is authorized to estimate the taxpayer's 6 wages and net earnings from self-employment or the wages from which 7 taxes are required to be deducted and withheld and the tax thereon, from 8 any information in the commissioner's possession, and to mail a notice 9 of deficiency to the taxpayer. A notice of deficiency shall be mailed 10 by certified or registered mail to the taxpayer at such taxpayer's last 11 known address in or out of the city. If the taxpayer is deceased or 12 under a legal disability, a notice of deficiency may be mailed to his or 13 her last known address in or out of the city, unless the commissioner 14 has received notice of the existence of a fiduciary relationship with 15 respect to the taxpayer. 16 (b) Notice of deficiency as assessment. The notice of deficiency shall 17 be an assessment of the amount of tax specified in such notice, together 18 with the interest, additions to tax and penalties stated in such notice. 19 (c) Restrictions on collection and levy. No notice and demand for 20 payment of an assessment of a deficiency in tax made by a notice of 21 deficiency and no levy or proceeding in court for its collection shall 22 be made, begun or prosecuted, except as otherwise provided in section 23 11-1937 of this subchapter, until the expiration of the time for filing 24 a petition contesting such notice, nor, if a petition with respect to 25 the taxable year has been filed with the commissioner, until the deci- 26 sion of the commissioner has become final. After a petition has been 27 filed the restriction provided herein shall not apply to such part of 28 the deficiency as is not contested by the petition. For exception in 29 the case of judicial review of the decision of the commissioner, see 30 subdivision (c) of section 11-1932 of this subchapter. 31 (d) Exceptions for mathematical errors. If a mathematical error 32 appears on a return, including an overstatement of the credit for tax 33 withheld at the source or of the amount paid as estimated tax, the 34 commissioner shall notify the taxpayer that an amount of tax in excess 35 of that shown upon the return is due, and that such excess has been 36 assessed. Such notice shall not be considered as a notice of deficiency 37 for the purposes of this section, subdivision (f) of section 11-1929 of 38 this subchapter, limiting credits or refunds after petition to the 39 commissioner, or subdivision (b) of section 11-1931 of this subchapter, 40 authorizing the filing of a petition with the commissioner based on a 41 notice of deficiency, nor shall collection of such assessment be prohib- 42 ited by the provisions of subdivision (c) of this section. 43 (e) Exception where change in federal or New York state taxable income 44 is not reported (1) If the taxpayer fails to comply with section 11-1922 45 of this chapter in not reporting a change or correction increasing his 46 or her federal or New York state taxable income or self-employment 47 income as reported on such taxpayer's federal or New York state tax 48 return or in not reporting a change or correction which is treated in 49 the same manner as if it were a deficiency for federal or New York state 50 tax purposes or in not filing an amended return or in not reporting the 51 execution of a notice of waiver or an assessment described in such 52 section, instead of the mode and time of assessment and collection 53 provided for in subdivision (b) of this section, the commissioner may 54 assess a deficiency based upon such changed or corrected federal or New 55 York state taxable income or self-employment income by mailing to the 56 taxpayer a notice of additional tax due specifying the amount of the

S. 8578 1002

1 deficiency, and such deficiency, together with the interest, additions 2 to tax and penalties stated in such notice, shall be deemed assessed and 3 subject to collection procedures on the date such notice is mailed 4 unless within thirty days after the mailing of such notice a report of 5 the federal or New York state change or correction or an amended return, 6 where such return was required by section 11-1922 of this chapter is 7 filed accompanied by a statement showing wherein such federal or New 8 York state determination of such notice of additional tax due are erro- 9 neous. 10 (2) Such notice shall not be considered as a notice of deficiency for 11 the purposes of this section, subdivision (f) of section 11-1929 of this 12 subchapter, limiting credits or refunds after petition to the commis- 13 sioner, or subdivision (b) of section 11-1931 of this subchapter, 14 authorizing the filing of a petition with the commissioner based on a 15 notice of deficiency, nor shall the collection of such assessment be 16 prohibited by the provisions of subdivision (c) of this section. 17 If the taxpayer is deceased or under a legal disability, a notice of 18 additional tax due may be mailed to his or her last known address in or 19 out of the city, unless the commissioner has received notice of the 20 existence of a fiduciary relationship with respect to the taxpayer. 21 (f) Waiver of restrictions. The taxpayer shall at any time have the 22 right to waive the mailing of a notice of deficiency or restriction on 23 collection of the whole or any part of the deficiency, or both, by a 24 signed notice in writing filed with the commissioner. 25 (g) Deficiency defined. For purposes of this chapter, a deficiency 26 means the amount of the tax imposed by this chapter, less (1) the amount 27 shown as the tax upon the taxpayer's return, whether the return was made 28 or the tax computed by the taxpayer or by the commissioner, and less, 29 (2) the amounts previously assessed, or collected without assessment, as 30 a deficiency and plus (3) the amount of any rebates. For the purpose of 31 this definition, the tax imposed by this chapter and the tax shown on 32 the return shall both be determined without regard to payments on 33 account of estimated tax or the credit for withholding tax; and a rebate 34 means so much of an abatement, refund or other repayment, whether or not 35 erroneous, made on the ground that the amounts entering into the defi- 36 nition of a deficiency showed a balance in favor of the taxpayer. 37 § 11-1924 Assessment. (a) Assessment date. The amount of tax which a 38 return shows to be due, or the amount of tax which a return would have 39 shown to be due but for a mathematical error, shall be deemed to be 40 assessed on the date of filing of the return, including any amended 41 return showing an increase of tax. In the case of a return properly 42 filed without computation of tax, the tax computed by the commissioner 43 shall be deemed to be assessed on the date on which payment is due. If 44 a notice of deficiency has been mailed, the amount of the deficiency 45 shall be deemed to be assessed on the date on which it is mailed. If an 46 amended return or report filed pursuant to section 11-1922 of this chap- 47 ter concedes the accuracy of a federal or New York state adjustment, 48 change or correction, any deficiency in tax under this chapter resulting 49 therefrom shall be deemed to be assessed on the date of filing such 50 report or amended return, and such assessment shall be timely notwith- 51 standing section 11-1925 of this subchapter. If a notice of additional 52 tax due, as prescribed in subdivision (e) of section 11-1923 of this 53 subchapter, has been mailed, the amount of the deficiency shall be 54 deemed to be assessed on the date specified in such subdivision unless 55 within thirty days after the mailing of such notice a report of the 56 federal or New York state change or correction or an amended return,

S. 8578 1003

1 where such return was required by section 11-1922 of this chapter, is 2 filed accompanied by a statement showing wherein such federal or New 3 York state determination and such notice of additional tax due are erro- 4 neous. Any amount paid as a tax or in respect of a tax, other than 5 amounts withheld at the source or paid as estimated income tax, shall be 6 deemed to be assessed upon the date of receipt of payment, notwithstand- 7 ing any other provisions. 8 (b) Other assessment powers. If the mode or time for the assessment 9 of any tax under this chapter, including interest, additions to tax and 10 assessable penalties, is not otherwise provided for, the commissioner 11 may establish the same by regulations. 12 (d) Supplemental assessment. The commissioner may, at any time within 13 the period prescribed for assessment, make a supplemental assessment, 14 subject to the provisions of section 11-1923 of this subchapter where 15 applicable, whenever it is ascertained that any assessment is imperfect 16 or incomplete in any material respect. 17 (e) Cross reference. For assessment in case of jeopardy, see section 18 11-1937 of this subchapter. 19 § 11-1925 Limitations on assessment. (a) General. Except as otherwise 20 provided in this section, any tax under this chapter shall be assessed 21 within three years after the return was filed, whether or not such 22 return was filed on or after the date prescribed. 23 (b) Exceptions. (1) Assessment at any time. The tax may be assessed at 24 any time if: 25 (A) no return is filed, 26 (B) a false or fraudulent return is filed with intent to evade tax, or 27 (C) the taxpayer fails to comply with section 11-1922 of this chapter 28 in not reporting a change or correction increasing his or her federal or 29 New York state taxable income or self-employment income as reported on 30 the taxpayer's federal or New York state tax return, or the execution of 31 a notice of waiver and the changes or corrections on which it is based 32 or in not reporting an assessment or a change or correction which is 33 treated in the same manner as if it were a deficiency for federal or New 34 York state income tax purposes, or in not filing an amended return. 35 (2) Extension by agreement. Where, before the expiration of the time 36 prescribed in this section for the assessment of tax, both the commis- 37 sioner and the taxpayer have consented in writing to its assessment 38 after such time, the tax may be assessed at any time prior to the expi- 39 ration of the period agreed upon. The period so agreed upon may be 40 extended by subsequent agreements in writing made before the expiration 41 of the period previously agreed upon. 42 (3) Report of changed or corrected federal or New York state income. 43 If the taxpayer shall, pursuant to section 11-1922 of this chapter, 44 report a change or correction or file an amended return increasing the 45 taxpayer's federal or New York state taxable income or earnings from 46 self-employment or report an assessment or a change or correction which 47 is treated in the same manner as if it were a deficiency for federal or 48 New York state income tax purposes, the assessment, if not deemed to 49 have been made upon the filing of the report or amended return, may be 50 made at any time within two years after such report or amended return 51 was filed. The amount of such assessment of tax shall not exceed the 52 amount of the increase in city tax on earnings attributable to such 53 federal or New York state change or correction. The provisions of this 54 paragraph shall not affect the time within which or the amount for which 55 an assessment may otherwise be made.

S. 8578 1004

1 (4) Recovery of erroneous refund. An erroneous refund shall be consid- 2 ered an underpayment of tax on the date made, and an assessment of a 3 deficiency arising out of an erroneous refund may be made at any time 4 within two years from the making of the refund, except that the assess- 5 ment may be made within five years from the making of the refund if it 6 appears that any part of the refund was induced by fraud or misrepresen- 7 tation of a material fact. 8 (5) Request for prompt assessment. If a return is required for a dece- 9 dent or for the decedent's estate during the period of administration, 10 the tax shall be assessed within eighteen months after written request 11 therefor, made after the return is filed, by the executor, administrator 12 or other person representing the estate of such decedent, but not more 13 than three years after the return was filed, except as otherwise 14 provided in this subdivision and subdivision (c) of this section. 15 (c) Omission of income on return. The tax may be assessed at any time 16 within six years after the return was filed if a taxpayer omits from a 17 return an amount properly includible therein which is in excess of twen- 18 ty-five per centum of the amount of the gross income derived by the 19 taxpayer from any trade or business. 20 For purposes of this subdivision there shall not be taken into account 21 any amount which is omitted in the return if such amount is disclosed in 22 the return, or in a statement attached to the return, in a manner 23 adequate to apprise the commissioner of the nature and amount of such 24 item. 25 (d) Suspension of running of period of limitation. The running of the 26 period of limitations on or collection of tax or other amount, or of a 27 transferee's liability, shall, after the mailing of a notice of defi- 28 ciency, be suspended for the period during which the commissioner is 29 prohibited under subdivision (c) of section 11-1923 of this subchapter 30 collecting by levy or proceeding in court. 31 § 11-1926 Interest on underpayment. (a) General. If any amount of tax 32 is not paid on or before the last date prescribed in this chapter for 33 payment, interest on such amount at the appropriate rates prescribed for 34 underpayments of tax under chapter seventeen of this title shall be paid 35 for the period from such last date to the date paid, whether or not any 36 extension of time for payment was granted. Interest under this subdivi- 37 sion shall not be paid if the amount thereof is less than one dollar. 38 If the time for filing a return of tax withheld by an employer is 39 extended, the employer shall pay interest for the period for which the 40 extension is granted and may not charge such interest to the employee. 41 (c) Exception for mathematical error. No interest shall be imposed on 42 any underpayment of tax due solely to mathematical error if the taxpayer 43 files a return within the time prescribed in this chapter, including any 44 extension of time, and pays the amount of underpayment within three 45 months after the due date of such return, as it may be extended. 46 (d) No interest on interest. No interest under this chapter shall be 47 imposed on any interest provided by this chapter. 48 (e) Suspension of interest on deficiencies. If a waiver of 49 restrictions on collection of an assessment of a deficiency has been 50 filed by the taxpayer, and if notice and demand by the commissioner for 51 payment of such assessed deficiency is not made within thirty days after 52 the filing of such waiver, interest shall not be imposed on such defi- 53 ciency for the period beginning immediately after such thirtieth day and 54 ending with the date of notice and demand. 55 (f) Interest treated as tax. Interest under this section shall be 56 paid upon notice and demand and shall be assessed, collected and paid in

S. 8578 1005

1 the same manner as tax. Any reference in this chapter to the tax 2 imposed by this chapter shall be deemed also to refer to interest 3 imposed by this section on such tax. 4 (g) Interest on penalties or additions to tax. Interest shall be 5 imposed under subdivision (a) of this section in respect of any assess- 6 able penalty or addition to tax only if such assessable penalty or addi- 7 tion to tax is not paid within ten days from the date of the notice and 8 demand therefor under subdivision (b) of section 11-1934 of this 9 subchapter, and in such case interest shall be imposed only for the 10 period from such date of the notice and demand to the date of payment. 11 (h) Payment prior to notice of deficiency. If, prior to the mailing 12 to the taxpayer of a notice of deficiency under subdivision (b) of 13 section 11-1923 of this subchapter, the commissioner mails to the 14 taxpayer a notice of proposed increase of tax and within thirty days 15 after the date of the notice of proposed increase the taxpayer pays all 16 amounts shown on the notice to be due to the commissioner, no interest 17 under this section on the amount so paid shall be imposed for the period 18 after the date of such notice of proposed increase. 19 (i) Payment within ninety days after notice of deficiency. If a 20 notice of deficiency under section 11-1923 of this subchapter is mailed 21 to the taxpayer, and the total amount specified in such notice is paid 22 on or before the ninetieth day after the date of mailing, interest under 23 this section shall not be imposed for the period after the date of the 24 notice. 25 (j) Payment within ten days after notice and demand. If notice and 26 demand is made for payment of any amount under subdivision (b) of 27 section 11-1934 of this subchapter, and if such amount is paid within 28 ten days after the date of such notice and demand, interest under this 29 section on the amount so paid shall not be imposed for the period after 30 the date of such notice and demand. 31 (k) Limitation on assessment and collection. Interest prescribed 32 under this section may be assessed and collected at any time during the 33 period within which the tax or other amount to which such interest 34 relates may be assessed and collected, respectively. 35 (l) Interest on erroneous refund. Any portion of tax or other amount 36 which has been erroneously refunded, and which is recoverable by the 37 commissioner, shall bear interest at the rate of six per centum per 38 annum from the date of the payment of the refund, but only if it appears 39 that any part of the refund was induced by fraud or a misrepresentation 40 of a material fact. 41 (m) Satisfaction by credits. If any portion of a tax is satisfied by 42 credit of an overpayment, then no interest shall be imposed under this 43 section on the portion of the tax so satisfied for any period during 44 which, if the credit had not been made, interest would have been allow- 45 able with respect to such overpayment. 46 § 11-1927 Additions to tax and civil penalties. (a) Failure to file 47 tax return. In case of failure to file a tax return under this chapter 48 on or before the prescribed date, determined with regard to any exten- 49 sion of time for filing, unless it is shown that such failure is due to 50 reasonable cause and not due to willful neglect, there shall be added to 51 the amount required to be shown as tax on such return five percent of 52 the amount of such tax if the failure is for not more than one month, 53 with an additional five percent for each additional month or fraction 54 thereof during which such failure continues, not exceeding twenty-five 55 percent in the aggregate. For this purpose, the amount of tax required 56 to be shown on the return shall be reduced by the amount of any part of

S. 8578 1006

1 the tax which is paid on or before the date prescribed for payment of 2 the tax and by the amount of any credit against the tax which may be 3 claimed upon the return. 4 (b) Deficiency due to negligence. If any part of a deficiency is due 5 to negligence or intentional disregard of this chapter or rules or regu- 6 lations hereunder, but without intent to defraud, there shall be added 7 to the tax an amount equal to five percent of the deficiency. 8 (c) Failure to file declaration or underpayment of estimated tax. If 9 any taxpayer fails to file a declaration of estimated tax or fails to 10 pay all or any part of an installment of estimated tax, the taxpayer 11 shall be deemed to have made an underpayment of estimated tax. There 12 shall be added to the tax for the taxable year an amount at the rate of 13 six per centum upon the amount of the underpayment for the period of the 14 underpayment but not beyond the fifteenth day of the fourth month 15 following the close of the taxable year. The amount of underpayment 16 shall be the excess of the amount of the installment which would be 17 required to be paid if the estimated tax were equal to seventy percent 18 of the tax attributable to net earnings from self employment shown on 19 the tax return for the taxable year, or if no return was filed, of the 20 tax so attributable for such year, over the amount, if any, of the 21 installment paid on or before the last day prescribed for such payment. 22 No underpayment shall be deemed to exist with respect to a declaration 23 or installment otherwise due on or after the taxpayer's death. 24 (d) Exception to addition for underpayment of estimated tax. The addi- 25 tion to tax under subdivision (c) of this section with respect to any 26 underpayment of any installment shall not be imposed if the total amount 27 of all payments of estimated tax made on or before the last date 28 prescribed for the payment of such installment equals or exceeds which- 29 ever of the following is the lesser: 30 (1) The amount which would have been required to be paid on or before 31 such date if the estimated tax were whichever of the following is the 32 lesser: 33 (A) The tax attributable to net earnings from self-employment shown on 34 the return of the individual for the preceding taxable year, if a return 35 showing a liability for tax was filed by the individual for the preced- 36 ing taxable year and such preceding year was a taxable year of twelve 37 months, or 38 (B) An amount equal to seventy percent of the tax so attributable for 39 the taxable year computed by placing on an annualized basis the taxable 40 net earnings from self-employment for the months in the taxable year 41 ending before the month in which the installment is required to be paid. 42 For purposes of this subparagraph, the taxable net earnings from self- 43 employment shall be placed on an annualized basis by: 44 (i) multiplying by twelve, or, in the case of a taxable year of less 45 than twelve months, the number of months in the taxable year, the taxa- 46 ble net earnings from self-employment for the months in the taxable year 47 ending before the month in which the installment is required to be 48 paid, 49 (ii) dividing the resulting amount by the number of months in the 50 taxable year ending before the month in which such installment date 51 falls, and 52 (iii) deducting from such amount the proper proportion of the exclu- 53 sion allowable for the taxable year by subdivision (b) of section 54 11-1902 of this chapter; or 55 (2) An amount equal to ninety percent of the tax computed, at the 56 rates applicable to the taxable year, on the basis of the actual taxable

S. 8578 1007

1 net earnings from self-employment for the months in the taxable year 2 ending before the month in which the installment is required to be paid. 3 (e) Deficiency due to fraud. If any part of a deficiency is due to 4 fraud, there shall be added to the tax an amount equal to fifty percent 5 of the deficiency. This amount shall be in lieu of any other addition 6 to tax imposed by subdivision (a) or (b) of this section. 7 (f) Non-willful failure to pay withholding tax. If any employer, with- 8 out intent to evade or defeat any tax imposed by this chapter or the 9 payment thereof, shall fail to make a return and pay a tax withheld by 10 him or her at the time required by or under provisions of section 11 11-1912 of this chapter, such employer shall be liable for such tax and 12 shall pay the same together with interest thereon and the addition to 13 tax provided in subdivision (a) of this section, and such interest and 14 addition to tax shall not be charged to or collected from the employee 15 by the employer. The commissioner shall have the same rights and powers 16 for the collection of such tax, interest and addition to tax against 17 such employer as are now prescribed by this chapter for the collection 18 of tax against an individual taxpayer. 19 (g) Willful failure to collect and pay over tax. Any person required 20 to collect, truthfully account for, and pay over the tax imposed by this 21 chapter who willfully fails to collect such tax or truthfully account 22 for and pay over such tax or willfully attempts in any manner to evade 23 or defeat the tax or the payment thereof, shall, in addition to other 24 penalties provided by law, be liable to a penalty equal to the total 25 amount of the tax evaded, or not collected, or not accounted for and 26 paid over. No addition to tax under subdivision (b) or (e) of this 27 section shall be imposed for any offense to which this subdivision 28 applies. 29 (h) Failure to file certain information returns. In case of each fail- 30 ure to file a statement of a payment to another person, required under 31 authority of subdivision (c) of section 11-1921 of this chapter, relat- 32 ing to information at source, including the duplicate statement of tax 33 withheld on wages, on the date prescribed therefor, determined with 34 regard to any extension of time for filing, unless it is shown that such 35 failure is due to reasonable cause and not willful neglect, there shall, 36 upon notice and demand by the commissioner and in the same manner as 37 tax, be paid by the person so failing to file the statement, a penalty 38 of one dollar for each statement not so filed, but the total amount 39 imposed on the delinquent person for all such failures during any calen- 40 dar year shall not exceed one thousand dollars. 41 (i) Additional penalty. Any person who with fraudulent intent shall 42 fail to pay, or to deduct or withhold and pay, any tax, or to make, 43 render, sign or certify any return or declaration of estimated tax, or 44 to supply any information within the time required by or under this 45 chapter, shall be liable to a penalty of not more than one thousand 46 dollars, in addition to any other amounts required under this chapter, 47 to be imposed, assessed and collected by the commissioner. The commis- 48 sioner shall have the power, in his or her discretion, to waive, reduce 49 or compromise any penalty under this subdivision. 50 (j) Additions treated as tax. The additions to tax and penalties 51 provided by this section shall be paid upon notice and demand and shall 52 be assessed, collected and paid in the same manner as taxes, and any 53 reference in this chapter to tax or tax imposed by this chapter, shall 54 be deemed also to refer to the additions to tax and penalties provided 55 by this section. For purposes of section 11-1923 of this subchapter, 56 this subdivision shall not apply to:

S. 8578 1008

1 (1) any addition to tax under subdivision (a) of this section except 2 as to that portion attributable to a deficiency; 3 (2) any addition to tax under subdivision (c) of this section; and 4 (3) any additional penalty under subdivision (i) of this section. 5 (k) Determination of deficiency. For purposes of subdivisions (b) and 6 (e) of this section, the amount shown as the tax by the taxpayer upon 7 his or her return shall be taken into account in determining the amount 8 of the deficiency only if such return was filed on or before the last 9 day prescribed for the filing of such return, determined with regard to 10 any extension of time for such filing. 11 (l) Person defined. For purposes of subdivisions (g) and (i) of this 12 section, the term "person" includes an individual, corporation or part- 13 nership or an officer or employee of any corporation, including a 14 dissolved corporation, or a member or employee of any partnership, who 15 as such officer, employee, or member is under a duty to perform the act 16 in respect of which the violation occurs. 17 § 11-1928 Overpayment. (a) General. The commissioner, within the 18 applicable period of limitations, may credit an overpayment of tax and 19 interest on such overpayment against any liability in respect of any tax 20 imposed by this chapter or by another chapter or chapters of this title 21 on the person who made the overpayment, and the balance shall be 22 refunded. Any refund under this section shall be made only upon the 23 filing of a return. 24 (b) Excessive withholding. If the amount allowable as a credit for tax 25 withheld from the taxpayer exceeds his or her tax to which the credit 26 relates, the excess shall be considered an overpayment. 27 (c) Overpayment by employer. If there has been an overpayment of tax 28 required to be deducted and withheld under section 11-1908 of this chap- 29 ter, refund shall be made to the employer only to the extent that the 30 amount of the overpayment was not deducted and withheld by the employer. 31 (d) Credits against estimated tax. The commissioner may prescribe 32 regulations providing for the crediting against the estimated tax for 33 any taxable year of the amount determined to be an overpayment of the 34 tax for a preceding taxable year. If any overpayment of tax is so 35 claimed as a credit against estimated tax for the succeeding taxable 36 year, such amount shall be considered as a payment of the tax for the 37 succeeding taxable year, whether or not claimed as a credit in the 38 declaration of estimated tax for such succeeding taxable year, and no 39 claim for credit or refund of such overpayment shall be allowed for the 40 taxable year for which the overpayment arises. 41 (e) Rule where no tax liability. If there is no tax liability for a 42 period in respect of which an amount is paid as tax, such amount shall 43 be considered an overpayment. 44 (f) Assessment and collection after limitation period. If any amount 45 of tax is assessed or collected after the expiration of the period of 46 limitations properly applicable thereto, such amount shall be considered 47 an overpayment. 48 (g) Notwithstanding any provision of law in article fifty-two of the 49 civil practice law and rules to the contrary, the procedures for the 50 enforcement of money judgments shall not apply to the department of 51 finance, or to any officer or employee of the department of finance, as 52 a garnishee, with respect to any amount of money to be refunded or cred- 53 ited to a taxpayer under this chapter. 54 § 11-1929 Limitations on credit or refund. (a) General. Claim for 55 credit or refund of an overpayment of tax shall be filed by the taxpayer 56 within three years from the time the return was filed or two years from

S. 8578 1009

1 the time the tax was paid, whichever of such periods expires the later, 2 or if no return was filed, within two years from the time the tax was 3 paid. If the claim is filed within the three year period, the amount of 4 the credit or refund shall not exceed the portion of the tax paid within 5 the three years immediately preceding the filing of the claim plus the 6 period of any extension of time for filing the return. If the claim is 7 not filed within the three year period, but is filed within the two year 8 period, the amount of the credit or refund shall not exceed the portion 9 of the tax paid during the two years immediately preceding the filing of 10 the claim. Except as otherwise provided in this section, if no claim is 11 filed, the amount of a credit or refund shall not exceed the amount 12 which would be allowable if a claim had been filed on the date the cred- 13 it or refund is allowed. 14 (b) Extension of time by agreement. If an agreement under the 15 provisions of paragraph two of subdivision (b) of section 11-1925 of 16 this subchapter, extending the period for assessment of tax, is made 17 within the period prescribed in subdivision (a) of this section for the 18 filing of a claim for credit or refund, the period for filing a claim 19 for credit or refund, or for making credit or refund if no claim is 20 filed, shall not expire prior to six months after the expiration of the 21 period within which an assessment may be made pursuant to the agreement 22 or any extension thereof. The amount of such credit or refund shall not 23 exceed the portion of the tax paid after the execution of the agreement 24 and before the filing of the claim or the making of the credit or 25 refund, as the case may be, plus the portion of the tax paid within the 26 period which would be applicable under subdivision (a) of this section 27 if a claim had been filed on the date the agreement was executed. 28 (c) Notice of change or correction of federal or New York state 29 income. If a taxpayer is required by section 11-1922 of this chapter to 30 report a change or correction in federal or New York state taxable 31 income or self-employment income reported on his or her federal or New 32 York state tax return, or to report an assessment or a change or 33 correction which is treated in the same manner as if it were an overpay- 34 ment for federal or New York state income tax purposes, or to file an 35 amended return with the commissioner, claim for credit or refund of any 36 resulting overpayment of tax shall be filed by the taxpayer within two 37 years from the time the notice of such change or correction or such 38 amended return was required to be filed with the commissioner. If the 39 report or amended return required by section 11-1922 of this chapter is 40 not filed within the ninety day period therein specified, interest on 41 any resulting refund or credit shall cease to accrue after such nineti- 42 eth day. The amount of such credit or refund shall not exceed the 43 amount of the reduction in tax attributable to such federal or New York 44 state change, correction or items amended on the taxpayer's amended 45 federal or New York state income tax or self-employment tax return. 46 This subdivision shall not affect the time within which or the amount 47 for which a claim for credit or refund may be filed apart from this 48 subdivision. 49 (d) Failure to file claim within prescribed period. No credit or 50 refund shall be allowed or made, except as provided in subdivision (e) 51 of this section or subdivision (d) of section 11-1932 of this subchapter 52 after the expiration of the applicable period of limitation specified in 53 this chapter unless a claim for credit or refund is filed by the taxpay- 54 er within such period. Any later credit shall be void and any later 55 refund erroneous. No period of limitations specified in any other law

S. 8578 1010

1 shall apply to the recovery by a taxpayer of moneys paid in respect of 2 taxes under this chapter. 3 (e) Effect of petition to commissioner. If a notice of deficiency for 4 a taxable year has been mailed to the taxpayer under section 11-1923 of 5 this subchapter and if the taxpayer files a timely petition with the 6 commissioner under section 11-1931 of this subchapter, the commissioner 7 may determine that the taxpayer has made an overpayment for such year, 8 whether or not the commissioner also determines a deficiency for such 9 year. No separate claim for credit or refund for such year shall be 10 filed, and no credit or refund for such year shall be allowed or made, 11 except: 12 (1) as to overpayments determined by a decision of the commissioner 13 which has become final; 14 (2) as to any amount collected in excess of an amount computed in 15 accordance with the decision of the commissioner which has become final; 16 (3) as to any amount collected after the period of limitation upon the 17 making of levy for collection has expired; and 18 (4) as to any amount claimed as a result of a change or correction 19 described in subdivision (c) of this section. 20 (f) Limit on amount of credit or refund. The amount of overpayment 21 determined under subdivision (e) of this section shall, when the deci- 22 sion of the commissioner has become final, be credited or refunded in 23 accordance with subdivision (a) of section 11-1928 of this subchapter 24 and shall not exceed the amount of tax which the commissioner determines 25 as part of his or her decision was paid: 26 (1) after the mailing of the notice of deficiency, or 27 (2) within the period which would be applicable under subdivision (a), 28 (b) or (c) of this section, if on the date of the mailing of the notice 29 of deficiency a claim has been filed, whether or not filed, stating the 30 grounds upon which the commissioner finds that there is an overpayment. 31 (g) Early return. For purposes of this section, any return filed 32 before the last day prescribed for the filing thereof shall be consid- 33 ered as filed on such last day, determined without regard to any exten- 34 sion of time granted the taxpayer. 35 (h) Prepaid tax. For purposes of this section, any tax paid by the 36 taxpayer before the last day prescribed for its payment, any tax with- 37 held from the taxpayer during any calendar year, and any amount paid by 38 the taxpayer as estimated tax for a taxable year shall be deemed to have 39 been paid by the taxpayer on the fifteenth day of the fourth month 40 following the close of his or her taxable year with respect to which 41 such amount constitutes a credit or payment. 42 (i) Return and payment of withholding tax. Notwithstanding subdivision 43 (g) of this section, for purposes of this section with respect to any 44 withholding tax: 45 (1) if a return for any period ending with or within a calendar year 46 is filed before April fifteenth of the succeeding calendar year, such 47 return shall be considered filed on April fifteenth of such succeeding 48 calendar year; and 49 (2) if a tax with respect to remuneration paid during any period 50 ending with or within a calendar year is paid before April fifteenth of 51 the succeeding calendar year, such tax shall be considered paid on April 52 fifteenth of such succeeding calendar year. 53 (j) Cross reference. For provision barring refund of overpayment cred- 54 ited against tax of a succeeding year, see subdivision (d) of section 55 11-1928 of this subchapter.

S. 8578 1011

1 § 11-1930 Interest on overpayment. (a) General. Notwithstanding the 2 provisions of section three-a of the general municipal law, interest 3 shall be allowed and paid as follows at the appropriate rates prescribed 4 for overpayments of tax under chapter seventeen of this title upon any 5 overpayment in respect of the tax imposed by this chapter: 6 (1) from the date of the overpayment to the due date of an amount 7 against which a credit is taken; or 8 (2) from the date of the overpayment to a date, to be determined by 9 the commissioner, preceding the date of a refund check by not more than 10 thirty days, whether or not such refund check is accepted by the taxpay- 11 er after tender of such check to the taxpayer. The acceptance of such 12 check shall be without prejudice to any right of the taxpayer to claim 13 any additional overpayment and interest thereon. 14 No interest shall be allowed or paid if the amount thereof is less 15 than one dollar. 16 (b) Advance payment of tax, payment of estimated tax, and credit for 17 tax withholding. The provisions of subdivisions (g), (h) and (i) of 18 section 11-1929 of this subchapter applicable in determining the date of 19 payment of tax for purposes of determining the period of limitations on 20 credit or refund, shall be applicable in determining the date of payment 21 for purposes of this section. 22 (c) Refund within three months of due date of tax. If any overpayment 23 of tax imposed by this chapter is refunded within three months after the 24 last date prescribed, or permitted by extension of time, for filing the 25 return of such tax or within three months after the return was filed, 26 whichever is later, no interest shall be allowed under this section on 27 such overpayment. 28 (d) Cross-reference. For provision terminating interest after failure 29 to file notice of federal or New York state change under section 11-1922 30 of this chapter, see subdivision (c) of 11-1929 of this subchapter. 31 § 11-1931 Petition to commissioner. (a) General. The form of a peti- 32 tion to the commissioner, and further proceedings before the commission- 33 er in any case initiated by the filing of a petition, shall be governed 34 by such rules as the commissioner shall prescribe. No petition shall be 35 denied in whole or in part without opportunity for a hearing on reason- 36 able prior notice. Such hearing shall be conducted by the commissioner, 37 or by a hearing officer designated by the commissioner to take evidence 38 and report to the commissioner. The commissioner shall decide the case 39 as quickly as practicable. Notice of the decision shall be mailed 40 promptly to the taxpayer by certified or registered mail at his or her 41 last known address and such notice shall set forth the commissioner's 42 findings of fact and a brief statement of the grounds of decision in 43 each case decided in whole or in part adversely to the taxpayer. Any 44 portion of an assessment of a deficiency disallowed by the commission- 45 er's decision, shall be forthwith abated, or if paid, credited or 46 refunded to the taxpayer without the making of a claim therefor. 47 (b) Petition for redetermination of a deficiency. Within ninety days, 48 or one hundred fifty days if the notice is addressed to a person outside 49 of the United States, after the mailing of the notice of deficiency 50 authorized by section 11-1923 of this subchapter, the taxpayer may file 51 a petition with the commissioner for a redetermination of the deficien- 52 cy. Such petition may also assert a claim for refund for the same taxa- 53 ble year or years, subject to the limitations of subdivision (f) of 54 section 11-1929 of this subchapter. 55 (c) Petition for refund. A taxpayer may file a petition with the 56 commissioner for the amounts asserted in a claim for refund if:

S. 8578 1012

1 (1) the taxpayer has filed a timely claim for refund with the commis- 2 sioner, 3 (2) the taxpayer has not previously filed with the commissioner a 4 timely petition under subdivision (b) of this section for the same 5 taxable year unless the petition under this subdivision relates to a 6 separate claim for credit or refund properly filed under subdivision (e) 7 of section 11-1929 of this subchapter, and 8 (3) either: (A) six months have expired since the claim was filed, or 9 (B) the commissioner has mailed to the taxpayer, by registered or certi- 10 fied mail, a notice of disallowance of such claim in whole or in part. 11 No petition under this subdivision shall be filed more than two years 12 after the date of mailing of a notice of disallowance, unless prior to 13 the expiration of such a two-year period it has been extended by writ- 14 ten agreement between the taxpayer and the commissioner. If a taxpayer 15 files a written waiver of the requirement that he or she be mailed a 16 notice of disallowance, the two year period prescribed by this subdivi- 17 sion for filing a petition for refund shall begin on the date such waiv- 18 er is filed. 19 (d) Assertion and assessment of deficiency after filing petition. 20 (1) Petition for redetermination of deficiency. If a taxpayer files 21 with the commissioner a petition for redetermination of a deficiency, 22 the commissioner shall have power to determine and assess a greater 23 deficiency than asserted in the notice of deficiency and to determine 24 and assess any addition to tax or penalty provided in section 11-1927 of 25 this subchapter, if claim therefor is asserted at or before the hearing 26 and within the period in which an assessment would be timely under 27 section 11-1925 of this subchapter under the rules of the commissioner. 28 (2) Petition for refund. If the taxpayer files with the commissioner a 29 petition for credit or refund for a taxable year, the commissioner may: 30 (A) determine and assess a deficiency for such year as to any amount 31 of deficiency claim, which shall be an assessment, for which is asserted 32 at or before the hearing under rules of the commissioner, and within the 33 period in which an assessment would be timely under section 11-1925 of 34 this subchapter, or 35 (B) deny so much of the amount for which credit or refund is sought in 36 the petition, as is offset by other issues pertaining to the same taxa- 37 ble year which are asserted at or before the hearing under rules of the 38 commissioner. 39 (3) Opportunity to respond. A taxpayer shall be given a reasonable 40 opportunity to respond to any matters asserted by the commissioner under 41 this subdivision. 42 (4) Restriction on further notices of deficiency. If the taxpayer 43 files a petition with the commissioner under this section, no notice of 44 deficiency under section 11-1923 of this subchapter may thereafter be 45 issued by the commissioner for the same taxable year, except in case of 46 fraud or with respect to a change or correction in federal or New York 47 state taxable income or self-employment income required to be reported 48 under section 11-1922 of this chapter. 49 (e) Burden of proof. In any case before the commissioner under this 50 chapter, the burden of proof shall be upon the petitioner except for the 51 following issues, as to which the burden of proof shall be upon the 52 commissioner: 53 (1) whether the petitioner has been guilty of fraud with intent to 54 evade tax; 55 (2) whether the petitioner is liable as the transferee of property of 56 a taxpayer, except where the petitioner's liability arises by reason of

S. 8578 1013

1 section 11-1936 of this subchapter, but not to show that the taxpayer 2 was liable for the tax; and 3 (3) whether the petitioner is liable for any increase in a deficiency 4 where such increase is asserted initially after a notice of deficiency 5 was mailed and a petition under this section filed, unless such increase 6 in deficiency is the result of a change or correction of federal or New 7 York state taxable income or self-employment income required to be 8 reported under section 11-1922 of this chapter, and of which change or 9 correction the commissioner had no notice at the time he or she mailed 10 the notice of deficiency. 11 (f) Evidence of related federal determination. Evidence of a federal 12 determination relating to issues raised in a case before the commission- 13 er under this section shall be admissible, under rules established by 14 the commissioner. 15 (g) Jurisdiction over other years. The commissioner shall consider 16 such facts with relation to the taxes for other years as may be neces- 17 sary correctly to determine the tax for the taxable year, but in so 18 doing shall have no jurisdiction to determine whether or not the tax for 19 any other year has been overpaid or underpaid. 20 § 11-1932 Review of commissioner's decision. (a) General. A decision 21 of the commissioner shall be subject to judicial review for error, ille- 22 gality or unconstitutionality at the instance of any taxpayer affected 23 thereby in the manner provided by law for the review of a final decision 24 or action of administrative agencies of the city. An application by a 25 taxpayer for such review must be made within four months after notice of 26 the decision is sent by certified or registered mail to the taxpayer. 27 (b) Judicial review exclusive remedy of taxpayer. The review of a 28 decision of the commissioner provided by this section shall be exclusive 29 remedy available to any taxpayer for the judicial determination of the 30 liability of the taxpayer for the taxes imposed by this chapter. 31 (c) Collection pending review; review bond. Irrespective of any 32 restrictions on the collection of assessments for deficiencies, the 33 commissioner may collect by levy or, otherwise any assessment of a defi- 34 ciency after the expiration of the period specified in subdivision (a) 35 of this section, notwithstanding that an application for judicial review 36 in respect of such deficiency has been duly made by the taxpayer, unless 37 the taxpayer, at or before the time his or her application for review is 38 made, has paid the assessed deficiency, has deposited with the commis- 39 sioner the amount of the assessed deficiency, or has filed with the 40 commissioner a bond, which may be a jeopardy bond under subdivision (h) 41 of section 11-1937 of this subchapter, in the amount of the portion of 42 the assessed deficiency, including interest and other amounts, in 43 respect of which the application for review is made with surety approved 44 by a justice of the supreme court of the state of New York, conditioned 45 upon the payment of the assessed deficiency, including interest and 46 other amounts, as finally determined. If as a result of a waiver of the 47 restrictions on the collection of a deficiency any part of the amount 48 determined by the commissioner is paid after the filing of the review 49 bond, such bond shall, at the request of the taxpayer, be proportionate- 50 ly reduced. A similar bond for all costs and charges which may accrue 51 against the taxpayer in the prosecution of such judicial review proceed- 52 ing must be filed with the commissioner before any such proceeding is 53 instituted. 54 (d) Credit, refund or abatement after review. If the amount of a defi- 55 ciency assessed and determined by the commissioner is disallowed in 56 whole or in part by the court of review, the amount so disallowed shall

S. 8578 1014

1 be credited or refunded to the taxpayer, without the making of claim 2 therefor, or, if payment has not been made, shall be abated. 3 (e) Date of finality of commissioner's decision. A decision of the 4 commissioner shall become final upon the expiration of the period speci- 5 fied in subdivision (a) of this section for making an application for 6 review, if no such application has been duly made within such time, or 7 if such application has been duly made, upon expiration of the time for 8 all further judicial review, or upon the rendering by the commissioner 9 of a decision in accordance with the mandate of the court on review. 10 Provided, however, for the purpose of making an application for review, 11 the decision of the commissioner shall be deemed final on the date the 12 notice of decision is sent by certified or registered mail to the 13 taxpayer. 14 § 11-1933 Mailing rules; holidays. (a) Timely mailing. If any claim, 15 statement, notice, petition, or other document, including to the extent 16 authorized by the commissioner, a return or declaration of estimated 17 tax, required to be filed within a prescribed period or on or before a 18 prescribed date under authority of any provision of this chapter is, 19 after such period or such date, delivered by the United States mail to 20 the commissioner, bureau, office, officer or person with which or with 21 whom such document is required to be filed, the date of the United 22 States postmark stamped on the envelope shall be deemed to be the date 23 of delivery. This subdivision shall apply only if the postmark date 24 falls within the prescribed period or on or before the prescribed date 25 for the filing of such document, determined with regard to any extension 26 granted for such filing, and only if such document was deposited in the 27 mail, postage prepaid, properly addressed to the commissioner, bureau, 28 office, officer or person with which or with whom the document is 29 required to be filed. If any document is sent by United States regis- 30 tered mail, such registration shall be prima facie evidence that such 31 document was delivered to the commissioner, bureau, office, officer or 32 person to which or to whom addressed. To the extent that the commis- 33 sioner shall prescribe by regulation, certified mail may be used in lieu 34 of registered mail under this section. This subdivision shall apply in 35 the case of postmarks not made by the United States post office only if 36 and to the extent provided by regulations of the commissioner. 37 (b) Last known address. For purposes of this chapter, a taxpayer's 38 last known address shall be the address given in the last return filed 39 by the taxpayer, unless subsequent to the filing of such return the 40 taxpayer shall have notified the commissioner of a change of address. 41 (c) Last day a Saturday, Sunday or legal holiday. When the last day 42 prescribed under authority of this chapter, including any extension of 43 time, for performing any act falls on Saturday, Sunday, or a legal holi- 44 day in the state of New York, the performance of such act shall be 45 considered timely if it is performed on the next succeeding day which is 46 not a Saturday, Sunday or a legal holiday. 47 § 11-1934 Collection, levy and liens. (a) Collection procedures. The 48 taxes imposed by this chapter shall be collected by the commissioner, 49 and he or she may establish the mode or time for the collection of any 50 amount due the commissioner under this chapter if not otherwise speci- 51 fied. The commissioner shall, upon request, give a receipt for any sum 52 collected under this chapter. The commissioner may authorize banks or 53 trust companies which are depositories or financial agents of the city 54 to receive and give a receipt for any tax imposed under this chapter in 55 such manner, at such times, and under such conditions as the commission- 56 er may prescribe; and the commissioner shall prescribe the manner, times

S. 8578 1015

1 and conditions under which the receipt of such tax by such banks and 2 trust companies is to be treated as payment of such tax to the commis- 3 sioner. 4 (b) Notice and demand for tax. The commissioner shall as soon as prac- 5 ticable and, in the case of an assessment the collection of which is 6 restricted by the provisions of subdivision (c) of section 11-1923 of 7 this subchapter, as soon as practicable after the expiration of such 8 restrictions give notice to each person liable for any amount of tax, 9 addition to tax, penalty or interest, which has been assessed but 10 remains unpaid, stating the amount and demanding payment thereof. Such 11 notice shall be left at the dwelling or usual place of business of such 12 person or shall be sent by mail to such person's last known address. 13 Except where the commissioner determines that collection would be jeop- 14 ardized by delay, if any tax is assessed prior to the last date, includ- 15 ing any date fixed by extension, prescribed for payment of such tax, 16 payment of such tax shall not be demanded until after such date. 17 (c) Issuance of warrant after notice and demand. If any person liable 18 under this chapter for the payment of any tax, addition to tax, penalty 19 or interest neglects or refuses to pay the same within ten days after 20 notice and demand therefor is given to such person under subdivision (b) 21 of this section, the commissioner may within six years after the date of 22 the expiration of the period of restriction on the collection of such 23 assessment issue a warrant directed to the sheriff of any county of the 24 state, or to any officer or employee of the department of finance of the 25 city, commanding the sheriff or such officer or employee to levy upon 26 and sell such person's real and personal property for the payment of the 27 amount assessed, with the cost of executing the warrant, and to return 28 such warrant to the commissioner and pay to him or her the money 29 collected by virtue thereof within sixty days after the receipt of the 30 warrant. If the commissioner finds that the collection of tax or other 31 amount is in jeopardy, notice and demand for immediate payment of such 32 tax may be made by the commissioner and upon failure or refusal to pay 33 such tax or other amount the commissioner may issue a warrant without 34 regard to the ten-day period provided in this subdivision. 35 (d) Copy of warrant to be filed and lien to be created. Any sheriff or 36 officer or employee who receives a warrant under subdivision (c) of this 37 section shall within five days thereafter file a copy with the clerk of 38 the appropriate county. The clerk shall thereupon enter in the judgment 39 docket, in the column for judgment debtors, the name of the taxpayer 40 mentioned in the warrant, and in appropriate columns the tax or other 41 amounts for which the warrant is issued and the date when such copy is 42 filed; and such amount shall thereupon be a binding lien upon the real, 43 personal and other property of the taxpayer. 44 (e) Judgment. When a warrant has been filed with the county clerk the 45 commissioner shall, on behalf of the city, be deemed to have obtained 46 judgment against the taxpayer for the tax or other amounts. 47 (f) Execution. The sheriff or officer or employee shall thereupon 48 proceed upon the judgment in all respects, with like effect, and in the 49 same manner prescribed by law in respect to executions issued against 50 property upon judgments of a court of record, and a sheriff shall be 51 entitled to the same fees for such sheriff's services in executing the 52 warrant, to be collected in the same manner. An officer or employee of 53 the department of finance of the city may proceed in any county or coun- 54 ties of this state and shall have all the powers of execution conferred 55 by law upon sheriffs, but shall be entitled to no fee or compensation in

S. 8578 1016

1 excess of actual expenses paid in connection with the execution of the 2 warrant. 3 (g) Taxpayer not then a resident. Where a notice and demand under 4 subdivision (b) of this section shall have been given to a taxpayer who 5 is not then a resident of this state, and it appears to the commissioner 6 that it is not practicable to find in this state property of the taxpay- 7 er sufficient to pay the entire balance of tax or other amount owing by 8 such taxpayer who is not then a resident of this state, the commissioner 9 may, in accordance with subdivision (c) of this section, issue a warrant 10 directed to an officer or employee of the department of finance of the 11 city a copy of which warrant shall be mailed by certified or registered 12 mail to the taxpayer at his or her last known address, subject to the 13 rules for mailing provided in subdivision (a) of section 11-1933 of this 14 subchapter. Such warrant shall command the officer or employee to 15 proceed in the city, and such officer or employee shall, within five 16 days after receipt of the warrant, file the warrant and obtain a judg- 17 ment in accordance with this section. Thereupon the commissioner may 18 authorize the institution of any action or proceeding to collect or 19 enforce the judgment in any place and by any procedure where and by 20 which a civil judgment of the supreme court of the state of New York 21 could be collected or enforced. The commissioner may also, in his or 22 her discretion, designate agents or retain counsel for the purpose of 23 collecting, outside the state of New York, any unpaid taxes, additions 24 to tax, penalties or interest which have been assessed under this chap- 25 ter against taxpayers who are not then residents of this state, may fix 26 the compensation of such agents and counsel to be paid out of money 27 appropriated or otherwise lawfully available for payment thereof, and 28 may require of them bonds or other security for the faithful performance 29 of their duties, in such form and in such amount as the commissioner 30 shall deem proper and sufficient. 31 (h) Action by the city for recovery of taxes. Action may be brought by 32 the corporation counsel or other appropriate officer of the city at the 33 insistence of the commissioner to recover the amount of any unpaid 34 taxes, additions to tax, penalties or interest which have been assessed 35 under this chapter within six years prior to the date the action is 36 commenced. The period during which collection of any assessment is 37 prohibited by subdivision (c) of section 11-1923 of this subchapter, 38 shall be added to such six years. 39 (i) Release of lien. The commissioner, if he or she finds that the 40 interest of the city will not thereby be jeopardized, and upon such 41 conditions as may require, may release any property from the lien of any 42 warrant for unpaid taxes, additions to tax, penalties and interest filed 43 pursuant to this section, and such release may be recorded in the office 44 of any recording officer in which such warrant has been filed. 45 § 11-1935 Transferees. (a) General. The liability, at law or in equi- 46 ty, of a transferee of property of a taxpayer for any tax, additions to 47 tax, penalty or interest due to the city under this chapter, shall be 48 assessed, paid, and collected in the same manner and subject to the same 49 provisions and limitations as in the case of the tax to which liability 50 relates, except that the period of limitations for assessment against 51 the transferee shall be extended by one year for each successive trans- 52 fer, in order, from the original taxpayer to the transferee involved, 53 but not by more than three years in the aggregate. The term "transfer- 54 ee" includes donee, heir, legatee, devisee and distributee; and also 55 includes a person liable for the amount of any tax, additions to tax,

S. 8578 1017

1 penalty or interest under the provisions of section 11-1936 of this 2 subchapter. 3 (b) Exceptions. (1) If before the expiration of the period of limita- 4 tions for assessment of liability of the transferee, a claim has been 5 filed by the commissioner in any court against the original taxpayer or 6 the last preceding transferee based upon the liability of the original 7 taxpayer, then the period of limitation for assessment of liability of 8 the transferee shall in no event expire prior to one year after such 9 claim has been finally allowed, disallowed or otherwise disposed of. 10 (2) If, before the expiration of the time prescribed in subdivision 11 (a) of this section or paragraph one of this subdivision for the assess- 12 ment of the liability, the commissioner and the transferee have both 13 consented in writing to its assessment after such time, the liability 14 may be assessed at any time prior to the expiration of the period agreed 15 upon. The period so agreed upon may be extended by subsequent agree- 16 ments in writing made before the expiration of the period previously 17 agreed upon. For the purpose of determining the period of limitation on 18 credit or refund to the transferee of overpayments of tax made by such 19 transferee or overpayments of tax made by the transferor as to which the 20 transferee is legally entitled to credit or refund, such agreement and 21 any extension thereof shall be deemed an agreement and extension thereof 22 referred to in subdivision (b) of section 11-1929 of this subchapter. 23 If the agreement is executed after the expiration of the period of limi- 24 tation for assessment against the original taxpayer, then in applying 25 the limitations under subdivision (b) of section 11-1929 of this 26 subchapter on the amount of the credit or refund, the periods specified 27 in subdivision (a) of section 11-1929 of this subchapter shall be 28 increased by the period from the date of such expiration to the date of 29 the agreement. 30 (c) Deceased transferor. If any person is deceased, the period of 31 limitation for assessment against such person shall be the period that 32 would be in effect if he or she had lived. 33 (d) Evidence. Notwithstanding the provisions of section 11-1942 of 34 this subchapter, the commissioner shall use his or her powers to make 35 available to the transferee evidence necessary to enable the transferee 36 to determine the liability of the original taxpayer and of any preceding 37 transferees, but without undue hardship to the original taxpayer or 38 preceding transferee. See subdivision (e) of section 11-1931 of this 39 subchapter for rule as to burden of proof. 40 § 11-1936 Liability of bulk transferees. Whenever there is made a 41 sale, transfer or assignment in bulk of any part or the whole of a stock 42 of merchandise or of fixtures, or merchandise and of fixtures pertaining 43 to the conducting of the business of the seller, transferor or assignor, 44 otherwise than in the ordinary course of trade and in the regular prose- 45 cution of said business, the purchaser, transferee or assignee shall at 46 least ten days before taking possession of such merchandise, fixtures, 47 or merchandise and fixtures, or paying therefor, notify the commissioner 48 by registered mail of the proposed sale and of the price, terms and 49 conditions thereof, whether or not the seller, transferor or assignor, 50 has represented to, or informed the purchaser, transferee or assignee, 51 that it owes any tax pursuant to this chapter, whether or not the 52 purchaser, transferee or assignee has knowledge that such taxes are 53 owing, and whether or not any such taxes are in fact owing. 54 Whenever the purchaser, transferee or assignee shall fail to give the 55 notice to the commissioner required by this section, or whenever the 56 commissioner shall inform the purchaser, transferee or assignee that a

S. 8578 1018

1 possible claim for such tax or taxes exists, any sums of money, property 2 or choses in action, or other consideration, which the purchaser, trans- 3 feree or assignee is required to transfer over to the seller, transferor 4 or assignor shall be subject to a first priority right and lien for any 5 such taxes theretofore or thereafter determined to be due from the sell- 6 er, transferor or assignor to the city, and the purchaser, transferee or 7 assignee is forbidden to transfer to the seller, transferor or assignor 8 any such sums of money, property or choses in action to the extent of 9 the amount of the city's claim. For failure to comply with the 10 provisions of this subdivision the purchaser, transferee or assignee, in 11 addition to being subject to the liabilities and remedies imposed under 12 the provisions of article six of the uniform commercial code, shall be 13 personally liable for the payment to the city of any such taxes, there- 14 tofore or thereafter determined to be due to the city from the seller, 15 transferor or assignor and such liability may be assessed and enforced 16 in the same manner as the liability for tax is imposed under this chap- 17 ter. 18 § 11-1937 Jeopardy determination or assessment. (a) Authority for 19 making. If the commissioner believes that the assessment or collection 20 of a deficiency will be jeopardized by delay, he or she shall, notwith- 21 standing the provisions of sections 11-1923 and 11-1939 of this subchap- 22 ter, immediately assess or proceed to collect such deficiency, together 23 with all interest, penalties and additions to tax provided for by law, 24 and notice and demand shall be made by the commissioner for the payment 25 thereof. 26 (b) Notice of deficiency. If the jeopardy assessment is made before 27 any notice in respect of the tax to which the jeopardy assessment 28 relates has been mailed under section 11-1923 of this subchapter, then 29 the commissioner shall mail a notice under such section within sixty 30 days after making of the assessment. 31 (c) Amount assessable before decision of commissioner. The jeopardy 32 assessment may be made in respect of a deficiency greater or less than 33 that of which notice is mailed to the taxpayer and whether or not the 34 taxpayer has therefor filed a petition with the commissioner. The 35 commissioner may, at any time before rendering his or her decision, 36 abate such assessment or any unpaid portion thereof, to the extent that 37 he or she believes the assessment to be excessive in amount. The 38 commissioner may in his or her decision redetermine the entire amount of 39 the deficiency and of all amounts assessed at the same time in 40 connection therewith. 41 (d) Amount assessable after decision of commissioner. If the jeopardy 42 assessment of determination of jeopardy is made after the decision of 43 the commissioner is rendered, such assessment or determination may be 44 made only in respect of the deficiency determined by the commissioner in 45 his or her decision. 46 (e) Expiration of right to assess. A jeopardy determination may not be 47 made after the decision of the commissioner has become final or after 48 the taxpayer has made an application for review of the decision of the 49 commissioner. 50 (f) Collection of unpaid amounts. When a petition has been filed with 51 the commissioner and when the amount which should have been assessed has 52 been determined by a decision of the commissioner which has become 53 final, then any unpaid portion, the collection of which has been stayed 54 by bond, shall be collected as part of the tax upon notice and demand 55 from the commissioner, and any remaining portion of the assessment shall 56 be abated. If the amount already collected exceeds the amount deter-

S. 8578 1019

1 mined as the amount which should have been assessed, such excess shall 2 be credited or refunded to the taxpayer as provided in section 11-1928 3 of this subchapter without the filing of claim therefor. If the amount 4 determined as the amount which should have been assessed is greater than 5 the amount actually assessed, then the difference shall be assessed and 6 shall be collected as part of the tax upon notice and demand from the 7 commissioner. 8 (g) Abatement if jeopardy does not exist. The commissioner may abate 9 the jeopardy determination if he or she finds that jeopardy does not 10 exist. Such abatement may not be made after a decision of the commis- 11 sioner in respect of the deficiency has been rendered or, if no petition 12 is filed with the commissioner, after the expiration of the period for 13 filing such petition. The period of limitation on the making of a levy 14 or a proceeding for collection, in respect of any deficiency, shall be 15 determined as if the jeopardy assessment so abated has not been made, 16 except that the running of such period shall in any event be suspended 17 for the period from the date of such jeopardy determination until the 18 expiration of the tenth day after the day on which such jeopardy deter- 19 mination is abated. 20 (h) Bond to stay collection. The collection of the whole or any amount 21 of any assessment determined to be in jeopardy may be stayed by filing 22 with the commissioner, within such time as may be fixed by regulation, a 23 bond in an amount equal to the amount as to which the stay is desired 24 conditioned upon the payment of the amount, together with interest ther- 25 eon, the collection of which is stayed at the time at which, but for the 26 making of the jeopardy assessment, such amount would be due. Upon the 27 filing of the bond, the collection of so much of the amount assessed as 28 is covered by the bond shall be stayed. The taxpayer shall have the 29 right to waive such stay at any time in respect of the whole or any part 30 of the amount covered by the bond and, if as a result of such waiver any 31 part of the amount covered by the bond is paid, then the bond shall, at 32 the request of the taxpayer, be proportionately reduced. If any portion 33 of the jeopardy assessment is abated, or if a notice of deficiency under 34 section 11-1923 of this subchapter is mailed to the taxpayer in a lesser 35 amount, the bond shall, at the request of the taxpayer, be proportion- 36 ately reduced. 37 (i) Petition to commissioner. If the bond is given before the taxpayer 38 has filed his or her petition under section 11-1931 of this subchapter, 39 the bond shall contain a further condition that if a petition is not 40 filed within the period provided in such section, then the amount, the 41 collection of which is stayed by the bond, will be paid on notice and 42 demand at any time after the expiration of such period, together with 43 interest thereon from the date of the jeopardy notice and demand to the 44 date of notice and demand under this subdivision. The bond shall be 45 conditioned upon the payment of so much of such assessment, collection 46 of which is stayed by the bond, as is not abated by a decision of the 47 commissioner which has become final. If the commissioner determines 48 that the amount assessed is greater than the amount which should have 49 been assessed, then the bond shall, at the request of the taxpayer, be 50 proportionately reduced when the decision of the commissioner is 51 rendered. 52 (j) Stay of sale of seized property pending commissioner's decision. 53 Where a jeopardy assessment or a determination of jeopardy is made, the 54 property seized for the collection of the tax shall not be sold: 55 (1) if subdivision (b) of this section is applicable, prior to the 56 issuance of the notice of deficiency and the expiration of the time

S. 8578 1020

1 provided in section 11-1931 of this subchapter for filing a petition 2 with the commissioner, and 3 (2) if a petition is filed with the commissioner, whether before or 4 after the making of such jeopardy assessment or determination, prior to 5 the expiration of the period during which the collection of the defi- 6 ciency assessed would be prohibited if subdivision (a) of this section 7 were not applicable. 8 Such property may be sold if the taxpayer consents to the sale, or if 9 the commissioner determines that the expenses of conservation and main- 10 tenance will greatly reduce the net proceeds, or if the property is 11 perishable. 12 (k) Interest. For the purpose of subdivision (a) of section 11-1926 of 13 this subchapter, the last date prescribed for payment shall be deter- 14 mined without regard to any notice and demand for payment issued under 15 this section prior to the last date otherwise prescribed for such 16 payment. 17 (l) Early termination of taxable year. If the commissioner finds that 18 a taxpayer designs quickly to depart from this state or to remove his or 19 her property therefrom, or to conceal himself or herself or his or her 20 property therein, or to do any other act tending to prejudice or to 21 render wholly or partly ineffectual proceedings to collect the tax for 22 the current or the preceding taxable year unless such proceedings be 23 brought without delay, the commissioner shall declare the taxable period 24 for such taxpayer immediately terminated, and shall cause notice of such 25 finding and declaration to be given the taxpayer, together with a demand 26 for immediate payment of the tax for the taxable period so declared 27 terminated and of the tax for the preceding taxable year or so much of 28 such tax as is unpaid, whether or not the time otherwise allowed by law 29 for filing return and paying the tax has expired; and such taxes shall 30 thereupon become immediately due and payable. In any proceeding brought 31 to enforce payment of taxes made due and payable by virtue of the 32 provisions of this subdivision, the finding of the commissioner made as 33 herein provided, whether made after notice to the taxpayer or not, shall 34 be for all purposes presumptive evidence of jeopardy. 35 (m) Reopening of taxable period. Notwithstanding the termination of 36 the taxable period of the taxpayer by the commissioner as provided in 37 subdivision (1) of this section, the commissioner may reopen such taxa- 38 ble period each time the taxpayer is found by the commissioner to have 39 received wages or net earnings from self-employment, within the current 40 taxable year, since the termination of such period. A taxable period so 41 terminated by the commissioner may be reopened by the taxpayer if he or 42 she files with the commissioner a true and accurate return of taxable 43 wages and net earnings from self-employment under this chapter for such 44 taxable period, together with such other information as the commissioner 45 may by regulation prescribe. 46 (n) Furnishing of bond where taxable year is closed by the commis- 47 sioner. Payment of taxes shall not be enforced by any proceedings under 48 the provisions of subdivision (1) of this section prior to the expira- 49 tion of the time otherwise allowed for paying such taxes if the taxpayer 50 furnishes, under regulations prescribed by the commissioner, a bond to 51 insure the timely making of returns with respect to, and payment of, 52 such taxes or any taxes for prior years. 53 § 11-1938 Criminal penalties. (a) Attempt to evade tax. Any individ- 54 ual, corporation or partnership or any officer or employee of any corpo- 55 ration, or member or employee of any partnership, who, with intent to 56 evade any tax or any requirement of this chapter or any lawful require-

S. 8578 1021

1 ment of the commissioner thereunder, shall fail to pay the tax, or to 2 make, render, sign or certify any return or declaration of estimated 3 tax, or to supply any information within the time required by or under 4 the provisions of this chapter, or who, with like intent, shall make, 5 render, sign or certify any false or fraudulent return, declaration or 6 statement, or shall supply any false or fraudulent information, or who 7 shall fail to comply with the provisions of subdivision (b) of section 8 11-1912 of this chapter after the service of a notice by the commission- 9 er thereunder, shall be guilty of a misdemeanor and shall, upon 10 conviction, be fined not to exceed five thousand dollars or be impri- 11 soned not to exceed one year, or both, at the discretion of the court. 12 (b) Limitations. Notwithstanding the provisions of section 30.10 of 13 the criminal procedure law or of any other law of this state, a prose- 14 cution for any offense under this section may be commenced at any time 15 not later than three years after the commission of such offense provided 16 that, if such offense is the failure to do an act required by or under 17 any provision of this chapter to be done before a certain date, a prose- 18 cution for such offense may be commenced not later than three years 19 after such date. 20 (c) Willful failure to withhold. Any individual, corporation or part- 21 nership or any officer or employee of any corporation, including a 22 dissolved corporation, or member or employee of any partnership, who 23 willfully fails to collect or pay over any withholding tax as required, 24 shall, in addition to other penalties provided by law, be guilty of a 25 misdemeanor, and, upon conviction thereof, shall be fined not to exceed 26 five thousand dollars or imprisoned not to exceed one year, or both. 27 (d) Two or more charges. In the prosecution of offenses under this 28 section, if there are two or more charges against any person or corpo- 29 ration, involving a violation or violations of any provision or 30 provisions of this chapter, whether for the same or different taxable 31 years, instead of returning several indictments or filing several infor- 32 mations, all of such charges may be joined in one indictment or informa- 33 tion, in separate counts, and if two or more indictments are found, or 34 two or more informations are filed, the court may order them to be 35 consolidated. If a person or corporation shall be convicted of two or 36 more offenses constituting different crimes set forth in different 37 counts of one indictment or information, or in separate indictments or 38 informations consolidated as hereinbefore provided, the court may impose 39 a separate sentence for each offense, and if imprisonment is imposed, 40 the court may order any of such sentences to be served concurrently or 41 consecutively. 42 (e) Miscellaneous rules. Any prosecution under this section may be 43 conducted in any county where the person or corporation to whose tax 44 liability the proceeding relates resides, or has a place of business, or 45 in any county in which any such crime is committed. The corporation 46 counsel of the city shall have concurrent jurisdiction with any district 47 attorney in the prosecution of any offense under this section. If the 48 provisions of this section conflict with those contained in any other 49 law, this section shall control. The certificate of the commissioner to 50 the effect that a tax has not been paid, that a return or declaration of 51 estimated tax has not been filed, or that information has not been 52 supplied, as required by or under the provisions of this chapter, shall 53 be prima facie evidence that such tax has not been paid, that such 54 return or declaration has not been filed, or that such information has 55 not been supplied. All fines levied under this section shall be paid to

S. 8578 1022

1 the commissioner and deposited in the same manner as revenues collected 2 or received under this chapter. 3 § 11-1939 Armed forces relief provisions. (a) Time to be disregarded. 4 In the case of an individual serving in the armed forces of the United 5 States or serving in support of such armed forces, in an area designated 6 by the president of the United States by executive order as a "combat 7 zone" at any time during the period designated by the president by exec- 8 utive order as the period of combatant activities in such zone, or 9 hospitalized outside the state as a result of injury received while 10 serving in such an area during such time, the period of service in such 11 area, plus the period of continuous hospitalization outside the state 12 attributable to such injury, and the next one hundred eighty days there- 13 after, shall be disregarded in determining, under this chapter in 14 respect of the tax liability, including any interest, penalty, or addi- 15 tion to the tax, of such individual: 16 (1) Whether any of the following acts was performed within the time 17 prescribed therefor: 18 (A) filing any return of tax, except withholding tax; 19 (B) payment of any tax, except withholding tax, or any installment 20 thereof or of any other liability to the commissioner, in respect there- 21 of; 22 (C) filing a petition with the commissioner for credit or refund or 23 for redetermination of a deficiency, or application for review of a 24 decision rendered by the commissioner; 25 (D) allowance of a credit or refund of tax; 26 (E) filing a claim for credit or refund of tax; 27 (F) giving or making any notice or demand for the payment of any tax, 28 or with respect to any liability to the commissioner in respect of tax; 29 (G) collection, by the commissioner, by levy or otherwise of the 30 amount of any liability in respect of tax; 31 (H) bringing suit by the city, or any officer, on its behalf, in 32 respect of any liability in respect of tax; and 33 (I) any other act required or permitted under this chapter or speci- 34 fied in the regulations prescribed under this section by the commission- 35 er. 36 (2) The amount of any credit or refund, including interest. 37 (b) Action taken before ascertainment of right to benefits. The 38 collection of the tax imposed by this chapter or of any liability to the 39 commissioner in respect of such tax, or any action or proceeding by or 40 on behalf of the commissioner in connection therewith, may be made, 41 taken, begun, or prosecuted in accordance with law, without regard to 42 the provisions of subdivision (a) of this section, unless prior to such 43 collection, action, or proceeding it is ascertained that the person 44 concerned is entitled to the benefit of subdivision (a) of this section. 45 (c) Members of armed forces dying in action. In the case of any person 46 who dies while in active service as a member of the armed forces of the 47 United States, if such death occurred while serving in a combat zone 48 during a period of combatant activities in such zone, as described in 49 subdivision (a) of this section, or as a result of wounds, disease or 50 injury incurred while so serving, the tax imposed by this chapter shall 51 not apply with respect to the taxable year in which falls the date of 52 his or her death, or with respect to any prior taxable year ending on or 53 after the first day so served in a combat zone, and no returns shall be 54 required in behalf of such person or his or her estate for such year; 55 and the tax for any such taxable year which is unpaid at the date of 56 death, including interest, additions to tax and penalties, if any, shall

S. 8578 1023

1 not be assessed and, if assessed, the assessment shall be abated and, if 2 collected, shall be refunded to the legal representative of such estate 3 if one has been appointed and has qualified, or, if no legal represen- 4 tative has been appointed or has qualified, to the surviving spouse. 5 § 11-1940 General powers of commissioner. (a) General. The commission- 6 er shall administer and enforce the tax imposed by this chapter and the 7 commissioner is authorized to make such rules and regulations, and to 8 require such facts and information to be reported, as the commissioner 9 may deem necessary to enforce the provisions of this chapter and the 10 commissioner may delegate his or her powers and functions under all 11 subchapters of this chapter to one of his or her deputies or to any 12 employee or employees of his or her department. 13 (b) Examination of books and witnesses. The commissioner for the 14 purpose of ascertaining the correctness of any return, or for the 15 purpose of making an estimate of taxable wages and net earnings from 16 self-employment of any person, shall have power to examine or to cause 17 to have examined, by any agent or representative designated by him or 18 her for that purpose, any books, papers, records or memoranda bearing 19 upon the matters required to be included in the return, and may require 20 the attendance of the person rendering the return or any officer or 21 employee of such person, or the attendance of any other person having 22 knowledge in the premises, may take testimony and require proof material 23 for the commissioner's information, with power to administer oaths to 24 such person or persons and may issue commissions for the examination of 25 witnesses who are out of the state or unable to attend before the 26 commissioner or excused from attendance, and for the production of 27 books, papers, records or memoranda. 28 (c) Abatement authority. The commissioner, of his or her own motion, 29 may abate any small unpaid balance of an assessment of tax, or any 30 liability in respect thereof, if the commissioner determines under 31 uniform rules prescribed by him or her that the administration and 32 collection costs involved would not warrant collection of the amount 33 due. The commissioner may also abate, of his or her own motion, the 34 unpaid portion of the assessment of any tax or any liability in respect 35 thereof, which is excessive in amount, or is assessed after the expira- 36 tion of the period of limitation properly applicable thereto, or is 37 erroneously or illegally assessed. No claim for abatement under this 38 subdivision shall be filed by a taxpayer. 39 (d) Special refund authority. Where no questions of fact or law are 40 involved and it appears from the records of the commissioner that any 41 moneys have been erroneously or illegally collected from any taxpayer or 42 other person, or paid by such taxpayer or other person under a mistake 43 of facts, pursuant to the provisions of this chapter, the commissioner 44 at any time, without regard to any period of limitations, shall have the 45 power, upon making a record of his or her reasons therefor in writing, 46 to cause such moneys so paid and being erroneously and illegally held to 47 be refunded. 48 (e) Cooperation with the United States and other states. Notwith- 49 standing the provisions of section 11-1942 of this subchapter, the 50 commissioner may permit the secretary of the treasury of the United 51 States or such secretary's delegates, or the proper tax officer of any 52 other state imposing an income tax upon the income of individuals, or 53 the authorized representative of either such officer, to inspect any 54 return filed under this chapter, or may furnish to such officer or his 55 or her authorized representative an abstract of any such return or 56 supply him or her with information concerning an item contained in any

S. 8578 1024

1 such return, or disclosed by any investigation of tax liability under 2 this chapter, but such permission shall be granted or such information 3 furnished to such officer or his or her representative only if the laws 4 of the United States or of such state, as the case may be, grant 5 substantially similar privileges to the commissioner and such informa- 6 tion is to be used for tax purposes only; and provided further the 7 commissioner may furnish to the commissioner of internal revenue or his 8 or her authorized representative such returns filed under this chapter 9 and other tax information as he or she may consider proper for the use 10 in court actions or proceedings under the internal revenue code, whether 11 civil or criminal, where a written request therefor has been made to the 12 commissioner by the secretary of the treasury of the United States or by 13 his or her delegates, provided the laws of the United States grant 14 substantially similar powers to the secretary of the treasury of the 15 United States or such secretary's delegates. Where the commissioner has 16 so authorized use of returns and other information in such actions or 17 proceedings, officers and employees of the department of taxation and 18 finance may testify in such actions or proceedings in respect to such 19 returns or other information. 20 § 11-1941 Joint enforcement. (1) If there is assessed a tax under this 21 chapter and there is also assessed a tax or taxes against the same 22 taxpayer pursuant to article twenty-two of the tax law and if the 23 commissioner of the tax imposed by this chapter takes action under the 24 tax law with respect to the enforcement and collection of the tax or 25 taxes assessed under such tax law, the commissioner shall, wherever 26 possible, accompany such action with a similar action under similar 27 enforcement and collection provisions of this chapter. 28 (2) Any monies collected as a result of such joint action shall be 29 deemed to have been collected in proportion in the amounts due, includ- 30 ing tax, penalties, interest and additions to tax under article twenty- 31 two of the tax law and under this chapter. 32 (3) Whenever the commissioner takes any action with respect to a defi- 33 ciency of personal income tax, under article twenty-two of the tax law 34 other than the action set forth in subdivision one of this section the 35 commissioner may, in his or her discretion, accompany such action with a 36 similar action under this chapter. 37 § 11-1942 Secrecy requirement and penalties for violation. 1. Except 38 in accordance with proper judicial order or as otherwise provided by 39 law, it shall be unlawful for the commissioner or any other officer or 40 employee of the department of finance of the city, any person engaged or 41 retained by such commissioner or department on an independent contract 42 basis, any depository to which any return may be delivered as provided 43 in subdivision two of this section, any officer or employee of such 44 depository, or any person who, pursuant to this section, is permitted to 45 inspect any report or return or to whom a copy, an abstract or a portion 46 of any report or return is furnished, or to whom any information 47 contained in any report or return is furnished, to divulge or make known 48 in any manner the amount of wages or earnings or any particulars set 49 forth or disclosed in any report or return required under this chapter. 50 The commissioner or any other officer and employee charged with the 51 custody of such reports and returns shall not be required to produce any 52 of them or evidence of anything contained in them in any action or 53 proceeding in any court, except on behalf of the city in an action or 54 proceeding under the provisions of this chapter or in any other action 55 or proceeding involving the collection of a tax due under this chapter 56 to which the city is a party or a claimant, or on behalf of any party to

S. 8578 1025

1 any action or proceeding under the provisions of this chapter when the 2 reports, returns or facts shown thereby are directly involved in such 3 action or proceeding, in any of which events the court may require the 4 production of, and may admit in evidence, so much of said reports, 5 returns or of the facts shown thereby, as are pertinent to the action or 6 proceeding and no more; except as provided in subdivision (e) of section 7 11-1940 of this subchapter. The commissioner may, nevertheless, publish 8 a copy or a summary of any determination or decision rendered after the 9 hearing required under section 11-1931 of this subchapter of this chap- 10 ter. Nothing in this section shall be construed to prohibit the deliv- 11 ery to a taxpayer or the taxpayer's duly authorized representative of a 12 certified copy of any return or report filed in connection with his or 13 her tax or to prohibit the publication of statistics so classified as to 14 prevent the identification of particular reports or returns and the 15 items thereof, or the inspection by the legal representatives of the 16 city of the report or return of any taxpayer who shall bring action to 17 set aside or review the tax based thereon, or against whom an action or 18 proceeding under this chapter has been recommended by the commissioner. 19 Reports and returns shall be preserved for three years and thereafter 20 until the commissioner orders them to be destroyed. Any violation of 21 the provisions of this section shall be punished by a fine not exceeding 22 one thousand dollars or by imprisonment not exceeding one year, or both, 23 at the discretion of the court, and if the offender be the commissioner 24 or any other officer or employee of the city, he or she shall be 25 dismissed from office and be incapable of holding any public office in 26 the city or the state for a period of five years thereafter. 27 2. Notwithstanding the provisions of subdivision one of this section, 28 the commissioner of finance, in his or her discretion, may require or 29 permit any or all individuals, estates or trusts, liable for any tax 30 imposed by this chapter, to make payments on account of estimated tax 31 and payment of any tax, penalty or interest imposed by this chapter to 32 banks, banking houses or trust companies designated by the commissioner 33 of finance and to file declarations of estimated tax and reports and 34 returns with such banks, banking houses or trust companies as agents of 35 the commissioner of finance, in lieu of making any such payment directly 36 to the commissioner of finance. However, the commissioner of finance 37 shall designate only such banks, banking houses or trust companies as 38 are depositories or financial agents of Staten Island. 39 § 11-1943 Provisions not applicable. The provisions contained in this 40 subchapter shall not be applicable with respect to taxes imposed for 41 taxable periods commencing on or after January first, nineteen hundred 42 seventy-six but, with respect to the tax imposed for such periods the 43 provisions contained in part VI of article twenty-two of the tax law and 44 sections six hundred fifty-three, six hundred fifty-eight, six hundred 45 sixty-two and thirteen hundred eleven of the tax law including the 46 provisions of judicial review by a proceeding under article seventy- 47 eight of the civil practice law and rules shall be applicable with the 48 same force and effect as if those provisions had been incorporated in 49 full in this section except where inconsistent with the provisions of 50 this chapter. 51 § 11-1944 Deposit and disposition of revenues by commissioner. All 52 taxes, penalties and interest imposed under this chapter which are paid 53 to or collected by the commissioner of finance shall be deposited by the 54 commissioner of finance in the general fund of the city. 55 § 11-1945 Effect of invalidity in part; inconsistencies with other 56 laws. (a) If any clause, sentence, paragraph, subdivision, section,

S. 8578 1026

1 provision or other portion of this chapter or the application thereof to 2 any person or circumstances shall be held to be invalid, such holding 3 shall not affect, impair or invalidate the remainder of this chapter or 4 the application of such portion held invalid, to any other person or 5 circumstances, but shall be confined in its operation to the clause, 6 sentence, paragraph, subdivision, section, provision or other portion 7 thereof directly involved in such holding or to the person and circum- 8 stances therein involved. 9 (b) If any provision of this chapter is inconsistent with, in conflict 10 with, or contrary to any other provision of law, such provision of this 11 chapter shall prevail over such other provision and such other provision 12 shall be deemed to have been amended, superseded or repealed to the 13 extent of such inconsistency, conflict or contrariety.

14 CHAPTER 20 15 SALES, EXCISE AND RELATED TAXES 16 SUBCHAPTER 1 17 GENERAL SALES AND COMPENSATING USE TAXES

18 § 11-2001 Imposition of general sales and compensating use taxes. (a) 19 There are hereby imposed and there shall be paid all of the sales and 20 compensating use taxes described in article twenty-eight of the tax law 21 as authorized by subdivision (a) of section twelve hundred ten of the 22 tax law, at the rate of four and one-half percent, provided that the 23 taxes described in paragraph six of subdivision (c) of section eleven 24 hundred five of the tax law shall be imposed and paid at the rate of six 25 percent. 26 (b) Notwithstanding any contrary provision of this section or other 27 law, this section: (1) does not impose tax on (i) receipts from the 28 sale of the services of laundering, dry-cleaning, tailoring, weaving, 29 pressing, shoe repairing and shoe shining described in subparagraph (ii) 30 of paragraph three of subdivision (c) of section eleven hundred five of 31 the tax law; (ii) receipts from the sale of services described in para- 32 graph six of subdivision (c) of section eleven hundred five of the tax 33 law at facilities owned and operated by the city or an agency or instru- 34 mentality of the city or a public corporation the majority of whose 35 members are appointed by the mayor or the city council or both of them; 36 (2) for purposes of the tax described in subdivision (e) of section 37 eleven hundred five of the tax law, defines "permanent resident" to mean 38 any occupant of any room or rooms in a hotel for at least one hundred 39 eighty consecutive days with regard to the period of such occupancy; (3) 40 does not omit from the tax described in paragraph one of subdivision (f) 41 of section eleven hundred five of the tax law charges to a patron for 42 admission to, or use of, facilities for sporting activities in which 43 such patron is to be a participant, such as bowling alleys and swimming 44 pools; (4) provides the clothing and footwear exemption in paragraph 45 thirty of subdivision (a) of section eleven hundred fifteen of the tax 46 law; (5) omits the exemption provided in paragraph forty-one of subdivi- 47 sion (a) of section eleven hundred fifteen of the tax law; (6) omits the 48 exemption provided in subdivision (c) of section eleven hundred fifteen 49 of the tax law insofar as it applies to fuel, gas, electricity, refrig- 50 eration and steam, and gas, electric, refrigeration and steam service of 51 whatever nature for use or consumption directly and exclusively in the 52 production of gas, electricity, refrigeration or steam; and (7) omits 53 the provision for refund or credit contained in clause six of subdivi- 54 sion (a) of section eleven hundred nineteen of the tax law.

S. 8578 1027

1 (c) The taxes imposed by this section shall be in addition to any and 2 all other taxes authorized or imposed under any other provision of law. 3 (d) The taxes imposed by this section shall be administered and 4 collected by the state commissioner of taxation and finance as provided 5 in articles twenty-eight and twenty-nine of the tax law. 6 (e) The provisions of articles twenty-eight and twenty-nine of the tax 7 law relating or applicable to the taxes imposed by this section, includ- 8 ing the applicable definitions, transitional provisions, limitations, 9 special provisions, exemptions, exclusions, refunds, credits and admin- 10 istrative provisions, so far as those provisions can be made applicable 11 to the taxes imposed by this section, shall apply to the taxes imposed 12 by this section with the same force and effect as if those provisions 13 had been incorporated in full into this section and had expressly 14 referred to the taxes imposed by this section, except to the extent that 15 any provision of article twenty-eight or twenty-nine of the tax law is 16 either inconsistent with or not relevant to the taxes imposed by this 17 section. 18 (f) Net collections from the taxes imposed by this section paid to 19 this city by the state comptroller shall be credited to and deposited in 20 the general fund of this city, but no part of such revenues may be 21 expended unless appropriated in the annual budget of this city. 22 (g) If any provision of this section or the application thereof shall 23 for any reason be adjudged by any court of competent jurisdiction to be 24 invalid, such judgment shall not affect, impair or invalidate the 25 remainder of this section but shall be confined in its operation to the 26 provision thereof directly involved in the controversy in which such 27 judgment shall have been rendered and the application of such provision 28 to other persons or circumstances shall not be affected thereby. 29 § 11-2002 Imposition of special sales taxes. (a) There are hereby 30 imposed and there shall be paid sales taxes at the rate of four and 31 one-half percent on receipts from every sale of the services of beauty, 32 barbering, hair restoring, manicuring, pedicuring, electrolysis, massage 33 services and similar services, and every sale of services by weight 34 control salons, health salons, gymnasiums, Turkish and sauna bath and 35 similar establishments and every charge for the use of such facilities, 36 whether or not any tangible personal property is transferred in conjunc- 37 tion therewith; but excluding services rendered by a physician, osteo- 38 path, dentist, nurse, physiotherapist, chiropractor, podiatrist, optome- 39 trist, ophthalmic dispenser or a person performing similar services 40 licensed under title eight of the education law, as amended, and exclud- 41 ing such services when performed on pets and other animals, as author- 42 ized by subdivision (a) of section twelve hundred twelve-a of the tax 43 law. Provided, however, that the tax hereby imposed shall not be imposed 44 after November thirtieth, two thousand twenty-six. 45 (b) The taxes imposed by this section shall be in addition to any and 46 all other taxes authorized or imposed under any other provision of law. 47 (c) The taxes imposed by this section shall be administered and 48 collected by the state commissioner of taxation and finance as provided 49 in articles twenty-eight and twenty-nine of the tax law. 50 (d) The provisions of articles twenty-eight and twenty-nine of the tax 51 law relating or applicable to the taxes imposed by this section, includ- 52 ing the applicable definitions, transitional provisions, limitations, 53 special provisions, exemptions, exclusions, refunds, credits and admin- 54 istrative provisions, so far as those provisions can be made applicable 55 to the taxes imposed by this section, shall apply to the taxes imposed 56 by this section with the same force and effect as if those provisions

S. 8578 1028

1 had been incorporated in full into this section and had expressly 2 referred to the taxes imposed by this section, except to the extent that 3 any provision of article twenty-eight or twenty-nine of the tax law is 4 either inconsistent with or not relevant to the taxes imposed by this 5 section. 6 (e) Net collections from the taxes imposed by this section paid to 7 this city by the state comptroller shall be credited to and deposited in 8 the general fund of this city, but no part of such revenues may be 9 expended unless appropriated in the annual budget of this city. 10 (f) If any provision of this section or the application thereof shall 11 for any reason be adjudged by any court of competent jurisdiction to be 12 invalid, such judgment shall not affect, impair or invalidate the 13 remainder of this section but shall be confined in its operation to the 14 provision thereof directly involved in the controversy in which such 15 judgment shall have been rendered and the application of such provision 16 to other persons or circumstances shall not be affected thereby. 17 § 11-2032 Construction and enforcement. This subchapter shall be 18 construed and enforced in conformity with articles twenty-eight and 19 twenty-nine of the tax law of the state of New York pursuant to which 20 the same is enacted.

21 SUBCHAPTER 3 22 SALES TAX ON CREDIT SERVICES, 23 PROTECTIVE AND DETECTIVE SERVICES, 24 INTERIOR DECORATING AND DESIGNING 25 SERVICES, AND INTERIOR CLEANING AND MAINTENANCE SERVICES

26 § 11-2039 Definitions. (a) "Person" includes an individual, partner- 27 ship, society, association, joint-stock company, corporation, estate, 28 receiver, trustee, assignee, referee, and any other person acting in a 29 fiduciary or representative capacity, whether appointed by a court or 30 otherwise, and any combination of the foregoing. 31 (b) When used in this subchapter for the purposes of the taxes imposed 32 by this subchapter, the following terms shall mean: 33 (1) "Purchaser." A person who purchases property or to whom are 34 rendered services, the receipts from which are taxable under this 35 subchapter. 36 (2) "Receipt." The amount of the sale price of any property and the 37 charge for any service taxable under this subchapter, valued in money, 38 whether received in money or otherwise, including any amount for which 39 credit is allowed by the vendor to the purchaser, without any deduction 40 for expenses or early payment discounts, but excluding any credit for 41 tangible personal property accepted in part payment and intended for 42 resale. 43 (3) "Sale." Any transfer of title or possession or both, exchange or 44 barter, rental, lease or license to use or consume, conditional or 45 otherwise, in any manner or by any means whatsoever for a consideration, 46 or any agreement therefor, including the rendering of any service, taxa- 47 ble under this subchapter, for a consideration or any agreement there- 48 for. 49 (4) "Vendor." A person making sales of tangible personal property or 50 services, the receipts from which are taxed by this subchapter. 51 (5) "Tax commission." Tax commission of the state of New York. 52 (6) "Tax law." Tax law of the state of New York. 53 § 11-2040 Imposition of tax. (a) There is hereby imposed within the 54 city and there shall be paid a tax at the rate of four and one-half

S. 8578 1029

1 percent upon the receipts from every sale, except for resale, of credit 2 rating and credit reporting services, including, but not limited to, 3 those services provided by mercantile and consumer credit rating or 4 reporting bureaus or agencies, whether rendered in written or oral form 5 or in any other manner, except to the extent otherwise taxable under 6 article twenty-eight of the tax law; provided, however, that the tax 7 hereby imposed shall not be imposed after November thirtieth, two thou- 8 sand twenty-six, on receipts from sales of the services specified in 9 this subdivision. 10 (b) Wages, salaries and other compensation paid by an employer to an 11 employee for performing as an employee the services described in subdi- 12 vision (a) of this section are not receipts subject to the taxes imposed 13 by such subdivision. 14 (c) Any taxes imposed by this subchapter are in addition to any other 15 tax which the city may impose or may be imposing pursuant to any law. 16 § 11-2041 Transitional provisions. The taxes imposed under subdivision 17 (a) of section 11-2040 of this subchapter shall be paid with respect to 18 receipts from all sales of services on or after September first, nine- 19 teen hundred seventy-five although rendered or agreed to be rendered 20 under a prior contract. Where a service is sold on a monthly, quarterly, 21 yearly or other term basis, the charge for such service shall be subject 22 to tax under this subchapter to the extent that such charge is applica- 23 ble to any period on or after September first, nineteen hundred seven- 24 ty-five, and such charge shall be apportioned on the basis of the ratio 25 of the number of days falling within such period to the total number of 26 days in the full term or period. 27 § 11-2042 Exempt organizations. Except as otherwise provided in this 28 section, any sale by or to any of the following shall not be subject to 29 the taxes imposed by this subchapter: 30 (1) The state of New York, or any of its agencies, instrumentalities, 31 public corporations, including a public corporation created pursuant to 32 agreement or compact with another state or Canada, or political subdivi- 33 sions where it is the purchaser, user or consumer, or where it is a 34 vendor of services or property of a kind not ordinarily sold by private 35 persons; 36 (2) The United States of America, and any of its agencies and instru- 37 mentalities, insofar as it is immune from taxation where it is the 38 purchaser, user or consumer, or where it sells services or property of a 39 kind not ordinarily sold by private persons; 40 (3) The United Nations or any international organization of which the 41 United States of America is a member where it is the purchaser, user or 42 consumer, or where it sells services or property of a kind not ordinar- 43 ily sold by private persons; 44 (4) Any corporation, association, trust, or community chest, fund or 45 foundation, organized and operated exclusively for religious, charita- 46 ble, scientific, testing for public safety, literary or educational 47 purposes, or for the prevention of cruelty to children or animals, no 48 part of the net earnings of which inures to the benefit of any private 49 shareholder or individual, no substantial part of the activities of 50 which is carrying on propaganda, or otherwise attempting to influence 51 legislation, and which does not participate in, or intervene in, includ- 52 ing the publishing or distributing of statements any political campaign 53 on behalf of any candidate for public office; 54 (5) A post or organization of war veterans, or an auxiliary unit or 55 society of, or a trust or foundation for, any such post or organization: 56 (A) organized in this state,

S. 8578 1030

1 (B) at least seventy-five percent of the members of which are war 2 veterans and substantially all of the other members of which are indi- 3 viduals who are veterans, but not war veterans, or are cadets, or are 4 spouses, widows or widowers of war veterans or such individuals, and 5 (C) no part of the net earnings of which inures to the benefit of any 6 private shareholder or individual. 7 § 11-2043 Refunds or credits based on proof of certain uses. A refund 8 or credit equal to the amount of the sales or compensating use tax 9 imposed by section eleven hundred seven of the tax law or by section 10 11-2001 of this chapter, as the case may be, and paid on the sale or use 11 of tangible personal property which is later used by such purchaser in 12 performing a service subject to tax under this subchapter shall be 13 allowed such purchaser against the tax imposed by this subchapter and 14 collected by such person on the sale of such services if such property 15 has become a physical component part of the property upon which the 16 service is performed or has been transferred to the purchaser of the 17 service in conjunction with the performance of the service subject to 18 tax; provided, however, that any such refund or credit shall be without 19 interest. 20 § 11-2044 Administration and collection. The taxes imposed by section 21 11-2040 of this subchapter shall be administered and collected by the 22 tax commission in the same manner as the taxes imposed by article twen- 23 ty-eight of the tax law are administered and collected by such commis- 24 sion. All of the provisions of such article relating to or applicable 25 to the administration and collection of the taxes imposed by that arti- 26 cle shall apply to the taxes imposed by this subchapter, including 27 sections eleven hundred one, eleven hundred eleven, and sections eleven 28 hundred thirty-one through eleven hundred forty-seven inclusive, with 29 the same force and effect as if those provisions had been incorporated 30 in full into this subchapter and had expressly referred to the taxes 31 imposed by this subchapter, except as otherwise provided in section 32 twelve hundred fifty of the tax law. For purposes of this subchapter, 33 the term "tax" in part IV of such article twenty-eight of the tax law 34 shall include the taxes imposed by this subchapter. 35 § 11-2045 Deposit and disposition of revenue. (a) The tax commission 36 shall deposit daily to the credit of the comptroller of the state of New 37 York, all taxes, penalties and interest collected under this subchapter 38 in such responsible banks, banking houses or trust companies as may be 39 designated by the comptroller. Such deposits shall be kept in trust for 40 the city and separate and apart from all other monies in the possession 41 of the comptroller. The comptroller shall require adequate security 42 from all such depositories. Of the revenue collected under this subchap- 43 ter the comptroller shall retain in his or her hands such amount as the 44 commissioner of taxation and finance of the state of New York may deter- 45 mine to be necessary for refunds under this subchapter and for reason- 46 able costs of the tax commission in administering, collecting and 47 distributing the taxes under this subchapter, out of which the comp- 48 troller shall pay any refunds made under the provisions of this subchap- 49 ter. The comptroller, after reserving such refund fund and such costs, 50 shall on or before the twelfth day of each month, pay to the commission- 51 er of finance of this city all taxes, interest and penalties collected 52 under this subchapter and remaining to the comptroller's credit in such 53 banks, banking houses or trust companies at the close of business on the 54 last day of the preceding month, provided, however, that the comptroller 55 shall on or before the last day of June and December make a partial 56 payment consisting of the collections made during and including the

S. 8578 1031

1 first twenty-five days of said months to the commissioner of finance of 2 this city. The amount so payable shall be certified to the comptroller 3 by the president of the tax commission or such president's delegate, who 4 shall not be held liable for any inaccuracy in such certificate. Where 5 the amount so paid over in any such distribution is more or less than 6 the amount then due to this city, the amount of the overpayment or 7 underpayment shall be certified to the comptroller by the president of 8 the tax commission or such president's delegate, who shall not be held 9 liable for any inaccuracy in such certificate. The amount of the over- 10 payment shall be so certified to the comptroller as soon after the 11 discovery of the overpayment or underpayment as reasonably possible and 12 subsequent payments and distributions by the comptroller to this city 13 shall be adjusted by subtracting the amount of any such overpayment from 14 or by adding the amount of any such underpayment to such number of 15 subsequent payments and distributions as the comptroller and the presi- 16 dent of the state tax commission shall consider reasonable in view of 17 the amount of the overpayment or underpayment and all other facts and 18 circumstances. 19 (b) All payments to the commissioner of finance pursuant to subdivi- 20 sion (a) of this section shall be credited to and deposited in the 21 general fund of this city, but no part of such revenues may be expended 22 unless appropriated in the annual budget of this city. 23 § 11-2046 Construction and enforcement. This subchapter shall be 24 construed and enforced in conformity with articles twenty-eight and 25 twenty-nine of the tax law of the state of New York pursuant to which it 26 is enacted. 27 § 11-2047 Effective date. This subchapter shall take effect September 28 first, nineteen hundred seventy-five except that certificates of regis- 29 tration may be filed with the state tax commission and certificates of 30 authority to collect tax may be issued by the state tax commission prior 31 to such date.

32 SUBCHAPTER 4 33 ADDITIONAL PARKING TAX

34 § 11-2048 Definitions. (a) "Person" includes an individual, partner- 35 ship, society, association, joint-stock company, corporation, estate, 36 receiver, trustee, assignee, referee, and any other person acting in a 37 fiduciary or representative capacity, whether appointed by a court or 38 otherwise, and any combination of the foregoing. 39 (b) When used in this subchapter for the purpose of the taxes imposed 40 by this subchapter, the following terms shall mean: 41 (1) "Purchaser." A person who purchased property or to whom are 42 rendered services, the receipts from which are taxable under this 43 subchapter. 44 (2) "Receipt." The amount of the sale price of any property and the 45 charge for any service taxable under this subchapter, valued in money, 46 whether received in money or otherwise, including any amount for which 47 credit is allowed by the vendor to the purchaser, without any deduction 48 for expenses or early payment discounts, but excluding any credit for 49 tangible personal property accepted in part payment and intended for 50 resale. 51 (3) "Sale." Any transfer of title or possession or both, exchange or 52 barter, rental, lease or license to use or consume, conditional or 53 otherwise, in any manner or by any means whatsoever for a consideration, 54 or any agreement therefor, including the rendering of any service, taxa-

S. 8578 1032

1 ble under this subchapter, for a consideration or any agreement there- 2 for. 3 (4) "Vendor." A person making sales of tangible personal property or 4 services, the receipts from which are taxed by this subchapter. 5 (5) "Tax commission." Tax commission of the state of New York. 6 (6) "Tax law." Tax law of the state of New York. 7 § 11-2049 Imposition of tax. On and after September first, nineteen 8 hundred eighty, there is hereby imposed within the city of New York, and 9 there shall be paid, a tax at the rate of eight percent on receipts from 10 every sale of the service of providing parking, garaging or storing for 11 motor vehicles by persons operating a garage, other than a garage which 12 is part of premises occupied solely as a private one or two family 13 dwelling, parking lot or other place of business engaged in providing 14 parking, garaging or storing for motor vehicles, in every county within 15 the city of New York with a population density in excess of fifty thou- 16 sand persons per square mile, as determined by reference to the latest 17 federal census; provided, however, that receipts for such services paid 18 to a homeowner's association by its members or receipts paid by members 19 of a homeowner's association to a person leasing the parking facility 20 from the homeowner's association shall not be subject to the tax imposed 21 by this section. For purposes of this section, a homeowner's association 22 is an association, including a cooperative housing or apartment corpo- 23 ration, (i) the membership of which is comprised exclusively of owners 24 or residents of residential dwelling units, including owners of units in 25 a condominium, and including shareholders in a cooperative housing or 26 apartment corporation, where such units are located in a defined 27 geographical area such as a housing development or subdivision; and (ii) 28 which owns or operates a garage, parking lot or other place of business 29 engaged in providing parking, garaging or storing for motor vehicles 30 located in such area for use, whether or not exclusive, by such owners 31 or residents. The tax imposed on the receipts described in this section 32 is in addition to the tax imposed on such receipts under subchapter one 33 of this chapter or section eleven hundred seven of the tax law, as the 34 case may be. 35 § 11-2050 Transitional provisions. The taxes imposed by this subchap- 36 ter shall be paid with respect to receipts from all sales of services on 37 or after September first, nineteen hundred eighty although rendered or 38 agreed to be rendered under a prior contract. Where a service is sold 39 on a monthly, quarterly, yearly or other term basis, the charge for such 40 service shall be subject to tax under this subchapter to the extent that 41 such charge is applicable to any period on or after September first, 42 nineteen hundred eighty, and such charge shall be apportioned on the 43 basis of the ratio of the number of days falling within such period to 44 the total number of days in the full term or period. 45 § 11-2051 Exempt organizations and individuals. (a) Except as other- 46 wise provided in this section, any sale by or to any of the following 47 shall not be subject to the taxes imposed by this subchapter: 48 (1) The state of New York, or any of its agencies, instrumentalities, 49 public corporations, including a public corporation created pursuant to 50 agreement or compact with another state or Canada, or political subdivi- 51 sions where it is the purchaser, user or consumer, or where it is a 52 vendor of services of a kind not ordinarily sold by private persons; 53 (2) The United States of America, and any of its agencies and instru- 54 mentalities, insofar as it is immune from taxation where it is the 55 purchaser, user or consumer or where it sells services of a kind not 56 ordinarily sold by private persons;

S. 8578 1033

1 (3) The United Nations or any international organization of which the 2 United States of America is a member where it is the purchaser, user or 3 consumer, or where it sells services of a kind not ordinarily sold by 4 private persons; 5 (4) Any corporation, association, trust, or community chest, fund or 6 foundation, organized and operated exclusively for religious, charita- 7 ble, scientific, testing for public safety, literary or educational 8 purposes, or to foster national or international amateur sports competi- 9 tion, but only if no part of its activities involve the provision of 10 athletic facilities or equipment, or for the prevention of cruelty to 11 children or animals, no part of the net earnings of which inures to the 12 benefit of any private shareholder or individual, no substantial part of 13 the activities of which is carrying on propaganda, or otherwise attempt- 14 ing to influence legislation, except as otherwise provided in subsection 15 (h) of section five hundred one of the United States internal revenue 16 code of nineteen hundred fifty-four, as amended, and which does not 17 participate in, or intervene in, including the publishing or distribut- 18 ing of statements, any political campaign on behalf of any candidate for 19 public office; 20 (5) A post or organization of past or present members of the armed 21 forces of the United States, or an auxiliary unit or society of, or a 22 trust or foundation for, any such post or organization: 23 (A) organized in this state, 24 (B) at least seventy-five percent of the members of which are past or 25 present members of the armed forces of the United States and substan- 26 tially all of the other members of which are individuals who are cadets 27 or are spouses, widows or widowers of past or present members of the 28 armed forces of the United States or of cadets, and 29 (C) no part of the net earnings of which inures to the benefit of any 30 private shareholder or individual; 31 (6) The following Indian nations or tribes residing in New York state: 32 Cayuga, Oneida, Onondaga, Poospatuck, Saint Regis Mohawk, Seneca, Shin- 33 necock, Tonawanda and Tuscarora, where it is the purchaser, user or 34 consumer; 35 (7) A not-for-profit corporation operating as a health maintenance 36 organization subject to the provisions of article forty-four of the 37 public health law; and 38 (8) Cooperative and foreign corporations doing business in this state 39 pursuant to the rural electric cooperative law. 40 (b) Nothing in this section shall exempt sales of the service of 41 providing parking, garaging or storing for motor vehicles by an organ- 42 ization described in paragraph four or paragraph five of subdivision (a) 43 of this section operating a garage, other than a garage which is part of 44 premises occupied solely as a private one-family or two-family dwelling, 45 parking lot or other place of business engaged in providing parking, 46 garaging or storing for motor vehicles. 47 (c) (1) For purposes of paragraph four of subdivision (a) of this 48 section, in the case of a qualified amateur sports organization (A) the 49 requirement of such paragraph that no part of its activities involve the 50 provision of athletic facilities or equipment shall not apply, and (B) 51 such organization shall not fail to meet the requirement of such para- 52 graph merely because its membership is local or regional in nature. 53 (2) For purposes of this subdivision, the term "qualified amateur 54 sports organization" means any organization organized and operated 55 exclusively to foster national or international amateur sports competi- 56 tion if such organization is also organized and operated primarily to

S. 8578 1034

1 conduct national or international competition in sports or to support 2 and develop amateur athletes for national or international competition 3 in sports. 4 (d) The tax imposed by this subchapter shall not apply to any sale of 5 services to an individual resident of the county in which such tax is 6 imposed when such services are rendered on a monthly or longer-term 7 basis at the principal location for the parking, garaging or storing of 8 a motor vehicle owned or leased, but only in the case of a lease for a 9 term of one year or more, by such individual resident. For purposes of 10 this subdivision, the term "individual resident" means a natural person 11 who maintains in such county a permanent place of abode which is such 12 person's primary residence; the term "motor vehicle" means a motor vehi- 13 cle which is registered pursuant to the vehicle and traffic law at the 14 address of the primary residence referred to in this subdivision, or 15 which is registered pursuant to the vehicle and traffic law and leased 16 to an individual resident at the address of the primary residence 17 referred to in this subdivision, and which is not used in carrying on 18 any trade, business or commercial activity; and the term "lease for a 19 term of one year or more" shall not include any lease the term of which 20 is less than one year, irrespective of the fact that the cumulative 21 period for which such lease may be in effect is one year or more as the 22 result of the right to exercise an option to renew or other like 23 provision. 24 § 11-2052 Administration and collection; penalties; refunds. (a) The 25 taxes imposed by this subchapter shall be administered and collected by 26 the tax commission in the same manner as the taxes imposed by article 27 twenty-eight of the tax law are administered and collected by such 28 commission. All of the provisions of such article relating to or appli- 29 cable to the administration and collection of the taxes imposed by that 30 article shall apply to the taxes imposed by this subchapter, including 31 section eleven hundred one and sections eleven hundred thirty-one 32 through eleven hundred forty-seven inclusive, with the same force and 33 effect as if those provisions had been incorporated in full into this 34 subchapter and had expressly referred to the taxes imposed by this 35 subchapter, except to the extent that any provisions of such article 36 twenty-eight are either inconsistent with a provision of this subchap- 37 ter, or of article twenty-nine of the tax law, or are not relevant to 38 this subchapter or to article twenty-nine of the tax law. For purposes 39 of this subchapter, the term "tax" in part IV of such article twenty- 40 eight of the tax law shall include the taxes imposed by this subchapter. 41 (b) Notwithstanding subdivision (a) of this section or any other 42 provision of law to the contrary, the tax commission shall, subject to 43 such terms and conditions as it may consider necessary, delegate to the 44 commissioner of finance the power and authority to develop and adminis- 45 ter reasonable and necessary procedures, including the use of exemption 46 certificates for presentation to vendors, for determining entitlement to 47 exemption from tax under subdivision (d) of section 11-2051 of this 48 subchapter, and to prescribe, subject to the approval of the tax commis- 49 sion, rules and regulations necessary and appropriate in carrying out 50 such responsibilities. 51 (c) Any person who, in violation of any provision of subdivision (d) 52 of section 11-2051 of this subchapter or any rule or regulation promul- 53 gated thereunder, obtains or uses a certificate of exemption relating to 54 the exemption allowed by such subdivision, shall, if such violation was 55 due to negligence or intentional disregard of such provision or rule or 56 regulation, but without intent to defraud, be liable for a penalty of

S. 8578 1035

1 not more than one hundred dollars for each such violation, and, if such 2 violation was due to fraud, be liable for a penalty of not more than 3 five hundred dollars for each such violation. The commissioner of 4 finance shall have the power, in his or her discretion, to waive, reduce 5 or compromise any penalty imposed pursuant to this subdivision. The 6 penalties authorized by this subdivision shall be in addition to any 7 penalty provided by section eleven hundred forty-five of the tax law, 8 and shall be paid and disposed of, and, if unpaid, shall be determined, 9 assessed, collected and enforced, in the same manner as the taxes 10 imposed by this subchapter. 11 (d) Notwithstanding subdivision (d) of section 11-2051 of this 12 subchapter, section eleven hundred thirty-nine of the tax law or any 13 other provision of law to the contrary, an individual resident shall not 14 be entitled to a refund or credit with respect to any amount of tax 15 which was paid to a vendor prior to the date such individual resident 16 presented to the vendor a valid certificate of exemption from such tax. 17 § 11-2053 Deposit and disposition of revenue. (a) The tax commission 18 shall deposit daily to the credit of the comptroller of the state of New 19 York, all taxes, penalties and interest collected under this subchapter 20 in such responsible banks, banking houses or trust companies as may be 21 designated by the comptroller. Such deposits shall be kept in trust for 22 the city and separate and apart from all other monies in the possession 23 of the comptroller. The comptroller shall require adequate security 24 from all such depositories. Of the revenue collected under this 25 subchapter the comptroller shall retain in his or her hands such amount 26 as the commissioner of taxation and finance of the state of New York may 27 determine to be necessary for refunds under this subchapter and for 28 reasonable costs of the tax commission in administering, collecting and 29 distributing the taxes under this subchapter, out of which the comp- 30 troller shall pay any refunds made under the provisions of this subchap- 31 ter. The comptroller, after reserving such refund fund and such costs 32 shall, on or before the twelfth day of each month, pay to the commis- 33 sioner of finance of this city all taxes, interest and penalties 34 collected under this subchapter during the next preceding calendar month 35 and remaining to the comptroller's credit in such banks, banking houses 36 or trust companies at the close of business on the last day of such 37 preceding month, provided, however, that the comptroller shall on or 38 before the last day of June and December make a partial payment consist- 39 ing of the collections made during and including the first twenty-five 40 days of said months to the commissioner of finance of this city. The 41 amount so payable shall be certified to the comptroller by the president 42 of the tax commission or such president's delegate, who shall not be 43 held liable for any inaccuracy in such certificate. Provided, however, 44 any such certification may be based on such information as may be avail- 45 able to the tax commission at the time such certificate must be made 46 under this section and may be estimated on the basis of percentages or 47 other indices calculated from distributions for prior periods. Where the 48 amount so paid over in any such distribution is more or less than the 49 amount then due to this city, the amount of the overpayment or underpay- 50 ment shall be certified to the comptroller by the president of the tax 51 commission or such president's delegate, who shall not be held liable 52 for any inaccuracy in such certificate. The amount of the overpayment or 53 underpayment shall be so certified to the comptroller as soon after the 54 discovery of the overpayment or underpayment as reasonably possible and 55 subsequent payments and distributions by the comptroller to this city 56 shall be adjusted by subtracting the amount of any such overpayment from

S. 8578 1036

1 or by adding the amount of any such underpayment to such number of 2 subsequent payments and distributions as the comptroller and the presi- 3 dent of the tax commission shall consider reasonable in view of the 4 amount of the overpayment or underpayment and all other facts and 5 circumstances. 6 (b) All payments to the commissioner of finance pursuant to subdivi- 7 sion (a) of this section shall be credited to and deposited in the 8 general fund of this city. 9 § 11-2054 Construction and enforcement. This subchapter shall be 10 construed and enforced in conformity with articles twenty-eight and 11 twenty-nine of the tax law of the state of New York pursuant to which it 12 is enacted.

13 SUBCHAPTER 5 14 TAX ON BEER AND LIQUOR

15 § 11-2055 Definitions. When used in this subchapter the following 16 terms shall mean or include: 17 1. "Person." An individual, partnership, society, association, 18 corporation, joint-stock company, and any combination of individuals, 19 and also an executor, administrator, receiver, trustee or other fiduci- 20 ary. 21 2. "Alcohol." Ethyl alcohol, hydrated oxide of ethyl or spirit of 22 wine, from whatever source or by whatever process produced. 23 3. "Beers." All alcoholic beer, lager beer, ale, porter, and stout, 24 and all other fermented beverages of any name or description manufac- 25 tured from malt, wholly or in part, or from any substitute therefor 26 containing one-half of one per centum, or more, of alcohol by volume. 27 4. "Liquors." Any and all distilled or rectified spirits, alcohol, 28 brandy, cordial, whether the base therefor be wine or liquor, whiskey, 29 rum, gin and all other distilled beverages containing alcohol, including 30 all dilutions and mixtures of one or more of such liquids, including any 31 alcoholic liquids which would be wines if the alcoholic content thereof 32 were not more than twenty-four per centum by volume. Such term shall not 33 include liquors containing not more than twenty-four per centum of alco- 34 hol by volume. 35 5. "Alcoholic beverages." Beer or liquors. 36 6. "Distributor." Any person who imports or causes to be imported into 37 this city any alcoholic beverages which are or will be offered for sale 38 or used for any commercial purpose; any purchaser of warehouse receipts 39 for alcoholic beverages stored in a warehouse in this city who causes 40 such beverages to be removed from such warehouse; and also any person 41 who produces, distills, manufactures, brews, compounds, mixes or 42 ferments any alcoholic beverages within this city for sale, except: (a) 43 a person who manufactures, mixes or compounds alcoholic beverages the 44 ingredients of which consist only of alcoholic beverages on which the 45 taxes imposed by this subchapter have been paid, and (b) a person who 46 mixes or compounds alcoholic beverages with non-alcoholic ingredients 47 for sale and immediate consumption on the premises, who shall be a 48 distributor only with respect to the ingredients which consist of alco- 49 holic beverages upon which the taxes imposed by this subchapter have not 50 been paid. 51 7. "Noncommercial importer." A person other than a distributor who 52 imports or causes to be imported into this city alcoholic beverages, 53 except that such person shall not be a noncommercial importer where he 54 or she imports or causes to be imported into this city alcoholic bever-

S. 8578 1037

1 ages in the quantities and under the conditions provided by subdivision 2 (e) of section 11-2056 of this subchapter. 3 8. "Sale." Any transfer, exchange or barter in any manner or by any 4 means whatsoever. The sale of warehouse receipts given upon the storage 5 of alcoholic beverages shall not be construed as a sale of the beverages 6 represented by such receipts. 7 9. "Use." Any compounding or mixing of alcoholic beverages with other 8 ingredients or other treatment of the same in such manner as to render 9 them unfit or unsuitable for consumption as a beverage and also the 10 actual consumption or possession for consumption of alcoholic beverages 11 as a beverage or otherwise. 12 10. "Gallon." One hundred twenty-eight fluid ounces; "quart" means 13 thirty-two fluid ounces. 14 11. "Liter." A metric unit of capacity equal to one thousand cubic 15 centimeters of alcoholic beverages and equivalent to thirty-three and 16 eight hundred fourteen thousandths fluid ounces. 17 12. "City." The city of Staten Island. 18 13. "Commissioner of finance." Commissioner of finance of the city. 19 14. "Tax commission." The tax commission of the state of New York. 20 15. Unless a different meaning is clearly required, any term used in 21 this subchapter shall have the same meaning as when used in a comparable 22 context in the laws of the state of New York relating to taxes on alco- 23 holic beverages. 24 § 11-2056 Imposition of tax. (a) There are hereby imposed on a 25 distributor and a noncommercial importer excise taxes at the following 26 rates: 27 (1) twelve cents per gallon upon beers; and 28 (2) twenty-six and four-tenths cents per liter upon liquors, when sold 29 or used within this city, except when sold or used under such circum- 30 stances that this city is without power to impose such tax or when sold 31 to the United States, and except beers when sold to or by a voluntary 32 unincorporated organization of the armed forces of the United States 33 operating a place for the sale of goods pursuant to regulations promul- 34 gated by the appropriate executive agency of the United States, and 35 except when sold to professional foreign consuls-general, consuls and 36 vice-consuls who are nationals of the state appointing them and who are 37 assigned to foreign consulates in this city provided that American 38 consular officers of equal rank who are citizens of the United States 39 and who exercise their official functions at American consulates in such 40 foreign country are granted reciprocal exemptions; provided, however, 41 that the tax commission may permit the sale of alcohol without tax to a 42 holder of any industrial alcohol permit, alcohol permit or alcohol 43 distributor's permit, issued by the state liquor authority, and by the 44 holder of an alcohol distributor's permit, class A, issued by such 45 authority to a holder of a distiller's license, class B, or a winery 46 license, issued by such authority and may also permit the use of alcohol 47 for any purpose other than the production of alcoholic beverages by such 48 holders without tax. 49 Notwithstanding any other provision of this subchapter, the tax 50 commission may permit the purchase of liquors without tax by a holder of 51 a distiller's license issued by the state liquor authority from another 52 holder of a distiller's license by such authority, in which event the 53 liquors so purchased shall be subject to the tax imposed by this 54 subchapter in the hands of the purchaser in the same manner and to the 55 same extent as if such purchaser had imported or caused the same to be

S. 8578 1038

1 imported into this city or had produced, distilled, manufactured, 2 brewed, compounded, mixed or fermented the same within this city. 3 (b) There is also imposed on each person, other than a distributor 4 within the meaning of this subchapter, who, on August first, nineteen 5 hundred eighty, owns and possesses for the purposes of sale beers or 6 liquors, a floor tax at the rates applicable under subdivision (a) upon 7 such beer in excess of one hundred gallons and upon such liquor in 8 excess of four hundred liters. Such floor tax shall be due and payable 9 on the twentieth day of the month succeeding the month of August, nine- 10 teen hundred eighty. 11 (c) If, prior to August first, nineteen hundred eighty, a contract of 12 sale of alcoholic beverages was made, and delivery thereof pursuant to 13 such contract is made within this city on or after August first, nine- 14 teen hundred eighty, the vendor shall be deemed a distributor for the 15 purposes of this subchapter, and such alcoholic beverages shall be 16 deemed to be sold, and shall be subject to such taxes, at the time of 17 such delivery. 18 (d) In any case where the quantity of alcoholic beverages taxable 19 pursuant to this subchapter is a fractional part of one liter, or one 20 gallon in the case of beers, or an amount greater than a whole multiple 21 of liters, or gallons in the case of beers, the amount of tax levied and 22 imposed on such fractional part of one liter, or one gallon in the case 23 of beers, or fractional part of a liter, or gallon, in excess of a whole 24 multiple of liters or gallons shall be such fractional part of the rate 25 imposed by subdivisions (a) and (b) of this section. 26 (e) Notwithstanding any other provisions of this subchapter, there 27 shall be exempt from the taxes imposed under this subchapter, per month, 28 one quart of alcoholic beverages, or one gallon of such beverages in the 29 case of a person arriving directly from American Samoa, Guam or the 30 Virgin Islands of the United States not more than one quart of which 31 shall have been acquired elsewhere than in such insular possessions: 32 (1) purchased outside this city as an incident to a journey from which 33 the purchaser is returning and 34 (2) not to be offered for sale or used for any commercial purpose, 35 provided such alcoholic beverages accompany such person on his or her 36 return to this city and provided, further, that in the case of a person 37 arriving in this city from other than a state of the United States, 38 including the District of Columbia, the Virgin Islands of the United 39 States or a contiguous country maintaining a free zone or free port, 40 such person shall have remained beyond the territorial limits of the 41 United States for a period of not less than forty-eight hours. 42 Provided, however, where the amounts purchased outside the city or 43 brought in exceed the amounts specified in this subdivision but are not 44 in excess of one liter in the case of the references to one quart or 45 four liters in the case of the reference to one gallon, and where no 46 duty is required by the laws of the United States to be paid on such 47 amounts, such metric standards of fill shall be substituted for one 48 quart and one gallon, respectively, and such amounts shall be exempt 49 from tax under the conditions provided for in this subdivision. 50 § 11-2057 Manner of administration and collection. All the provisions 51 of article eighteen of the tax law shall apply to the taxes imposed by 52 subdivision (a) of section 11-2056 of this subchapter, and the 53 provisions of sections four hundred twenty, four hundred twenty-six, 54 four hundred twenty-nine through four hundred thirty-four, four hundred 55 thirty-six and four hundred thirty-seven of the tax law shall apply to 56 the tax imposed by subdivision (b) of section 11-2056 of this subchap-

S. 8578 1039

1 ter, so far as such sections can be made applicable to the taxes imposed 2 by this subchapter with such limitations as set forth in section four 3 hundred forty-five of the tax law and such modifications as may be 4 necessary in order to adapt such language to the taxes imposed by this 5 subchapter. 6 § 11-2058 State tax commission; administration. The taxes imposed by 7 this subchapter shall be administered and collected by the tax commis- 8 sion in the same manner as the taxes imposed under sections four hundred 9 twenty-four and four hundred twenty-five of the tax law subject to all 10 provisions of that article as may be applicable. The tax commission may 11 make such provisions as it deems necessary for the joint administration 12 and collection of the state and local taxes imposed and authorized by 13 article eighteen of the tax law and this subchapter. Nothing in such 14 article eighteen or this subchapter which requires payment of both state 15 and local taxes to the tax commission shall be construed as the payment 16 of either tax more than once. 17 § 11-2059 Disposition of revenues. All taxes, penalties and interest 18 imposed by this subchapter, which are collected by the tax commission, 19 shall be deposited daily with such responsible banks, banking houses or 20 trust companies, as may be designated by the state comptroller, to the 21 credit of the comptroller, in trust for this city. Such deposits shall 22 be kept in trust and separate and apart from all other monies in the 23 possession of the comptroller. The comptroller shall require adequate 24 security from all such depositories of such revenues collected by the 25 tax commission. The comptroller shall retain in his or her hands such 26 amount as the commissioner of taxation and finance may determine to be 27 necessary for refunds in respect of the taxes imposed by this subchap- 28 ter, and for reasonable costs of the state tax commission in administer- 29 ing, collecting and distributing such taxes, out of which the comp- 30 troller shall pay any refunds of such taxes to which taxpayers shall be 31 entitled under the provisions of this subchapter. The comptroller, after 32 reserving such refund and such costs shall, on or before the twelfth day 33 of each month, pay to the commissioner of finance the taxes, penalties 34 and interest imposed by this subchapter, collected by the state tax 35 commission pursuant to this subchapter during the next preceding calen- 36 dar month. The amount so payable shall be certified to the comptroller 37 by the president of the state tax commission or his or her delegate, who 38 shall not be held liable for any inaccuracy in such certificate. Where 39 the amount so paid over to the city in any such distribution is more or 40 less than the amount then due to the city, the amount of the overpayment 41 or underpayment shall be certified to the comptroller by the president 42 of the state tax commission or his or her delegate, who shall not be 43 held liable for any inaccuracy in such certificate. The amount of the 44 overpayment or underpayment shall be so certified to the comptroller as 45 soon after the discovery of the overpayment or underpayment as reason- 46 ably possible and subsequent payments and distributions by the comp- 47 troller to the city shall be adjusted by subtracting the amount of any 48 such overpayment from or by adding the amount of any such underpayment 49 to such number of subsequent payments and distributions as the comp- 50 troller and the president of the state tax commission shall consider 51 reasonable in view of the amount of the overpayment or underpayment and 52 all other facts or circumstances. 53 § 11-2060 Construction. This subchapter shall be construed and 54 enforced in conformity with section four hundred forty-five of the tax 55 law, pursuant to which it is enacted.

S. 8578 1040

1 CHAPTER 21 2 REAL PROPERTY TAX

3 § 11-2101 Definitions. When used in this chapter the following terms 4 shall mean or include: 5 1. "Person." An individual, partnership, society, association, joint 6 stock company, corporation, estate, receiver, trustee, assignee, referee 7 or any other person acting in a fiduciary or representative capacity, 8 whether appointed by a court or otherwise, any combination of individ- 9 uals, and any other form of unincorporated enterprise owned or conducted 10 by two or more persons. 11 2. "Deed." Any document or writing, other than a will, regardless of 12 where made, executed or delivered, whereby any real property or interest 13 therein is created, vested, granted, bargained, sold, transferred, 14 assigned or otherwise conveyed, including any such document or writing 15 whereby any leasehold interest in real property is granted, assigned or 16 surrendered. 17 3. "Instrument." Any document or writing, other than a deed or a will, 18 regardless of where made, executed or delivered, whereby any economic 19 interest in real property is transferred. 20 4. "Transaction." Any act or acts, regardless of where performed, and 21 whether or not reduced to writing, unless evidenced by a deed or instru- 22 ment, whereby any economic interest in real property is transferred, 23 other than a transfer pursuant to the laws of intestate succession. 24 5. "Real property." Every estate or right, legal or equitable, present 25 or future, vested or contingent, in lands, tenements or hereditaments, 26 which are located in whole or in part within the city of Staten Island. 27 It shall not include a mortgage, a release of mortgage or, for purposes 28 of paragraph three and subparagraphs (ii) and (iii) of paragraph seven 29 of subdivision a of section 11-2102 of this chapter, a leasehold inter- 30 est in a one, two or three-family house or an individual dwelling unit 31 in a dwelling which is to be occupied or is occupied as the residence or 32 home of four or more families living independently of each other. It 33 shall not include rights to sepulture. 34 6. "Economic interest in real property." The ownership of shares of 35 stock in a corporation which owns real property; the ownership of an 36 interest or interests in a partnership, association or other unincorpo- 37 rated entity which owns real property; and the ownership of a beneficial 38 interest or interests in a trust which owns real property. 39 7. "Transfer" or "transferred." When used in relation to an economic 40 interest in real property, the terms "transfer" or "transferred" shall 41 include the transfer or transfers or issuance of shares of stock in a 42 corporation, interest or interests in a partnership, association or 43 other unincorporated entity, or beneficial interest in a trust, whether 44 made by one or several persons, or in one or several related trans- 45 actions, which shares of stock or interest or interests constitute a 46 controlling interest in such corporation, partnership, association, 47 trust or other entity. 48 8. "Controlling interest." In the case of a corporation, fifty percent 49 or more of the total combined voting power of all classes of stock of 50 such corporation, or fifty percent or more of the total fair market 51 value of all classes of stock of such corporation; and, in the case of a 52 partnership, association, trust or other entity, fifty percent or more 53 of the capital, profits or beneficial interest in such partnership, 54 association, trust or other entity.

S. 8578 1041

1 9. "Consideration." The price actually paid or required to be paid for 2 the real property or economic interest therein, without deduction for 3 mortgages, liens or encumbrances, whether or not expressed in the deed 4 or instrument and whether paid or required to be paid by money, proper- 5 ty, or any other thing of value. It shall include the cancellation or 6 discharge of an indebtedness or obligation. It shall also include the 7 amount of any mortgage, lien or other encumbrance, whether or not the 8 underlying indebtedness is assumed. 9 10. "Net consideration." Any consideration, exclusive of any mortgage 10 or other lien or encumbrance on the real property or interest therein 11 which existed before the delivery of the deed and remains thereon after 12 the delivery of the deed. 13 11. "Comptroller." The comptroller of the city of Staten Island. 14 12. "Commissioner of finance." The commissioner of finance of the city 15 of Staten Island. 16 13. "City." The city of Staten Island. 17 14. "Grantor." The person or persons making, executing or delivering 18 the deed. The term "grantor" also includes the entity with an interest 19 in real property or the person or persons who transfer an economic 20 interest in real property. 21 15. "Grantee." The person or persons accepting the deed or who obtain 22 any of the real property which is the subject of the deed or any inter- 23 est therein. The term "grantee" also includes the person or persons to 24 whom an economic interest in real property is transferred. 25 16. "Affixed." Includes attached or annexed by adhesion, stapling or 26 otherwise, or a notation by stamp, imprint or writing. 27 17. "Register." Includes the city register and the county clerk of the 28 county of Richmond. 29 18. "Tax appeals tribunal." The tax appeals tribunal established by 30 section one hundred sixty-eight of the charter of the preceding munici- 31 pality as it existed January first, nineteen hundred ninety-four. 32 § 11-2102 Imposition of tax. a. A tax is hereby imposed on each deed 33 at the time of delivery by a grantor to a grantee when the consideration 34 for the real property and any improvement thereon, whether or not 35 included in the same deed, exceeds twenty-five thousand dollars. The tax 36 shall be: 37 (1) at the rate of one-half of one per centum of the net consideration 38 with respect to conveyances made before July first, nineteen hundred 39 seventy-one, or made in performance of a contract therefor executed 40 before such date; 41 (2) at the rate of one percent of such net consideration with respect 42 to 43 (i) all conveyance made on or after July first, nineteen hundred 44 seventy-one and before February first, nineteen hundred eighty-two, or 45 made in performance of a contract therefor executed during such period; 46 (ii) conveyances made on or after February first, nineteen hundred 47 eighty-two and before July first, nineteen hundred eighty-two of one, 48 two or three-family houses and individual residential condominium units, 49 and 50 (iii) conveyances made on or after February first, nineteen hundred 51 eighty-two and before July first, nineteen hundred eighty-two where the 52 consideration is less than five hundred thousand dollars, other than 53 grants, assignments or surrenders of leasehold interests in real proper- 54 ty taxable under paragraph three of this subdivision; 55 (3) at the rate of one percent of the consideration with respect to 56 grants, assignments or surrenders of leasehold interests in real proper-

S. 8578 1042

1 ty made on or after February first, nineteen hundred eighty-two and 2 before July first, nineteen hundred eighty-two where the consideration 3 if five hundred thousand dollars or more, provided however, that for 4 purposes of this paragraph the amount subject to tax in the case of a 5 grant of a leasehold interest in real property shall be only such amount 6 as is not considered rent for purposes of the tax imposed by chapter 7 seven of this title; 8 (4) at the rate of two percent of the consideration with respect to 9 all other conveyances made on or after February first, nineteen hundred 10 eighty-two and before July first, nineteen hundred eighty-two, except 11 that, for purposes of this paragraph, where the consideration includes 12 the amount of any mortgage or other lien or encumbrance on the real 13 property or interest therein which existed before the delivery of the 14 deed and remains thereon after the delivery of the deed, the portion of 15 the consideration ascribable to such mortgage, lien or encumbrance shall 16 be taxed at the rate of one percent, and only the balance of such 17 consideration shall be taxed at the rate of two percent; 18 (5) at the rate of one percent of the consideration with respect to 19 conveyances made on or after July first, nineteen hundred eighty-two and 20 before August first, nineteen hundred eighty-nine of one, two or three- 21 family houses and individual residential condominium units; 22 (6) at the rate of one percent of the consideration with respect to 23 conveyances made on or after July first, nineteen hundred eighty-two and 24 before August first, nineteen hundred eighty-nine where the consider- 25 ation is less than five hundred thousand dollars, other than grants, 26 assignments or surrenders of leasehold interests in real property taxa- 27 ble as hereafter provided; 28 (7) (i) at the rate of one percent of the consideration with respect 29 to a grant, assignment or surrender, made on or after July first, nine- 30 teen hundred eighty-two and before August first, nineteen hundred eight- 31 y-nine, of a leasehold interest in a one, two or three-family house or 32 an individual dwelling unit in a dwelling which is to be occupied or is 33 occupied as the residence or home of four or more families living inde- 34 pendently of each other, 35 (ii) at the rate of one percent of the consideration with respect to 36 grants, assignments or surrenders of leasehold interests in real proper- 37 ty made on or after July first, nineteen hundred eighty-two and before 38 August first, nineteen hundred eighty-nine where the consideration is 39 less than five hundred thousand dollars, or 40 (iii) at the rate of two percent of the consideration with respect to 41 grants, assignments or surrenders of leasehold interests in real proper- 42 ty made on or after July first, nineteen hundred eighty-two and before 43 August first, nineteen hundred eighty-nine where the consideration is 44 five hundred thousand dollars or more; 45 (iv) provided, however, that for purposes of subparagraphs (i), (ii) 46 and (iii) of this paragraph, the amount subject to tax in the case of a 47 grant of a leasehold interest shall be only such amount as is not 48 considered rent for purposes of the tax imposed by chapter seven of this 49 title; and 50 (8) at the rate of two percent of the consideration with respect to 51 all other conveyances made on or after July first, nineteen hundred 52 eighty-two and before August first, nineteen hundred eighty-nine; 53 (9) with respect to conveyances made on or after August first, nine- 54 teen hundred eighty-nine, other than grants, assignments or surrenders 55 of leasehold interests in real property taxable as provided in paragraph 56 ten of this subdivision, the tax shall be at the following rates:

S. 8578 1043

1 (i) at the rate of one percent of the consideration for conveyances of 2 one, two or three-family houses and individual residential condominium 3 units where the consideration is five hundred thousand dollars or less, 4 and at the rate of one and four hundred twenty-five thousandths of one 5 percent of the consideration for such conveyances where the consider- 6 ation is more than five hundred thousand dollars, and 7 (ii) at the rate of one and four hundred twenty-five thousandths of 8 one percent of the consideration with respect to all other conveyances 9 where the consideration is five hundred thousand dollars or less, and at 10 the rate of two and six hundred twenty-five thousandths of one percent 11 where the consideration for such conveyances is more than five hundred 12 thousand dollars; 13 (10) With respect to a grant, assignment or surrender of a leasehold 14 interest in real property made on or after August first, nineteen 15 hundred eighty-nine, the tax shall be at the following rates: 16 (i) at the rate of one percent of the consideration for the granting, 17 assignment or surrender of a leasehold interest in a one, two or three- 18 family house or an individual dwelling unit in a dwelling which is to be 19 occupied or is occupied as the residence or home of four or more fami- 20 lies living independently of each other where the consideration is five 21 hundred thousand dollars or less, and at the rate of one and four 22 hundred twenty-five thousandths of one percent of the consideration 23 where the consideration for granting, assignment or surrender or such 24 leasehold interest is more than five hundred thousand dollars; and 25 (ii) at the rate of one and four hundred twenty-five thousandths of 26 one percent of the consideration for the granting, assignment or surren- 27 der of a leasehold interest in all other real property where the consid- 28 eration is five hundred thousand dollars or less, and at the rate of two 29 and six hundred twenty-five thousandths of one percent of the consider- 30 ation where the consideration for the granting, assignment or surrender 31 of such a leasehold interest is more than five hundred thousand dollars; 32 and 33 (iii) provided, however, that for purposes of subparagraphs (i) and 34 (ii) of this paragraph, the amount subject to tax in the case of a grant 35 of a leasehold interest shall be only such amount as is not considered 36 rent for purposes of the tax imposed by chapter seven of this title. 37 Where any real property is situated partly within and partly without 38 the boundaries of the city of Staten Island the consideration and net 39 consideration subject to tax shall be such part of the total consider- 40 ation and total net consideration attributable to that portion of such 41 real property situated within the city of Staten Island or to the inter- 42 est in such portion. 43 b. (1) In addition to the taxes imposed by subdivision a of this 44 section, there is hereby imposed a tax on each instrument or trans- 45 action, unless evidenced by a deed subject to tax under subdivision a of 46 this section, at the time of the transfer, whereby any economic interest 47 in real property is transferred by a grantor to a grantee, where the 48 consideration exceeds twenty-five thousand dollars. 49 (A) With respect to such transfers made on or after July thirteenth, 50 nineteen hundred eighty-six and before August first, nineteen hundred 51 eighty-nine, the tax shall be (i) at the rate of one percent of the 52 consideration where the real property the economic interest in which is 53 transferred is a one, two or three-family house, an individual cooper- 54 ative apartment, an individual residential condominium unit or an indi- 55 vidual dwelling unit in a dwelling which is to be occupied or is occu- 56 pied as the residence or home of four or more families living

S. 8578 1044

1 independently of each other, or where the consideration for the transfer 2 is less than five hundred thousand dollars, and (ii) at the rate of two 3 percent of the consideration with respect to all other transfers. 4 (B) With respect to such transfers made on or after August first, 5 nineteen hundred eighty-nine, the tax shall be at the following rates: 6 (i) at the rate of one percent of the consideration where the real 7 property, the economic interest in which is transferred, is a one, two 8 or three-family house, an individual cooperative apartment, an individ- 9 ual residential condominium unit or an individual dwelling unit in a 10 dwelling which is to be occupied or is occupied as the residence or home 11 of four or more families living independently of each other and where 12 the consideration for such transfer of an economic interest in such real 13 property is five hundred thousand dollars or less, and at the rate of 14 one and four hundred twenty-five thousandths of one percent of the 15 consideration where the consideration for such transfer of an economic 16 interest in such property is more than five hundred thousand dollars, 17 and 18 (ii) at the rate of one and four hundred twenty-five thousandths of 19 one percent of the consideration with respect to all other transfers of 20 an economic interest in real property where the consideration is five 21 hundred thousand dollars or less, and at the rate of two and six hundred 22 twenty-five thousandths of one percent of the consideration where the 23 consideration for such transfers is more than five hundred thousand 24 dollars. 25 (C) Where any real property, the economic interest in which is trans- 26 ferred, is situated partly within and partly without the boundaries of 27 the city of Staten Island, the consideration subject to tax shall be 28 such part of the consideration as is attributable to that portion of 29 such real property which is situated within the city of Staten Island. 30 (2) Notwithstanding the definition of "controlling interest" contained 31 in subdivision eight of section 11-2101 of this chapter or anything to 32 the contrary contained in subdivision seven of such section, in the case 33 of any transfer of shares of stock in a cooperative housing corporation 34 in connection with the grant or transfer of a proprietary leasehold, the 35 tax imposed by this subdivision shall apply to (i) the original transfer 36 of such shares of stock by the cooperative corporation or cooperative 37 plan sponsor, and (ii) any subsequent transfer of such shares of stock 38 by the owner thereof. Notwithstanding any provision of this chapter to 39 the contrary, in the case of a transfer described in clause (ii) of this 40 subparagraph which relates to an individual residential unit, the 41 consideration for such transfer shall not include any portion of the 42 unpaid principal of any mortgage on the real property of the cooperative 43 housing corporation. In determining the tax on a transfer described in 44 clause (i) of this subparagraph, a credit shall be allowed for a propor- 45 tionate part of the amount of any tax paid upon the conveyance to the 46 cooperative housing corporation of the land and building or buildings 47 comprising the cooperative dwelling or dwellings. Such proportionate 48 part shall be the amount determined by multiplying the amount of tax 49 paid upon the conveyance to the cooperative housing corporation by a 50 fraction, the numerator of which shall be the number of shares of stock 51 transferred in a transaction described in clause (i) of this subpara- 52 graph and the denominator of which shall be the total number of 53 outstanding shares of stock of the cooperative housing corporation, 54 including any stock held by the corporation. In no event, however, shall 55 such credit reduce the tax on a transfer described in clause (i) of this 56 subparagraph below zero, nor shall any such credit be allowed for any

S. 8578 1045

1 tax paid more than twenty-four months prior to the date on which occurs 2 the first in a series of transfers of shares of stock in an offering of 3 cooperative housing corporation shares described in clause (i) of this 4 subparagraph. For purposes of this paragraph, the term "cooperative 5 housing corporation" shall not include a housing company organized and 6 operating pursuant to the provisions of article two, four, five or elev- 7 en of the private housing finance law. 8 (3) Notwithstanding the definition of "controlling interest" contained 9 in paragraph eight of section 11-2101 of this chapter or anything to the 10 contrary contained in paragraph seven of such section, in the case of a 11 corporation, other than a cooperative housing corporation, partnership, 12 association, trust or other entity formed for the purpose of cooperative 13 ownership of real property, the tax imposed by this subdivision shall 14 apply to each transfer of shares of stock in such corporation, interest 15 in such partnership, association or other entity or beneficial interest 16 in such trust, in connection with the grant or transfer of a proprietary 17 leasehold. Notwithstanding any provision of this chapter to the contra- 18 ry, in the case of a transfer described in this paragraph which relates 19 to an individual residential unit, other than the original transfer of 20 such a unit by the cooperative entity or cooperative plan sponsor, the 21 consideration for such transfer shall not include any portion of the 22 unpaid principal of any mortgage on the real property of such corpo- 23 ration, partnership, association, trust or other entity. Notwithstanding 24 any other provision of law to the contrary, all revenues arising from 25 the tax imposed pursuant to this paragraph shall be credited to and 26 deposited in the general fund of the city, but no part of such revenues 27 may be expended unless appropriated in the annual budget of the city. 28 c. (1) Anything to the contrary notwithstanding, in the case of any 29 conveyance or transfer of real property or any economic interest therein 30 in complete or partial liquidation of a corporation, partnership, asso- 31 ciation, trust or other entity, the taxes imposed by this section shall 32 be measured by (i) the consideration for such conveyance or transfer, or 33 (ii) the value of the real property or economic interest therein, which- 34 ever is greater. 35 (2) If, within twenty-four months following the transfer of an econom- 36 ic interest in real property which is subject to the tax imposed by this 37 chapter, the corporation, partnership, association, trust or other enti- 38 ty owning the real property the economic interest in which was so trans- 39 ferred, is liquidated, and such real property is conveyed to the grantee 40 or grantees of such economic interest, a credit shall be allowed against 41 the tax imposed by this chapter upon such conveyance in liquidation to 42 such grantee or grantees. The amount of such credit shall be equal to 43 the amount of the tax paid upon the prior transfer of the economic 44 interest in such real property, but shall in no event be greater than 45 the tax payable upon the conveyance in liquidation. 46 d. In the case of a transfer of an economic interest in any entity 47 that owns assets in addition to real property or interest therein, the 48 consideration subject to tax shall be deemed equal to the fair market 49 value of the real property or interest therein apportioned based on the 50 percentage of the ownership interest in the entity transferred. 51 e. (1) Notwithstanding anything contained in this section, the tax 52 imposed under subdivisions a and b of this section on any deed or other 53 instrument or transaction conveying or transferring real property or an 54 economic interest therein, that qualifies as a real estate investment 55 trust transfer, as defined below, shall be imposed at a rate equal to 56 fifty percent of the otherwise applicable rate.

S. 8578 1046

1 (2) For purposes of this subdivision, a real estate investment trust 2 transfer shall mean (A) any deed or other instrument or transaction 3 conveying or transferring real property or an economic interest therein 4 to a real estate investment trust as defined in section eight hundred 5 fifty-six of the internal revenue code (a "REIT") or to a partnership or 6 corporation in which a REIT owns a controlling interest immediately 7 following the transaction; and (B) any issuance or transfer of an inter- 8 est in a REIT, or in a partnership or corporation in which a REIT owns a 9 controlling interest immediately following the issuance or transfer in 10 connection with a transaction described in subparagraph (A) of this 11 paragraph. 12 Provided, however, a transaction described in the opening paragraph 13 of this paragraph shall not constitute a real estate investment trust 14 transfer unless (i) it occurs in connection with the initial formation 15 of the REIT and the conditions described in subparagraphs (C) and (D) of 16 this paragraph are satisfied, or (ii) in the case of any real estate 17 investment trust transfer occurring on or after July thirteenth, nine- 18 teen hundred ninety-six and before September first, two thousand twen- 19 ty-six, the transaction is described in subparagraph (E) of this para- 20 graph in which case the provision of such subparagraph shall apply. 21 (C) The value of the ownership interests in the REIT, or in a partner- 22 ship or corporation in which the REIT owns a controlling interest, 23 received by the grantor as consideration for such conveyance or transfer 24 must be equal to an amount not less than forty percent of the value of 25 the equity interest in the real property or economic interest therein 26 conveyed or transferred by the grantor to the grantee and such ownership 27 interests must be retained by the grantor or owners of the grantor for a 28 period of not less than two years following the date of such conveyance 29 or transfer; provided, however, that in the case of the death of the 30 grantor or an owner of the grantor within such two year period, this two 31 year retention requirement shall be deemed to be satisfied notwithstand- 32 ing any conveyance or transfer of such ownership interests held by such 33 individual as a result of such death. The value of the equity interest 34 in such real property or economic interest therein shall be computed by 35 subtracting from the consideration for the conveyance or transfer of the 36 real property or economic interest therein the unpaid balance of any 37 loans secured by mortgages or other encumbrances which are liens on the 38 real property or economic interest therein immediately before the 39 conveyance or transfer. For purposes of this computation, in the case of 40 a conveyance or transfer of real property other than a conveyance or 41 transfer of an economic interest in real property, the amount of the 42 unpaid balance of any loans secured by mortgages or other encumbrances 43 to be subtracted from consideration is determined by multiplying the 44 total unpaid balance of any loans secured by mortgages or other encum- 45 brances on the real property by the percentage of the ownership interest 46 in the real property being conveyed or transferred to the grantee. In 47 the case of a transfer of an economic interest in real property, such 48 amount to be subtracted is equal to the sum of the following amounts: 49 (i) a reasonable apportionment to the interests in real property owned 50 by the entity of the amount of any loans secured by encumbrances on the 51 ownership interests in the entity which are being conveyed or trans- 52 ferred and (ii) the amount of any loans secured by mortgages or other 53 encumbrances on the real property of the entity multiplied by the 54 percentage interest in the entity which is being conveyed or trans- 55 ferred.

S. 8578 1047

1 Provided, however, that for purposes of the computation made pursuant 2 to this subparagraph, any mortgages or other encumbrances on the real 3 property or economic interest therein which are created in contemplation 4 of the initial formation of the REIT or in contemplation of the convey- 5 ance or transfer of such real property or economic interest therein to 6 the REIT or to a partnership or corporation in which the REIT owns a 7 controlling interest immediately following the conveyance or transfer 8 shall not be considered. 9 (D) Seventy-five percent or more of the cash proceeds received by such 10 REIT from the sale of ownership interests in such REIT upon its initial 11 formation must be used: (i) to make payments on loans secured by any 12 interest in real property, including an ownership interest in an entity 13 owning real property, which is owned directly or indirectly by such 14 REIT; (ii) to pay for capital improvements to real property or any 15 interest therein owned directly or indirectly by such REIT; (iii) to pay 16 brokerage fees and commissions, professional fees and payments to or on 17 behalf of a tenant as an inducement to enter into a lease or sublease 18 incurred in connection with the creation of a leasehold or sublease 19 pertaining to real property or any interest therein owned directly or 20 indirectly by such REIT; (iv) to acquire any interest in real property, 21 including an ownership interest in any entity owning real property, 22 apart from any acquisition to which a reduced rate of tax is applicable 23 pursuant to this subdivision, without regard to this subparagraph; or 24 (v) for reserves established for any of the purposes described in clause 25 (i), (ii) or (iii) of this subparagraph. For purposes of this subpara- 26 graph, the term real property shall include real property wherever 27 located. 28 (E) If a transaction otherwise described in subparagraph (A) or (B) of 29 this paragraph occurs other than in connection with the initial forma- 30 tion of a REIT, the condition set forth in subparagraph (D) shall be 31 disregarded and such transaction shall constitute a "real estate invest- 32 ment trust transfer" if the condition set forth in subparagraph (C) 33 would be satisfied if "fifty percent" is substituted for "forty percent" 34 therein. 35 (3) For purposes of determining the consideration for a real estate 36 investment trust transfer taxable under this subdivision the value of 37 the real property or interest therein shall be equal to the estimated 38 market value as determined by the commissioner of finance for real prop- 39 erty tax purposes as reflected on the most recent notice of assessment 40 issued by such commissioner, or such other value as the taxpayer may 41 establish to the satisfaction of such commissioner. 42 (4) This subdivision shall only apply to real estate investment trust 43 transfers occurring on or after the effective date of this subdivision. 44 f. Notwithstanding any other provision of this chapter, in determining 45 the tax imposed by this chapter with respect to a deed, instrument or 46 transaction conveying or transferring a one, two or three-family house, 47 an individual residential condominium unit, an individual residential 48 cooperative apartment, or an interest therein, the consideration for 49 such conveyance or transfer shall exclude, to the extent otherwise 50 included therein, the amount of any mortgage or other lien or encum- 51 brance on the real property or interest therein that existed before the 52 delivery of the deed or the transfer and remains thereon after the date 53 of delivery of the deed or the transfer, other than any mortgage, lien 54 or encumbrance placed on the property or interest in connection with, or 55 in anticipation of, the conveyance or transfer, or by reason of deferred 56 payments of the purchase price whether represented by notes or other-

S. 8578 1048

1 wise. Provided, however, that this subdivision shall not apply to a 2 conveyance or transfer (1) to a mortgagee, lienor or encumbrancer, 3 regardless of whether the grantor or transferor is or was personally 4 liable for the indebtedness secured by the mortgage, lien or encumbrance 5 or whether the mortgage, lien or encumbrance is canceled of record, or 6 (2) which qualifies as a "real estate investment trust transfer" as 7 defined in subdivision e of this section. 8 § 11-2103 Presumptions and burden of proof. For the purpose of the 9 proper administration of this chapter and to prevent evasion of the tax 10 hereby imposed, it shall be presumed that all deeds and transfers of 11 economic interests in real property are taxable. Where the consider- 12 ation includes property other than money, it shall be presumed that the 13 consideration is the value of the real property or interest therein. 14 Such presumptions shall prevail until the contrary is established and 15 the burden of proving the contrary shall be on the taxpayer. The burden 16 of proving that a lien or encumbrance existed on the real property or 17 interest therein before the delivery of the deed and remained thereon 18 thereafter and the burden of proving the amount of such lien or encum- 19 brance at the time of the delivery of the deed shall be on the taxpayer. 20 § 11-2104 Payment. The tax imposed hereunder shall be paid by the 21 grantor to the commissioner of finance at the office of the register in 22 the county where the deed is or would be recorded within thirty days 23 after the delivery of the deed by the grantor to the grantee but before 24 the recording of such deed, or, in the case of a tax on the transfer of 25 an economic interest in real property, at such place as the commissioner 26 of finance shall designate, within thirty days after the transfer. The 27 grantee shall also be liable for the payment of such tax in the event 28 that the amount of tax due is not paid by the grantor or the grantor is 29 exempt from tax. All moneys received as such payments by the register 30 during the preceding month shall be transmitted to the commissioner of 31 finance on the first day of each month or on such other day as is mutu- 32 ally agreeable to the commissioner of finance and the register. From the 33 moneys so received by him or her, the commissioner of finance shall set 34 said in a special account: 35 (1) the total amount of taxes imposed pursuant to the provisions of 36 paragraph three of subdivision a of section 11-2102 of this chapter 37 including any interest or penalties thereon; 38 (2) fifty percent of the total amount of taxes imposed pursuant to the 39 provisions of paragraph four of subdivision a of section 11-2102 of this 40 chapter, including fifty percent of any interest or penalties thereon, 41 provided, however, that where such tax is measured by the consideration 42 for a conveyance without deduction for the amount of any mortgage or 43 other lien or encumbrance on the real property or interest therein which 44 existed before the delivery of the deed and remains thereon after the 45 delivery of the deed, the entire amount of tax imposed at the rate of 46 one percent on the portion of the consideration ascribable to such 47 nondeductible mortgage, lien or other encumbrance, including any inter- 48 est or penalties thereon, and fifty percent of the tax on the balance of 49 the consideration, including fifty percent of any interest or penalties 50 thereon, shall be set aside in such special account; 51 (3) fifty percent of the total amount of taxes imposed pursuant to the 52 provisions of subparagraph (iii) of paragraph seven of subdivision a of 53 section 11-2102 of this chapter, including fifty percent of any interest 54 or penalties thereon; 55 (4) fifty percent of the total amount of taxes imposed pursuant to the 56 provisions of paragraph eight of subdivision a of section 11-2102 of

S. 8578 1049

1 this chapter, including fifty percent of any interest or penalties ther- 2 eon; 3 (5) fifty percent of the total amount of taxes imposed at the rate of 4 two percent pursuant to the provisions of clause (ii) of subparagraph A 5 of paragraph one of subdivision b of section 11-2102 of this chapter 6 including fifty percent of any interest or penalties thereon; 7 (6) with respect to any conveyance of real property, transfer of an 8 economic interest therein, or any grant, assignment or surrender of a 9 leasehold interest in real property, made on or after August first, 10 nineteen hundred eighty-nine and taxable under this chapter, in each 11 instance where the tax rate is in excess of two percent, a portion of 12 the tax received equal to one percent of the consideration subject to 13 the tax plus any interest or penalty attributable to such portion of the 14 tax; and 15 (7) notwithstanding anything in subdivision six of this section to the 16 contrary, in each instance where the tax rate imposed pursuant to subdi- 17 vision e of section 11-2102 of this chapter is in excess of one percent, 18 a portion of the tax received equal to one-half of one percent of the 19 total consideration for the real property or economic interest therein 20 conveyed or transferred, plus any interest or penalty attributable to 21 such portion of the tax. 22 Moneys in such account shall be used for payment by such commissioner 23 to the state comptroller for deposit in the urban mass transit operating 24 assistance account of the mass transportation operating assistance fund 25 of any amount of insufficiency certified by the state comptroller pursu- 26 ant to the provisions of subdivision six of section eighty-eight-a of 27 the state finance law, and, on the fifteenth day of each month, the 28 commissioner of finance shall transmit all funds in such account on the 29 last day of the preceding month, except the amount required for the 30 payment of any amount of insufficiency certified by the state comp- 31 troller and such amount as he or she deems necessary for refunds and 32 such other amounts necessary to finance the New York City transportation 33 disabled committee and the New York City paratransit system as estab- 34 lished by section fifteen-b of the transportation law, provided, howev- 35 er, that such amounts shall not exceed six percent of the total funds in 36 the account but in no event be less than one hundred seventy-five thou- 37 sand dollars beginning April first, nineteen hundred eighty-six, and 38 further that beginning November fifteenth, nineteen hundred eighty-four 39 and during the entire period prior to operation of such system, the 40 total of such amounts shall not exceed three hundred seventy-five thou- 41 sand dollars for the administrative expenses of such committee and fifty 42 thousand dollars for the expenses of the agency designated pursuant to 43 paragraph b of subdivision five of such section, and other amounts 44 necessary to finance the operating needs of the private bus companies 45 franchised by the city of New York and eligible to receive state operat- 46 ing assistance under section eighteen-b of the transportation law, 47 provided, however, that such amounts shall not exceed four percent of 48 the total funds in the account, to the New York city transit authority 49 for mass transit within the city. 50 § 11-2105 Returns. a. A joint return shall be filed by both the 51 grantor and the grantee for each deed whether or not a tax is due there- 52 on. Such return shall be filed with the commissioner of finance within 53 thirty days after the delivery of the deed by the grantor to the grantee 54 but before the recording of such deed. The commissioner of finance may, 55 by rule, require that such returns be filed electronically.

S. 8578 1050

1 Filing shall be accomplished by delivering the return to the register 2 for transmittal to the commissioner of finance or, where required by the 3 commissioner of finance, by electronic filing of the return in a manner 4 designated by the commissioner of finance. In the case of a transfer of 5 an economic interest in real property, a joint return shall be filed in 6 the above manner by both the grantor and the grantee for each instrument 7 or transaction by which such transfer is effected, whether or not a tax 8 is due thereon. Such return shall be filed with the commissioner of 9 finance, at such place and in such manner as he or she may designate 10 within thirty days after the transfer. The commissioner of finance shall 11 prescribe the form of the return and the information which it shall 12 contain. The return shall be signed by both the grantor or the grantor's 13 agent and the grantee or the grantee's agent. Where the commissioner of 14 finance requires electronic filing, the return shall be signed electron- 15 ically. Upon the filing of such return for a deed, evidence of the 16 filing shall be affixed to the deed by the register. The commissioner of 17 finance may provide for the use of stamps as evidence of payment and 18 that they shall be affixed to the deed before it is recorded. Where 19 either the grantor or grantee has failed to sign the return, it shall be 20 accepted as a return, but the party who has failed to sign the return or 21 file a separate return shall be subject to the penalties applicable to a 22 person who has failed to file a return and the period of limitations for 23 assessment of tax or of additional tax shall not apply to such party. 24 For good cause, the commissioner of finance may waive any rule requiring 25 electronic filing and may permit a return to be filed in such other 26 manner as the commissioner of finance may designate. 27 b. Returns shall be preserved for three years and thereafter until 28 the commissioner of finance permits them to be destroyed. 29 c. The commissioner of finance may require amended returns to be filed 30 within twenty days after notice and to contain the information specified 31 in the notice. 32 d. If a return required by this chapter is not filed or if a return 33 when filed is incorrect or insufficient on its face the commissioner of 34 finance shall take the necessary steps to enforce the filing of such a 35 return or of a corrected return. 36 e. Where a deed, or instrument or transaction has more than one gran- 37 tor or more than one grantee, the return may be signed by any one of the 38 grantors and by any one of the grantees, provided, however, that those 39 not signing shall not be relieved of any liability for the tax imposed 40 by this chapter. 41 f. The payment of, and the filing of returns relating to, the taxes 42 imposed hereunder, shall be required as a condition precedent to the 43 recording or filing of a deed, lease, assignment or surrender of lease 44 or other instrument effecting a conveyance or transfer subject to such 45 taxes. 46 g. Every cooperative housing corporation shall be required to file an 47 information return with the commissioner of finance as follows: such 48 information return shall be filed by February fifteenth of the year two 49 thousand and of each year thereafter, covering the reporting period 50 beginning on January sixth of the year preceding the filing and ending 51 on January fifth of the year of the filing. For reporting periods begin- 52 ning before January sixth, nineteen hundred ninety-nine, such informa- 53 tion return shall be filed by July fifteenth of each year covering the 54 preceding period of January first through June thirtieth and by January 55 fifteenth of each year covering the preceding period of July first 56 through December thirty-first provided, however, that for the reporting

S. 8578 1051

1 period from January first through June thirtieth, nineteen hundred 2 eighty-nine, such information return shall be filed by July thirty- 3 first, nineteen hundred eighty-nine. The return shall contain such 4 information regarding the transfer of shares of stock in the cooperative 5 housing corporation as the commissioner may deem necessary, including 6 but not limited to, the names, addresses and employer identification 7 numbers or social security numbers of the grantor and the grantee, the 8 number of shares transferred, the date of the transfer and the consider- 9 ation paid for such transfer, provided, however, that if such cooper- 10 ative housing corporation elects that such information return be deemed 11 an application for an abatement pursuant to paragraph (f) of subdivision 12 three of section four hundred sixty-seven-a of the real property tax 13 law, such return shall contain the information required pursuant to 14 paragraph (d) of subdivision three of such section. The commissioner of 15 finance may enter into an agreement with the commissioner of taxation 16 and finance of the state of New York to provide that a single informa- 17 tion return may be filed for purposes of the tax imposed by this chapter 18 and the real estate transfer tax imposed by article thirty-one of the 19 tax law. 20 h. Returns with respect to the conveyance of a one- or two-family 21 dwelling will not be accepted for filing unless accompanied by an affi- 22 davit signed by the grantor and grantee indicating that the premises is 23 equipped with an approved and operational smoke detecting device as 24 provided in article six of subchapter seventeen of chapter one of title 25 twenty-seven of this code. 26 i. When the grantor or grantee of a deed for a building used as resi- 27 dential real property containing up to four family dwelling units is a 28 limited liability company, the joint return shall not be accepted for 29 filing unless it is accompanied by a document which identifies the names 30 and business addresses of all members, managers, and any other author- 31 ized persons, if any, of such limited liability company and the names 32 and business addresses or, if none, the business addresses of all share- 33 holders, directors, officers, members, managers and partners of any 34 limited liability company or other business entity that are to be the 35 members, managers or authorized persons, if any, of such limited liabil- 36 ity company. The identification of such names and addresses shall not be 37 deemed an unwarranted invasion of personal privacy pursuant to article 38 six of the public officers law. If any such member, manager or author- 39 ized person of the limited liability company is itself a limited liabil- 40 ity company or other business entity other than a publicly traded enti- 41 ty, a REIT, an UPREIT, or a mutual fund, the names and addresses of the 42 shareholders, directors, officers, members, managers and partners of the 43 limited liability company or other business entity shall also be 44 disclosed until full disclosure of ultimate ownership by natural persons 45 is achieved. For purposes of this subdivision, the terms "members", 46 "managers", "authorized person", "limited liability company" and "other 47 business entity" shall have the same meaning as those terms are defined 48 in section one hundred two of the limited liability company law. 49 § 11-2106 Exemptions. a. The following shall be exempt from the 50 payment of the tax imposed by this chapter and from filing a return: 51 1. The state of New York, or any of its agencies, instrumentalities, 52 public corporations, including a public corporation created pursuant to 53 agreement or compact with another state or the Dominion of Canada, or 54 political subdivisions; 55 2. The United States of America, and any of its agencies and instru- 56 mentalities, insofar, as they are immune from taxation, provided, howev-

S. 8578 1052

1 er, that the exemption of such governmental bodies or persons shall not 2 relieve a grantee from them of liability for the tax or from filing a 3 return. 4 b. The tax imposed by this chapter shall not apply to any of the 5 following deeds, instruments or transactions: 6 1. A deed, instrument or transaction conveying or transferring real 7 property or an economic interest therein by or to the United Nations or 8 other world-wide international organizations of which the United States 9 of America is a member; 10 2. A deed, instrument or transaction conveying or transferring real 11 property or an economic interest therein by or to any corporation, or 12 association, or trust, or community chest, fund or foundation, organized 13 or operated exclusively for religious, charitable, or educational 14 purposes, or for the prevention of cruelty to children or animals, and 15 no part of the net earnings of which inures to the benefit of any 16 private shareholder or individual and no substantial part of the activ- 17 ities of which is carrying on propaganda, or otherwise attempting to 18 influence legislation; provided, however, that nothing in this paragraph 19 shall include an organization operated for the primary purpose of carry- 20 ing on a trade or business for profit, whether or not all of its profits 21 are payable to one or more organizations described in this paragraph; 22 3. A deed, instrument or transaction conveying or transferring real 23 property or an economic interest therein to any governmental body or 24 person exempt from payment of the tax pursuant to subdivision a of this 25 section; 26 4. A deed delivered pursuant to a contract made prior to May first, 27 nineteen hundred fifty-nine; 28 5. A deed delivered by any governmental body or person exempt from 29 payment of the tax pursuant to subdivision a of this section as a result 30 of a sale at a public auction held in accordance with the provisions of 31 a contract made prior to May first, nineteen hundred fifty-nine; 32 6. A deed or instrument given solely as security for, or a transaction 33 the sole purpose of which is to secure, a debt or obligation or a deed 34 or instrument given, or a transaction entered into, solely for the 35 purpose of returning such security; 36 7. A deed, instrument or transaction conveying or transferring real 37 property or an economic interest therein from a mere agent, dummy, straw 38 man or conduit to his principal or a deed, instrument or transaction 39 conveying or transferring real property or an economic interest therein 40 from the principal to his agent, dummy, straw man or conduit. 41 8. A deed, instrument or transaction conveying or transferring real 42 property or an economic interest therein that effects a mere change of 43 identity or form of ownership or organization to the extent the benefi- 44 cial ownership of such real property or economic interest therein 45 remains the same, other than a conveyance to a cooperative housing 46 corporation of the land and building or buildings comprising the cooper- 47 ative dwelling or dwellings. For purposes of this paragraph, the term 48 "cooperative housing corporation" shall not include a housing company 49 organized and operating pursuant to the provisions of article two, four, 50 five or eleven of the private housing finance law. 51 9. A deed, instrument or transaction conveying or transferring real 52 property or an economic interest therein by or to any housing develop- 53 ment fund company organized pursuant to article eleven of the private 54 housing finance law or to an entity, the controlling interest of which 55 is held by such a company, if at the time of such conveyance or trans- 56 fer, such real property is subject to, or simultaneously with such

S. 8578 1053

1 conveyance or transfer is made subject to, a regulatory agreement with 2 the state of New York, a municipal corporation or any other public 3 corporation created by or pursuant to any law of the state of New York 4 that: encumbers the real property for thirty years or more, requires 5 mutual consent for revocation or amendment, restricts more than fifty 6 percent of the floor area, other than common areas, to residential real 7 property, and restricts at least sixty-six and two-thirds percent of 8 such residential real property to purchase, lease, license or other use 9 by persons of low income and families of low income within the meaning 10 of section two of the private housing finance law; provided, however, 11 that if such regulatory agreement restricts less than one hundred 12 percent of the floor area, other than common areas, to purchase, lease, 13 license or other use by persons of low income and families of low income 14 within the meaning of section two of the private housing finance law, 15 the tax shall apply to the consideration less the product of the consid- 16 eration and a fraction, the numerator of which is the floor area that 17 such regulatory agreement restricts to purchase, lease, license or other 18 use by persons of low income and families of low income within the mean- 19 ing of section two of the private housing finance law and the denomina- 20 tor of which is the entire floor area, minus the floor area of common 21 areas; provided further, that if such real property is made subject to a 22 regulatory agreement that meets the terms of this paragraph within two 23 years of the conveyance or transfer then the commissioner of finance may 24 issue a refund based on the application of this paragraph pursuant to 25 the provisions of section 11-2108 of this chapter, treating the transfer 26 or conveyance as if such real property were subject to such regulatory 27 agreement as of the date of such transfer or conveyance, if, notwith- 28 standing any other time limitation set forth in section 11-2108 of this 29 chapter, application to the commissioner of finance for such refund is 30 made within twelve months of the effective date of such regulatory 31 agreement. 32 c. Notwithstanding any provision of this chapter to the contrary, 33 where stock of a cooperative housing corporation and the appurtenant 34 proprietary leasehold are transferred to such cooperative housing corpo- 35 ration or a wholly owned subsidiary of such housing corporation, or to 36 the holder of a mortgage on the real property of such cooperative hous- 37 ing corporation or a wholly owned subsidiary of such holder of a mort- 38 gage on the real property of such cooperative housing corporation, such 39 cooperative housing corporation or its wholly owned subsidiary, or such 40 mortgage holder or its wholly owned subsidiary, shall not be liable as 41 grantee for the tax determined to be due under this chapter from the 42 grantor in such transfer, provided that such transfer occurred pursuant 43 to, as the result of, or in connection with an action, proceeding, or 44 other procedure to which such cooperative housing corporation is a 45 party, to enforce a lien, security interest or other rights on or in 46 such stock and proprietary leasehold, including but not limited to 47 rights under the proprietary lease. This subdivision shall apply to 48 transfers occurring on or after June sixteenth, nineteen hundred nine- 49 ty-two. 50 § 11-2107 Determination of tax. If a return required by this chapter 51 is not filed, or if a return when filed is incorrect or insufficient, 52 the amount of tax due shall be determined by the commissioner of finance 53 from such information as may be obtainable, including the assessed valu- 54 ation of the real property or interest therein. Notice of such determi- 55 nation shall be given to the person liable for the tax. Such determi- 56 nation shall finally and irrevocably fix the tax unless the person

S. 8578 1054

1 against whom it is assessed, within ninety days after the giving of 2 notice of such determination, or, if the commissioner of finance has 3 established a conciliation procedure pursuant to section 11-124 of the 4 code of the preceding municipality and the taxpayer has requested a 5 conciliation conference in accordance therewith, within ninety days from 6 the mailing of a conciliation decision or the date of the commissioner's 7 confirmation of the discontinuance of the conciliation proceeding, both 8 (1) serves a petition upon the commissioner of finance and (2) files a 9 petition with the tax appeals tribunal for a hearing, or, unless the 10 commissioner of finance of his or her own motion shall redetermine the 11 same. Such hearing and any appeal to the tax appeals tribunal sitting en 12 banc from the decision rendered in such hearing shall be conducted in 13 the manner and subject to the requirements prescribed by the tax appeals 14 tribunal pursuant to sections one hundred sixty-eight through one 15 hundred seventy-two of the charter of the preceding municipality as it 16 existed January first, nineteen hundred ninety-four. After such hearing 17 the tax appeals tribunal shall give notice of its decision to the person 18 against whom the tax is assessed and to the commissioner of finance. A 19 decision of the tax appeals tribunal sitting en banc shall be reviewable 20 for error, illegality or unconstitutionality or any other reason whatso- 21 ever by a proceeding under article seventy-eight of the civil practice 22 law and rules if application therefor is made to the supreme court by 23 the person against whom the tax was assessed within four months after 24 the giving of the notice of such tax appeals tribunal decision. A 25 proceeding under article seventy-eight of the civil practice law and 26 rules shall not be instituted by a taxpayer unless: (a) the amount of 27 any tax sought to be reviewed, with penalties and interest thereon, if 28 any, shall be first deposited with the commissioner of finance and there 29 shall be filed with the commissioner of finance an undertaking, issued 30 by a surety company authorized to transact business in this state and 31 approved by the superintendent of insurance of this state as to solvency 32 and responsibility, in such amount and with such sureties as a justice 33 of the supreme court shall approve, to the effect that if such proceed- 34 ing be dismissed or the tax confirmed, the taxpayer will pay all costs 35 and charges which may accrue in the prosecution of the proceeding; or 36 (b) at the option of the taxpayer such undertaking filed with the 37 commissioner of finance may be in a sum sufficient to cover the taxes, 38 penalties and interest thereon stated in such decision plus the costs 39 and charges which may accrue against it in the prosecution of the 40 proceeding, in which event the taxpayer shall not be required to deposit 41 such taxes, penalties and interest as a condition precedent to the 42 application. 43 § 11-2108 Refunds. a. In the manner provided in this section the 44 commissioner of finance shall refund or credit, without interest, any 45 tax, penalty or interest erroneously, illegally or unconstitutionally 46 collected or paid if application to the commissioner of finance for such 47 refund shall be made within one year from the payment thereof. Whenever 48 a refund is made or denied by the commissioner of finance, the commis- 49 sioner shall state his or her reason therefor and give notice thereof to 50 the taxpayer in writing. Such application may be made by the grantor, 51 grantee or other person who has actually paid the tax. The commissioner 52 of finance may, in lieu of any refund required to be made, allow credit 53 therefor on payments due from the applicant. 54 b. Any determination of the commissioner of finance denying a refund 55 or credit pursuant to subdivision a of this section shall be final and 56 irrevocable unless the applicant for such refund or credit, within nine-

S. 8578 1055

1 ty days from the mailing of notice of such determination, or, if the 2 commissioner of finance has established a conciliation procedure pursu- 3 ant to section 11-124 of the code of the preceding municipality and the 4 applicant has requested a conciliation conference in accordance there- 5 with, within ninety days from the mailing of a conciliation decision or 6 the date of the commissioner's confirmation of the discontinuance of the 7 conciliation proceeding, both (1) serves a petition upon the commission- 8 er of finance and (2) files a petition with the tax appeals tribunal for 9 a hearing. Such petition for a refund or credit made as herein provided 10 shall be deemed an application for a revision of any tax, penalty or 11 interest complained of. Such hearing and any appeal to the tax appeals 12 tribunal sitting en banc from the decision rendered in such hearing 13 shall be conducted in the manner and subject to the requirements 14 prescribed by the tax appeals tribunal pursuant to sections one hundred 15 sixty-eight through one hundred seventy-two of the charter of the 16 preceding municipality as it existed January first, nineteen hundred 17 ninety-four. After such hearing, the tax appeals tribunal shall give 18 notice of its decision to the applicant and the commissioner of finance. 19 The applicant shall be entitled to review such decision of the tax 20 appeals tribunal sitting en banc by a proceeding pursuant to article 21 seventy-eight of the civil practice law and rules, provided such 22 proceeding is instituted within four months after the giving of notice 23 of such decision, and provided, in the case of an application by a 24 taxpayer, that a final determination of tax due was not previously made. 25 Such a proceeding shall not be instituted by a taxpayer unless an under- 26 taking is filed with the commissioner of finance in such amount and with 27 such sureties as a justice of the supreme court shall approve to the 28 effect that if such proceeding be dismissed or the tax confirmed, the 29 taxpayer will pay all costs and charges which may accrue in the prose- 30 cution of such proceeding. 31 c. A person shall not be entitled to a revision, refund or credit 32 under this section of a tax, interest or penalty which had been deter- 33 mined to be due pursuant to the provisions of section 11-2107 of this 34 chapter where he or she has had a hearing or an opportunity for a hear- 35 ing, as provided in said section, or has failed to avail himself or 36 herself of the remedies therein provided. No refund or credit shall be 37 made of a tax, interest or penalty paid after a determination by the 38 commissioner of finance made pursuant to section 11-2107 of this chapter 39 unless it be found that such determination was erroneous, illegal or 40 unconstitutional or otherwise improper, by the tax appeals tribunal 41 after a hearing, or on the commissioner of finance's own motion, or, if 42 such tax appeals tribunal affirms in whole or in part the determination 43 of the commissioner of finance, in a proceeding under article seventy- 44 eight of the civil practice law and rules, pursuant to the provisions of 45 said section, in which event refund or credit without interest shall be 46 made of the tax, interest or penalty found to have been overpaid. 47 § 11-2109 Reserves. In cases where the grantor or grantee has 48 applied for a refund and has instituted a proceeding under article 49 seventy-eight of the civil practice law and rules to review a determi- 50 nation adverse to him or her on his or her application for refund, the 51 comptroller shall set up appropriate reserves to meet any decision 52 adverse to the city. 53 § 11-2110 Remedies exclusive. The remedies provided by sections 54 11-2107 and 11-2108 of this chapter shall be exclusive remedies avail- 55 able to any person for the review of tax liability imposed by this chap- 56 ter; and no determination or proposed determination of tax or determi-

S. 8578 1056

1 nation on any application for refund shall be enjoined or reviewed by an 2 action for declaratory judgment, an action for money had and received or 3 by any action or proceeding other than a proceeding in the nature of a 4 certiorari proceeding under article seventy-eight of the civil practice 5 law and rules; provided, however, that a taxpayer may proceed by declar- 6 atory judgment if he or she institutes suit within thirty days after a 7 deficiency assessment is made and pays the amount of the deficiency 8 assessment to the commissioner of finance prior to the institution of 9 such suit and posts a bond for costs as provided in section 11-2107 of 10 this chapter. 11 § 11-2111 Proceedings to recover tax. a. Whenever any grantor or 12 grantee shall fail to pay any tax, penalty or interest imposed by this 13 chapter as herein provided, the corporation counsel shall, upon the 14 request of the commissioner of finance bring or cause to be brought an 15 action to enforce the payment of the same on behalf of the city of 16 Staten Island in any court of the state of New York or of any other 17 state or of the United States. If, however, the commissioner of finance 18 in his or her discretion believes that any such grantor or grantee 19 subject to the provisions of this chapter is about to cease business, 20 leave the state or remove or dissipate the assets out of which the tax 21 or penalty might be satisfied, and that any such tax or penalty will not 22 be paid when due, such commissioner may declare such tax or penalty to 23 be immediately due and payable and may issue a warrant immediately. 24 b. As an additional or alternate remedy, the commissioner of finance 25 may issue a warrant, directed to the city sheriff commanding him or her 26 to levy upon and sell the real and personal property of the grantor, 27 grantee or other person liable for the tax which may be found within the 28 city, for the payment of the amount thereof, with any penalty and inter- 29 est, and the cost of executing the warrant, and to return such warrant 30 to the commissioner of finance and to pay to him or her the money 31 collected by virtue thereof within sixty days after the receipt of such 32 warrant. The city sheriff shall within five days after the receipt of 33 the warrant file with the county clerk a copy thereof, and thereupon 34 such clerk shall enter in the judgment docket the name of the person 35 mentioned in the warrant and the amount of the tax, penalty and interest 36 for which the warrant is issued and the date when such copy is filed. 37 Thereupon the amount of such warrant so docketed shall become a lien 38 upon the title to and the interest in real and personal property of the 39 person against whom the warrant is issued. The city sheriff shall then 40 proceed upon the warrant in the same manner, and with like effect, as 41 that provided by law in respect to executions issued against property 42 upon judgments of a court of record and for services in executing the 43 warrant he or she shall be entitled to the same fees, which such sheriff 44 may collect in the same manner. In the discretion of the commissioner 45 of finance a warrant of like terms, force and effect may be issued and 46 directed to an officer or employee of the department of finance, and in 47 the execution thereof such officer or employee shall have all the powers 48 conferred by law upon sheriffs, but shall be entitled to no fee or 49 compensation in excess of the actual expenses paid in the performance of 50 such duty. If a warrant is returned not satisfied in full, the commis- 51 sioner of finance may from time to time issue new warrants and shall 52 also have the same remedies to enforce the amount due thereunder as if 53 the city had recovered judgment therefor and execution thereon had been 54 returned unsatisfied. 55 c. The commissioner of finance, if he or she finds that the interests 56 of the city will not thereby be jeopardized, and upon such conditions as

S. 8578 1057

1 the commissioner of finance may require, may release any property from 2 the lien of any warrant or vacate such warrant for unpaid taxes, addi- 3 tions to tax, penalties and interest filed pursuant to subdivision b of 4 this section, and such release or vacating of the warrant may be 5 recorded in the office of any recording officer in which such warrant 6 has been filed. The clerk shall thereupon cancel and discharge as of the 7 original date of docketing the vacated warrant. 8 § 11-2112 General powers of the commissioner of finance. In addition 9 to the powers granted to the commissioner of finance in this chapter, he 10 or she is hereby authorized and empowered: 11 1. To make, adopt and amend rules and regulations appropriate to the 12 carrying out of this chapter and the purposes thereof; 13 2. To extend, for cause shown, the time for filing any return for a 14 period not exceeding thirty days; and to compromise disputed claims in 15 connection with the taxes hereby imposed; 16 3. To request information from the tax commission of the state of New 17 York or the treasury department of the United States relative to any 18 person; and to afford returns, reports and other information to such tax 19 commission or such treasury department relative to any person, any other 20 provision of this chapter to the contrary notwithstanding; 21 4. To delegate his or her functions under this section to a deputy 22 commissioner of finance or any employee or employees of the department 23 of finance; 24 5. To prescribe the methods for determining the consideration and net 25 consideration attributable to that portion of real property located 26 partly within and partly without the city of Staten Island which is 27 located within the city of Staten Island or any interest therein; 28 6. To require any grantor or grantee to keep such records, and for 29 such length of time as may be required for the proper administration of 30 this chapter and to furnish such records to the commissioner of finance 31 upon request; 32 7. To assess, determine, revise and adjust the taxes imposed under 33 this chapter. 34 § 11-2113 Administration of oaths and compelling testimony. a. The 35 commissioner of finance, his or her employees or agents duly designated 36 and authorized by him or her, the tax appeals tribunal and any of its 37 duly designated and authorized employees or agents shall have power to 38 administer oaths and take affidavits in relation to any matter or 39 proceeding in the exercise of their powers and duties under this chap- 40 ter. The commissioner of finance and the tax appeals tribunal shall have 41 power to subpoena and require the attendance of witnesses and the 42 production of books, papers and documents to secure information perti- 43 nent to the performance of the duties of the commissioner or of the tax 44 appeals tribunal under this chapter and of the enforcement of this chap- 45 ter and to examine them in relation thereto, and to issue commissions 46 for the examination of witnesses who are out of the state or unable to 47 attend before such commissioner or the tax appeals tribunal or excused 48 from attendance. 49 b. A justice of the supreme court either in court or at chambers shall 50 have power summarily to enforce by proper proceedings the attendance and 51 testimony of witnesses and the production and examination of books, 52 papers and documents called for by the subpoena of the commissioner of 53 finance or the tax appeals tribunal under this chapter. 54 c. Cross-reference; criminal penalties. For failure to obey subpoenas 55 or for testifying falsely, see section 11-4007 of this title; for

S. 8578 1058

1 supplying false or fraudulent information, see section 11-4009 of this 2 title. 3 d. The officers who serve the summons or subpoena of the commissioner 4 of finance or the tax appeals tribunal and witnesses attending in 5 response thereto shall be entitled to the same fees as are allowed to 6 officers and witnesses in civil cases in courts of record, except as 7 herein otherwise provided. Such officers shall be the city sheriff and 8 his or her duly appointed deputies or any officers or employees of the 9 department of finance or the tax appeals tribunal, designated to serve 10 such process. 11 § 11-2114 Interest and penalties. (a) Interest on underpayments. If 12 any amount of tax is not paid on or before the last date prescribed for 13 payment, without regard to any extension of time granted for payment, 14 interest on such amount at the rate set by the commissioner of finance 15 pursuant to subdivision (g) of this section, or, if no rate is set, at 16 the rate of seven and one-half percent per annum, shall be paid for the 17 period from such last date to the date of payment. In computing the 18 amount of interest to be paid, such interest shall be compounded daily. 19 Interest under this subdivision shall not be paid if the amount thereof 20 is less than one dollar. 21 (b) (1) Failure to file return. (A) In case of failure to file a 22 return under this chapter on or before the prescribed date, determined 23 with regard to any extension of time for filing, unless it is shown that 24 such failure is due to reasonable cause and not due to willful neglect, 25 there shall be added to the amount required to be shown as tax on such 26 return five percent of the amount of such tax if the failure is for not 27 more than one month, with an additional five percent for each additional 28 month or fraction thereof during which such failure continues, not 29 exceeding twenty-five percent in the aggregate. 30 (B) In the case of a failure to file a return of tax within sixty days 31 of the date prescribed for filing of such return, determined with regard 32 to any extension of time for filing, unless it is shown that such fail- 33 ure is due to reasonable cause and not due to willful neglect, the addi- 34 tion to tax under subparagraph (A) of this paragraph shall not be less 35 than the lesser of one hundred dollars or one hundred percent of the 36 amount required to be shown as tax on such return. 37 (C) For purposes of this paragraph, the amount of tax required to be 38 shown on the return shall be reduced by the amount of any part of the 39 tax which is paid on or before the date prescribed for payment of the 40 tax and by the amount of any credit against the tax which may be claimed 41 upon the return. 42 (2) Failure to pay tax shown on return. In case of failure to pay the 43 amount shown as tax on a return required to be filed under this chapter 44 on or before the prescribed date, determined with regard to any exten- 45 sion of time for payment, unless it is shown that such failure is due to 46 reasonable cause and not due to willful neglect, there shall be added to 47 the amount shown as tax on such return one-half of one percent of the 48 amount of such tax if the failure is not for more than one month, with 49 an additional one-half of one percent for each additional month or frac- 50 tion thereof during which such failure continues, not exceeding twenty- 51 five percent in the aggregate. For the purpose of computing the addition 52 for any month the amount of tax shown on the return shall be reduced by 53 the amount of any part of the tax which is paid on or before the begin- 54 ning of such month and by the amount of any credit against the tax which 55 may be claimed upon the return. If the amount of tax required to be

S. 8578 1059

1 shown on a return is less than the amount shown as tax on such return, 2 this paragraph shall be applied by substituting such lower amount. 3 (3) Failure to pay tax required to be shown on return. In case of 4 failure to pay any amount in respect of any tax required to be shown on 5 a return required to be filed under this chapter which is not so shown, 6 including a determination made pursuant to section 11-2107 of this chap- 7 ter, within ten days of the date of a notice and demand therefor, unless 8 it is shown that such failure is due to reasonable cause and not due to 9 willful neglect, there shall be added to the amount of tax stated in 10 such notice and demand one-half of one percent of such tax if the fail- 11 ure is not for more than one month, with an additional one-half of one 12 percent for each additional month or fraction thereof during which such 13 failure continues, not exceeding twenty-five percent in the aggregate. 14 For the purpose of computing the addition for any month, the amount of 15 tax stated in the notice and demand shall be reduced by the amount of 16 any part of the tax which is paid before the beginning of such month. 17 (4) Limitations on additions. 18 (A) With respect to any return, the amount of the addition under para- 19 graph one of this subdivision shall be reduced by the amount of the 20 addition under paragraph two of this subdivision for any month to which 21 an addition applies under both paragraphs one and two of this subdivi- 22 sion. In any case described in subparagraph (B) of paragraph one of this 23 subdivision, the amount of the addition under such paragraph one shall 24 not be reduced below the amount provided in such subparagraph. 25 (B) With respect to any return, the maximum amount of the addition 26 permitted under paragraph three of this subdivision shall be reduced by 27 the amount of the addition under paragraph one of this subdivision, 28 determined without regard to subparagraph (B) of such paragraph one, 29 which is attributable to the tax for which the notice and demand is made 30 and which is not paid within ten days of such notice and demand. 31 (c) Underpayment due to negligence. (1) If any part of an underpayment 32 of tax is due to negligence or intentional disregard of this chapter or 33 any rules or regulations hereunder, but without intent to defraud, there 34 shall be added to the tax a penalty equal to five percent of the under- 35 payment. 36 (2) There shall be added to the tax, in addition to the amount deter- 37 mined under paragraph one of this subdivision, an amount equal to fifty 38 percent of the interest payable under subdivision (a) of this section 39 with respect to the portion of the underpayment described in such para- 40 graph one which is attributable to the negligence or intentional disre- 41 gard referred to in such paragraph one, for the period beginning on the 42 last date prescribed by law for payment of such underpayment, determined 43 without regard to any extension, and ending on the date of the assess- 44 ment of the tax, or, if earlier, the date of the payment of the tax. 45 (d) Underpayment due to fraud. (1) If any part of an underpayment of 46 tax is due to fraud, there shall be added to the tax a penalty equal to 47 fifty percent of the underpayment. 48 (2) There shall be added to the tax, in addition to the penalty deter- 49 mined under paragraph one of this subdivision, an amount equal to fifty 50 percent of the interest payable under subdivision (a) of this section 51 with respect to the portion of the underpayment described in such para- 52 graph one which is attributable to fraud, for the period beginning on 53 the last day prescribed by law for payment of such underpayment, deter- 54 mined without regard to any extension, and ending on the date of the 55 assessment of the tax, or, if earlier, the date of the payment of the 56 tax.

S. 8578 1060

1 (3) The penalty under this subdivision shall be in lieu of any other 2 addition to tax imposed by subdivision (b) or (c) of this section. 3 (e) Additional penalty. Any person who, with fraudulent intent, shall 4 fail to pay any tax imposed by this chapter, or to make, render, sign or 5 certify any return, or to supply any information within the time 6 required by or under this chapter, shall be liable for a penalty of not 7 more than one thousand dollars, in addition to any other amounts 8 required under this chapter to be imposed, assessed and collected by the 9 commissioner of finance. The commissioner of finance shall have the 10 power, in his or her discretion, to waive, reduce or compromise any 11 penalty under this subdivision. 12 (f) The interest and penalties imposed by this section shall be paid 13 and disposed of in the same manner as other revenues from this chapter. 14 Unpaid interest and penalties may be enforced in the same manner as the 15 tax imposed by this chapter. 16 (g)(1) Authority to set interest rates. The commissioner of finance 17 shall set the rate of interest to be paid pursuant to subdivision (a) of 18 this section, but if no such rate of interest is set, such rate shall be 19 deemed to be set at seven and one-half percent per annum. Such rate 20 shall be the rate prescribed in paragraph two of this subdivision but 21 shall not be less than seven and one-half percent per annum. Any such 22 rate set by the commissioner of finance shall apply to taxes, or any 23 portion thereof, which remain or become due on or after the date on 24 which such rate becomes effective and shall apply only with respect to 25 interest computed or computable for periods or portions of periods 26 occurring in the period in which such rate is in effect. 27 (2) General rule. The rate of interest set under this subdivision 28 shall be the sum of (i) the federal short-term rate as provided under 29 paragraph three of this subdivision, plus (ii) seven percentage points. 30 (3) Federal short-term rate. For purposes of this subdivision: 31 (A) The federal short-term rate for any month shall be the federal 32 short-term rate determined by the United States secretary of the treas- 33 ury during such month in accordance with subsection (d) of section 34 twelve hundred seventy-four of the internal revenue code for use in 35 connection with section six thousand six hundred twenty-one of the 36 internal revenue code. Any such rate shall be rounded to the nearest 37 full percent, or, if a multiple of one-half of one percent, such rate 38 shall be increased to the next highest full percent. 39 (B) Period during which rate applies. 40 (i) In general. Except as provided in clause (ii) of this subpara- 41 graph, the federal short-term rate for the first month in each calendar 42 quarter shall apply during the first calendar quarter beginning after 43 such month. 44 (ii) Special rule for the month of September, nineteen hundred eight- 45 y-nine. The federal short-term rate for the month of April, nineteen 46 hundred eighty-nine shall apply with respect to setting the rate of 47 interest for the month of September, nineteen hundred eighty-nine. 48 (4) Publication of interest rate. The commissioner of finance shall 49 cause to be published in the City Record, and give other appropriate 50 general notice of, the interest rate to be set under this subdivision no 51 later than twenty days preceding the first day of the calendar quarter 52 during which such interest rate applies. The setting and publication of 53 such interest rate shall not be included within paragraph (a) of subdi- 54 vision five of section one thousand forty-one of the city charter of the 55 preceding municipality as it existed January first, nineteen hundred 56 ninety-four relating to the definition of a rule.

S. 8578 1061

1 (h) Miscellaneous. (1) The certificate of the commissioner to the 2 effect that a tax has not been paid or that information has not been 3 supplied pursuant to the provisions of this chapter shall be presumptive 4 evidence thereof. 5 (2) Cross-reference: For criminal penalties, see chapter forty of 6 this title. 7 (i) Failure to file information return. If a cooperative housing 8 corporation fails to file an information return required under subdivi- 9 sion g of section 11-2105 of this chapter on or before the prescribed 10 date, determined with regard to any extension of time for filing, unless 11 it is shown that such failure is due to reasonable cause and not due to 12 willful neglect, there shall be imposed on such cooperative housing 13 corporation a penalty of one hundred dollars for each such failure. 14 § 11-2115 Returns to be secret. a. Except in accordance with proper 15 judicial order, or as otherwise provided by law, it shall be unlawful 16 for the commissioner of finance, register or tax appeals tribunal or any 17 officer or employee of the department of finance, register or tax 18 appeals tribunal to divulge or make known in any manner any information 19 contained in or relating to any return provided for by this chapter. The 20 officers charged with the custody of such returns shall not be required 21 to produce any of them or evidence of anything contained in them in any 22 action or proceeding in any court, except on behalf of the commissioner 23 of finance in an action or proceeding under the provisions of this chap- 24 ter, or on behalf of any party to an action or proceeding under the 25 provisions of this chapter when the returns or facts shown thereby are 26 directly involved in such action or proceeding, in either of which 27 events the court may require the production of, and may admit in 28 evidence, so much of said returns or of the facts shown thereby, as are 29 pertinent to the action or proceeding and no more. Nothing in this 30 section shall be construed to prohibit the delivery to a grantor or 31 grantee of a deed or to any subsequent owner of the real property 32 conveyed by such deed or to the duly authorized representative of any of 33 them of a certified copy of any return filed in connection with the tax 34 on such deed; nor to prohibit the delivery of such a certified copy of 35 such return or of any information contained in or relating thereto to 36 the United States of America or any department thereof, the state of New 37 York or any department thereof, the city of Staten Island or any depart- 38 ment thereof provided the same is required for official business; nor to 39 prohibit the inspection for official business of such returns by the 40 register, the corporation counsel or other legal representatives of the 41 city or by the district attorney of Richmond county; nor to prohibit the 42 publication of statistics so classified as to prevent the identification 43 of particular returns or items thereof. 44 b. (1) Any officer or employee of the city who willfully violates the 45 provisions of subdivision a of this section shall be dismissed from 46 office and be incapable of holding any public office in this city for a 47 period of five years thereafter. 48 (2) Cross-reference: For criminal penalties, see chapter forty of 49 this title. 50 c. This section shall be deemed a state statute for purposes of para- 51 graph (a) of subdivision two of section eighty-seven of the public offi- 52 cers law. 53 d. Notwithstanding anything in subdivision a of this section to the 54 contrary, if a taxpayer has petitioned the tax appeals tribunal for 55 administrative review as provided in section one hundred seventy of the 56 charter of the preceding municipality as it existed January first, nine-

S. 8578 1062

1 teen hundred ninety-four, the commissioner of finance shall be author- 2 ized to present to the tribunal any report or return of such taxpayer, 3 or any information contained therein or relating thereto, which may be 4 material or relevant to the proceeding before the tribunal. The tax 5 appeals tribunal shall be authorized to publish a copy or a summary of 6 any decision rendered pursuant to section one hundred seventy-one of the 7 charter of the preceding municipality as it existed January first, nine- 8 teen hundred ninety-four. 9 e. This section shall not apply to any information contained in or 10 relating to a return filed on or after the first day of January, two 11 thousand three with respect to a transaction or transfer occurring on or 12 after that date; provided, however, that this section shall continue to 13 apply to any social security account number contained in any report or 14 return pursuant to this chapter. 15 § 11-2116 Notices and limitations of time. a. Any notice authorized 16 or required under the provisions of this chapter may be given by mailing 17 the same to the person for whom it is intended in a postpaid envelope 18 addressed to such person at the address given in the last return filed 19 by him or her pursuant to the provisions of this chapter in any applica- 20 tion made by him or her, or in any deed or instrument which is the 21 subject of the notice, or, if no return has been filed or application 22 made or address stated in the deed or instrument, then to such address 23 as may be obtainable. The mailing of such notice shall be presumptive 24 evidence of the receipt of the same by the person to whom addressed. 25 Any period of time which is determined according to the provisions of 26 this chapter by the giving of notice shall commence to run from the date 27 of mailing of such notice. 28 b. The provisions of the civil practice law and rules or any other law 29 relative to limitations of time for the enforcement of a civil remedy 30 shall not apply to any proceeding or action taken by the city to levy, 31 appraise, assess, determine or enforce the collection of any tax or 32 penalty provided by this chapter. However, except in the case of a 33 wilfully false or fraudulent return with intent to evade the tax, no 34 assessment of additional tax shall be made after the expiration of more 35 than three years from the date of the filing of a return; provided, 36 however, that where no return has been filed as provided by law the tax 37 may be assessed at any time. 38 c. Where, before the expiration of the period prescribed in this 39 section for the assessment of an additional tax, a taxpayer has 40 consented in writing that such period be extended, the amount of such 41 additional tax due may be determined at any time within such extended 42 period. The period so extended may be further extended by subsequent 43 consents in writing made before the expiration of the extended period. 44 d. Except as otherwise provided in this subdivision, if any return, 45 claim, statement, notice, application, or other document required to be 46 filed, or any payment required to be made, within a prescribed period or 47 on or before a prescribed date under authority of any provision of this 48 chapter is, after such period or such date, delivered by United States 49 mail to the commissioner of finance, the tax appeals tribunal, bureau, 50 office, officer or person with which or with whom such document is 51 required to be filed, or to which or to whom such payment is required to 52 be made, the date of the United States postmark stamped on the envelope 53 shall be deemed to be the date of delivery. This subdivision shall apply 54 only if the postmark date falls within the prescribed period or on or 55 before the prescribed date for the filing of such document, or for 56 making the payment, including any extension granted for such filing or

S. 8578 1063

1 payment, and only if such document or payment was deposited in the mail, 2 postage prepaid, properly addressed to the commissioner of finance, the 3 tax appeals tribunal, bureau, office, officer or person with which or 4 with whom the document is required to be filed or to which or to whom 5 such payment is required to be made. If any document is sent by United 6 States registered mail, such registration shall be prima facie evidence 7 that such document was delivered to the commissioner of finance, the tax 8 appeals tribunal, bureau, office, officer or person to which or to whom 9 addressed, and the date of registration shall be deemed the postmark 10 date. The commissioner of finance and, where relevant, the tax appeals 11 tribunal are authorized to provide by regulation the extent to which the 12 provisions of the preceding sentence with respect to prima facie 13 evidence of delivery and the postmark date shall apply to certified 14 mail. Except as provided in subdivision f of this section, this subdivi- 15 sion shall apply in the case of postmarks not made by the United States 16 postal service only if and to the extent provided by regulation of the 17 commissioner of finance or, where relevant, the tax appeals tribunal. 18 Any return filed electronically shall be deemed to be filed on the date 19 of issuance by the commissioner of finance of a confirmation. 20 e. When the last day prescribed under authority of this chapter, 21 including any extension of time, for performing any act falls on a 22 Saturday, Sunday or legal holiday in the state, the performance of such 23 act shall be considered timely if it is performed on the next succeeding 24 day which is not a Saturday, Sunday or legal holiday. 25 f. (1) Any reference in subdivision d of this section to the United 26 States mail shall be treated as including a reference to any delivery 27 service designated by the secretary of the treasury of the United States 28 pursuant to section seventy-five hundred two of the internal revenue 29 code and any reference in subdivision d of this section to a United 30 States postmark shall be treated as including a reference to any date 31 recorded or marked in the manner described in section seventy-five 32 hundred two of the internal revenue code by a designated delivery 33 service. If the commissioner of finance finds that any delivery service 34 designated by such secretary is inadequate for the needs of the city, 35 the commissioner of finance may withdraw such designation for purposes 36 of this title. The commissioner of finance may also designate additional 37 delivery services meeting the criteria of section seventy-five hundred 38 two of the internal revenue code for purposes of this title, or may 39 withdraw any such designation if the commissioner of finance finds that 40 a delivery service so designated is inadequate for the needs of the 41 city. Any reference in subdivision d of this section to the United 42 States mail shall be treated as including a reference to any delivery 43 service designated by the commissioner of finance and any reference in 44 subdivision d of this section to a United States postmark shall be 45 treated as including a reference to any date recorded or marked in the 46 manner described in section seventy-five hundred two of the internal 47 revenue code by a delivery service designated by the commissioner of 48 finance, provided, however, any withdrawal of designation or additional 49 designation by the commissioner of finance shall not be effective for 50 purposes of service upon the tax appeals tribunal, unless and until such 51 withdrawal of designation or additional designation is ratified by the 52 president of the tax appeals tribunal. 53 (2) Any equivalent of registered or certified mail designated by the 54 United States secretary of the treasury, or as may be designated by the 55 commissioner of finance pursuant to the same criteria used by such 56 secretary for such designations pursuant to section seventy-five hundred

S. 8578 1064

1 two of the internal revenue code, shall be included within the meaning 2 of registered or certified mail as used in subdivision d of this 3 section. If the commissioner of finance finds that any equivalent of 4 registered or certified mail designated by such secretary or the commis- 5 sioner of finance is inadequate for the needs of the city, the commis- 6 sioner of finance may withdraw such designation for purposes of this 7 title, provided, however, any withdrawal of designation or additional 8 designation by the commissioner of finance shall not be effective for 9 purposes of service upon the tax appeals tribunal, unless and until such 10 withdrawal of designation or additional designation is ratified by the 11 president of the tax appeals tribunal. 12 § 11-2117 Construction and enforcement. This chapter shall be 13 construed and enforced in conformity with chapter ninety-three of the 14 laws of nineteen hundred sixty-five, as amended. 15 § 11-2118 Disposition of revenues. Except as otherwise provided, all 16 revenues resulting from the imposition of the tax under this chapter 17 shall be paid into the treasury of the city and shall be credited to and 18 deposited in the general fund of the city. Except as otherwise 19 provided, no part of such revenues may be expended unless appropriated 20 in the annual budget of the city. 21 § 11-2119 Foreclosure proceedings. Where the conveyance consists of a 22 transfer of property made as a result of an order of the court in a 23 foreclosure proceeding ordering the sale of such property, the referee 24 or sheriff effectuating the transfer shall not be liable for any inter- 25 est or penalties authorized by this chapter or chapter forty of this 26 title.

27 CHAPTER 22 28 TAX ON OWNERS OF MOTOR VEHICLES

29 § 11-2201 Definitions. When used in this chapter, the following terms 30 shall mean and include: 31 1. "City". The city of Staten Island. 32 2. "Commissioner of finance". The commissioner of finance of the city. 33 3. "Highway". The entire width between the boundary lines of every way 34 publicly maintained when any part thereof is open to the use of the 35 public for purposes of vehicular travel. 36 4. "Individual resident". One or more natural persons other than a 37 firm, copartnership, trustee or trustees conducting a business or asso- 38 ciation who, or one of whom, owns a motor vehicle registered or required 39 to be registered pursuant to section four hundred one of the vehicle and 40 traffic law, the registration fees for which are provided for by subdi- 41 vision six of such section, who, at the time he or she makes application 42 for registration or renewal thereof of such motor vehicle, or such 43 application is made on his or her behalf: (a) is domiciled in the city, 44 unless he or she maintains no permanent place of abode in the city, 45 maintains a permanent place of abode elsewhere, and during the period of 46 one year next preceding the date upon which such application is made, 47 spent in the aggregate not more than thirty days in the city; or (b) is 48 not domiciled in the city but maintains a permanent place of abode in 49 the city and, during the period of one year next preceding the date upon 50 which such application is made, spent in the aggregate more than one 51 hundred eighty-three days in the city, unless such individual is in the 52 armed forces of the United States. 53 5. "Motor vehicle". Every vehicle, except electrically-driven invalid 54 chairs being operated or driven by an invalid, operated or driven upon a

S. 8578 1065

1 public highway by any power, other than muscular power, which includes 2 electric power obtained from overhead trolley wires, except vehicles 3 which run only upon rails or tracks. 4 6. "Other resident". Every firm, copartnership, trustee or trustees 5 conducting a business or association or a corporation, who or which 6 regularly keeps, stores, garages or maintains within the city a motor 7 vehicle owned by it which, at the time it makes application for regis- 8 tration or renewal of registration thereof, is registered or required to 9 be registered pursuant to subdivision six of section four hundred one of 10 the vehicle and traffic law. 11 7. "Person". Unless otherwise indicated, an individual, partnership, 12 society, association, joint-stock company, corporation, estate, receiv- 13 er, trustee, assignee, referee or any other person acting in a fiduciary 14 or representative capacity, whether appointed by a court or otherwise, 15 and any other form of unincorporated enterprise. 16 8. "Owner". A person, other than a lien holder, having the property in 17 or title to a vehicle. The term includes a person entitled to the use 18 and possession of a vehicle subject to a security interest in another 19 person. 20 9. "Vehicle". Every device in, upon or by which any person or property 21 is or may be transported or drawn upon a highway, except devices moved 22 by human power or used exclusively upon stationary rails or tracks. 23 10. "Leased or rented passenger motor vehicles". Any motor vehicle 24 owned by any person engaged in the business of renting or leasing motor 25 vehicles to be operated on the public highways for carrying passengers 26 registered or required to be registered pursuant to any provision of 27 section four hundred one of the vehicle and traffic law, which vehicle 28 at the time when application is made for registration, re-registration 29 or renewal thereof is regularly kept, stored, garaged or maintained in 30 the city, including such vehicles which have been rented and leased by 31 the owner and are in possession of lessees when such application for 32 registration, re-registration or renewal is made. 33 11. "Tax appeals tribunal." The tax appeals tribunal established by 34 section one hundred sixty-eight of the charter of the preceding munici- 35 pality as it existed January first, nineteen hundred ninety-four. 36 § 11-2202 Imposition of tax. Notwithstanding the provisions of 37 section four hundred of the vehicle and traffic law and of subdivision 38 ten of section four hundred one of the vehicle and traffic law to the 39 contrary, a tax of fifteen dollars per annum is hereby imposed: 40 1. With respect to each motor vehicle registered or required to be 41 registered pursuant to subdivision six of section four hundred one of 42 the vehicle and traffic law: 43 a. Upon each individual resident for each such motor vehicle regis- 44 tered or for which registration is renewed, or required to be registered 45 or renewed by him or her; and 46 b. Upon each other resident of each such motor vehicle regularly 47 kept, stored, garaged or maintained in the city and registered or 48 required to be registered or renewed by such other resident; and 49 2. With respect to each leased or rented passenger motor vehicle, 50 upon the owner thereof. 51 § 11-2203 Exemptions. The tax imposed by this chapter shall not be 52 imposed upon: 53 (1) owners of motor vehicles, the registration fees for which are or 54 may be prescribed, governed or established by subdivisions seven, except 55 for leased or rented passenger vehicles, eight, twelve, thirteen,

S. 8578 1066

1 sixteen of section four hundred one, articles fifteen and sixteen, or 2 section four hundred twenty of the vehicle and traffic law; 3 (2) any owner to whom the provisions of the vehicle and traffic law 4 relative to registration and equipment of motor vehicles are made inap- 5 plicable by the provisions of article three of such law, for the period 6 of such inapplicability; 7 (3) the state of New York, or any of its agencies, instrumentalities, 8 public corporations, including a public corporation created pursuant to 9 agreement or compact with another state or the Dominion of Canada, or 10 political subdivision; 11 (4) the United States of America, and any of its agencies and instru- 12 mentalities insofar as it is immune from taxation; 13 (5) the United Nations or other international organizations of which 14 the United States of America is a member; 15 (6) any corporation, or association, or trust, or community chest, 16 fund or foundation, organized and operated exclusively for religious, 17 charitable, or educational purposes, or for the prevention of cruelty to 18 children or animals, and no part of the net earnings of which inures to 19 the benefit of any private shareholder or individual and no substantial 20 part of the activities of which is carrying on propaganda, or otherwise 21 attempting to influence legislation; provided, however, that nothing in 22 this subdivision shall include an organization operated for the primary 23 purpose of carrying on a trade or business for profit, whether or not 24 all of its profits are payable to one or more organizations described in 25 this subdivision. 26 § 11-2204 Payment of tax and evidence of tax payment. Every owner of 27 a motor vehicle subject to tax under this chapter shall pay the tax 28 thereon to the commissioner of motor vehicles of the state of New York 29 on or before the date upon which he or she registers or renews his or 30 her registration thereof or is required to register or renew his or her 31 registration thereof pursuant to section four hundred one of the vehicle 32 and traffic law. 33 Notwithstanding the provisions of section four hundred of the vehicle 34 and traffic law to the contrary, the payment of such tax shall be a 35 condition precedent to the registration or renewal thereof of such motor 36 vehicle and to the issuance of any certificate of registration and 37 plates or removable tag specified in subdivision three of section four 38 hundred one and in sections four hundred three and four hundred four of 39 the vehicle and traffic law, and no such certificate of registration, 40 plates or tag shall be issued unless such tax has been paid. The 41 commissioner of motor vehicles shall not issue a registration certif- 42 icate for any motor vehicle for which the registrant's address is with- 43 in any such city, except upon proof, in a form approved by the commis- 44 sioner of motor vehicles, that such tax has been paid, or is not due, 45 with respect to such motor vehicle. The commissioner of motor vehicles, 46 upon the payment of such tax or upon the application of any person 47 exempt therefrom, shall furnish to each taxpayer paying the tax a 48 receipt for such tax and to each such taxpayer or exempt person a state- 49 ment, document or other form approved by the commissioner of motor vehi- 50 cles, showing that such tax has been paid or is not due, with respect to 51 such motor vehicle. 52 § 11-2205 Returns. a. At the time the payment of the tax imposed by 53 this chapter becomes due, every person subject to tax under this chapter 54 shall file a return with the commissioner of motor vehicles in form and 55 containing such information as may be prescribed by such commissioner of 56 motor vehicles. The taxpayer's application for registration or the

S. 8578 1067

1 renewal of registration shall constitute the return required under this 2 chapter, unless the commissioner of motor vehicles, by regulation, shall 3 otherwise provide. 4 b. Returns shall be preserved for three years and thereafter until 5 the commissioner of motor vehicles permits them to be destroyed. 6 c. The commissioner of motor vehicles may require amended returns or 7 certificates of facts to be filed within twenty days after notice and to 8 contain the information specified in the notice. Any such certificate 9 shall be deemed to be part of the return required to be filed. 10 d. If a return required by this chapter is not filed or if a return 11 when filed is incorrect or insufficient on its face the commissioner of 12 motor vehicles or the commissioner of finance if designated as his or 13 her agent shall take the necessary steps to enforce the filing of such a 14 return or of a corrected return. 15 § 11-2206 Determination of tax. If a return required by this chapter 16 is not filed or if a return when filed is incorrect or insufficient, or 17 if a tax or any part thereof due pursuant to this chapter be not paid 18 when required, the amount of tax due shall be determined by the commis- 19 sioner of motor vehicles or by the commissioner of finance if designated 20 as his or her agent, from such information as may be obtainable, includ- 21 ing motor vehicle registration with the department of motor vehicles of 22 the state of New York or other factors. Notice of such determination 23 shall be given to the person liable for the tax. Such a determination by 24 the commissioner of motor vehicles shall finally and irrevocably fix the 25 tax unless the person against whom it is assessed, within ninety days 26 after the giving of notice of such determination, shall apply to the 27 commissioner of motor vehicles for a hearing, or unless such commission- 28 er of his or her own motion shall redetermine the same. If the commis- 29 sioner of finance is designated as the agent of the commissioner of 30 motor vehicles, such a determination by the commissioner of finance 31 shall finally and irrevocably fix the tax unless the person against whom 32 it is assessed, within ninety days after the giving of such determi- 33 nation, or, if the commissioner of finance has established a concil- 34 iation procedure pursuant to section 11-124 of the code of the preceding 35 municipality and the taxpayer has requested a conciliation conference in 36 accordance therewith, within ninety days from the mailing of a concil- 37 iation decision or the date of the commissioner's confirmation of the 38 discontinuance of the conciliation proceeding, both (1) serves a peti- 39 tion upon the commissioner of finance and (2) applies to the tax appeals 40 tribunal for a hearing by filing a petition, or unless the commissioner 41 of finance of his or her own motion shall redetermine the same. A hear- 42 ing following a petition to the tax appeals tribunal and any appeal to 43 the tax appeals tribunal sitting en banc from the decision rendered in 44 such hearing shall be conducted in the manner and subject to the 45 requirements prescribed by the tax appeals tribunal pursuant to sections 46 one hundred sixty-eight through one hundred seventy-two of the charter 47 of the preceding municipality as it existed January first, nineteen 48 hundred ninety-four. After such hearing by the commissioner of motor 49 vehicles or the tax appeals tribunal, the commissioner of motor vehi- 50 cles, if he or she holds the hearing, or the tax appeals tribunal if the 51 tax appeals tribunal holds the hearing, shall give notice of the deter- 52 mination or decision to the person against whom the tax is assessed and 53 in the case of a tax appeals tribunal decision, to the commissioner of 54 finance. Such determination by the commissioner of motor vehicles, or a 55 decision of the tax appeals tribunal sitting en banc shall be reviewable 56 for error, illegality or unconstitutionality or any other reason whatso-

S. 8578 1068

1 ever by a proceeding under article seventy-eight of the civil practice 2 law and rules if application therefor is made to the supreme court by 3 the person against whom the tax was assessed within four months after 4 the giving of the notice of such determination or tax appeals tribunal 5 decision. A proceeding under article seventy-eight of the civil prac- 6 tice law and rules shall not be instituted by a taxpayer unless (a) the 7 amount of any tax sought to be reviewed, with penalties and interest 8 thereon, if any, shall be first deposited with the commissioner of motor 9 vehicles and there shall be filed with the commissioner of motor vehi- 10 cles an undertaking, issued by a surety company authorized to transact 11 business in this state and approved by the superintendent of insurance 12 of this state as to solvency and responsibility, in such amount as a 13 justice of the supreme court shall approve, to the effect that if such 14 proceeding be dismissed or the tax confirmed, the taxpayer will pay all 15 costs and charges which may accrue in the prosecution of the proceeding; 16 or (b) at the option of the taxpayer such undertaking filed with the 17 commissioner of motor vehicles may be in a sum sufficient to cover the 18 taxes, penalties and interest thereon stated in such determination or 19 decision, plus the costs and charges which may accrue against it in the 20 prosecution of the proceeding, in which event the taxpayer shall not be 21 required to deposit such taxes, penalties and interest as a condition 22 precedent to the application. 23 § 11-2207 Refunds for certain unused registrations. Whenever any fee 24 or portion of a fee paid for the registration of a motor vehicle under 25 the provisions of the vehicle and traffic law is refunded pursuant to 26 the provisions of subdivision one of section four hundred twenty-eight 27 of the vehicle and traffic law, the amount of any tax paid pursuant to 28 this chapter upon such registration shall also be refunded by the 29 commissioner. 30 § 11-2208 Refunds. a. In the manner provided in this section the 31 commissioner of motor vehicles shall refund or credit, without interest, 32 any tax, penalty or interest erroneously, illegally or unconstitu- 33 tionally collected or paid if application for such refund shall be made 34 within one year from the payment thereof to the commissioner of motor 35 vehicles or to the commissioner of finance if designated as his or her 36 agent. Whenever a refund is made or denied, the reasons therefor shall 37 be stated in writing by the commissioner of motor vehicles or by the 38 commissioner of finance, as the case may be, who in lieu of any refund, 39 may allow credit therefor on payments due from the applicant. 40 b. (1) If the commissioner of motor vehicles has not designated the 41 commissioner of finance as his or her agent, application for a refund or 42 credit made as provided under this section shall be deemed an applica- 43 tion for a revision of any tax, penalty or interest complained of and 44 the commissioner of motor vehicles shall hold a hearing and receive 45 evidence with respect thereto. After such hearing, the commissioner of 46 motor vehicles shall give notice of the determination of such applica- 47 tion to the applicant who shall be entitled to review such determination 48 by a proceeding pursuant to article seventy-eight of the civil practice 49 law and rules, provided such proceeding is instituted within four months 50 after the giving of notice of such determination, and provided that a 51 final determination of tax due was not previously made. Such a proceed- 52 ing shall not be instituted unless an undertaking is filed with the 53 commissioner of motor vehicles in such amount and with such sureties as 54 a justice of the supreme court shall approve, to the effect that if such 55 proceeding be dismissed or the tax confirmed, the petitioner will pay

S. 8578 1069

1 all costs and charges which may accrue in the prosecution of such 2 proceeding. 3 (2) If the commissioner of motor vehicles has designated the commis- 4 sioner of finance as his or her agent, a determination of the commis- 5 sioner of finance denying a refund or credit pursuant to subdivision a 6 of this section shall be final and irrevocable unless the applicant for 7 such refund or credit, within ninety days from the mailing of notice of 8 such determination, or, if the commissioner of finance has established a 9 conciliation procedure pursuant to section 11-124 of the code of the 10 preceding municipality and the applicant has requested a conciliation 11 conference in accordance therewith, within ninety days from the mailing 12 of a conciliation decision or the date of the commissioner's confirma- 13 tion of the discontinuance of the conciliation proceeding, both (1) 14 serves a petition upon the commissioner of finance and (2) files a peti- 15 tion with the tax appeals tribunal for a hearing. Such petition for a 16 refund or credit, made as provided under this section, shall be deemed 17 an application for a revision of any tax, penalty or interest complained 18 of. Such hearing and any appeal to the tax appeals tribunal sitting en 19 banc from the decision rendered in such hearing shall be conducted in 20 the manner and subject to the requirements prescribed by the tax appeals 21 tribunal pursuant to sections one hundred sixty-eight through one 22 hundred seventy-two of the charter of the preceding municipality as it 23 existed January first, nineteen hundred ninety-four. After such hearing, 24 the tax appeals tribunal shall give notice of its decision to the appli- 25 cant and to the commissioner of finance. The applicant shall be entitled 26 to institute a proceeding pursuant to article seventy-eight of the civil 27 practice law and rules to review a decision of the tax appeals tribunal 28 sitting en banc if application to the supreme court be made therefor 29 within four months after the giving of notice of such decision, and 30 provided, in the case of an application by a taxpayer, that a final 31 determination of tax due was not previously made. Such a proceeding 32 shall not be instituted by a taxpayer unless an undertaking shall first 33 be filed with the commissioner of motor vehicles, in such amount and 34 with such sureties as a justice of the supreme court shall approve, to 35 the effect that if such proceeding be dismissed or the tax confirmed, 36 the taxpayer will pay all costs and charges which may accrue in the 37 prosecution of such proceeding. 38 c. A person shall not be entitled to a revision, refund or credit 39 under this section of a tax, interest or penalty which has been deter- 40 mined to be due pursuant to the provisions of section 11-2206 of this 41 chapter where he or she has had a hearing or an opportunity for a hear- 42 ing, as provided in such section, or has failed to avail himself or 43 herself of the remedies provided in such section. No refund or credit 44 shall be made of a tax, interest or penalty paid after a determination 45 made pursuant to section 11-2206 of this chapter, unless it be found 46 that such determination was erroneous, illegal or unconstitutional or 47 otherwise improper after a hearing, or on his or her own motion, by the 48 commissioner of motor vehicles or after a hearing by the tax appeals 49 tribunal, or on his or her own motion by the commissioner of finance, as 50 the case may be, or in a proceeding under article seventy-eight of the 51 civil practice law and rules, pursuant to the provisions of said 52 section, in which event refund or credit without interest shall be made 53 of the tax, interest or penalty found to have been overpaid. 54 § 11-2209 Reserves. In cases where a taxpayer has applied for a 55 refund and has instituted a proceeding under article seventy-eight of 56 the civil practice law and rules to review a determination adverse to

S. 8578 1070

1 such taxpayer on his or her application for refund, the commissioner of 2 motor vehicles shall set up appropriate reserves to meet any decision 3 adverse to the city. 4 § 11-2210 Remedies exclusive. The remedies provided by sections 5 11-2206 and 11-2208 of this chapter shall be the exclusive remedies 6 available to any person for the review of tax liability imposed by this 7 chapter; and no determination or proposed determination of tax or deter- 8 mination on any application for refund by the commissioner of motor 9 vehicles or by the commissioner of finance, nor any decision by the tax 10 appeals tribunal or any of its administrative law judges, shall be 11 enjoined or reviewed by an action for declaratory judgment, an action 12 for money had and received or by any action or proceeding other than, in 13 the case of a final determination by the commissioner of motor vehicles 14 or a decision by the tax appeals tribunal sitting en banc, a proceeding 15 in the nature of a certiorari proceeding under article seventy-eight of 16 the civil practice law and rules; provided, however, that a taxpayer may 17 proceed by declaratory judgment if he or she institutes suit within 18 thirty days after a deficiency assessment is made and pays the amount of 19 the deficiency assessment to the commissioner of motor vehicles prior to 20 the institution of such suit and posts a bond for costs as provided in 21 section 11-2206 of this chapter. 22 § 11-2211 Proceedings to recover tax. a. Whenever any person shall 23 fail to pay any tax, penalty or interest imposed by this chapter, the 24 corporation counsel, upon the request of the commissioner of motor vehi- 25 cles or of the commissioner of finance if designated as his or her 26 agent, shall bring or cause to be brought an action to enforce the 27 payment of the same on behalf of the city of Staten Island in any court 28 of the state of New York or of any other state of the United States. 29 However, if in his or her discretion the commissioner of motor vehicles, 30 or the commissioner of finance if designated as his or her agent, 31 believes that any such person subject to the provisions of this chapter 32 is about to cease business, leave the state or remove or dissipate the 33 assets out of which the tax or penalty might be satisfied, and that any 34 such tax or penalty will not be paid when due, he or she may declare 35 such tax or penalty to be immediately due and payable and may issue a 36 warrant immediately. 37 b. As an additional or alternate remedy, the commissioner of motor 38 vehicles, or the commissioner of finance if designated as his or her 39 agent, may issue a warrant, directed to the city sheriff commanding him 40 or her to levy upon and sell the real and personal property of the 41 person liable for the tax which may be found within the city, for the 42 payment of the amount thereof, with any penalty and interest, and the 43 cost of executing the warrant, and to return such warrant to the person 44 who issued it and to pay to him or her the money collected by virtue 45 thereof within sixty days after the receipt of such warrant. The city 46 sheriff shall within five days after the receipt of the warrant file 47 with the county clerk a copy thereof, and thereupon such clerk shall 48 enter in the judgment docket the name of the person mentioned in the 49 warrant and the amount of the tax, penalty and interest for which the 50 warrant is issued and the date when such copy is filed. Thereupon the 51 amount of such warrant so docketed shall become a lien upon the title to 52 and the interest in real and personal property of the person against 53 whom the warrant is issued. The city sheriff shall then proceed upon 54 the warrant in the same manner, and with like effect, as that provided 55 by law in respect to executions issued against property upon judgments 56 of a court of record and for services in executing the warrant such

S. 8578 1071

1 sheriff shall be entitled to the same fees, which he or she may collect 2 in the same manner. In the discretion of the commissioner of motor 3 vehicles, or of the commissioner of finance if designated as his or her 4 agent, a warrant of like terms, force and effect may be issued and 5 directed to an officer or employee of the department of finance of the 6 city, and in the execution thereof such officer or employee shall have 7 all the powers conferred by law upon sheriffs, but shall be entitled to 8 no fee or compensation in excess of the actual expenses paid in the 9 performance of such duty. If a warrant is returned not satisfied in 10 full, the commissioner of motor vehicles or the commissioner of finance, 11 as the case may be, may from time to time issue new warrants and shall 12 also have the same remedies to enforce the amount due thereunder as if 13 he or she had recovered judgment therefor and execution thereon had been 14 returned unsatisfied. 15 c. The commissioner of finance, if he or she finds that the interests 16 of the city will not thereby be jeopardized, and upon such conditions as 17 the commissioner of finance may require, may release any property from 18 the lien of any warrant or vacate such warrant for unpaid taxes, addi- 19 tions to tax, penalties and interest filed pursuant to subdivision b of 20 this section, and such release or vacating of the warrant may be 21 recorded in the office of any recording officer in which such warrant 22 has been filed. The clerk shall thereupon cancel and discharge as of the 23 original date of docketing the vacated warrant. 24 § 11-2212 General powers of the commissioner of motor vehicles. In 25 addition to the powers granted to the commissioner of motor vehicles in 26 this chapter, he or she is hereby authorized and empowered: 27 1. To make, adopt and amend rules and regulations appropriate to the 28 carrying out of this chapter and the purposes thereof; 29 2. For cause shown, to remit penalties; and to compromise disputed 30 claims in connection with the taxes imposed under this chapter; 31 3. To request information concerning motor vehicles and persons 32 subject to the provisions of this chapter from the department of motor 33 vehicles of any other state or the treasury department of the United 34 States, or any city or county of the state of New York; and to afford 35 such information to such other state, treasury department, city or coun- 36 ty, any provision of this chapter to the contrary notwithstanding; 37 4. To delegate his or her functions under this section to a deputy 38 commissioner in the department of motor vehicles or any employee or 39 employees of his or her department or to any county clerk or other offi- 40 cer who acts as the agent of such commissioner in the registration of 41 motor vehicles; 42 5. To prescribe methods for determining the tax; 43 6. To require all persons owning motor vehicles subject to tax to 44 keep such records as he or she may prescribe and to furnish such infor- 45 mation upon his or her request; 46 7. To request the police department of the city to assist in the 47 enforcement of the provisions of this chapter. 48 § 11-2213 Administration of oaths and compelling testimony. a. The 49 commissioner of motor vehicles or his or her employees or agents duly 50 designated and authorized by such commissioner, and the tax appeals 51 tribunal, shall have power to administer oaths and take affidavits in 52 relation to any matter or proceeding in the exercise of the powers and 53 duties under this chapter. The commissioner of motor vehicles, or the 54 commissioner of finance if designated as his or her agent or the tax 55 appeals tribunal, shall have the power to subpoena and require the 56 attendance of witnesses and the production of books, papers and docu-

S. 8578 1072

1 ments to secure information pertinent to the performance of the duties 2 of the commissioner of motor vehicles, the commissioner of finance or 3 the tax appeals tribunal pursuant to this chapter and of the enforcement 4 of this chapter and to examine them in relation thereto, and to issue 5 commissions for the examination of witnesses who are out of the state or 6 unable to attend before him or her or the tax appeals tribunal or 7 excused from attendance. 8 b. A justice of the supreme court either in court or at chambers shall 9 have power summarily to enforce by proper proceedings the attendance and 10 testimony of witnesses and production and examination of books, papers 11 and documents called for by the subpoena of the commissioner of motor 12 vehicles, or, if the commissioner of finance is designated as his or her 13 agent under this chapter, of the commissioner of finance and the tax 14 appeals tribunal. 15 c. Cross-reference; criminal penalties. For failure to obey subpoenas 16 or for testifying falsely, see section 11-4007 of this title; for 17 supplying false or fraudulent information, see section 11-4009 of this 18 title. 19 d. The officers who serve the summons or subpoena of the commissioner 20 of motor vehicles, or the commissioner of finance if designated as his 21 or her agent, or the tax appeals tribunal if the commissioner of finance 22 is designated as the agent of the commissioner of motor vehicles, and 23 witnesses attending in response thereto shall be entitled to the same 24 fees as are allowed to officers and witnesses in civil cases in courts 25 of record, except as otherwise provided in this section. Such officers 26 shall be the city sheriff and his or her duly appointed deputies, or any 27 officers or employees of the department of motor vehicles designated by 28 the commissioner of motor vehicles to serve such process or any officers 29 or employees of the department of finance of the city designated by the 30 commissioner of finance to serve such process or any officers or employ- 31 ees of the tax appeals tribunal designated to serve such process. 32 § 11-2214 Penalties and interest. a. Any person failing to file a 33 return or to pay any tax or any portion thereof within the time required 34 by this chapter shall be subject to a penalty of five times the amount 35 of the tax due, plus interest of five percent of such tax for each month 36 of delay or fraction thereof, but the commissioner of motor vehicles, or 37 the commissioner of finance if designated as his or her agent, if satis- 38 fied that the delay was excusable, may remit all or any part of such 39 penalty, but not interest at the rate of six percent per year. Penal- 40 ties and interest shall be paid and disposed of in the same manner as 41 other revenues under this chapter. Unpaid penalties and interest may be 42 enforced in the same manner as the tax imposed by this chapter. 43 b. The certificate of the commissioner of motor vehicles or of the 44 commissioner of finance if designated as his or her agent to the effect 45 that a tax has not been paid, or that a return required by this chapter 46 has not been filed, or that information has not been supplied pursuant 47 to the provisions of this chapter shall be presumptive evidence thereof. 48 c. Cross-reference: For criminal penalties, see chapter forty of this 49 title. 50 § 11-2215 Returns to be secret. a. Except in accordance with proper 51 judicial order or as otherwise provided by law, it shall be unlawful for 52 the commissioner of motor vehicles, any officer or employee of the 53 department of motor vehicles, the commissioner of finance, any officer 54 or employee of the department of finance, the tax appeals tribunal, any 55 commissioner or employee of such tribunal, any agent of the commissioner 56 of motor vehicles, or any person who, pursuant to this section, is

S. 8578 1073

1 permitted to inspect any return or to whom a copy, an abstract or 2 portion of any return is furnished, or to whom any information contained 3 in any return is furnished to divulge or make known in any manner any 4 information contained in or relating to any return provided for by this 5 chapter. The officers charged with the custody of such returns shall 6 not be required to produce any of them or evidence of anything contained 7 in them in any action or proceeding in any court, except on behalf of 8 the commissioner of motor vehicles or the commissioner of finance in an 9 action or proceeding under the provisions of this chapter, or on behalf 10 of any party to an action or proceeding under the provisions of this 11 chapter when the returns or facts shown thereby are directly involved in 12 such action or proceeding, in either of which events the court may 13 require the production of, and may admit in evidence, so much of said 14 returns or of the facts shown thereby, as are pertinent to the action or 15 proceeding and no more. The commissioner of motor vehicles may, never- 16 theless, publish a copy or a summary of any determination or decision 17 rendered after a formal hearing held pursuant to section 11-2206 or 18 11-2208 of this chapter. Nothing under this section shall be construed 19 to prohibit the delivery to a person or his or her duly authorized 20 representative of a certified copy of any return filed by him or her 21 pursuant to this chapter, or of the receipt, document or other form 22 issued pursuant to section 11-2204 of this chapter, or a duplicate copy 23 thereof; nor to prohibit the delivery of such a certified copy of such 24 return or of any information contained in or relating thereto, to the 25 United States of America or any department thereof, the state of New 26 York or any department thereof, the city of Staten Island or any depart- 27 ment thereof provided the same is required for official business; nor to 28 prohibit the inspection for official business of such returns by the 29 corporation counsel or other legal representatives of the city or by the 30 district attorney of Richmond county; nor to prohibit the publication of 31 statistics so classified as to prevent the identification of particular 32 returns or items thereof. 33 b. (1) Any officer or employee of the state of New York or the city 34 who willfully violates the provisions of subdivision a of this section 35 shall be dismissed from office and be incapable of holding any public 36 office in the state of New York or this city for a period of five years 37 thereafter. 38 (2) Cross-reference: For criminal penalties, see chapter forty of this 39 title. 40 c. This section shall be deemed a state statute for purposes of para- 41 graph (a) of subdivision two of section eighty-seven of the public offi- 42 cers law. 43 d. Notwithstanding anything in subdivision a of this section to the 44 contrary, if a taxpayer has petitioned the tax appeals tribunal for 45 administrative review as provided in section one hundred seventy of the 46 charter of the preceding municipality as it existed January first, nine- 47 teen hundred ninety-four, the commissioner of finance shall be author- 48 ized to present to the tax appeals tribunal any report or return of such 49 taxpayer, or any information contained therein or relating thereto, 50 which may be material or relevant to the proceeding before the tax 51 appeals tribunal. The tax appeals tribunal shall be authorized to 52 publish a copy or a summary of any decision rendered pursuant to section 53 one hundred seventy-one of the charter of the preceding municipality as 54 it existed January first, nineteen hundred ninety-four. 55 § 11-2216 Notices and limitations of time. a. Any notice authorized or 56 required under the provisions of this chapter may be given by mailing

S. 8578 1074

1 the same to the person for whom it is intended in a postpaid envelope 2 addressed to such person at the address given in the last return filed 3 by him or her pursuant to the provisions of this chapter, in any appli- 4 cation made by him or her, or in any application for registration made 5 by him or her pursuant to section four hundred one of the vehicle and 6 traffic law or, if no return has been filed or application made, then to 7 such address as may be obtainable. The mailing of such notice shall be 8 presumptive evidence of the receipt of the same by the person to whom 9 addressed. Any period of time which is determined according to the 10 provisions of this chapter by the giving of notice shall commence to run 11 from the date of mailing of such notice. 12 b. The provisions of the civil practice law and rules or any other law 13 relative to limitations of time for the enforcement of a civil remedy 14 shall not apply to any proceeding or action taken by the commissioner of 15 motor vehicles, or the commissioner of finance if designated as his or 16 her agent, to levy, appraise, assess, determine or enforce the 17 collection of any tax or penalty provided by this chapter. However, 18 except in the case of a wilfully false or fraudulent return with intent 19 to evade the tax, no assessment of additional tax shall be made after 20 the expiration of more than three years from the date of the filing of a 21 return; provided, however, that where no return has been filed as 22 provided by law the tax may be assessed at any time. 23 c. Where, before the expiration of the period prescribed under this 24 section for the assessment of an additional tax, a taxpayer has 25 consented in writing that such period be extended, the amount of such 26 additional tax may be determined at any time within such extended peri- 27 od. The period so extended may be further extended by subsequent 28 consents in writing made before the expiration of the extended period. 29 d. If any return, claim, statement, notice, application, or other 30 document required to be filed, or any payment required to be made, with- 31 in a prescribed period or on or before a prescribed date under authority 32 of any provision of this title is, after such period or such date, 33 delivered by United States mail to the commissioner of motor vehicles, 34 commissioner of finance, the tax appeals tribunal, bureau, office, offi- 35 cer or person with which or with whom such document is required to be 36 filed, or to which or to whom such payment is required to be made, the 37 date of the United States postmark stamped on the envelope shall be 38 deemed to be the date of delivery. This subdivision shall apply only if 39 the postmark date falls within the prescribed period or on or before the 40 prescribed date for the filing of such document, or for making the 41 payment, including any extension granted for such filing or payment, and 42 only if such document or payment was deposited in the mail, postage 43 prepaid, properly addressed to the commissioner of motor vehicles, 44 commissioner of finance, the tax appeals tribunal, bureau, office, offi- 45 cer or person with which or with whom the document is required to be 46 filed or to which or to whom such payment is required to be made. If any 47 document is sent by United States registered mail, such registration 48 shall be prima facie evidence that such document was delivered to the 49 commissioner of motor vehicles, commissioner of finance, the tax appeals 50 tribunal, bureau, office, officer or person to which or to whom 51 addressed, and the date of registration shall be deemed the postmark 52 date. The commissioner of motor vehicles is authorized to provide by 53 regulation the extent to which, such provisions with respect to prima 54 facie evidence of delivery and the postmark date, shall apply to certi- 55 fied mail. This subdivision shall apply in the case of postmarks not

S. 8578 1075

1 made by the United States Postal Service only if and to the extent 2 provided by regulation of the commissioner of motor vehicles. 3 e. When the last day prescribed under authority of this title, includ- 4 ing any extension of time, for performing any act falls on a Saturday, 5 Sunday or legal holiday in the state of New York, the performance of 6 such act shall be considered timely if it is performed on the next 7 succeeding day which is not a Saturday, Sunday or legal holiday. 8 § 11-2217 Commissioner of finance as agent. The commissioner of motor 9 vehicles is hereby authorized to designate the commissioner of finance 10 as his or her agent to exercise any or all of his or her functions and 11 powers specified or provided for in subdivision (d) of section 11-2205 12 and in sections 11-2206, 11-2208, 11-2211, 11-2213, 11-2214 and 11-2216 13 of this chapter. Where the commissioner of finance has been so desig- 14 nated as agent, the commissioner of finance, in addition to the powers 15 elsewhere granted to him or her in this chapter, is hereby authorized 16 and empowered: 17 1. To delegate such functions and powers to a commissioner or deputy 18 commissioner in the department of finance or to any employee or employ- 19 ees of the department of finance; 20 2. For cause shown, to remit penalties and to compromise disputed 21 claims in connection with the taxes hereby imposed; 22 3. To request information concerning motor vehicles and persons 23 subject to the provisions of this chapter from the department of motor 24 vehicles of any other state or the treasury department of the United 25 States, or any city or county of the state of New York; and to afford 26 such information to such other state, treasury department, city or coun- 27 ty, any provision of this chapter to the contrary notwithstanding; 28 4. To request the police department of the city to assist in the 29 enforcement of the provisions of this chapter. 30 § 11-2218 Agreement between commissioner of finance and commissioner 31 of motor vehicles. The commissioner of finance is hereby authorized and 32 empowered to enter into an agreement with the commissioner of motor 33 vehicles to govern the administration and collection of the taxes 34 imposed by this chapter, which agreement shall provide for the exclusive 35 method of collection of such taxes, custody and remittal of the proceeds 36 of such tax; for the payment by the city of the reasonable expenses 37 incurred by the department of motor vehicles in collecting and adminis- 38 tering such tax; and for the audit, upon request of the commissioner of 39 finance or his or her delegate, of the accuracy of the payments, 40 distributions and remittances to the commissioner of finance pursuant to 41 the provisions of this chapter, to be conducted at a time agreed upon by 42 the state comptroller and to be allowed not more frequently than once in 43 each calendar year. Such agreement shall have the force and effect of a 44 rule or regulation of the commissioner of motor vehicles, and shall be 45 filed and published in accordance with any statutory requirements relat- 46 ing thereto. 47 § 11-2219 Notification to corporation counsel. The commissioner of 48 motor vehicles shall promptly notify the corporation counsel of the city 49 of any litigation instituted against him or her which challenges the 50 constitutionality or validity of any provision of this chapter, or of 51 the enabling act pursuant to which it was adopted, or which attempts to 52 limit or question the applicability of either such law, and such notifi- 53 cation shall include a copy of the papers served upon him or her. 54 § 11-2220 Construction and enforcement. This chapter shall be 55 construed and enforced in conformity with subdivisions (g) and (h) of

S. 8578 1076

1 section twelve hundred one of the tax law, pursuant to which it is 2 enacted. 3 § 11-2221 Disposition of revenues. All revenues resulting from the 4 imposition of the tax under this chapter shall be paid into the treasury 5 of the city and shall be credited to and deposited in the general fund 6 of the city, but no part of such revenues may be expended unless appro- 7 priated in the annual budget of the city.

8 CHAPTER 23-A 9 ENHANCED 911 TELEPHONE SURCHARGE

10 § 11-2321 Short title. This chapter shall be known and may be cited as 11 the "enhanced 911 telephone surcharge act." 12 § 11-2322 Definitions. When used in this chapter the following terms 13 shall mean: 14 (a) "E911 system" means an enhanced emergency telephone service which 15 automatically connects a person dialing the digits 9-1-1 to the answer- 16 ing point established within the city of Staten Island police depart- 17 ment, and which shall include, but not be limited to, selective routing, 18 automatic number identification and automatic location identification. 19 (b) "Lifeline" means a discounted or low-priced telephone service 20 available to eligible low-income residential customers. 21 (c) "Access line" means a communications circuit that connects a 22 customer location to a facility housing the switching system and related 23 equipment that provides telephone service. 24 (d) "911 service area" means the area within the geographic boundaries 25 of the city of Staten Island. 26 (e) "Municipality" means any New York city agency, or any public bene- 27 fit corporation, local development corporation or other governmental 28 entity the majority of whose members or governing body is appointed by a 29 city official. 30 (f) "Public safety agency" means a public safety agency as defined in 31 subdivision five of section three hundred one of the county law. 32 (g) "Service supplier" means a service supplier as defined in subdivi- 33 sion seven of section three hundred one of the county law that provides 34 service within the 911 service area. 35 (h) "System costs" means the costs associated with obtaining and main- 36 taining the telecommunication equipment, all operations and maintenance 37 costs and the telephone services costs necessary to establish and 38 provide an E911 system. 39 (i) "Voice over internet protocol service" or "VOIP service" shall 40 mean any service that (1) enables real-time, two-way voice communi- 41 cations; (2) requires a broadband connection from the user's location; 42 (3) requires internet protocol compatible customer premises equipment 43 (CPE); and (4) permits users generally to receive calls that originate 44 on the public switched telephone network and to terminate calls to the 45 public switched telephone network. 46 § 11-2323 Establishment of surcharge for E911 system. (a) In accord- 47 ance with the provisions of article six of the county law, as amended, 48 there is hereby established a surcharge of one dollar per telephone 49 access line, or equivalent, per month on the customers of every service 50 supplier within the city of New York. 51 (b) The surcharge imposed by subdivision (a) of this section shall be 52 used to pay for the costs associated with obtaining, operating and main- 53 taining the telecommunication equipment and telephone services needed to

S. 8578 1077

1 provide an enhanced 911 emergency telephone system to serve the city of 2 New York. 3 (c) All service suppliers that provide local access service within the 4 911 service area in the city of New York shall begin to add the monthly 5 surcharge of one dollar per telephone access line per month as provided 6 in subdivision (a) of this section to all service bills no later than 7 the forty-fifth day after the effective date of the local law that 8 increased such surcharge to one dollar per telephone access line per 9 month. Notwithstanding the provisions of this subdivision, all provid- 10 ers of voice over internet protocol service that provide such service 11 within the 911 service area shall begin to add the monthly surcharge of 12 one dollar per telephone access line, or equivalent, per month as 13 provided in subdivision (a) of this section to all service bills no 14 later than September fifth, two thousand ten. 15 § 11-2324 Application; limitations; exemptions. (a) The surcharge 16 established pursuant to the provisions of section 11-2323 of this chap- 17 ter shall be imposed on a per access line basis on all current bills 18 rendered for local exchange access service within the 911 service area. 19 (b) No such surcharge shall be imposed upon: 20 (1) more than seventy-five exchange access lines per customer per 21 location; 22 (2) any lifeline customers of a local telephone service supplier; or 23 (3) a public safety agency; or 24 (4) any municipality, as defined in subdivision (e) of section 11-2322 25 of this chapter. 26 § 11-2325 Collection of surcharge. (a) The appropriate service suppli- 27 er or suppliers serving the city of Staten Island 911 service area shall 28 act as collection agents for the city and shall remit the funds 29 collected as the surcharge to the commissioner of finance each month. 30 Such funds shall be remitted no later than thirty days after the last 31 business day of such period. 32 (b) The service supplier shall be entitled to retain as an administra- 33 tive fee an amount equal to two per cent of its collections of the 34 surcharge. 35 (c) The surcharge required to be collected by the service supplier 36 shall be added to and stated separately in its billings to the customer. 37 (d) The service supplier shall annually provide to the commissioner of 38 finance an accounting of the surcharge amounts billed and collected. 39 § 11-2326 Liability for surcharge. (a) Each service supplier who is 40 subject to the provisions of this chapter shall be liable to the city 41 for the surcharge until it has been paid to the city, except that 42 payment to a service supplier is sufficient to relieve the customer from 43 further liability for such surcharge. 44 (b) The service supplier customer shall have no obligation to take any 45 legal action to enforce the collection of any surcharge. However, when- 46 ever the service supplier remits the funds collected as the surcharge to 47 the city, it shall also provide the city with the name and address of 48 any customer refusing or failing to pay the surcharge imposed by this 49 chapter and shall state the amount of such surcharge remaining unpaid. 50 § 11-2327 System revenues; adjustment of surcharge. (a) All surcharge 51 monies remitted to the commissioner of finance by a service supplier and 52 all other monies dedicated to the payment of system costs from whatever 53 source derived or received by the city of Staten Island shall be 54 expended only upon authorization of the council, and only for payment of 55 system costs as permitted by this chapter. The finance commissioner and 56 the director of the office of management and budget shall separately

S. 8578 1078

1 account for and keep adequate records of the amount and source of all 2 such revenues and of the amount and object or purpose of all expendi- 3 tures thereof. 4 (b) If at the end of any fiscal year the total amount of all such 5 revenues exceeds the amount necessary for payment of system costs in 6 such fiscal year, such excess shall be reserved and carried over for the 7 payment of system costs in the following fiscal year. However, if at the 8 end of any fiscal year in conformance with applicable law, such E911 9 reserved fund balance exceeds an amount equal to five per cent of that 10 necessary for the payment of system costs in such fiscal year, the coun- 11 cil shall by local law reduce the surcharge for the following fiscal 12 year to a level that more adequately reflects the system cost require- 13 ments of its E911 system. The council may also reestablish or increase 14 such surcharge, subject to the provisions of section three hundred three 15 of the county law, if the revenues generated by such surcharge and by 16 any other source are not adequate to pay for system costs. 17 CHAPTER 23-B 18 WIRELESS COMMUNICATIONS SERVICE SURCHARGE 19 § 11-2341 Short title. This chapter shall be known and may be cited as 20 the "wireless communications service surcharge act." 21 § 11-2342 Definitions. (a) "Wireless communications device" means any 22 equipment used to access a wireless communications service. 23 (b) "Wireless communications service" means all commercial mobile 24 services, as that term is defined in subdivision (d) of section three 25 hundred thirty-two of title forty-seven of the United States Code, as 26 amended from time to time, including, but not limited to, all broadband 27 personal communications services, wireless radio telephone services, 28 geographic area specialized and enhanced specialized mobile radio 29 services, and incumbent-wide area specialized mobile radio licensees, 30 which offer real time, two-way voice or data service that is intercon- 31 nected with the public switched telephone network or otherwise provides 32 access to emergency communications services. 33 (c) "Wireless communications service supplier" means any commercial 34 entity that operates a wireless communications service. 35 (d) "Place of primary use" means the street address that is represen- 36 tative of where the customer's use of the wireless communications 37 service primarily occurs, which address must be either the residential 38 street address or the primary business street address of the customer; 39 and within the licensed service area of the wireless communications 40 service provider. 41 § 11-2343 Establishment of surcharge for wireless communications 42 devices. (a) In accordance with the provisions of article six of the 43 county law, as amended, there is hereby established a surcharge of thir- 44 ty cents per month on wireless communications service in the city of New 45 York. The surcharge shall be imposed on each wireless communications 46 device and shall be reflected and made payable on bills rendered for 47 wireless communications service that is provided to a customer whose 48 place of primary use is within the city of New York. 49 (b) The surcharge imposed by subdivision (a) of this section shall be 50 used to pay for the costs associated with the design, construction, 51 operation, maintenance, and administration of public safety communi- 52 cations networks serving the city of New York. 53 (c) All wireless communications service suppliers that provide service 54 to customers whose place of primary use is within the city of New York 55 shall begin to add the monthly surcharge as provided in subdivision (a)

S. 8578 1079

1 of this section to all service bills no later than the forty-fifth day 2 after the effective date of the local law that added this chapter. 3 (d) Notwithstanding any provision of law to the contrary, no surcharge 4 shall be imposed pursuant to this chapter on or after December first, 5 two thousand seventeen. 6 § 11-2344 Collection of surcharge. (a) Each wireless communications 7 service supplier serving the city of New York shall act as collection 8 agent for the city of Staten Island and shall remit the funds collected 9 pursuant to the surcharge imposed under the provisions of this chapter 10 to the commissioner of finance each month. Such funds shall be remitted 11 no later than thirty days after the last business day of the month. 12 (b) Each wireless communications service supplier shall be entitled to 13 retain, as an administrative fee, an amount equal to two per cent of its 14 collections of the surcharge. 15 (c) The surcharge required to be collected by the wireless communi- 16 cations service supplier shall be added to and stated separately in its 17 billings to customers. 18 (d) Each wireless communications service supplier shall annually 19 provide to the city of Staten Island an accounting of the surcharge 20 amounts billed and collected. 21 § 11-2345 Liability for surcharge. (a) Each wireless communications 22 service customer who is subject to the provisions of this chapter shall 23 be liable to the city of Staten Island for the surcharge until it has 24 been paid to the city except that payment to a wireless communications 25 service supplier is sufficient to relieve the customer from further 26 liability for such surcharge. 27 (b) No wireless communications service supplier shall have a legal 28 obligation to enforce the collection of any surcharge imposed under the 29 provisions of this chapter, provided, however, that whenever the wire- 30 less communications service supplier remits the funds collected to the 31 city of Staten Island, it shall also provide the city with the name and 32 address of any customer refusing or failing to pay the surcharge and 33 shall state the amount of such surcharge remaining unpaid. 34 § 11-2346 Systems revenues; adjustment of surcharge. (a) All surcharge 35 monies remitted to the city of Staten Island by a wireless communi- 36 cations service supplier shall be expended only upon authorization of 37 the council and only for payment of system costs or other costs associ- 38 ated with the design, construction, operation, maintenance, and adminis- 39 tration of public safety communications networks serving the city of 40 Staten Island. The finance commissioner and the director of the office 41 of management and budget shall separately account for and keep adequate 42 books and records of the amount and source of all such monies and of the 43 amount and object or purpose of all expenditures thereof. 44 (b) If, at the end of any fiscal year, the total amount of all such 45 monies exceeds the amount necessary for payment of the above mentioned 46 costs in such fiscal year, such excess shall be reserved and carried 47 over for the payment of those costs in the following fiscal year.

48 CHAPTER 23-C 49 WIRELESS COMMUNICATIONS SURCHARGE

50 § 11-2351 Surcharge on wireless communications service. (a) There is 51 hereby imposed within the territorial limits of the city of Staten 52 Island, in accordance with the provisions of section one hundred eight- 53 y-six-g of the tax law, a surcharge on wireless communications service,

S. 8578 1080

1 as such surcharge is described in paragraph (b) of subdivision two of 2 section one hundred eighty-six-g of the tax law. 3 (b) Such surcharge shall be imposed at the rate of thirty cents per 4 month on each wireless communications device in service during any part 5 of the month. 6 (c) A wireless communications service supplier shall begin to add such 7 surcharge to the billings of its customers on December first, two thou- 8 sand seventeen. 9 § 11-2352 Surcharge on the retail sale of each prepaid wireless commu- 10 nications service. (a) There is hereby imposed within the territorial 11 limits of the city of Staten Island, in accordance with the provisions 12 of section one hundred eighty-six-g of the tax law, a surcharge on 13 prepaid wireless communications service, as such surcharge is described 14 in paragraph (c) of subdivision two of section one hundred eighty-six-g 15 of the tax law. 16 (b) Such surcharge shall be imposed at the rate of thirty cents per 17 retail sale. 18 (c) A prepaid wireless communications seller shall begin to collect 19 such surcharge from its customers on December first, two thousand seven- 20 teen.

21 CHAPTER 24 22 TAX ON RETAIL LICENSEES OF THE STATE LIQUOR AUTHORITY

23 § 11-2401 Definitions. When used in this chapter the following terms 24 shall mean or include: 25 1. "Person." An individual, partnership, society, association, joint- 26 stock company, corporation, estate, receiver, lessee, trustee, assignee, 27 referee, or any other person acting in a fiduciary or representative 28 capacity, whether appointed by a court or otherwise, and any combination 29 of individuals. 30 2. "Retail licensee." Any person to whom a license has been issued 31 by the state liquor authority under the state alcoholic beverage control 32 law who sells at retail in the city, for on or off premises consumption, 33 any liquor, wine or beer for the sale of which such license is required. 34 3. "Return." Any return required to be filed as provided under this 35 chapter. 36 4. "State." The state of New York. 37 5. "City." The city of Staten Island. 38 6. "Commissioner." The commissioner of finance of the city of Staten 39 Island. 40 7. "Tax year." June first of any calendar year through May thirty- 41 first of the following calendar year. 42 8. "Tax appeals tribunal." The tax appeals tribunal established by 43 section one hundred sixty-eight of the charter of the preceding munici- 44 pality as it existed January first, nineteen hundred ninety-four. 45 § 11-2402 Imposition of tax. For the privilege of selling liquor, 46 wine or beer at retail, for on or off premises consumption, within the 47 city of Staten Island, there is hereby imposed and there shall be paid 48 annually for each tax year, commencing with the tax year beginning June 49 first, nineteen hundred eighty, a tax to be paid by each retail licensee 50 in an amount equal to twenty-five percent of the license fees payable 51 under the state alcoholic beverage control law by such retail licensee 52 for the license year in effect at the commencement of the tax year under 53 this chapter. A retail licensee who obtains a license subsequent to the 54 commencement of a tax year shall pay the tax based upon fees payable

S. 8578 1081

1 under the state alcoholic beverage control law by such licensee for the 2 license year in effect at the time such license is issued. This tax 3 shall be in addition to any and all other taxes paid by such retail 4 licensee. 5 § 11-2403 Exemptions. The tax imposed by this chapter shall not apply 6 to the following: 7 (a) The state of New York, or any of its agencies, instrumentalities, 8 public corporations, including a public corporation created pursuant to 9 agreement or compact with another state or Canada, or political subdivi- 10 sions; 11 (b) The United States of America, and any of its agencies and instru- 12 mentalities insofar as it is immune from taxation; 13 (c) The United Nations or other international organizations of which 14 the United States of America is a member; and 15 (d) Any corporation, or association, or trust, or community chest, 16 fund or foundation, organized and operated exclusively for religious, 17 charitable, or educational purposes, or for the prevention of cruelty to 18 children or animals, and no part of the net earnings of which inures to 19 the benefit of any private shareholder or individual, and no substantial 20 part of the activities of which is carrying on propaganda, or otherwise 21 attempting to influence legislation; provided, however, that nothing in 22 this paragraph shall include an organization operated for the primary 23 purpose of carrying on a trade or business for profit, whether or not 24 all of its profits are payable to one or more organizations described in 25 this subdivision. 26 § 11-2404 Records to be kept. Every retail licensee shall keep such 27 records of its business and in such form as the commissioner may by 28 regulation require. Such records shall be offered for inspection and 29 examination at any time upon demand by the commissioner or his or her 30 duly authorized agent or employee and shall be preserved for a period of 31 three years, except that the commissioner may consent to their 32 destruction within that period or may require that they be kept longer. 33 § 11-2405 Returns. a. On or before the twenty-fifth day of June in 34 each tax year, every person subject to tax under this chapter shall file 35 a return with the commissioner on a form prescribed by the commissioner. 36 A retail licensee who obtains a license subsequent to the commencement 37 of a tax year shall file a return for such tax year on or before the 38 twenty-fifth day of the month following the month in which such license 39 was obtained. 40 b. The return shall state the amount of license fees paid to the 41 state under the alcoholic beverage control law and the date when a 42 license under such law was issued to the retail licensee and shall 43 contain any other information which the commissioner may deem necessary 44 for the proper administration of this chapter. The commissioner may 45 require amended returns to be filed within twenty days after notice and 46 to contain the information specified in the notice. 47 c. If a return required by this chapter is not filed or if a return 48 when filed is incorrect or insufficient on its face, the commissioner 49 shall take the necessary steps to enforce the filing of such a return or 50 of a corrected return. 51 d. The return otherwise required to be filed on or before June twen- 52 ty-fifth, nineteen hundred eighty under the provisions of subdivision a 53 of this section, shall be made and filed on or before August twenty- 54 fifth, nineteen hundred eighty. 55 § 11-2406 Payment of tax. At the time of filing a return each person 56 shall pay to the commissioner the tax imposed under this chapter. Such

S. 8578 1082

1 tax shall be due and payable on the last day on which such return is 2 required to be filed, regardless of whether a return is filed or whether 3 the return which is filed correctly indicates the amount of tax due. 4 § 11-2407 Determination of tax. If a return required by this chapter 5 is not filed, or if a return when filed is incorrect or insufficient, 6 the commissioner shall determine the amount of tax due from such infor- 7 mation as may be obtainable and, if necessary, may estimate the tax on 8 the basis of external indices. Notice of such determination shall be 9 given to the person liable for the payment of the tax. Such determi- 10 nation shall finally and irrevocably fix the tax unless the person 11 against whom it is assessed, within ninety days after the giving of 12 notice of such determination, or, if the commissioner of finance has 13 established a conciliation procedure pursuant to section 11-124 of the 14 code of the preceding municipality and the taxpayer has requested a 15 conciliation conference in accordance therewith, within ninety days from 16 the mailing of a conciliation decision or the date of the commissioner's 17 confirmation of the discontinuance of the conciliation proceeding, both 18 (1) serves a petition upon the commissioner of finance and (2) files a 19 petition with the tax appeals tribunal for a hearing, or unless the 20 commissioner of his or her own motion shall redetermine the same. Such 21 hearing and any appeal to the tax appeals tribunal sitting en banc from 22 the decision rendered in such hearing shall be conducted in the manner 23 and subject to the requirements prescribed by the tax appeals tribunal 24 pursuant to sections one hundred sixty-eight through one hundred seven- 25 ty-two of the charter of the preceding municipality as it existed Janu- 26 ary first, nineteen hundred ninety-four. After such hearing the tax 27 appeals tribunal shall give notice of its decision to the person against 28 whom the tax is assessed and to the commissioner of finance. A decision 29 of the tax appeals tribunal sitting en banc shall be reviewable for 30 error, illegality or unconstitutionality or any other reason whatsoever 31 by a proceeding under article seventy-eight of the civil practice law 32 and rules if application therefor is made to the supreme court by the 33 person against whom the tax was assessed within four months after the 34 giving of the notice of such tax appeals tribunal decision. A proceed- 35 ing under article seventy-eight of the civil practice law and rules 36 shall not be instituted by a taxpayer unless: (a) the amount of any tax 37 sought to be reviewed, with penalties and interest thereon, if any, 38 shall be first deposited with the commissioner and there shall be filed 39 with the commissioner an undertaking issued by a surety company author- 40 ized to transact business in this state and approved by the superinten- 41 dent of insurance of this state as to solvency and responsibility, in 42 such amount as a justice of the supreme court shall approve, to the 43 effect that if such proceeding be dismissed or the tax confirmed, the 44 taxpayer will pay all costs and charges which may accrue in the prose- 45 cution of the proceedings or (b) at the option of the taxpayer, such 46 undertaking may be in a sum sufficient to cover the taxes, interest and 47 penalties stated in such decision, plus the costs and charges which may 48 accrue against it in the prosecution of the proceeding, in which event 49 the taxpayer shall not be required to pay such taxes, interest or penal- 50 ties as a condition precedent to the application. 51 § 11-2408 Refunds. a. In the manner provided in this section, the 52 commissioner shall refund or credit, without interest, any tax, penalty 53 or interest erroneously, illegally or unconstitutionally collected or 54 paid, if written application to the commissioner for such refund shall 55 be made within one year from the payment thereof. Whenever a refund or 56 credit is made or denied, the commissioner shall state his or her reason

S. 8578 1083

1 therefor and give notice thereof to the taxpayer in writing. The commis- 2 sioner may, in lieu of any refund required to be made, allow credit 3 therefor on payments due from the applicant. 4 b. Any determination of the commissioner of finance denying a refund 5 or credit pursuant to subdivision a of this section shall be final and 6 irrevocable unless the applicant for such refund or credit, within nine- 7 ty days from the mailing of notice of such determination, or, if the 8 commissioner of finance has established a conciliation procedure pursu- 9 ant to section 11-124 of the code of the preceding municipality and the 10 applicant has requested a conciliation conference in accordance there- 11 with, within ninety days from the mailing of a conciliation decision or 12 the date of the commissioner's confirmation of the discontinuance of the 13 conciliation proceeding, both (1) serves a petition upon the commission- 14 er of finance and (2) files a petition with the tax appeals tribunal for 15 a hearing. Such petition for a refund or credit made as provided in this 16 section shall be deemed an application for a revision of any tax, penal- 17 ty or interest complained of. Such hearing and any appeal to the tribu- 18 nal sitting en banc from the decision rendered in such hearing shall be 19 conducted in the manner and subject to the requirements prescribed by 20 the tax appeals tribunal pursuant to sections one hundred sixty-eight 21 through one hundred seventy-two of the charter of the preceding munici- 22 pality as it existed January first, nineteen hundred ninety-four. After 23 such hearing, the tax appeals tribunal shall give notice of its decision 24 to the applicant and to the commissioner of finance. The applicant shall 25 be entitled to institute a proceeding pursuant to article seventy-eight 26 of the civil practice law and rules to review a decision of the tax 27 appeals tribunal sitting en banc if application to the supreme court be 28 made therefor within four months after the giving of notice of such 29 decision, and provided, in the case of an application by a taxpayer, 30 that a final determination of tax due was not previously made. Such a 31 proceeding shall not be instituted by a taxpayer unless an undertaking 32 shall first be filed with the commissioner, in such amount and with such 33 sureties as a justice of the supreme court shall approve, to the effect 34 that if such proceeding be dismissed or the tax confirmed, the taxpayer 35 will pay all costs and charges which may accrue in the prosecution of 36 the proceeding. 37 c. A person shall not be entitled to a revision, refund or credit 38 under this section, of a tax, interest or penalty which had been deter- 39 mined to be due pursuant to the provisions of section 11-2407 of this 40 chapter where such person has had a hearing or an opportunity for a 41 hearing, as provided in such section or has failed to avail himself or 42 herself of the remedies as provided in such section. No refund or cred- 43 it shall be made of a tax, interest or penalty paid after a determi- 44 nation by the commissioner made pursuant to section 11-2407 of this 45 chapter unless it be found that such determination was erroneous, ille- 46 gal or unconstitutional or otherwise improper, by the tax appeals tribu- 47 nal after a hearing or of the commissioner's own motion, or, if such tax 48 appeals tribunal affirms in whole or in part the determination of the 49 commissioner of finance, in a proceeding under article seventy-eight of 50 the civil practice law and rules, pursuant to the provisions of said 51 section in which event refund or credit without interest shall be made 52 of the tax, interest or penalty found to have been overpaid. 53 § 11-2409 Remedies exclusive. The remedies provided by this chapter 54 shall be the exclusive remedies available to any person for the review 55 of tax liability imposed by this chapter; and no determination or 56 proposed determination of tax or determination on any application for

S. 8578 1084

1 refund by the commissioner of finance, nor any decision by the tax 2 appeals tribunal or any of its administrative law judges, shall be 3 enjoined or reviewed by an action for declaratory judgment, an action 4 for money had and received or by any action or proceeding other than, in 5 the case of a decision by the tax appeals tribunal sitting en banc, a 6 proceeding under article seventy-eight of the civil practice law and 7 rules; provided, however, that a taxpayer may proceed by declaratory 8 judgment if such taxpayer institutes suit within thirty days after a 9 deficiency assessment is made and pays the amount of the deficiency 10 assessment to the commissioner prior to the institution of such suit and 11 posts a bond for costs as provided in section 11-2407 of this chapter. 12 § 11-2410 Reserves. In cases where the taxpayer has applied for a 13 refund and has instituted a proceeding under article seventy-eight of 14 the civil practice law and rules to review a determination adverse to 15 such taxpayer on his or her application for refund, the city comptroller 16 shall set up appropriate reserves to meet any decision adverse to the 17 city. 18 § 11-2411 Proceedings to recover tax. a. Whenever any person shall 19 fail to pay any tax or penalty or interest imposed by this chapter, the 20 corporation counsel shall, upon the request of the commissioner, bring 21 or cause to be brought an action to enforce payment of the same against 22 the person liable for the same on behalf of the city of Staten Island in 23 any court of the state of New York or of any other state or of the 24 United States. If, however, the commissioner in his or her discretion 25 believes that a taxpayer subject to the provisions of this chapter is 26 about to cease business, leave the state or remove or dissipate the 27 assets out of which tax or penalties or interest might be satisfied and 28 that any such tax or penalty or interest will not be paid when due, he 29 or she may declare such tax or penalty or interest to be immediately due 30 and payable and may issue a warrant immediately. 31 b. As an additional or alternate remedy, the commission may issue a 32 warrant, directed to the city sheriff, commanding such sheriff to levy 33 upon and sell the real and personal property of such person which may be 34 found within the city, for the payment of the amount thereof, with any 35 penalties and interest, and the cost of executing the warrant, and to 36 return such warrant to the commissioner and to pay to him or her the 37 money collected by virtue thereof within sixty days after receipt of 38 such warrant. The city sheriff shall, within five days after the 39 receipt of the warrant, file with the county clerk a copy thereof, and 40 thereupon such clerk shall enter in the judgment docket the name of the 41 person mentioned in the warrant and the amount of the tax, penalties and 42 interest for which the warrant is issued and the date when such copy is 43 filed. Thereupon the amount of such warrant so docketed shall become a 44 lien upon the title to and interest in real and personal property of the 45 person against whom the warrant is issued. The city sheriff shall then 46 proceed upon the warrant in the same manner and with like effect as that 47 provided by law in respect to executions issued against property upon 48 judgments of a court of record, and for services in executing the 49 warrant such sheriff shall be entitled to the same fees which he or she 50 may collect in the same manner. In the discretion of the commissioner a 51 warrant of like terms, force and effect may be issued and directed to 52 any officer or employee of the department of finance, and in the 53 execution thereof such officer or employee shall have all the powers 54 conferred by law upon sheriffs, but he or she shall be entitled to no 55 fee for compensation in excess of the actual expenses paid in the 56 performance of such duty. If a warrant is returned not satisfied in

S. 8578 1085

1 full, the commissioner may from time to time issue new warrants and 2 shall also have the same remedies to enforce the amount due thereunder 3 as if the city had recovered judgment therefor and execution thereon had 4 been returned unsatisfied. 5 c. Whenever there is made a sale, transfer or assignment in bulk of 6 any part or the whole of a stock of merchandise or of fixtures, or 7 merchandise and of fixtures pertaining to the conducting of the business 8 of the seller, transferor or assignor, otherwise than in the ordinary 9 course of trade and in the regular prosecution of said business, the 10 purchaser, transferee or assignee shall at least ten days before taking 11 possession of such merchandise, fixtures, or merchandise and fixtures, 12 or paying therefor, notify the commissioner by registered mail of the 13 proposed sale and of the price, terms and conditions thereof whether or 14 not the seller, transferor or assignor, has represented to, or informed 15 the purchaser, transferee or assignee that it owes any tax pursuant to 16 this chapter and whether or not the purchaser, transferee or assignee 17 has knowledge that such taxes are owing, and whether any such taxes are 18 in fact owing. 19 Whenever the purchaser, transferee or assignee shall fail to give 20 notice to the commissioner as required by the opening paragraph of this 21 subdivision, or whenever the commissioner shall inform the purchaser, 22 transferee or assignee that a possible claim for such tax or taxes 23 exists, any sums of money, property or choses in action, or other 24 consideration, which the purchaser, transferee or assignee is required 25 to transfer over to the seller, transferor or assignor shall be subject 26 to a first priority right and lien for any such taxes theretofore or 27 thereafter determined to be due from the seller, transferor or assignor 28 to the city, and the purchaser, transferee or assignee is forbidden to 29 transfer to the seller, transferor or assignor any such sums of money, 30 property or choses in action to the extent of the amount of the city's 31 claim. For failure to comply with the provisions of this subdivision, 32 the purchaser, transferee or assignee, in addition to being subject to 33 the liabilities and remedies imposed under the provisions of article six 34 of the uniform commercial code, shall be personally liable for the 35 payment to the city of any such taxes theretofore or thereafter deter- 36 mined to be due to the city from the seller, transferor or assignor, and 37 such liability may be assessed and enforced in the same manner as the 38 liability for tax under this chapter. 39 d. The commissioner of finance, if he or she finds that the interests 40 of the city will not thereby be jeopardized, and upon such conditions as 41 the commissioner of finance may require, may release any property from 42 the lien of any warrant or vacate such warrant for unpaid taxes, addi- 43 tions to tax, penalties and interest filed pursuant to subdivision b of 44 this section, and such release or vacating of the warrant may be 45 recorded in the office of any recording officer in which such warrant 46 has been filed. The clerk shall thereupon cancel and discharge as of the 47 original date of docketing the vacated warrant. 48 § 11-2412 General powers of the commissioner. In addition to all 49 other powers granted to the commissioner in this chapter, he or she is 50 hereby authorized and empowered: 51 1. To make, adopt and amend rules and regulations appropriate to the 52 carrying out of this chapter and the purposes thereof; and to prescribe 53 the form of blanks, reports and other records relating to the enforce- 54 ment and administration of this chapter;

S. 8578 1086

1 2. To extend, for cause shown, the time for filing any return for a 2 period not exceeding thirty days; and to compromise disputed claims in 3 connection with the taxes hereby imposed; 4 3. To request information from the department of taxation and finance 5 of the state of New York or the state liquor authority or the officials 6 of any political subdivision of this state or the treasury department of 7 the United States relative to any person; and to afford information to 8 such department of taxation and finance, liquor authority, officials or 9 treasury department relative to any person, any other provision of this 10 chapter to the contrary notwithstanding; 11 4. To delegate his or her functions under this section to a deputy or 12 assistant or other employee or employees of his or her department; 13 5. To assess, reassess, determine, revise and readjust the taxes 14 imposed under this chapter; 15 6. To provide by regulation for granting a refund of an appropriate 16 portion of the tax where the retail licensee ceases to do business 17 during the course of the tax year under circumstances which result in, 18 or would entitle such licensee to, a refund of license fee by the state 19 liquor authority. The provisions of section 11-2408 of this chapter 20 shall be applicable to such refunds. 21 § 11-2413 Administration of oaths and compelling testimony. a. The 22 commissioner, his or her employees duly designated and authorized by the 23 commissioner, the tax appeals tribunal and any of its duly designated 24 and authorized employees shall have power to administer oaths and take 25 affidavits in relation to any matter or proceeding in the exercise of 26 their powers and duties under this chapter. The commissioner and the tax 27 appeals tribunal shall have power to subpoena and require the attendance 28 of witnesses and the production of books, papers and documents to secure 29 information pertinent to the performance of the duties of the commis- 30 sioner or the tax appeals tribunal under this chapter and of the 31 enforcement of this chapter and to examine them in relation thereto, and 32 to issue commissions for the examination of witnesses who are out of the 33 state or unable to attend before the commissioner or the tax appeals 34 tribunal or excused from attendance. 35 b. A justice of the supreme court either in court or at chambers shall 36 have power summarily to enforce by proper proceedings the attendance and 37 testimony of witnesses and the production and examination of books, 38 papers and documents called for by the subpoena of the commissioner or 39 the tax appeals tribunal under this chapter. 40 c. Cross-reference; criminal penalties. For failure to obey subpoenas 41 or for testifying falsely, see section 11-4007 of this title; for 42 supplying false or fraudulent information, see section 11-4009 of this 43 title. 44 d. The officers who serve the summons or subpoena of the commissioner 45 of finance or the tax appeals tribunal under this chapter and witnesses 46 attending in response thereto shall be entitled to the same fees as are 47 allowed to officers and witnesses in civil cases in courts of record, 48 except as otherwise provided in this chapter. Such officers shall be 49 the city sheriff, and his or her duly appointed deputies or any officers 50 or employees of the department of finance or the tax appeals tribunal, 51 designated to serve such process. 52 § 11-2414 Interest and penalties. (a) Interest on underpayments. If 53 any amount of tax is not paid on or before the last date prescribed for 54 payment, without regard to any extension of time granted for payment, 55 interest on such amount at the rate set by the commissioner of finance 56 pursuant to subdivision (g) of this section, or, if no rate is set, at

S. 8578 1087

1 the rate of seven and one-half percent per annum, shall be paid for the 2 period from such last date to the date of payment. In computing the 3 amount of interest to be paid, such interest shall be compounded daily. 4 Interest under this subdivision shall not be paid if the amount thereof 5 is less than one dollar. 6 (b) (1) Failure to file return. (A) In case of failure to file a 7 return under this chapter on or before the prescribed date, determined 8 with regard to any extension of time for filing, unless it is shown that 9 such failure is due to reasonable cause and not due to willful neglect, 10 there shall be added to the amount required to be shown as tax on such 11 return five percent of the amount of such tax if the failure is for not 12 more than one month, with an additional five percent for each additional 13 month or fraction thereof during which such failure continues, not 14 exceeding twenty-five percent in the aggregate. 15 (B) In the case of a failure to file a return of tax within sixty days 16 of the date prescribed for filing of such return, determined with regard 17 to any extension of time for filing, unless it is shown that such fail- 18 ure is due to reasonable cause and not due to willful neglect, the addi- 19 tion to tax under subparagraph (A) of this paragraph shall not be less 20 than the lesser of one hundred dollars or one hundred percent of the 21 amount required to be shown as tax on such return. 22 (C) For purposes of this paragraph, the amount of tax required to be 23 shown on the return shall be reduced by the amount of any part of the 24 tax which is paid on or before the date prescribed for payment of the 25 tax and by the amount of any credit against the tax which may be claimed 26 upon the return. 27 (2) Failure to pay tax shown on return. In case of failure to pay the 28 amount shown as tax on a return required to be filed under this chapter 29 on or before the prescribed date, determined with regard to any exten- 30 sion of time for payment, unless it is shown that such failure is due to 31 reasonable cause and not due to willful neglect, there shall be added to 32 the amount shown as tax on such return one-half of one percent of the 33 amount of such tax if the failure is not for more than one month, with 34 an additional one-half of one percent for each additional month or frac- 35 tion thereof during which such failure continues, not exceeding twenty- 36 five percent in the aggregate. For the purpose of computing the addition 37 for any month the amount of tax shown on the return shall be reduced by 38 the amount of any part of the tax which is paid on or before the begin- 39 ning of such month and by the amount of any credit against the tax which 40 may be claimed upon the return. If the amount of tax required to be 41 shown on a return is less than the amount shown as tax on such return, 42 this paragraph shall be applied by substituting such lower amount. 43 (3) Failure to pay tax required to be shown on return. In case of 44 failure to pay any amount in respect of any tax required to be shown on 45 a return required to be filed under this chapter which is not so shown, 46 including a determination made pursuant to section 11-2407 of this chap- 47 ter, within ten days of the date of a notice and demand therefor, unless 48 it is shown that such failure is due to reasonable cause and not due to 49 willful neglect, there shall be added to the amount of tax stated in 50 such notice and demand one-half of one percent of such tax if the fail- 51 ure is not for more than one month, with an additional one-half of one 52 percent for each additional month or fraction thereof during which such 53 failure continues, not exceeding twenty-five percent in the aggregate. 54 For the purpose of computing the addition for any month, the amount of 55 tax stated in the notice and demand shall be reduced by the amount of 56 any part of the tax which is paid before the beginning of such month.

S. 8578 1088

1 (4) Limitations on additions. 2 (A) With respect to any return the amount of the addition under para- 3 graph one of this subdivision shall be reduced by the amount of the 4 addition under paragraph two of this subdivision for any month to which 5 an addition applies under both paragraphs one and two. In any case 6 described in subparagraph (B) of paragraph one of this subdivision, the 7 amount of the addition under such paragraph one shall not be reduced 8 below the amount provided in such subparagraph. 9 (B) With respect to any return, the maximum amount of the addition 10 permitted under paragraph three of this subdivision shall be reduced by 11 the amount of the addition under paragraph one of this subdivision, 12 determined without regard to subparagraph (B) of such paragraph one, 13 which is attributable to the tax for which the notice and demand is made 14 and which is not paid within ten days of such notice and demand. 15 (c) Underpayment due to negligence. (1) If any part of an underpay- 16 ment of tax is due to negligence or intentional disregard of this chap- 17 ter or any rules or regulations relating thereto, but without intent to 18 defraud, there shall be added to the tax a penalty equal to five percent 19 of the underpayment. 20 (2) There shall be added to the tax, in addition to the amount deter- 21 mined under paragraph one of this subdivision, an amount equal to fifty 22 percent of the interest payable under subdivision (a) of this section 23 with respect to the portion of the underpayment described in such para- 24 graph one which is attributable to the negligence or intentional disre- 25 gard referred to in such paragraph one, for the period beginning on the 26 last date prescribed by law for payment of such underpayment, determined 27 without regard to any extension, and ending on the date of the assess- 28 ment of the tax, or, if earlier, the date of the payment of the tax. 29 (d) Underpayment due to fraud. (1) If any part of an underpayment of 30 tax is due to fraud, there shall be added to the tax a penalty equal to 31 fifty percent of the underpayment. 32 (2) There shall be added to the tax, in addition to the penalty deter- 33 mined under paragraph one of this subdivision, an amount equal to fifty 34 percent of the interest payable under subdivision (a) of this section 35 with respect to the portion of the underpayment described in such para- 36 graph one which is attributable to fraud, for the period beginning on 37 the last day prescribed by law for payment of such underpayment, deter- 38 mined without regard to any extension, and ending on the date of the 39 assessment of the tax, or, if earlier, the date of the payment of the 40 tax. 41 (3) The penalty under this subdivision shall be in lieu of any other 42 addition to tax imposed by subdivision (b) or (c) of this section. 43 (e) Additional penalty. Any person who, with fraudulent intent, shall 44 fail to pay any tax imposed by this chapter, or to make, render, sign or 45 certify any return, or to supply any information within the time 46 required by or under this chapter, shall be liable for a penalty of not 47 more than one thousand dollars, in addition to any other amounts 48 required under this chapter to be imposed, assessed and collected by the 49 commissioner of finance. The commissioner of finance shall have the 50 power, in his or her discretion, to waive, reduce or compromise any 51 penalty under this subdivision. 52 (f) The interest and penalties imposed by this section shall be paid 53 and disposed of in the same manner as other revenues from this chapter. 54 Unpaid interest and penalties may be enforced in the same manner as the 55 tax imposed by this chapter.

S. 8578 1089

1 (g)(1) Authority to set interest rates. The commissioner of finance 2 shall set the rate of interest to be paid pursuant to subdivision (a) of 3 this section, but if no such rate of interest is set, such rate shall be 4 deemed to be set at seven and one-half percent per annum. Such rate 5 shall be the rate prescribed in paragraph two of this subdivision but 6 shall not be less than seven and one-half percent per annum. Any such 7 rate set by the commissioner of finance shall apply to taxes, or any 8 portion thereof, which remain or become due on or after the date on 9 which such rate becomes effective and shall apply only with respect to 10 interest computed or computable for periods or portions of periods 11 occurring in the period in which such rate is in effect. 12 (2) General rule. The rate of interest set under this subdivision 13 shall be the sum of (i) the federal short-term rate as provided under 14 paragraph three of this subdivision, plus (ii) seven percentage points. 15 (3) Federal short-term rate. For purposes of this subdivision: 16 (A) The federal short-term rate for any month shall be the federal 17 short-term rate determined by the United States secretary of the treas- 18 ury during such month in accordance with subsection (d) of section 19 twelve hundred seventy-four of the internal revenue code for use in 20 connection with section six thousand six hundred twenty-one of the 21 internal revenue code. Any such rate shall be rounded to the nearest 22 full percent, or, if a multiple of one-half of one percent, such rate 23 shall be increased to the next highest full percent. 24 (B) Period during which rate applies. 25 (i) In general. Except as provided in clause (ii) of this subpara- 26 graph, the federal short-term rate for the first month in each calendar 27 quarter shall apply during the first calendar quarter beginning after 28 such month. 29 (ii) Special rule for the month of September, nineteen hundred eight- 30 y-nine. The federal short-term rate for the month of April, nineteen 31 hundred eighty-nine shall apply with respect to setting the rate of 32 interest for the month of September, nineteen hundred eighty-nine. 33 (4) Publication of interest rate. The commissioner of finance shall 34 cause to be published in the City Record, and give other appropriate 35 general notice of, the interest rate to be set under this subdivision no 36 later than twenty days preceding the first day of the calendar quarter 37 during which such interest rate applies. The setting and publication of 38 such interest rate shall not be included within paragraph (a) of subdi- 39 vision five of section one thousand forty-one of the city charter of the 40 preceding municipality as it existed January first, nineteen hundred 41 ninety-four relating to the definition of a rule. 42 (h) Miscellaneous. (1) The certificate of the commissioner of finance 43 to the effect that a tax has not been paid, that a return has not been 44 filed, that information has not been supplied pursuant to the provisions 45 of this chapter or that records have not been retained pursuant to the 46 provisions of this chapter shall be prima facie evidence thereof. 47 (2) Cross-reference: For criminal penalties, see chapter forty of this 48 title. 49 § 11-2415 Returns to be secret. (a) Except in accordance with proper 50 judicial order, or as otherwise provided by law, it shall be unlawful 51 for the commissioner, the tax appeals tribunal or any officer or employ- 52 ee of the city to divulge or make known in any manner any information 53 relating to the business of a taxpayer contained in any return required 54 under this chapter. The officers charged with the custody of such 55 returns shall not be required to produce any of them or evidence of 56 anything contained in them in any action or proceeding in any court,

S. 8578 1090

1 except on behalf of the commissioner in an action or proceeding under 2 the provisions of this chapter, or on behalf of any party to any action 3 or proceeding under the provisions of this chapter when the returns or 4 facts shown thereby are directly involved in such action or proceeding, 5 in either of which events the court may require the production of, and 6 may admit in evidence, so much of said returns or of the facts shown 7 thereby, as are pertinent to the action or proceeding and no more. 8 Nothing under this section shall be construed to prohibit the delivery 9 to a taxpayer or the taxpayer's duly authorized representative of a 10 certified copy of any return filed in connection with his or her tax nor 11 to prohibit the publication of statistics so classified as to prevent 12 the identification of particular returns and the items thereof, or the 13 inspection by the corporation counsel or other legal representatives of 14 the city, or by the district attorney of Richmond county, of the return 15 of any taxpayer who shall bring action to set aside or review the tax 16 based thereon, or against whom an action or proceeding under this chap- 17 ter may be instituted. Returns shall be preserved for three years and 18 thereafter until the commissioner permits them to be destroyed. 19 (b) (1) Any officer or employee of the city who willfully violates the 20 provisions of subdivision (a) of this section shall be dismissed from 21 office and be incapable of holding any public office in this city for a 22 period of five years thereafter. 23 (2) Cross-reference: For criminal penalties, see chapter forty of this 24 title. 25 (c) This section shall be deemed a state statute for purposes of 26 paragraph (a) of subdivision two of section eighty-seven of the public 27 officers law. 28 (d) Notwithstanding anything in subdivision (a) of this section to the 29 contrary, if a taxpayer has petitioned the tax appeals tribunal for 30 administrative review as provided in section one hundred seventy of the 31 charter of the preceding municipality as it existed January first, nine- 32 teen hundred ninety-four, the commissioner of finance shall be author- 33 ized to present to the tribunal any report or return of such taxpayer, 34 or any information contained therein or relating thereto, which may be 35 material or relevant to the proceeding before the tribunal. The tax 36 appeals tribunal shall be authorized to publish a copy or a summary of 37 any decision rendered pursuant to section one hundred seventy-one of the 38 charter of the preceding municipality as it existed January first, nine- 39 teen hundred ninety-four. 40 § 11-2416 Notices and limitations of time. a. Any notice authorized 41 or required under the provisions of this chapter may be given by mailing 42 the same to the person for whom it is intended in a postpaid envelope 43 addressed to such person at the address given in the last return filed 44 by him or her pursuant to the provisions of this chapter or in any 45 application made by him or her, or, if no return has been filed or 46 application made, then to such address as may be obtainable. The mailing 47 of such notice shall be presumptive evidence of the receipt of the same 48 by the person to whom addressed. Any period of time which is determined 49 according to the provisions of this chapter by the giving of notice 50 shall commence to run from the date of mailing of such notice. 51 b. The provisions of the civil practice law and rules or any other law 52 relative to limitations of time for the enforcement of a civil remedy 53 shall not apply to any proceeding or action taken by the city to levy, 54 appraise, assess, determine or enforce the collection of any tax or 55 penalty or interest provided by this chapter. However, except in the 56 case of a wilfully false or fraudulent return with intent to evade the

S. 8578 1091

1 tax, no assessment of additional tax shall be made after the expiration 2 of more than three years from the date of the filing of a return, 3 provided, however, that where no return has been filed as provided by 4 law the tax may be assessed at any time. 5 c. Where, before the expiration of the period prescribed in this 6 section for the assessment of an additional tax, a taxpayer has 7 consented in writing that such period be extended, the amount of such 8 additional tax due may be determined at any time within such extended 9 period. The period so extended may be further extended by subsequent 10 consents in writing made before the expiration of the extended period. 11 d. If any return, claim, statement, notice, application, or other 12 document required to be filed, or any payment required to be made, with- 13 in a prescribed period or on or before a prescribed date under authority 14 of any provision of this chapter is, after such period or such date, 15 delivered by United States mail to the commissioner of finance, the tax 16 appeals tribunal, bureau, office, officer or person with which or with 17 whom such document is required to be filed, or to which or to whom such 18 payment is required to be made, the date of the United States postmark 19 stamped on the envelope shall be deemed to be the date of delivery. This 20 subdivision shall apply only if the postmark date falls within the 21 prescribed period or on or before the prescribed date for the filing of 22 such document, or for making the payment, including any extension grant- 23 ed for such filing or payment, and only if such document or payment was 24 deposited in the mail, postage prepaid, properly addressed to the 25 commissioner of finance, the tax appeals tribunal, bureau, office, offi- 26 cer or person with which or with whom the document is required to be 27 filed or to which or to whom such payment is required to be made. If any 28 document is sent by United States registered mail, such registration 29 shall be prima facie evidence that such document was delivered to the 30 commissioner of finance, the tax appeals tribunal, bureau, office, offi- 31 cer or person to which or to whom addressed, and the date of registra- 32 tion shall be deemed the postmark date. The commissioner of finance and, 33 where relevant, the tax appeals tribunal are authorized to provide by 34 regulation the extent to which, such provisions with respect to prima 35 facie evidence of delivery and the postmark date, shall apply to certi- 36 fied mail. Except as provided in subdivision f of this section, this 37 subdivision shall apply in the case of postmarks not made by the United 38 States postal service only if and to the extent provided by regulation 39 of the commissioner of finance or, where relevant, the tax appeals 40 tribunal. 41 e. When the last day prescribed under authority of this chapter, 42 including any extension of time, for performing any act falls on a 43 Saturday, Sunday or legal holiday in the state, the performance of such 44 act shall be considered timely if it is performed on the next succeeding 45 day which is not a Saturday, Sunday or legal holiday. 46 f. (1) Any reference in subdivision d of this section to the United 47 States mail shall be treated as including a reference to any delivery 48 service designated by the secretary of the treasury of the United States 49 pursuant to section seventy-five hundred two of the internal revenue 50 code and any reference in subdivision d of this section to a United 51 States postmark shall be treated as including a reference to any date 52 recorded or marked in the manner described in section seventy-five 53 hundred two of the internal revenue code by a designated delivery 54 service. If the commissioner of finance finds that any delivery service 55 designated by such secretary is inadequate for the needs of the city, 56 the commissioner of finance may withdraw such designation for purposes

S. 8578 1092

1 of this title. The commissioner of finance may also designate additional 2 delivery services meeting the criteria of section seventy-five hundred 3 two of the internal revenue code for purposes of this title, or may 4 withdraw any such designation if the commissioner of finance finds that 5 a delivery service so designated is inadequate for the needs of the 6 city. Any reference in subdivision d of this section to the United 7 States mail shall be treated as including a reference to any delivery 8 service designated by the commissioner of finance and any reference in 9 subdivision d of this section to a United States postmark shall be 10 treated as including a reference to any date recorded or marked in the 11 manner described in section seventy-five hundred two of the internal 12 revenue code by a delivery service designated by the commissioner of 13 finance, provided, however, any withdrawal of designation or additional 14 designation by the commissioner of finance shall not be effective for 15 purposes of service upon the tax appeals tribunal, unless and until such 16 withdrawal of designation or additional designation is ratified by the 17 president of the tax appeals tribunal. 18 (2) Any equivalent of registered or certified mail designated by the 19 United States secretary of the treasury, or as may be designated by the 20 commissioner of finance pursuant to the same criteria used by such 21 secretary for such designations pursuant to section seventy-five hundred 22 two of the internal revenue code, shall be included within the meaning 23 of registered or certified mail as used in subdivision d of this 24 section. If the commissioner of finance finds that any equivalent of 25 registered or certified mail designated by such secretary or the commis- 26 sioner of finance is inadequate for the needs of the city, the commis- 27 sioner of finance may withdraw such designation for purposes of this 28 title, provided, however, any withdrawal of designation or additional 29 designation by the commissioner of finance shall not be effective for 30 purposes of service upon the tax appeals tribunal, unless and until such 31 withdrawal of designation or additional designation is ratified by the 32 president of the tax appeals tribunal. 33 § 11-2417 Construction and enforcement. This chapter shall be 34 construed and enforced in conformity with article twenty-nine of the tax 35 law, pursuant to which it is enacted.

36 CHAPTER 25 37 TAX ON OCCUPANCY OF HOTEL ROOMS

38 § 11-2501 Definitions. When used in this chapter the following terms 39 shall mean or include: 40 1. "Person." An individual, partnership, society, association, joint- 41 stock company, corporation, estate, receiver, trustee, assignee, refer- 42 ee, or any other person acting in a fiduciary or representative capaci- 43 ty, whether appointed by a court or otherwise and any combination 44 thereof. 45 2. "Operator." Any person operating a hotel in the city of Staten 46 Island, including, but not limited to, the owner or proprietor of such 47 premises, lessee, sublessee, mortgagee in possession, licensee or any 48 other person otherwise operating such hotel. 49 3. "Occupant." A person who, for a consideration, uses, possesses, or 50 has the right to use or possess, any room or rooms in a hotel under any 51 lease, concession, permit, right of access, license to use or other 52 agreement, or otherwise. "Right to use or possess" includes the rights 53 of a room remarketer as described in subdivision twelve of this section.

S. 8578 1093

1 4. "Occupancy." The use or possession, or the right to the use or 2 possession of any room or rooms in a hotel, or the right to the use or 3 possession of the furnishings or to the services and accommodations 4 accompanying the use and possession of the room or rooms. "Right to use 5 or possess" includes the rights of a room remarketer as described in 6 subdivision twelve of this section. 7 5. "Hotel." A building or portion of it which is regularly used and 8 kept open as such for the lodging of guests. The term "hotel" includes 9 an apartment hotel, a motel, boarding house or club, whether or not 10 meals are served. 11 6. "Room." Any room of any kind, other than a bathroom or lavatory, in 12 any part or portion of a hotel which is available for, or let out for, 13 use or possession for any purpose other than a place of assembly as 14 defined in section 27-232 of the code of the preceding municipality. 15 7. "Rent." The consideration received for occupancy valued in money, 16 whether received in money or otherwise, including all receipts, cash, 17 credits, and property or services of any kind or nature, including any 18 service or other charge or amount required to be paid as a condition for 19 occupancy, and also any amount for which credit is allowed by the opera- 20 tor or room remarketer to the occupant, without any deduction therefrom 21 whatsoever, whether received by the operator or a room remarketer or 22 another person on behalf of either of them. 23 8. "Permanent resident." Any occupant of any room or rooms in a hotel 24 for at least one hundred eighty consecutive days shall be considered a 25 permanent resident with regard to the period of such occupancy. 26 9. "Commissioner of finance." The commissioner of finance of the city. 27 10. "Comptroller." The comptroller of the city. 28 11. "Tax appeals tribunal." The tax appeals tribunal established by 29 section one hundred sixty-eight of the charter of the preceding munici- 30 pality as it existed January first, nineteen hundred ninety-four. 31 12. "Room remarketer." A person who reserves, arranges for, conveys, 32 or furnishes occupancy, whether directly or indirectly, to an occupant 33 for rent in an amount determined by such room remarketer, directly or 34 indirectly, whether pursuant to a written or other agreement. Such 35 person's ability or authority to reserve, arrange for, convey, or 36 furnish occupancy, directly or indirectly, and to determine rent there- 37 for, shall be the "rights of a room remarketer". A room remarketer is 38 not a permanent resident with respect to a room for which such person 39 has the rights of a room remarketer. 40 § 11-2502 Imposition of tax. a. (1) On and after July first, nineteen 41 hundred seventy until and including August thirty-first, nineteen 42 hundred eighty, there is hereby imposed and there shall be paid a tax 43 for every occupancy of each room in a hotel in the city of Staten Island 44 at the rates set forth in, and determined in accordance with the follow- 45 ing table: 46 If the rent per day for the room is: The tax is: 47 Less than $10 ............................................. $.25 per day 48 $10 or more, but less than $15 ............................ $.50 per day 49 $15 or more, but less than $20 ............................ $.75 per day 50 $20 or more .............................................. $1.00 per day 51 (2) On and after September first, nineteen hundred eighty, there is 52 hereby imposed and there shall be paid a tax for every occupancy of each 53 room in a hotel in the city of Staten Island at the rates set forth in, 54 and determined in accordance with, the following table: 55 If the rent per day for the room is: The tax is: 56 $10 or more, but less than $20 ............................ $.50 per day

S. 8578 1094

1 $20 or more, but less than $30 ........................... $1.00 per day 2 $30 or more, but less than $40 ........................... $1.50 per day 3 $40 or more .............................................. $2.00 per day 4 Where a person occupies a room for less than a full day and pays less 5 than the rent for a full day, the tax shall nevertheless be the same 6 amount as would be due had such person occupied the room for a full day 7 at the rent for a full day. 8 (3) In addition to the tax imposed by paragraph two of this subdivi- 9 sion, there is hereby imposed and there shall be paid a tax for every 10 occupancy of each room in a hotel in the city (A) at the rate of five 11 percent of the rent or charge per day for each such room up to and 12 including August thirty-first, nineteen hundred ninety, (B) at the rate 13 of six percent of the rent or charge per day for each such room on and 14 after September first, nineteen hundred ninety and before December 15 first, nineteen hundred ninety-four, (C) at the rate of five percent of 16 the rent or charge per day for each such room on and after December 17 first, nineteen hundred ninety-four and before March first, two thousand 18 nine, (D) at the rate of five and seven-eighths percent of the rent or 19 charge per day for each such room on and after March first, two thousand 20 nine and before December first, two thousand thirteen, (E) at the rate 21 of five percent of the rent or charge per day for each such room on and 22 after December first, two thousand thirteen and before December twenti- 23 eth, two thousand thirteen, (F) at the rate of five and seven-eighths 24 percent of the rent or charge per day for each such room on and after 25 December twentieth, two thousand thirteen and before December first, two 26 thousand twenty-three, and (G) at the rate of five percent of the rent 27 or charge per day for each such room on and after December first, two 28 thousand twenty-three. 29 (4) (A) When occupancy is provided, for a single consideration, with 30 property, services, amusement charges, or any other items, the separate 31 sale of which is not subject to tax under this chapter, and the rent 32 paid for such occupancy does not qualify for the exemption in this 33 subdivision, the entire consideration shall be treated as rent subject 34 to tax under paragraph one of this subdivision; provided, however, that 35 where the amount of the rent for occupancy is stated separately from the 36 price of such property, services, amusement charges or other items on 37 any sales slip, invoice, receipt, or other statement given the occupant 38 and such rent is reasonable in relation to the value of such property, 39 services, amusement charges, or other items, only such separately stated 40 rent will be subject to tax under this subdivision. (B) In regard to 41 the collection of tax on occupancies by remarketers, when occupancy is 42 provided, for a single consideration, with property, services, amusement 43 charges, or any other items, whether or not such other items are taxa- 44 ble, the rent portion of the consideration for such sale shall be 45 computed as follows: the total consideration for the sale multiplied by 46 a fraction, the numerator of which shall be the consideration paid to 47 the hotel for the occupancy and the denominator of which shall be the 48 consideration paid to the hotel for the occupancy plus the consideration 49 paid to the providers of the other items being sold, or by any other 50 reasonable method pursuant to which the rent portion of consideration 51 would be no less than the computation of rent portion of consideration 52 under subparagraph (A) of this paragraph. Nothing in this subdivision 53 shall be construed to subject to tax or exempt from tax any service or 54 property or amusement charge or other items otherwise subject to tax or 55 exempt from tax under this chapter.

S. 8578 1095

1 (5) A room remarketer shall be allowed a refund or credit against the 2 taxes collected and required to be remitted pursuant to section 11-2505 3 of this chapter in the amount of the tax it paid to the operator of the 4 hotel or another room remarketer under this subdivision. Provided, 5 however, that in order to qualify for a refund or credit under this 6 paragraph with respect to any quarterly period, as described in subdivi- 7 sion a of section 11-2504 of this chapter, the room remarketer must, 8 with respect to such quarter, (A) be registered for hotel room occupancy 9 tax purposes under section 11-2514 of this chapter, and (B) collect the 10 taxes imposed by paragraphs two and three of this subdivision. Subject 11 to the conditions and limitations of this paragraph, the provisions of 12 section 11-2507 of this chapter shall apply to refunds or credits under 13 this paragraph. 14 (6) Where the rent is paid or charged or billed, or falls due on 15 either a weekly, monthly or other term basis, the daily rent upon which 16 the tax is determined shall be the result obtained by dividing the rent 17 for such term by the number of days in such term. Where the rent is for 18 more than one room, including but not limited to a suite of rooms, the 19 daily rent per room upon which tax is determined shall be calculated by 20 multiplying the daily rent for the group of rooms by a fraction, the 21 numerator of which shall be the daily rent for the particular room, or a 22 similar room, when such room is rented alone with similar bath facili- 23 ties, and the denominator of which shall be the total of the daily rent 24 for the individual rooms in the group of rooms, or similar rooms, when 25 such rooms are rented alone with similar bath facilities. In any case in 26 which it is not possible to determine the daily rent per room in the 27 manner described under this paragraph, the commissioner of finance shall 28 prescribe methods for making such determination. 29 b. (1) No tax shall be imposed under this chapter upon a permanent 30 resident. 31 (2) For purposes of this subdivision, an occupant who is eligible to 32 request and has requested a lease pursuant to the provisions of para- 33 graph two of subdivision (a) of section 2522.5 of the rent stabilization 34 regulations promulgated by the division of housing and community renewal 35 of the state of New York, shall tentatively be accorded the status of 36 permanent resident as of the date of such request, notwithstanding that 37 such occupant has not met the one hundred eighty-consecutive-day 38 requirement contained in subdivision eight of section 11-2501 of this 39 chapter as of such date. In the case of such an occupant, the operator 40 or room remarketer shall not collect the taxes imposed by this chapter 41 for any day, commencing with the date such lease is requested, which 42 falls within a period of continuous occupancy by such occupant of a room 43 or rooms in the hotel. Provided, however, if such occupant ceases to 44 occupy a room or rooms in the hotel prior to the completion of one 45 hundred eighty consecutive days of occupancy, any taxes not collected 46 theretofore by reason of the provisions of this paragraph shall become 47 immediately due and payable on the date of cessation of occupancy and 48 shall be collected by the operator or room remarketer from such occu- 49 pant. In the event, however, that the operator or room remarketer is 50 unable to collect such taxes from the occupant, the operator or room 51 remarketer shall not be liable to the city for such taxes. The 52 provisions of this paragraph shall apply with respect to leases 53 requested on or after September first, nineteen hundred ninety. 54 c. No tax shall be imposed under this chapter upon any organization 55 described in subdivision (a) of section eleven hundred sixteen of the 56 tax law to the extent such organization is not subject to the tax

S. 8578 1096

1 imposed under subdivision (e) of section eleven hundred five of the tax 2 law. 3 d. (1) No tax shall be imposed under this chapter upon any person 4 occupying any room or rooms in a hotel solely and directly as a result 5 of such person's involuntary displacement from premises by the attack on 6 the World Trade Center on September eleventh, two thousand one, provided 7 such premises were not subject to the tax imposed by this section or the 8 tax imposed under section eleven hundred seven of the tax law. 9 (2) Where an occupant claims exemption from the tax under the 10 provisions of paragraph one of this subdivision, the rent shall be 11 deemed taxable under this chapter unless the operator shall receive from 12 the occupant claiming such exemption a signed written statement describ- 13 ing the specific circumstances providing the basis for such claim and 14 containing such other information as the commissioner of finance may 15 require. The operator shall retain such statement and provide it to the 16 commissioner of finance upon request. 17 e. Where any corporation, or association, or trust, or community 18 chest, fund or foundation, organized and operated exclusively for reli- 19 gious, charitable, or educational purposes, or for the prevention of 20 cruelty to children or animals, and no part of the net earnings of which 21 inures to the benefit of any private shareholder or individual and no 22 substantial part of the activities of which is carrying on propaganda, 23 or otherwise attempting to influence legislation, carries on its activ- 24 ities in furtherance of any of the purposes for which it was organized, 25 in premises in which, as part of said activities, it operates a hotel, 26 occupancy of rooms in said premises and rents therefrom received by such 27 corporation or association shall not be subject to tax under this chap- 28 ter. Nothing in this subdivision shall be deemed to include an organ- 29 ization operated for the primary purpose of carrying on a trade or busi- 30 ness for profit, whether or not all of its profits are payable to one or 31 more organizations described in this subdivision. 32 f. The tax to be collected shall be stated and charged separately from 33 the rent and shown separately on any record thereof, at the time when 34 the occupancy is arranged or contracted for and charged for and upon 35 every evidence of occupancy or any bill or statement or charge made for 36 said occupancy issued or delivered by the operator or room remarketer. 37 (1) Where an occupant rents a room directly from an operator, the tax 38 shall be paid by the occupant to the operator as trustee for and on 39 account of the city, and the operator shall be liable for the collection 40 of the tax on the rent and for the payment of the tax on the rent. 41 (2) The operator or room remarketer and any officer of any corporate 42 operator or room remarketer shall be personally liable for the portion 43 of the tax collected or required to be collected under this chapter, and 44 the operator shall have the same right in respect to collecting the tax 45 from the occupant, or in respect to nonpayment of the tax by the occu- 46 pant as if the tax were a part of the rent for the occupancy payable at 47 the time such tax shall become due and owing, including all rights of 48 eviction, dispossession, repossession and enforcement of any innkeeper's 49 lien that he or she may have in the event of nonpayment of rent by the 50 occupant; provided however, that the commissioner of finance shall be 51 joined as a party in any action or proceeding brought by the operator to 52 collect or enforce collection of the tax. 53 g. Where the occupant has failed to pay and the operator or room 54 remarketer has failed to collect a tax as imposed by this chapter, then 55 in addition to all other rights, obligations and remedies provided, such 56 tax shall be payable by the occupant directly to the commissioner of

S. 8578 1097

1 finance, and it shall be the duty of the occupant to file a return ther- 2 eof with the commissioner of finance and to pay the tax imposed therein 3 to the commissioner of finance within fifteen days after such tax was 4 due. 5 h. The commissioner of finance may, wherever he or she deems it neces- 6 sary for the proper enforcement of this chapter, provide by regulation 7 that the occupant shall file returns and pay directly to the commission- 8 er of finance the tax imposed by this chapter, at such times as returns 9 are required to be filed and payment over made by the operator or room 10 remarketer. 11 i. The tax imposed by this chapter shall be paid upon any occupancy on 12 and after July first, nineteen hundred seventy, although such occupancy 13 is had pursuant to a contract, lease or other arrangement made prior to 14 such effective date. Where rent is paid, or charged or billed, or falls 15 due on either a weekly, monthly, or other term basis, the rent so paid, 16 charged, billed or falling due shall be subject to the tax imposed by 17 this chapter to the extent that it covers any portion of the period on 18 and after July first, nineteen hundred seventy, and such payment, bill, 19 charge or rent due shall be apportioned on the basis of the ratio of the 20 number of days falling within said period, to the total number of days 21 covered thereby. Where any tax has been paid pursuant to this chapter 22 upon any rent which has been ascertained to be worthless, the commis- 23 sioner of finance may by regulation provide for credit or refund of the 24 amount of such tax upon application therefor as provided in section 25 11-2507 of this chapter. 26 j. For the purpose of the proper administration of this chapter and to 27 prevent evasion of the tax hereby imposed, it shall be presumed that all 28 rents are subject to tax until the contrary is established, and the 29 burden of proving that a rent for occupancy is not taxable under this 30 chapter shall be upon the operator, the room remarketer, or the occu- 31 pant. Where an occupant claims exemption from the tax under the 32 provisions of subdivision c of this section, the rent shall be deemed 33 taxable under this chapter unless the operator or room remarketer shall 34 receive from the occupant claiming such exemption a copy of the exempt 35 organization certificate that is necessary to obtain exemption from the 36 tax imposed under subdivision (e) of section eleven hundred five of the 37 tax law, together with a certificate duly executed by the organization 38 named in such certificate certifying that the occupant is its agent, 39 representative or employee and that his or her occupancy is paid or to 40 be paid by, and is necessary or required in the course of or in 41 connection with the affairs of said organization. 42 k. No operator or room remarketer shall advertise or hold out to the 43 public in any manner, directly or indirectly, that the tax imposed by 44 this chapter is not considered as a mandatory addition to the rent 45 charged to the occupant. 46 1. An occupancy that an operator conveys or furnishes to a room 47 remarketer that the room remarketer intends to convey or furnish, 48 directly or indirectly, to an occupant for rent shall be exempt from the 49 taxes imposed by this section, provided that such room remarketer 50 furnishes the operator with a certificate in such form and containing 51 such information as may be prescribed by the commissioner of finance. 52 The operator shall retain such statement and provide it to the commis- 53 sioner of finance upon request. 54 § 11-2503 Records to be kept. a. Every operator and every room 55 remarketer shall keep records of every occupancy and of all rent paid, 56 charged or due thereon and of the tax payable thereon, in such form as

S. 8578 1098

1 the commissioner of finance may by regulation require. Such records 2 shall be available for inspection and examination at any time upon 3 demand by the commissioner of finance or his or her duly authorized 4 agent or employee and shall be preserved for a period of three years, 5 except that the commissioner of finance may consent to their destruction 6 within that period or may require that they be kept longer. 7 b. Notwithstanding the provisions of sections three hundred five and 8 three hundred nine of the state technology law or any other law, the 9 commissioner may require any person who has elected to maintain in an 10 electronic format any portion of the records required to be maintained 11 by that person under this chapter, to make the electronic records avail- 12 able and accessible to the commissioner, notwithstanding that the 13 records are also maintained in a hard copy format. 14 § 11-2504 Returns. a. Every operator and every room remarketer shall 15 file with the commissioner of finance a return of occupancy and of 16 rents, and of the taxes payable thereon, for the quarterly periods 17 ending on the last day of February, May, August and November of each 18 year. Such returns shall be filed within twenty days after the end of 19 the quarterly period covered thereby. The commissioner of finance may 20 permit or require returns to be made by other periods and upon such 21 dates as he or she may specify. If the commissioner of finance deems it 22 necessary in order to insure the payment of the tax imposed by this 23 chapter, he or she may require returns to be made for shorter periods 24 than those prescribed pursuant to the provisions of this subdivision and 25 upon such dates as he or she may specify. 26 b. The forms of returns shall be prescribed by the commissioner of 27 finance and shall contain such information as he or she may deem neces- 28 sary for the proper administration of this chapter. The commissioner of 29 finance may require amended returns to be filed within twenty days after 30 notice and to contain the information specified in the notice. 31 c. If a return required by this chapter is not filed or if a return 32 when filed is incorrect or insufficient on its face the commissioner of 33 finance shall take the necessary steps to enforce the filing of such a 34 return or a corrected return. 35 § 11-2505 Payment of tax. At the time of filing a return of occupancy 36 and of rents each operator and room remarketer shall pay to the commis- 37 sioner of finance the taxes imposed by this chapter upon the rents 38 required to be included in such return, as well as all other moneys 39 collected by the operator or room remarketer acting or purporting to act 40 under the provisions of this chapter, even though it be judicially 41 determined that the tax collected is invalidly imposed. All the taxes 42 for the period for which a return is required to be filed shall be due 43 from the operator or room remarketer and payable to the commissioner of 44 finance on the date limited for the filing of the return for such peri- 45 od, without regard to whether a return is filed or whether the return 46 which is filed correctly shows the amount of rents and the taxes due 47 thereon. Where the commissioner of finance in his or her discretion 48 deems it necessary to protect revenues to be obtained under this chapter 49 he or she may require any operator or room remarketer required to 50 collect the tax imposed by this chapter to file with him or her a bond, 51 issued by a surety company authorized to transact business in this state 52 and approved by the superintendent of insurance of this state as to 53 solvency and responsibility, in such amount as the commissioner of 54 finance may fix, to secure the payment of any tax or penalties and 55 interest due or which may become due from such operator or room remark- 56 eter. In the event that the commissioner of finance determines that an

S. 8578 1099

1 operator or room remarketer is to file such bond he or she shall give 2 notice to such operator or room remarketer to that effect specifying the 3 amount of the bond required. The operator or room remarketer shall file 4 such bond within five days after the giving of such notice unless within 5 such five days the operator or room remarketer shall request in writing 6 a hearing before the commissioner of finance at which the necessity, 7 propriety and amount of the bond shall be determined by the commissioner 8 of finance. Such determination shall be final and shall be complied with 9 within fifteen days after the giving of notice thereof. In lieu of such 10 bond, securities approved by the commissioner of finance or cash in such 11 amount as he or she may prescribe, may be deposited which shall be kept 12 in the custody of the commissioner of finance who may at any time with- 13 out notice to the depositor apply them to any tax or interest or penal- 14 ties due, and for that purpose the securities may be sold by him or her 15 at public or private sale without notice to the depositor thereof. 16 § 11-2506 Determination of tax. If a return required by this chapter 17 is not filed, or if a return when filed is incorrect or insufficient, 18 the amount of tax due shall be determined by the commissioner of finance 19 from such information as may be obtainable and, if necessary, the tax 20 may be estimated on the basis of external indices, such as number of 21 rooms, location, scale of rents, comparable rents, type of accommo- 22 dations and service, number of employees or other factors. Notice of 23 such determination shall be given to the person liable for the 24 collection and/or payment of the tax. Such determination shall finally 25 and irrevocably fix the tax unless the person against whom it is 26 assessed, within ninety days after giving of notice of such determi- 27 nation, or, if the commissioner of finance has established a concil- 28 iation procedure pursuant to section 11-124 of the code of the preceding 29 municipality and the taxpayer has requested a conciliation conference in 30 accordance therewith, within ninety days from the mailing of a concil- 31 iation decision or the date of the commissioner's confirmation of the 32 discontinuance of the conciliation proceeding, both (1) serves a peti- 33 tion upon the commissioner of finance and (2) files a petition with the 34 tax appeals tribunal for a hearing, or unless the commissioner of 35 finance of his or her own motion shall redetermine the same. Such hear- 36 ing and any appeal to the tax appeals tribunal sitting en banc from the 37 decision rendered in such hearing shall be conducted in the manner and 38 subject to the requirements prescribed by the tax appeals tribunal 39 pursuant to sections one hundred sixty-eight through one hundred seven- 40 ty-two of the charter of the preceding municipality as it existed Janu- 41 ary first, nineteen hundred ninety-four. After such hearing the tax 42 appeals tribunal shall give notice of its decision to the person against 43 whom the tax is assessed. A decision of the tax appeals tribunal 44 sitting en banc shall be reviewable for error, illegality or unconstitu- 45 tionality or any other reason whatsoever by a proceeding under article 46 seventy-eight of the civil practice law and rules if application there- 47 for is made to the supreme court by the person against whom the tax was 48 assessed, within four months after the giving of the notice of such tax 49 appeals tribunal decision. A proceeding under article seventy-eight of 50 the civil practice law and rules shall not be instituted by a person 51 liable for the tax unless: (a) the amount of any tax sought to be 52 reviewed, with penalties and interest thereon, if any, shall be first 53 deposited with the commissioner of finance and there shall be filed with 54 the commissioner of finance an undertaking, issued by a surety company 55 authorized to transact business in this state and approved by the super- 56 intendent of insurance of this state as to solvency and responsibility,

S. 8578 1100

1 in such amount as a justice of the supreme court shall approve, to the 2 effect that if such proceeding be dismissed or the tax confirmed, such 3 person will pay all costs and charges which may accrue in the prose- 4 cution of the proceeding; or (b) at the option of such person such 5 undertaking filed with the commissioner of finance may be in a sum 6 sufficient to cover the taxes, penalties and interest thereon stated in 7 such decision plus the costs and charges which may accrue against it in 8 the prosecution of the proceeding, in which event such person shall not 9 be required to deposit such taxes, penalties and interest as a condition 10 precedent to the application. 11 § 11-2507 Refunds. a. In the manner provided in this section the 12 commissioner of finance shall refund or credit, without interest, any 13 tax, penalty or interest erroneously, illegally or unconstitutionally 14 collected or paid if written application to the commissioner of finance 15 for such refund shall be made within one year from the payment thereof. 16 Whenever a refund or credit is made or denied by the commissioner of 17 finance, he or she shall state his or her reasons therefor and give 18 notice thereof to the taxpayer in writing. Such application may be made 19 by the occupant, operator, room remarketer or other person who has actu- 20 ally paid the tax to the commissioner of finance. Such application may 21 also be made by an operator or room remarketer who has collected and 22 paid over such tax to the commissioner of finance provided that the 23 application is made within one year of the payment by the occupant to 24 the operator or room remarketer, but no actual refund of moneys shall be 25 made to such operator or room remarketer until he or she shall first 26 establish to the satisfaction of the commissioner of finance, under such 27 regulations as the commissioner of finance may prescribe, that he or she 28 has repaid to the occupant the amount for which the application for 29 refund is made. The commissioner of finance may, in lieu of any refund 30 required to be made, allow credit therefor on payments due from the 31 applicant. 32 b. Any determination of the commissioner of finance denying a refund 33 or credit pursuant to subdivision a of this section shall be final and 34 irrevocable unless the applicant for such refund or credit, within nine- 35 ty days from the mailing of notice of such determination, or, if the 36 commissioner of finance has established a conciliation procedure pursu- 37 ant to section 11-124 of the code of the preceding municipality and the 38 applicant has requested a conciliation conference in accordance there- 39 with, within ninety days from the mailing of a conciliation decision or 40 the date of the commissioner's confirmation of the discontinuance of the 41 conciliation proceeding, both (1) serves a petition upon the commission- 42 er of finance and (2) files a petition with the tax appeals tribunal for 43 a hearing. Such petition for a refund or credit, made as provided in 44 this section, shall be deemed an application for a revision of any tax, 45 penalty or interest complained of. Such hearing and any appeal to the 46 tax appeals tribunal sitting en banc from the decision rendered in such 47 hearing shall be conducted in the manner and subject to the requirements 48 prescribed by the tax appeals tribunal pursuant to sections one hundred 49 sixty-eight through one hundred seventy-two of the charter of the 50 preceding municipality as it existed January first, nineteen hundred 51 ninety-four. After such hearing, the tax appeals tribunal shall give 52 notice of its decision to the applicant and to the commissioner of 53 finance. The applicant shall be entitled to review such decision of the 54 tax appeals tribunal sitting en banc by a proceeding pursuant to article 55 seventy-eight of the civil practice law and rules, provided such 56 proceeding is instituted within four months after the giving of the

S. 8578 1101

1 notice of such decision, and provided, in the case of an application by 2 a person liable for the tax, that a final determination of tax was not 3 previously made. Such a proceeding shall not be instituted by a person 4 liable for the tax unless an undertaking is filed with the commissioner 5 of finance in such amount and with such sureties as a justice of the 6 supreme court shall approve to the effect that if such proceeding be 7 dismissed or the tax confirmed, such person will pay all costs and 8 charges which may accrue in the prosecution of such proceeding. 9 c. A person shall not be entitled to a revision, refund or credit 10 under this section of a tax, interest or penalty which had been deter- 11 mined to be due pursuant to the provisions of section 11-2506 of this 12 chapter where he or she has had a hearing or an opportunity for a hear- 13 ing, as provided in said section, or has failed to avail himself or 14 herself of the remedies therein provided. No refund or credit shall be 15 made of a tax, interest or penalty paid after a determination by the 16 commissioner of finance made pursuant to section 11-2506 of this chapter 17 unless it be found that such determination was erroneous, illegal or 18 unconstitutional or otherwise improper, by the tax appeals tribunal 19 after a hearing or of the commissioner of finance's own motion, or, if 20 such tax appeals tribunal affirms in whole or in part the determination 21 of the commissioner of finance, in a proceeding under article seventy- 22 eight of the civil practice law and rules, pursuant to the provision of 23 said section, in which event refund or credit without interest shall be 24 made of the tax, interest or penalty found to have been overpaid. 25 § 11-2508 Reserves. In cases where the occupant, operator or room 26 remarketer has applied for a refund and has instituted a proceeding 27 under article seventy-eight of the civil practice law and rules to 28 review a determination adverse to such occupant, operator or room 29 remarketer on his or her application for refund, the comptroller shall 30 set up appropriate reserves to meet any decision adverse to the city. 31 § 11-2509 Remedies exclusive. The remedies provided by sections 32 11-2506 and 11-2507 of this chapter shall be the exclusive remedies 33 available to any person for the review of tax liability imposed by this 34 chapter; and no determination or proposed determination of tax or deter- 35 mination on any application for refund by the commissioner of finance, 36 nor any decision by the tax appeals tribunal or any of its administra- 37 tive law judges, shall be enjoined or reviewed by an action for declara- 38 tory judgment, and action for money had and received or by any action or 39 proceeding other than, in the case of a decision by the tax appeals 40 tribunal sitting en banc, a proceeding in the nature of a certiorari 41 proceeding under article seventy-eight of the civil practice law and 42 rules; provided, however, that a taxpayer may proceed by declaratory 43 judgment if he or she institutes suit within thirty days after a defi- 44 ciency assessment is made and pays the amount of the deficiency assess- 45 ment to the commissioner of finance prior to the institution of such 46 suit and posts a bond for costs as provided in section 11-2506 of this 47 chapter. 48 § 11-2510 Proceedings to recover tax. a. Whenever any operator or room 49 remarketer or any officer of a corporate operator or room remarketer or 50 any occupant or other person shall fail to collect and pay over any tax 51 and/or to pay any tax, penalty or interest imposed by this chapter as 52 provided, the corporation counsel shall, upon the request of the commis- 53 sioner of finance bring or cause to be brought an action to enforce the 54 payment of the same on behalf of the city of Staten Island in any court 55 of the state of New York or of any other state or of the United States. 56 If, however, the commissioner of finance in his or her discretion

S. 8578 1102

1 believes that any such operator, or room remarketer, officer, occupant 2 or other person is about to cease business, leave the state or remove or 3 dissipate the assets out of which the tax, penalties or interest might 4 be satisfied, and that any such tax, penalty or interest will not be 5 paid when due, he or she may declare such tax, penalty or interest to be 6 immediately due and payable and may issue a warrant immediately. 7 b. As an additional or alternate remedy, the commissioner of finance 8 may issue a warrant, directed to the city sheriff commanding him or her 9 to levy upon and sell the real and personal property of the operator or 10 room remarketer or officer of a corporate operator or room remarketer or 11 of the occupant or other person liable for the tax, which may be found 12 within the city for the payment of the amount thereof, with any penal- 13 ties and interest, and the cost of executing the warrant, and to return 14 such warrant to the commissioner of finance and to pay to him or her the 15 money collected by virtue thereof within sixty days after the receipt of 16 such warrant. The city sheriff shall within five days after the receipt 17 of the warrant file with the county clerk a copy thereof, and thereupon 18 such clerk shall enter in the judgment docket the name of the person 19 mentioned in the warrant and the amount of the tax, penalties and inter- 20 est for which the warrant is issued and the date when such copy is 21 filed. Thereupon the amount of such warrant so docketed shall become a 22 lien upon the title to and interest in real and personal property of the 23 person against whom the warrant is issued. The city sheriff shall then 24 proceed upon the warrant, in the same manner, and with like effect, as 25 that provided by law in respect to executions issued against property 26 upon judgments of a court of record, and for services in executing the 27 warrant such sheriff shall be entitled to the same fees, which he or she 28 may collect in the same manner. In the discretion of the commissioner of 29 finance a warrant of like terms, force and effect may be issued and 30 directed to any officer or employee of the department of finance, and in 31 the execution thereof such officer or employee shall have all the powers 32 conferred by law upon sheriffs, but shall be entitled to no fee or 33 compensation in excess of the actual expenses paid in the performance of 34 such duty. If a warrant is returned not satisfied in full, the commis- 35 sioner of finance may from time to time issue new warrants and shall 36 also have the same remedies to enforce the amount due thereunder as if 37 the city had recovered judgment therefor and execution thereon had been 38 returned unsatisfied. 39 c. Whenever an operator shall make a sale, transfer, or assignment in 40 bulk of any part or the whole of such operator's hotel or of his or her 41 lease, license or other agreement or right to possess or operate such 42 hotel, or of the equipment, furnishings, fixtures, supplies or stock of 43 merchandise, or of the said premises or lease, license or other agree- 44 ment or right to possess or operate such hotel and the equipment, 45 furnishings, fixtures, supplies and stock of merchandise pertaining to 46 the conduct or operation of said hotel, otherwise than in the ordinary 47 and regular prosecution of business, the purchaser, transferee or assig- 48 nee shall at least ten days before taking possession of the subject of 49 said sale, transfer or assignment, or paying therefor, notify the 50 commissioner of finance by registered mail of the proposed sale and of 51 the price, terms and conditions thereof whether or not the seller, 52 transferor or assignor, has represented to, or informed the purchaser, 53 transferee or assignee that it owes any tax pursuant to this chapter, 54 and whether or not the purchaser, transferee or assignee has knowledge 55 that such taxes are owing, and whether any such taxes are in fact owing.

S. 8578 1103

1 Whenever the purchaser, transferee or assignee shall fail to give 2 notice to the commissioner of finance as required by the opening para- 3 graph of this subdivision, or whenever the commissioner of finance shall 4 inform the purchaser, transferee or assignee that a possible claim for 5 such tax or taxes exists, any sums of money, property or choses in 6 action, or other consideration, which the purchaser, transferee or 7 assignee is required to transfer over to the seller, transferor or 8 assignor shall be subject to a first priority right and lien for any 9 such taxes theretofore or thereafter determined to be due from the sell- 10 er, transferor or assignor to the city, and the purchaser, transferee or 11 assignee is forbidden to transfer to the seller, transferor or assignor 12 any such sums of money, property or choses in action to the extent of 13 the amount of the city's claim. For failure to comply with the 14 provisions of this subdivision, the purchaser, transferee or assignee, 15 in addition to being subject to the liabilities and remedies imposed 16 under the provisions of article six of the uniform commercial code, 17 shall be personally liable for the payment to the city of any such taxes 18 theretofore or thereafter determined to be due to the city from the 19 seller, transferor or assignor, and such liability may be assessed and 20 enforced in the same manner as the liability for tax under this chapter. 21 d. The commissioner of finance, if he or she finds that the interests 22 of the city will not thereby be jeopardized, and upon such conditions as 23 the commissioner of finance may require, may release any property from 24 the lien of any warrant or vacate such warrant for unpaid taxes, addi- 25 tions to tax, penalties and interest filed pursuant to subdivision b of 26 this section, and such release or vacating of the warrant may be 27 recorded in the office of any recording officer in which such warrant 28 has been filed. The clerk shall thereupon cancel and discharge as of the 29 original date of docketing the vacated warrant. 30 § 11-2511 General powers of the commissioner of finance. In addition 31 to the powers granted to the commissioner of finance in this chapter, he 32 or she is hereby authorized and empowered: 33 1. To make, adopt and amend rules and regulations appropriate to the 34 carrying out of this chapter and the purposes thereof; 35 2. To extend, for cause shown, the time for filing any return for a 36 period not exceeding thirty days; and to compromise disputed claims in 37 connection with the taxes hereby imposed; 38 3. To request information from the tax commission of the state of New 39 York or the treasury department of the United States relative to any 40 person; and to afford information to such tax commission or such treas- 41 ury department relative to any person, any other provision of this chap- 42 ter to the contrary notwithstanding; 43 4. To delegate his or her functions under this section to a commis- 44 sioner or deputy commissioner in the department of finance or to any 45 employee or employees of the department of finance; 46 5. To prescribe methods for determining the rents for occupancy and to 47 determine the taxable and non-taxable rents; 48 6. To require any operator within the city to keep detailed records of 49 the nature and type of hotel maintained and the nature and type of 50 service rendered, and to require any operator or room remarketer to keep 51 detailed records of the rooms available and rooms occupied daily, leases 52 or occupancy contracts or arrangements, rents received, charged and 53 accrued, the names and addresses of the occupants, whether or not any 54 occupancy is claimed to be subject to the tax imposed by this chapter, 55 and to furnish such information upon request to the commissioner of 56 finance;

S. 8578 1104

1 7. To assess, determine, revise and readjust the taxes imposed under 2 this chapter. 3 § 11-2512 Administration of oaths and compelling testimony. a. The 4 commissioner of finance, his or her employees or agents duly designated 5 and authorized by him or her, the tax appeals tribunal and any of its 6 duly designated and authorized employees or agents shall have power to 7 administer oaths and take affidavits in relation to any matter or 8 proceeding in the exercise of their powers and duties under this chap- 9 ter. The commissioner of finance and the tax appeals tribunal shall 10 have power to subpoena and require the attendance of witnesses and the 11 production of books, papers and documents to secure information perti- 12 nent to the performance of the duties of the commissioner or the tax 13 appeals tribunal under this chapter and of the enforcement of this chap- 14 ter and to examine them in relation thereto, and to issue commissions 15 for the examination of witnesses who are out of the state or unable to 16 attend before such commissioner or tax appeals tribunal or excused from 17 attendance. 18 b. A justice of the supreme court either in court or at chambers shall 19 have power summarily to enforce by proper proceedings the attendance and 20 testimony of witnesses and the production and examination of books, 21 papers and documents called for by the subpoena of the commissioner of 22 finance or the tax appeals tribunal under this chapter. 23 c. Cross-reference; criminal penalties. For failure to obey subpoenas 24 or for testifying falsely, see section 11-4007 of this title; for 25 supplying false or fraudulent information, see section 11-4009 of this 26 title. 27 d. The officers who serve the summons or subpoena of the commissioner 28 of finance or the tax appeals tribunal and witnesses attending in 29 response thereto shall be entitled to the same fees as are allowed to 30 officers and witnesses in civil cases in courts of record, except as 31 otherwise provided under this section. Such officers shall be the city 32 sheriff and his or her duly appointed deputies or any officers or 33 employees of the department of finance or the tax appeals tribunal, 34 designated to serve such process. 35 § 11-2513 Reference to tax. Whenever reference is made in placards 36 or advertisements or in any other publication to this tax, such refer- 37 ence shall be substantially in the following form: "city tax on occupan- 38 cy of hotel rooms", except that in any bill, receipt, statement or other 39 evidence or memorandum of occupancy or rent charge issued or employed by 40 the operator the words "city tax" will suffice. 41 § 11-2514 Registration. By June thirtieth, nineteen hundred seventy, 42 or in the case of operators or room remarketers commencing business or 43 opening new hotels after such date, within three days after such 44 commencement or opening, every operator or room remarketer shall file 45 with the commissioner of finance a certificate of registration in a form 46 prescribed by the commissioner of finance. The commissioner of finance 47 shall within five days after such registration issue without charge to 48 each operator or room remarketer a certificate of authority empowering 49 such operator or room remarketer to collect the tax from the occupant 50 and duplicate thereof for each additional hotel of such operator or room 51 remarketer. Each certificate or duplicate shall state the hotel to 52 which it is applicable. Such certificates of authority shall be promi- 53 nently displayed by the operator or room remarketer in such manner that 54 it may be seen and come to the notice of all occupants and persons seek- 55 ing occupancy. Such certificates shall be non-assignable and nontrans- 56 ferable and shall be surrendered immediately to the commissioner of

S. 8578 1105

1 finance upon the cessation of business at the hotel named or upon its 2 sale or transfer, or upon cessation of business of the named room 3 remarketer. 4 § 11-2515 Interest and penalties. (a) Interest on underpayments. If 5 any amount of tax is not paid or paid over on or before the last date 6 prescribed for payment, without regard to any extension of time granted 7 for payment, interest on such amount at the rate set by the commissioner 8 of finance pursuant to subdivision (g) of this section, or, if no rate 9 is set, at the rate of seven and one-half percent per annum, shall be 10 paid for the period from such last date to the date of payment. In 11 computing the amount of interest to be paid, such interest shall be 12 compounded daily. Interest under this subdivision shall not be paid if 13 the amount thereof is less than one dollar. 14 (b) (1) Failure to file return. (A) In case of failure to file a 15 return under this chapter on or before the prescribed date, determined 16 with regard to any extension of time for filing, unless it is shown that 17 such failure is due to reasonable cause and not due to willful neglect, 18 there shall be added to the amount required to be shown as tax on such 19 return five percent of the amount of such tax if the failure is for not 20 more than one month, with an additional five percent for each additional 21 month or fraction thereof during which such failure continues, not 22 exceeding twenty-five percent in the aggregate. 23 (B) In the case of a failure to file a return of tax within sixty days 24 of the date prescribed for filing of such return, determined with regard 25 to any extension of time for filing, unless it is shown that such fail- 26 ure is due to reasonable cause and not due to willful neglect, the addi- 27 tion to tax under subparagraph (A) of this paragraph shall not be less 28 than the lesser of one hundred dollars or one hundred percent of the 29 amount required to be shown as tax on such return. 30 (C) For purposes of this paragraph, the amount of tax required to be 31 shown on the return shall be reduced by the amount of any part of the 32 tax which is paid on or before the date prescribed for payment of the 33 tax and by the amount of any credit against the tax which may be claimed 34 upon the return. 35 (2) Failure to pay tax shown on return. In case of failure to pay the 36 amount shown as tax on a return required to be filed under this chapter 37 on or before the prescribed date, determined with regard to any exten- 38 sion of time for payment, unless it is shown that such failure is due to 39 reasonable cause and not due to willful neglect, there shall be added to 40 the amount shown as tax on such return one-half of one percent of the 41 amount of such tax if the failure is not for more than one month, with 42 an additional one-half of one percent for each additional month or frac- 43 tion thereof during which such failure continues, not exceeding twenty- 44 five percent in the aggregate. For the purpose of computing the addition 45 for any month the amount of tax shown on the return shall be reduced by 46 the amount of any part of the tax which is paid on or before the begin- 47 ning of such month and by the amount of any credit against the tax which 48 may be claimed upon the return. If the amount of tax required to be 49 shown on a return is less than the amount shown as tax on such return, 50 this paragraph shall be applied by substituting such lower amount. 51 (3) Failure to pay tax required to be shown on return. In case of 52 failure to pay any amount in respect of any tax required to be shown on 53 a return required to be filed under this chapter which is not so shown, 54 including a determination made pursuant to section 11-2506 of this chap- 55 ter, within ten days of the date of a notice and demand therefor, unless 56 it is shown that such failure is due to reasonable cause and not due to

S. 8578 1106

1 willful neglect, there shall be added to the amount of tax stated in 2 such notice and demand one-half of one percent of such tax if the fail- 3 ure is not for more than one month, with an additional one-half of one 4 percent for each additional month or fraction thereof during which such 5 failure continues, not exceeding twenty-five percent in the aggregate. 6 For the purpose of computing the addition for any month, the amount of 7 tax stated in the notice and demand shall be reduced by the amount of 8 any part of the tax which is paid before the beginning of such month. 9 (4) Limitations on additions. 10 (A) With respect to any return, the amount of the addition under para- 11 graph one of this subdivision shall be reduced by the amount of the 12 addition under paragraph two of this subdivision for any month to which 13 an addition applies under both paragraphs one and two. In any case 14 described in subparagraph (B) of paragraph one of this subdivision, the 15 amount of the addition under such paragraph one shall not be reduced 16 below the amount provided in such paragraph. 17 (B) With respect to any return, the maximum amount of the addition 18 permitted under paragraph three of this subdivision shall be reduced by 19 the amount of the addition under paragraph one of this subdivision, 20 determined without regard to subparagraph (B) of such paragraph one, 21 which is attributable to the tax for which the notice and demand is made 22 and which is not paid within ten days of such notice and demand. 23 (c) Underpayment due to negligence. (1) If any part of an underpayment 24 of tax is due to negligence or intentional disregard of this chapter or 25 any rules or regulations related thereto, but without intent to defraud, 26 there shall be added to the tax a penalty equal to five percent of the 27 underpayment. 28 (2) There shall be added to the tax, in addition to the amount deter- 29 mined under paragraph one of this subdivision, an amount equal to fifty 30 percent of the interest payable under subdivision (a) of this section 31 with respect to the portion of the underpayment described in such para- 32 graph one which is attributable to the negligence or intentional disre- 33 gard referred to in such paragraph one, for the period beginning on the 34 last date prescribed by law for payment of such underpayment, determined 35 without regard to any extension, and ending on the date of the assess- 36 ment of the tax, or, if earlier, the date of the payment of the tax. 37 (d) Underpayment due to fraud. (1) If any part of an underpayment of 38 tax is due to fraud, there shall be added to the tax a penalty equal to 39 two times of the underpayment. 40 (2) The penalty under this subdivision shall be in lieu of any other 41 addition to tax imposed by subdivision (b) or (c) of this section. 42 (e) Additional penalty. Any person who, with fraudulent intent, shall 43 fail to pay any tax imposed by this chapter, or to make, render, sign or 44 certify any return, or to supply any information within the time 45 required by or under this chapter, shall be liable for a penalty of not 46 more than one thousand dollars, in addition to any other amounts 47 required under this chapter to be imposed, assessed and collected by the 48 commissioner of finance. The commissioner of finance shall have the 49 power, in his or her discretion, to waive, reduce or compromise any 50 penalty under this subdivision. 51 (f) The interest and penalties imposed by this section shall be paid 52 and disposed of in the same manner as other revenues from this chapter. 53 Unpaid interest and penalties may be enforced in the same manner as the 54 tax imposed by this chapter. 55 (g)(1) Authority to set interest rates. The commissioner of finance 56 shall set the rate of interest to be paid pursuant to subdivision (a) of

S. 8578 1107

1 this section, but if no such rate of interest is set, such rate shall be 2 deemed to be set at seven and one-half percent per annum. Such rate 3 shall be the rate prescribed in paragraph two of this subdivision but 4 shall not be less than seven and one-half percent per annum. Any such 5 rate set by the commissioner of finance shall apply to taxes, or any 6 portion thereof, which remain or become due on or after the date on 7 which such rate becomes effective and shall apply only with respect to 8 interest computed or computable for periods or portions of periods 9 occurring in the period in which such rate is in effect. 10 (2) General rule. The rate of interest set under this subdivision 11 shall be the sum of (i) the federal short-term rate as provided under 12 paragraph three of this subdivision, plus (ii) seven percentage points. 13 (3) Federal short-term rate. For purposes of this subdivision: 14 (A) The federal short-term rate for any month shall be the federal 15 short-term rate determined by the United States secretary of the treas- 16 ury during such month in accordance with subsection (d) of section 17 twelve hundred seventy-four of the internal revenue code for use in 18 connection with section six thousand six hundred twenty-one of the 19 internal revenue code. Any such rate shall be rounded to the nearest 20 full percent, or, if a multiple of one-half of one percent, such rate 21 shall be increased to the next highest full percent. 22 (B) Period during which rate applies. 23 (i) In general. Except as provided in clause (ii) of this subpara- 24 graph, the federal short-term rate for the first month in each calendar 25 quarter shall apply during the first calendar quarter beginning after 26 such month. 27 (ii) Special rule for the month of September, nineteen hundred eight- 28 y-nine. The federal short-term rate for the month of April, nineteen 29 hundred eighty-nine shall apply with respect to setting the rate of 30 interest for the month of September, nineteen hundred eighty-nine. 31 (4) Publication of interest rate. The commissioner of finance shall 32 cause to be published in the City Record, and give other appropriate 33 general notice of, the interest rate to be set under this subdivision no 34 later than twenty days preceding the first day of the calendar quarter 35 during which such interest rate applies. The setting and publication of 36 such interest rate shall not be included within paragraph (a) of subdi- 37 vision five of section one thousand forty-one of the city charter of the 38 preceding municipality as it existed January first, nineteen hundred 39 ninety-four relating to the definition of a rule. 40 (h) Miscellaneous. (1) Officers of a corporate operator or room 41 remarketer and partners in a partnership which is an operator or room 42 remarketer shall be personally liable for the tax collected or required 43 to be collected by such corporation or partnership under this chapter, 44 and subject to the penalties and interest imposed by this section. 45 (2) The certificate of the commissioner of finance to the effect that 46 a tax has not been paid, that a return, bond or registration certificate 47 has not been filed, or that information has not been supplied pursuant 48 to the provisions of this chapter, shall be presumptive evidence there- 49 of. 50 (3) Cross-reference: For criminal penalties, see chapter forty of this 51 title. 52 (i) Any person required to make or maintain records under this chapter 53 who fails to make or maintain or make available to the commissioner 54 these records is subject to a penalty not to exceed one thousand dollars 55 for the first quarterly period or part thereof for which the failure 56 occurs and not to exceed five thousand dollars for each additional quar-

S. 8578 1108

1 terly period or part thereof for which the failure occurs. This penalty 2 is in addition to any other penalty provided for in this chapter but may 3 not be imposed and collected more than once for failures for the same 4 quarterly period or part thereof. If the commissioner determines that a 5 failure to make or maintain or make available records in any quarterly 6 period was entirely due to reasonable cause and not to willful neglect, 7 the commissioner must remit the penalty imposed for that quarterly peri- 8 od. These penalties will be paid and disposed of in the same manner as 9 other revenues from this chapter. These penalties will be determined, 10 assessed, collected, paid and enforced in the same manner as the tax 11 imposed by this chapter, and all the provisions of this chapter relating 12 to tax will be deemed also to apply to the penalties imposed by this 13 subdivision. For purposes of the penalty imposed by this subdivision, a 14 person will be considered to have failed to make or maintain the 15 required records when the commissioner of finance determines that the 16 records made or maintained by that person for a quarterly period do not 17 enable the commissioner to verify occupancy or the amounts received for 18 such occupancy or the taxability of that occupancy and to conduct a 19 complete audit. 20 (j) Any person required to make or maintain records under this chapter 21 who fails to present and make available these records in an auditable 22 form is subject to a penalty not to exceed one thousand dollars for each 23 quarterly period or part thereof for which records maintained by that 24 person are not presented and made available by that person in auditable 25 form, even if these records are adequate to verify credits, receipts, 26 and the taxability thereof and to perform a complete audit. This penal- 27 ty is in addition to any other penalty provided for in this chapter, but 28 will not be imposed and collected more than once for these failures for 29 the same quarterly period or part thereof. If the commissioner deter- 30 mines that any failure described in this subdivision for a quarterly 31 period was entirely due to reasonable cause and not to willful neglect, 32 the commissioner must remit the penalty imposed for that quarter. The 33 penalties imposed by this subdivision will be paid and disposed of in 34 the same manner as other revenues from this chapter. These penalties 35 will be determined, assessed, collected, paid and enforced in the same 36 manner as the tax imposed by this chapter, and all the provisions of 37 this chapter relating to tax will be deemed also to apply to the penal- 38 ties imposed by this subdivision. For purposes of the penalty imposed by 39 this subdivision, a person will be considered to have failed to present 40 and make records available in auditable form when the records presented 41 by that person for that quarter lack sufficient organization, such as by 42 date, invoice number, sales receipts, or sequential numbering, or are 43 otherwise inadequate, without reorganizing, reordering or otherwise 44 rearranging the records into an auditable form, to permit direct recon- 45 ciliation of the receipts, invoices or other source documents with the 46 entries for the quarterly period in the books and records and on the 47 returns of that person. 48 (k) Any person who, having elected to maintain in an electronic format 49 any portion or all of the records he or she is required to make and 50 maintain by this chapter, fails to present and make these records avail- 51 able and accessible to the commissioner in electronic format, is subject 52 to a penalty not to exceed five thousand dollars for each quarterly 53 period or part thereof for which these electronic records are not 54 presented and made available and accessible upon request, notwithstand- 55 ing that the records may also be maintained and available in hard copy 56 format. This penalty is in addition to any other penalty provided for in

S. 8578 1109

1 this chapter, but may not be imposed and collected more than once for a 2 failure for the same quarterly period or part thereof. Provided, howev- 3 er, nothing in this subdivision will prevent the separate imposition, if 4 applicable, of any penalty imposed by subdivision (i) or (j) of this 5 section for the same quarterly period or part thereof. If the commis- 6 sioner determines that the failure to present and make electronically 7 maintained records available and accessible for a quarterly period was 8 entirely due to reasonable cause and not to willful neglect, the commis- 9 sioner must remit the penalty imposed for that quarter. These penalties 10 will be paid and disposed of in the same manner as other revenues from 11 this chapter. These penalties will be determined, assessed, collected, 12 paid and enforced in the same manner as the tax imposed by this chapter, 13 and all the provisions of this chapter relating to tax will be deemed 14 also to apply to the penalty imposed by this subdivision. For purposes 15 of the penalty imposed by this subdivision, a failure to present and 16 make available and accessible a record maintained in electronic format 17 includes not only the denial of access to the requested records that 18 were maintained electronically, but also the failure to make available 19 to the commissioner the information, knowledge, or means necessary to 20 access and otherwise use the electronically maintained records in the 21 inspection and examination of these records. 22 (l) Aiding or assisting in the giving of fraudulent returns, reports, 23 statements or other documents. Any person who, with the intent that tax 24 be evaded, for a fee or other compensation or as an incident to the 25 performance of other services for which that person receives compen- 26 sation, aids or assists in, or procures, counsels, or advises the prepa- 27 ration or presentation under this chapter, or in connection with any 28 matter arising under this chapter, of any return, report, declaration, 29 statement or other document that is fraudulent or false as to any mate- 30 rial matter, or supplies any false or fraudulent information, whether or 31 not such falsity or fraud is with the knowledge or consent of the person 32 authorized or required to present that return, report, declaration, 33 statement or other document, will pay a penalty not exceeding five thou- 34 sand dollars. The definitions in subsection (l) of section one thousand 35 eighty-five of the tax law apply for the purposes of this penalty. 36 (m) False or fraudulent document penalty. Any taxpayer that submits a 37 false or fraudulent document to the department will be subject to a 38 penalty of one hundred dollars per document submitted, or five hundred 39 dollars per tax return submitted. This penalty will be in addition to 40 any other penalty provided by law. 41 § 11-2516 Returns to be secret. a. Except in accordance with proper 42 judicial order, or as otherwise provided by law, it shall be unlawful 43 for the commissioner of finance, any officer or employee of the depart- 44 ment of finance, any person engaged or retained on an independent 45 contract basis, the tax appeals tribunal, any commissioner or employee 46 of such tribunal, or any person who, pursuant to this section, is 47 permitted to inspect any return or to whom a copy, an abstract or a 48 portion of any return is furnished, or to whom any information contained 49 in any return is furnished, to divulge or make known in any manner the 50 rents or other information relating to the business of a taxpayer 51 contained in any return required under this chapter. The officers 52 charged with the custody of such returns shall not be required to 53 produce any of them or evidence of anything contained in them in any 54 action or proceeding in any court, except on behalf of the commissioner 55 of finance in an action or proceeding under the provisions of this chap- 56 ter or on behalf of any party to any action or proceeding under the

S. 8578 1110

1 provisions of this chapter when the returns or facts shown thereby are 2 directly involved in such action or proceeding, in either of which 3 events the court may require the production of, and may admit in 4 evidence, so much of said returns or of the facts shown thereby, as are 5 pertinent to the action or proceeding and no more. Nothing in this 6 section shall be construed to prohibit the delivery to a taxpayer or his 7 or her duly authorized representative of a certified copy of any return 8 filed in connection with his or her tax; nor to prohibit the delivery of 9 such a certified copy of such return or of any information contained in 10 or relating thereto, to the United States of America or any department 11 thereof, to the state of New York or any department thereof, or to any 12 agency or department of the city of Staten Island, provided the same is 13 requested for official business; nor to prohibit the inspection for 14 official business of such returns by the corporation counsel or other 15 legal representatives of the city or by the district attorney of any 16 county within the city; nor to prohibit the publication of statistics so 17 classified as to prevent the identification of particular returns and 18 the items thereof. Returns shall be preserved for three years and ther- 19 eafter until the commissioner of finance permits them to be destroyed. 20 b. (1) Any officer or employee of the city who willfully violates the 21 provisions of subdivision a of this section shall be dismissed from 22 office and be incapable of holding any public office for a period of 23 five years thereafter. 24 (2) Cross-reference: For criminal penalties, see chapter forty of this 25 title. 26 c. This section shall be deemed a state statute for purposes of para- 27 graph (a) of subdivision two of section eighty-seven of the public offi- 28 cers law. 29 d. Notwithstanding anything in subdivision a of this section to the 30 contrary, if a taxpayer has petitioned the tax appeals tribunal for 31 administrative review as provided in section one hundred seventy of the 32 charter of the preceding municipality as it existed January first, nine- 33 teen hundred ninety-four, the commissioner of finance shall be author- 34 ized to present to the tribunal any report or return of such taxpayer, 35 or any information contained therein or relating thereto, which may be 36 material or relevant to the proceeding before the tribunal. The tax 37 appeals tribunal shall be authorized to publish a copy or a summary of 38 any decision rendered pursuant to section one hundred seventy-one of the 39 charter of the preceding municipality as it existed January first, nine- 40 teen hundred ninety-four. 41 § 11-2517 Notices and limitations of time. a. Any notice authorized or 42 required under the provisions of this chapter may be given by mailing 43 the same to the person for whom it is intended in a postpaid envelope 44 addressed to such person at the address given in the last return filed 45 by him or her pursuant to the provisions of this chapter or in any 46 application made by him or her or, if no return has been filed or appli- 47 cation made, then to such address as may be obtainable. The mailing of 48 such notice shall be presumptive evidence of the receipt of the same by 49 the person to whom addressed. Any period of time which is determined 50 according to the provisions of this chapter by the giving of notice 51 shall commence to run from the date of mailing of such notice. 52 b. The provisions of the civil practice law and rules or any other law 53 relative to limitations of time for the enforcement of a civil remedy 54 shall not apply to any proceeding or action taken by the city to levy, 55 appraise, assess, determine or enforce the collection of any tax or 56 penalty provided by this chapter. However, except in the case of a

S. 8578 1111

1 wilfully false or fraudulent return with intent to evade the tax, no 2 assessment of additional tax shall be made after the expiration of more 3 than three years from the date of the filing of a return; provided, 4 however, that where no return has been filed as provided by law the tax 5 may be assessed at any time. 6 c. Where, before the expiration of the period prescribed in this 7 section for the assessment of an additional tax, a taxpayer has 8 consented in writing that such period be extended, the amount of such 9 additional tax due may be determined at any time within such extended 10 period. The period so extended may be further extended by subsequent 11 consents in writing made before the expiration of the extended period. 12 d. If any return, claim, statement, notice, application, or other 13 document required to be filed, or any payment required to be made, with- 14 in a prescribed period or on or before a prescribed date under authority 15 of any provision of this chapter is, after such period or such date, 16 delivered by United States mail to the commissioner of finance, the tax 17 appeals tribunal, bureau, office, officer or person with which or with 18 whom such document is required to be filed, or to which or to whom such 19 payment is required to be made, the date of the United States postmark 20 stamped on the envelope shall be deemed to be the date of delivery. This 21 subdivision shall apply only if the postmark date falls within the 22 prescribed period or on or before the prescribed date for the filing of 23 such document, or for making the payment, including any extension grant- 24 ed for such filing or payment, and only if such document or payment was 25 deposited in the mail, postage prepaid, properly addressed to the 26 commissioner of finance, the tax appeals tribunal, bureau, office, offi- 27 cer or person with which or with whom the document is required to be 28 filed or to which or to whom such payment is required to be made. If any 29 document is sent by United States registered mail, such registration 30 shall be prima facie evidence that such document was delivered to the 31 commissioner of finance, the tax appeals tribunal, bureau, office, offi- 32 cer or person to which or to whom addressed, and the date of registra- 33 tion shall be deemed the postmark date. The commissioner of finance and, 34 where relevant, the tax appeals tribunal are authorized to provide by 35 regulation the extent to which, such provisions with respect to prima 36 facie evidence of delivery and the postmark date, shall apply to certi- 37 fied mail. Except as provided in subdivision f of this section, this 38 subdivision shall apply in the case of postmarks not made by the United 39 States postal service only if and to the extent provided by regulation 40 of the commissioner of finance or, where relevant, the tax appeals 41 tribunal. 42 e. When the last day prescribed under authority of this chapter, 43 including any extension of time, for performing any act falls on a 44 Saturday, Sunday or legal holiday in the state, the performance of such 45 act shall be considered timely if it is performed on the next succeeding 46 day which is not a Saturday, Sunday or legal holiday. 47 f. (1) Any reference in subdivision d of this section to the United 48 States mail shall be treated as including a reference to any delivery 49 service designated by the secretary of the treasury of the United States 50 pursuant to section seventy-five hundred two of the internal revenue 51 code and any reference in subdivision d of this section to a United 52 States postmark shall be treated as including a reference to any date 53 recorded or marked in the manner described in section seventy-five 54 hundred two of the internal revenue code by a designated delivery 55 service. If the commissioner of finance finds that any delivery service 56 designated by such secretary is inadequate for the needs of the city,

S. 8578 1112

1 the commissioner of finance may withdraw such designation for purposes 2 of this title. The commissioner of finance may also designate additional 3 delivery services meeting the criteria of section seventy-five hundred 4 two of the internal revenue code for purposes of this title, or may 5 withdraw any such designation if the commissioner of finance finds that 6 a delivery service so designated is inadequate for the needs of the 7 city. Any reference in subdivision d of this section to the United 8 States mail shall be treated as including a reference to any delivery 9 service designated by the commissioner of finance and any reference in 10 subdivision d of this section to a United States postmark shall be 11 treated as including a reference to any date recorded or marked in the 12 manner described in section seventy-five hundred two of the internal 13 revenue code by a delivery service designated by the commissioner of 14 finance, provided, however any withdrawal of designation or additional 15 designation by the commissioner of finance shall not be effective for 16 purposes of service upon the tax appeals tribunal, unless and until such 17 withdrawal of designation or additional designation is ratified by the 18 president of the tax appeals tribunal. 19 (2) Any equivalent of registered or certified mail designated by the 20 United States secretary of the treasury, or as may be designated by the 21 commissioner of finance pursuant to the same criteria used by such 22 secretary for such designations pursuant to section seventy-five hundred 23 two of the internal revenue code, shall be included within the meaning 24 of registered or certified mail as used in subdivision d of this 25 section. If the commissioner of finance finds that any equivalent of 26 registered or certified mail designated by such secretary or the commis- 27 sioner of finance is inadequate for the needs of the city, the commis- 28 sioner of finance may withdraw such designation for purposes of this 29 title, provided, however, any withdrawal of designation or additional 30 designation by the commissioner of finance shall not be effective for 31 purposes of service upon the tax appeals tribunal, unless and until such 32 withdrawal of designation or additional designation is ratified by the 33 president of the tax appeals tribunal. 34 § 11-2518 Construction and enforcement. This chapter shall be 35 construed and enforced in conformity with chapter one hundred sixty-one 36 of the laws of nineteen hundred seventy, as amended by chapter one 37 hundred sixty-two of the laws of nineteen hundred seventy, pursuant to 38 which it is enacted. 39 § 11-2519 Tourism and convention fund. Notwithstanding any provision 40 of law to the contrary, with respect to the additional tax imposed at 41 the rate of six percent on and after September first, nineteen hundred 42 ninety and before December first, nineteen hundred ninety-four pursuant 43 to subparagraph (B) of paragraph three of subdivision a of section 44 11-2502 of this chapter, four and one-sixth percent of the total reven- 45 ues resulting from the imposition of such tax, including four and one- 46 sixth percent of any interest or penalties thereon, shall be credited to 47 and deposited in a special tourism and convention fund, which shall be 48 used solely for the purpose of promoting tourism and conventions in the 49 city. Seven-eighths of the moneys in such fund shall be made available 50 to the New York Convention and Visitor's Bureau, Inc. pursuant to an 51 annual contract with the city which may specify, among other things, the 52 services which shall be provided by such bureau with such moneys and the 53 content and number of reports which will have to be provided by such 54 bureau to the city concerning the expenditure of such moneys, and 55 provided that the annual budget and business plan of such bureau is 56 approved by the mayor of the city or his or her designee. The remaining

S. 8578 1113

1 one-eighth of the fund shall be spent for promoting tourism and 2 conventions which may include, at the mayor's discretion, moneys spent 3 in connection with additional contracts made with the New York Conven- 4 tion and Visitor's Bureau, Inc. For purposes of this section, the term 5 "promoting tourism and conventions" shall mean developing, placing and 6 purchasing advertising promoting the city, and engaging in such other 7 efforts as are designed to attract tourists and conventions to the city.

8 CHAPTER 26 9 TAX ON MORTGAGES

10 § 11-2601 Imposition of tax. a. A tax of fifty cents for each one 11 hundred dollars and each remaining major fraction thereof of principal 12 debt or obligation which is, or under any contingency may be secured at 13 the date of execution thereof or at any time thereafter by a mortgage on 14 real property situated within the city and recorded on or after August 15 first, nineteen hundred seventy-one and prior to February first, nine- 16 teen hundred eighty-two, is hereby imposed on each such mortgage and 17 shall be collected and paid as provided in this chapter. If the princi- 18 pal debt or obligation which is or by any contingency may be secured by 19 such mortgage is less than one hundred dollars, a tax of fifty cents is 20 hereby imposed on such mortgage, and shall be collected and paid as 21 provided in this chapter. 22 b. With respect to: (1) one, two or three-family houses, individual 23 cooperative apartments and individual residential condominium units, and 24 (2) real property securing a principal debt or obligation of less than 25 five hundred thousand dollars, a tax of fifty cents, and with respect to 26 all other real property a tax of one dollar and twelve and one-half 27 cents, for each one hundred dollars and each remaining major fraction 28 thereof of principal debt or obligation which is, or under any contin- 29 gency may be secured at the date of execution thereof or at any time 30 thereafter by a mortgage on such real property situated within the city 31 and recorded on or after February first, nineteen hundred eighty-two and 32 before July first, nineteen hundred eighty-two, is hereby imposed on 33 each such mortgage and shall be collected and paid as provided in this 34 chapter. If the principal debt or obligation which is or by any contin- 35 gency may be secured by such mortgage is less than one hundred dollars, 36 a tax of one dollar is hereby imposed on such mortgage, and shall be 37 collected and paid as provided in this chapter. 38 c. With respect to: (1) real property securing a principal debt or 39 obligation of less than five hundred thousand dollars, a tax of fifty 40 cents, (2) with respect to one, two or three-family houses, individual 41 cooperative apartments and individual residential condominium units 42 securing a principal debt or obligation of five hundred thousand dollars 43 or more, a tax of sixty-two and one-half cents, and (3) with respect to 44 all other real property, a tax of one dollar and twenty-five cents, for 45 each one hundred dollars and each remaining major fraction thereof of 46 principal debt or obligation which is, or under any contingency may be 47 secured at the date of execution thereof or at any time thereafter by a 48 mortgage on such real property situated within the city and recorded on 49 or after July first, nineteen hundred eighty-two and before August 50 first, nineteen hundred ninety, is hereby imposed on each such mortgage 51 and shall be collected and paid as provided in this chapter. If the 52 principal debt or obligation which is or by any contingency may be 53 secured by such mortgage is less than one hundred dollars, a tax of one

S. 8578 1114

1 dollar is hereby imposed on such mortgage and shall be collected and 2 paid as provided in this chapter. 3 d. With respect to: (1) real property securing a principal debt or 4 obligation of less than five hundred thousand dollars, a tax of one 5 dollar, (2) with respect to one, two or three-family houses and individ- 6 ual residential condominium units securing a principal debt or obli- 7 gation of five hundred thousand dollars or more, a tax of one dollar and 8 twelve and one-half cents, and (3) with respect to all other real prop- 9 erty, a tax of one dollar and seventy-five cents, for each one hundred 10 dollars and each remaining major fraction thereof of principal debt or 11 obligation which is, or under any contingency may be secured at the date 12 of execution thereof, or at anytime thereafter by a mortgage on such 13 real property situated within the city and recorded on or after August 14 first, nineteen hundred ninety, is hereby imposed on each such mortgage 15 and shall be collected and paid as provided in this chapter. If the 16 principal debt or obligation which is or by any contingency may be 17 secured by such mortgage is less than one hundred dollars, a tax of one 18 dollar is hereby imposed on such mortgage and shall be collected and 19 paid as provided in this chapter. 20 e. (1) For the purpose of determining whether a mortgage is subject to 21 the tax imposed by subdivision b or c of this section at a rate in 22 excess of fifty cents, or by subdivision d of this section at a rate in 23 excess of one dollar, for each one hundred dollars and each remaining 24 major fraction thereof of principal debt or obligation, the principal 25 debt or obligation which is or under any contingency may be secured at 26 the date of execution thereof, or at any time thereafter, by such mort- 27 gage shall be aggregated with the principal debt or obligation which is 28 or under any contingency may be secured at the date of execution there- 29 of, or at any time thereafter, by any other mortgage, where such mort- 30 gages form part of the same or related transactions and have the same or 31 related mortgagors. If the commissioner of taxation and finance finds 32 that a mortgage transaction or mortgage transactions have been formu- 33 lated for the purpose of avoiding or evading a rate of tax imposed under 34 this section in excess of the lowest such rate, rather than solely for 35 an independent business or financial purpose, such commissioner shall 36 treat all of the mortgages forming part of such transaction or trans- 37 actions as a single mortgage for the purpose of determining the applica- 38 ble rate of tax. For the purposes of this subdivision, all mortgages 39 having the same or related mortgagors offered for recording within a 40 period of twelve consecutive months shall be presumed to form part of a 41 related transaction, unless clear and convincing evidence is offered to 42 the contrary. The commissioner of taxation and finance may require such 43 affidavits and forms, and may prescribe such rules and regulations, as 44 he or she determines to be necessary to enforce the provisions of this 45 subdivision. 46 (2) The term "related", when used in this subdivision with reference 47 to mortgagors, shall include, but shall not be limited to, the following 48 relationships: 49 (i) members of a family, including spouses, ancestors, lineal descend- 50 ants, and brothers and sisters, whether by the whole or half blood; 51 (ii) a shareholder and a corporation more than fifty percent of the 52 value of the outstanding stock of which is owned or controlled directly 53 or indirectly by such shareholder; 54 (iii) a partner and a partnership more than fifty percent of the capi- 55 tal or profits interest in which is owned or controlled directly or 56 indirectly by such partner;

S. 8578 1115

1 (iv) a beneficiary and a trust more than fifty percent of the benefi- 2 cial interest in which is owned or controlled directly or indirectly by 3 such beneficiary; 4 (v) two or more corporations, partnerships, associations, or trusts, 5 or any combination thereof, which are owned or controlled, either 6 directly or indirectly, by the same person, corporation or other entity, 7 or interests; and 8 (vi) a grantor of a trust and such trust. 9 f. Notwithstanding any provision to the contrary in paragraph (a) of 10 subdivision one of section two hundred fifty-five of the tax law, the 11 taxes imposed by subdivision c or d of this section shall also apply to 12 principal indebtedness or obligation secured by or which under any 13 contingency may be secured by a supplemental instrument or additional 14 mortgage, whether or not there is any new or further indebtedness or 15 obligation other than the principal indebtedness or obligation secured 16 by a recorded primary mortgage, where (1) the supplemental instrument or 17 additional mortgage imposes the lien of a recorded mortgage upon real 18 property situated within the city not previously subject to the mortgage 19 or where an additional mortgage upon such additional property is 20 recorded as additional or substitute security for indebtedness or obli- 21 gation already secured by a recorded mortgage and (2) the recorded 22 primary mortgage was on real property outside the city and recorded 23 without payment of the city tax. 24 § 11-2602 Payment and payment over of taxes. The taxes imposed by 25 this chapter shall be payable on the recording of each mortgage of real 26 property subject to taxes pursuant to such chapter. Such taxes shall be 27 paid to the recording officer of the county in which the real property 28 or any part thereof is situated, except where real property is situated 29 within and without the city, the recording officer of the county in 30 which the mortgage is first recorded shall collect the tax imposed by 31 this chapter, as required by subdivision three of section two hundred 32 fifty-three-a of the tax law. It shall be the duty of such recording 33 officer to indorse upon each mortgage a receipt for the amount of the 34 tax so paid. Any mortgage so endorsed may thereupon or thereafter be 35 recorded by any recording officer and the receipt for such tax indorsed 36 upon each mortgage shall be recorded therewith. The record of such 37 receipt shall be conclusive proof that the amount of tax stated therein 38 has been paid upon such mortgage. Upon the first day of each month the 39 city register and the recording officer of Richmond county shall pay 40 over to the commissioner of finance of the city for credit to the gener- 41 al fund of such city, the balance of the moneys received during the 42 preceding month upon account of taxes paid to him or her as prescribed 43 in this section, after deducting the necessary expenses of his or her 44 office as provided in section two hundred sixty-two of the tax law, 45 except taxes paid upon mortgages which are first to be apportioned by 46 the commissioner of taxation and finance, which taxes and money shall be 47 paid over by him or her as provided by the determination of the said 48 commissioner of taxation and finance, provided, however, in each 49 instance where the tax imposed pursuant to section 11-2601 of this chap- 50 ter is one dollar and twenty-five cents for each one hundred dollars and 51 each remaining major fraction thereof of such principal debt or obli- 52 gation, fifty percent of the total amount of such tax, including fifty 53 percent of any interest or penalties thereon, shall be set aside in a 54 special account by the commissioner of finance, and in each instance 55 where the tax imposed pursuant to that section is one dollar and seven- 56 ty-five cents for each one hundred dollars and each remaining major

S. 8578 1116

1 fraction thereof of such principal debt or obligation, thirty-five and 2 seven-tenths percent of the total amount of such tax, including thirty- 3 five and seven-tenths percent of any interest or penalties thereon, 4 shall also be set aside in such special account. Moneys in such account 5 shall be used for payment by such commissioner to the state comptroller 6 for deposit in the urban mass transit operating assistance account of 7 the mass transportation operating assistance fund of any amount of 8 insufficiency certified by the state comptroller pursuant to the 9 provisions of subdivision six of section eighty-eight-a of the state 10 finance law, and on the fifteenth day of each month, such commissioner 11 shall transmit all funds in such account at the end of the preceding 12 month, except the amount required for the payment of any amount of 13 insufficiency certified by the state comptroller and such amount as he 14 or she deems necessary for refunds and such other amounts necessary to 15 finance the city transportation disabled committee and the city para- 16 transit system as established by section fifteen-b of the transportation 17 law, provided, however, that such amounts shall not exceed six percent 18 of the total funds in the account but in no event be less than two 19 hundred twenty-five thousand dollars beginning April first, nineteen 20 hundred eighty-six, and further that beginning November fifteenth, nine- 21 teen hundred eighty-four and during the entire period prior to operation 22 of such system, the total of such amounts shall not exceed three hundred 23 seventy-five thousand dollars for the administrative expenses of such 24 committee and fifty thousand dollars for the expenses of the agency 25 designated pursuant to paragraph b of subdivision five of such section, 26 and other amounts necessary to finance the operating needs of the 27 private bus companies franchised by the city of Staten Island and eligi- 28 ble to receive state operating assistance under section eighteen-b of 29 the transportation law, provided, however, that such amounts shall not 30 exceed four percent of the total funds in the account, to the New York 31 city transit authority for mass transit within the city. 32 § 11-2603 Manner of administration and collection. The taxes imposed 33 under this chapter shall be administered and collected in the same 34 manner as the taxes imposed under subdivision one of section two hundred 35 fifty-three and subdivision one of section two hundred fifty-five of the 36 tax law. All the provisions of article eleven of the tax law relating 37 to or applicable to the administration and collection of the taxes 38 imposed by subdivision one of section two hundred fifty-three and subdi- 39 vision one of section two hundred fifty-five of the tax law shall apply 40 to the taxes imposed under this chapter with the same force and effect 41 as if those provisions had been set forth in full in this chapter except 42 to the extent that any such provision is either inconsistent with a 43 provision of this chapter or not relevant to the tax imposed by this 44 chapter. For purposes of this chapter any reference in article eleven 45 of the tax law to the tax or taxes imposed by such article shall be 46 deemed to refer to a tax imposed by this chapter, and any reference to 47 the phrase "within this state" shall be read as "within this city" 48 unless a different meaning is clearly required. Whenever real property 49 covered by the mortgage is partly within and partly without the city of 50 Staten Island, the portion of the mortgage taxable under this chapter 51 shall be determined in the manner prescribed in the first paragraph of 52 section two hundred sixty of the tax law where the property without the 53 city is located within the state and, in the manner prescribed in the 54 second paragraph of such section of the tax law, where the property 55 without the city is located without the state.

S. 8578 1117

1 § 11-2604 Tax additional. The tax imposed by this chapter shall be 2 in addition to any taxes imposed by section two hundred fifty-three of 3 the tax law.

4 CHAPTER 27 5 ANNUAL VAULT CHARGE

6 § 11-2701 Definitions. When used in this chapter, the following terms 7 shall mean or include: 8 1. "Person." An individual, partnership, society, association, joint- 9 stock company, corporation, estate, receiver, lessee, trustee, assignee, 10 referee, or any other person acting in a fiduciary or representative 11 capacity, whether appointed by a court or otherwise, and any combination 12 of individuals. 13 2. "Vault." Any subsurface opening, structure or erection, whether or 14 not wholly or partly covered over, to the extent that it extends from 15 the building line into any street of the city, for the erection of which 16 a license fee is required pursuant to the charter of the city or this 17 code. 18 3. "Street." Every public street, avenue, road, alley, lane, highway, 19 boulevard, concourse, parkway, driveway, culvert, sidewalk, crosswalk 20 and viaduct, and every other class of public highway, road, square and 21 place within or belonging to the city. 22 4. "Using, occupying or maintaining." Any right or authority to 23 install, store or maintain property of any kind in a vault, or otherwise 24 to use, occupy or maintain such vault for any purpose whatsoever. Such 25 right or authority shall be deemed to exist wherever a vault has not 26 been filled in or closed by the licensee or abutting property owner and 27 the street restored to its original condition pursuant to the require- 28 ments of the charter of the city or this code. 29 5. "City surveyor." Any person appointed a surveyor of the city of 30 Staten Island pursuant to the code of the city. 31 6. "Owner of the premises immediately adjoining the vault." Any person 32 who is the owner of record of real property located in whole or in part 33 within the city, from which a vault has been extended. 34 7. "Depth." The vertical distance from the ceiling, roof or top of a 35 vault to the floor, bottom or lowest point thereof. 36 8. "City." The city of Staten Island. 37 9. "Comptroller." The comptroller of the city. 38 10. "Commissioner of finance." The commissioner of finance of the 39 city. 40 11. "Return." Any return required to be filed as under this chapter 41 provided. 42 12. "Tax appeals tribunal." The tax appeals tribunal established by 43 section one hundred sixty-eight of the charter of the preceding munici- 44 pality as it existed January first, nineteen hundred ninety-four. 45 § 11-2702 Imposition of charge. (a) In addition to any and all 46 other license fees, charges and taxes, there is hereby imposed and there 47 shall be paid an annual vault charge, beginning as of July first, nine- 48 teen hundred sixty-two, for the privilege of occupying, using or main- 49 taining a vault in the streets of the city, to be paid by the owner of 50 the premises immediately adjoining the vault. 51 (A) For periods prior to July first, nineteen hundred seventy-one such 52 annual vault charges shall be at the following rates: 53 1. On any vault occupying up to two hundred and fifty square feet in 54 plane or surface area but no more than twelve feet in depth, thirty-five

S. 8578 1118

1 cents per square foot but not less than five dollars for the total occu- 2 pancy; 3 2. On any vault occupying more than two hundred fifty square feet in 4 plane or surface area but not more than twelve feet in depth, thirty- 5 five cents per square foot for the first two hundred fifty square feet 6 of an area and sixty cents per square foot for that portion of the area 7 in excess of two hundred fifty square feet; 8 3. On any vault more than twelve feet in depth, an additional charge 9 for each additional ten feet in depth or fraction thereof calculated by 10 adding the plane or surface area for each such additional depth to the 11 area calculated pursuant to subparagraphs one and two and by applying to 12 such total area the same rates as provided in subparagraphs one and two. 13 The additional area for any additional depth of ten feet or fraction 14 thereof shall however, be reduced by ten percent for each foot of depth 15 less than ten feet. 16 (B) For periods beginning on or after July first, nineteen hundred 17 seventy-one and ending on or before May thirty-first, nineteen hundred 18 eighty, such annual vault charges shall be at the following rates: 19 1. On any vault occupying no more than twelve feet in depth, one 20 dollar per square foot of plane or surface area but not less than five 21 dollars for the total occupancy; 22 2. On any vault more than twelve feet in depth, an additional charge 23 for each additional ten feet in depth, or fraction thereof calculated by 24 adding the plane or surface area for each such additional depth to the 25 area calculated pursuant to subparagraph one of this paragraph and by 26 applying to such total area the same rate as provided in subparagraph 27 one of this paragraph. The additional area for any additional depth of 28 ten feet or fraction thereof shall however, be reduced by ten percent 29 for each foot of depth less than ten feet. 30 (C) For periods beginning on or after June first, nineteen hundred 31 eighty such annual vault charge shall be at the following rates: 32 1. On any vault occupying no more than twelve feet in depth, two 33 dollars per square foot of plane or surface area; 34 2. On any vault more than twelve feet in depth, an additional charge 35 for each additional ten feet in depth, or fraction thereof calculated by 36 adding the plane or surface area for each such additional depth to the 37 area calculated pursuant to subparagraph one of this paragraph and by 38 applying to such total area the same rate as provided in subparagraph 39 one of this paragraph. The additional area for any additional depth of 40 ten feet or fraction thereof shall however, be reduced by ten percent 41 for each foot of depth less than ten feet. 42 (D) Notwithstanding any provision of law to the contrary, no annual 43 vault charge or additional charge shall be imposed pursuant to this 44 chapter on or after June first, nineteen hundred ninety-eight. 45 (b) Where the owner of the premises immediately adjoining the vault 46 is exempt from or otherwise not liable for the annual vault charge, the 47 tenant, lessee or any other person using, occupying or maintaining such 48 vault shall be liable therefor. 49 (c) The annual vault charge imposed by this section shall be due from, 50 and shall be paid by, the person who is the owner of the premises imme- 51 diately adjoining the vault on the first day of July of the year for 52 which such charge is imposed except that, on and after June first, nine- 53 teen hundred seventy-two, such charge shall be due from, and shall be 54 paid by the person who is the owner of the premises immediately adjoin- 55 ing the vault on the first day of June of the year for which such charge 56 is imposed. Where the annual vault charge is imposed pursuant to subdi-

S. 8578 1119

1 vision (b) of this section, such annual vault charge shall be due from 2 and paid by, the tenant, lessee or any other person using, occupying or 3 maintaining the vault on the first day of July of the year for which 4 such charge is imposed, except that for years beginning on or after June 5 first, nineteen hundred seventy-two, such charge shall be due from, and 6 paid by, the tenant, lessee or any other person using, occupying or 7 maintaining the vault on the first day of June of the year for which 8 such charge is imposed. 9 (d) In the event that the annual vault charge as imposed by this chap- 10 ter shall be held invalid, then such annual vault charge shall be deemed 11 a tax on the same basis and at the same rates as provided in this chap- 12 ter and all other provisions of this chapter shall be equally applica- 13 ble. 14 (e) Where, prior to the first day of August in any year in which the 15 annual vault charge imposed under this chapter shall be due and payable, 16 if a vault or part thereof is made unavailable for use or occupancy, the 17 annual vault charge paid for such year, pursuant to the provisions of 18 this chapter, shall be refunded in full upon application to and furnish- 19 ing of such proof as the commissioner of finance may require. Where 20 such closing of a vault occurs prior to the last day of December in any 21 such year, fifty percent of the annual vault charge due and actually 22 paid for such year shall be refunded to the payor upon application to 23 and furnishing of such proof as the commissioner of finance may require. 24 Where such closing is limited to a part of a vault, such a refund shall 25 be granted only to the extent that the closing reduces the area of the 26 vault and thereby the amount of the charge for the vault. 27 § 11-2703 Exemptions. The charges imposed by this chapter shall not 28 apply to the following: 29 1. The state of New York, or any public corporation, including a 30 public corporation created pursuant to agreement or compact with another 31 state or the Dominion of Canada, improvement district or other political 32 subdivision of the state; 33 2. The United States of America, insofar as it is immune from taxa- 34 tion; 35 3. The United Nations or other world-wide international organizations 36 of which the United States of America is a member; 37 4. Any corporation, or association, or trust, or community chest, fund 38 or foundation, organized and operated exclusively for religious, chari- 39 table, or educational purposes, or for the prevention of cruelty to 40 children or animals, and no part of the net earnings of which inures to 41 the benefit of any private shareholder or individual and no substantial 42 part of the activities of which is carrying on propaganda, or otherwise 43 attempting to influence legislation; provided, however, that nothing in 44 this subdivision shall include an organization operated for the primary 45 purpose of carrying on a trade or business for profit, whether or not 46 all of its profits are payable to one or more organizations described in 47 this subdivision. 48 5. Any vault constituting property defined as a special franchise in 49 section one hundred two of the real property tax law or assessed as such 50 pursuant to article six of such law. 51 6. Any vault to the extent that it is used, occupied or maintained 52 pursuant to a revocable consent granted pursuant to section three 53 hundred seventy-four of the charter of the preceding municipality as it 54 existed January first, nineteen hundred ninety-four. 55 7. Any vault immediately adjoining a building or structure designed 56 for and used exclusively as a single-family or a two-family dwelling

S. 8578 1120

1 house or any other real property which is classified as class one real 2 property pursuant to section eighteen hundred two of the real property 3 tax law. 4 8. Any street occupancy usable solely and exclusively for the melting 5 of snow and ice, or for delivery into the immediately adjoining prem- 6 ises, of coal, oil or other fuel for the heating thereof. 7 9. Any vault occupying no more than thirty-six square feet in plane or 8 surface area, irrespective of the depth of such vault. 9 § 11-2704 Filing of returns. a. Every person subject to the annual 10 vault charge under this chapter shall, on or before the first day of 11 August, nineteen hundred sixty-two, and on or before the fifteenth day 12 of July of every year thereafter, file with the commissioner of finance 13 a return showing the dimensions of the vault as to length, width and 14 depth, except that the return required to be filed on or before July 15 fifteenth, nineteen hundred seventy-two shall be filed on or before June 16 fifteenth, nineteen hundred seventy-two and those due in later years 17 shall be required to be filed on or before June fifteenth of such years. 18 The commissioner of finance, if he or she deems it necessary to insure 19 adequate information with regard to the proper charge to be imposed, may 20 require information returns from other persons, including the owners of 21 real property regardless of whether a vault has been extended therefrom, 22 the users or lessees of the vault or lessees or tenants of the property 23 adjoining the vault. 24 b. The forms of returns shall be prescribed by the commissioner of 25 finance and shall contain such information as he or she may deem neces- 26 sary for the proper administration of this chapter; and the commissioner 27 of finance or his or her duly authorized agents or employees shall be 28 empowered to require supplemental returns. If a return required by this 29 chapter is not filed or if the return when filed is incorrect or insuf- 30 ficient on its face, the commissioner of finance shall take the neces- 31 sary steps to enforce the filing of such a return or of a corrected 32 return. Upon failure to comply with a notice to furnish a return or a 33 sufficient return, the commissioner of finance may require the filing of 34 a certificate signed by a city surveyor specifying the dimensions of the 35 vault. 36 c. For each annual vault charge year beginning on or after June first, 37 nineteen hundred eighty-nine, the commissioner of finance shall, at 38 least thirty days prior to the commencement of such year, mail to each 39 person who has filed an annual vault charge return for the immediately 40 preceding year an annual vault charge return form on which shall be 41 shown the amount of the charge for such immediately preceding year. Such 42 return form shall be accompanied by instructions which explain in clear 43 and simple terms how to determine the dimensions and extent of street 44 occupancy of a vault, how to calculate the amount of the charge, and 45 such other matters as the commissioner considers necessary or helpful to 46 an understanding of the requirements of this chapter, provided, however, 47 neither the failure of the commissioner to mail such return form and 48 instructions nor the failure of any person to receive the same shall 49 relieve any person of the obligation to file any return required under 50 this section or of liability for the charge, interest or penalties 51 imposed by this chapter. 52 d. If no form or other notice has previously been sent to a person 53 subject to the annual vault charge with respect to the amount of vault 54 charge owed for any year, the commissioner of finance shall notify such 55 person of the amount owed as soon as practicable after discovering that 56 such amount is owed.

S. 8578 1121

1 § 11-2705 Payment of vault charges. a. At the time of filing a return 2 as required by this chapter the person subject to the annual vault 3 charge shall pay to the commissioner of finance the charge imposed by 4 this chapter. Such charge shall be due and payable on the last day on 5 which such return is required to be filed, without regard to whether a 6 return is filed or whether the return which is filed correctly shows the 7 amount due. 8 b. The charge otherwise required to be paid with the return due on or 9 before June fifteenth, nineteen hundred eighty shall be paid in two 10 equal installments as follows: one-half of the charge shall be paid with 11 the return on or before June fifteenth, nineteen hundred eighty, and 12 one-half of the charge shall be paid on or before September fifteenth, 13 nineteen hundred eighty. 14 § 11-2706 Presumption and burden of proof. For the purpose of the 15 proper administration of this chapter and to prevent evasion of the 16 annual vault charge hereby imposed, it shall be presumed, except where 17 the depth of a vault exceeds twelve feet, that the size of the vault as 18 indicated upon the license therefor originally issued by the former 19 borough president of Staten Island up to and including December thirty- 20 first, nineteen hundred sixty-two, and the commissioner of transporta- 21 tion thereafter is a proper measure of the charge until the contrary is 22 established, and the burden of proving that the size of the vault is not 23 accurately stated upon the license shall be upon the person so claiming. 24 In cases where no license of record has been issued for a vault or where 25 the depth of a vault exceeds twelve feet, the burden of proving the 26 actual size of the vault shall be upon the person liable for the vault 27 charge. 28 § 11-2707 Determination of vault charge. If a return required by this 29 chapter is not filed or if a return when filed is incorrect or insuffi- 30 cient, the amount of the vault charge due shall be determined by the 31 commissioner of finance from such information as may be obtainable and, 32 if necessary, the charge may be estimated on the basis of external 33 indices, including but not limited to the records of the department of 34 transportation, the reports of tax assessors, the reports of inspectors 35 and investigators in the offices of the commissioner of finance and 36 commissioner of transportation, or other information or factors. Notice 37 of such determination shall be given to the person liable for the 38 payment thereof. Such determination shall finally and irrevocably fix 39 the vault charge unless the person against whom it is assessed shall, 40 within ninety days after the giving of notice of such determination, or, 41 if the commissioner of finance has established a conciliation procedure 42 pursuant to section 11-124 of the code of the preceding municipality and 43 such person has requested a conciliation conference in accordance there- 44 with, within ninety days from the mailing of a conciliation decision or 45 the date of the commissioner's confirmation of the discontinuance of the 46 conciliation proceeding, both (1) serves a petition upon the commission- 47 er of finance and (2) files a petition with the tax appeals tribunal, or 48 unless the commissioner of finance of his or her own motion shall rede- 49 termine the same. Upon such hearing the tax appeals tribunal may 50 require the filing of a certificate signed by a city surveyor specifying 51 the dimensions of the vault. After such hearing the tax appeals tribu- 52 nal shall give notice of its decision to the person against whom the 53 vault charge is assessed. A decision of the tax appeals tribunal 54 sitting en banc shall be reviewable for error, illegality or unconstitu- 55 tionality or any other reason whatsoever by a proceeding under article 56 seventy-eight of the civil practice law and rules if application there-

S. 8578 1122

1 for is made to the supreme court by the person against whom the vault 2 charge was assessed within four months after the giving of the notice of 3 such tax appeals tribunal decision. A proceeding under article seventy- 4 eight of the civil practice law and rules shall not be instituted by a 5 person against whom the vault charge is assessed unless (a) the amount 6 of any vault charge sought to be reviewed, with penalties and interest 7 thereon, if any, shall be first deposited with the commissioner of 8 finance and there shall be filed with the commissioner of finance an 9 undertaking in such amount and with such sureties as a justice of the 10 supreme court shall approve, to the effect that if such proceeding be 11 dismissed or the vault charge confirmed the person against whom the 12 vault charge is assessed will pay all costs and charges which may accrue 13 in the prosecution of the proceeding, or (b) at the option of such 14 person, such undertaking filed with the commissioner of finance may be 15 in a sum sufficient to cover the vault charge, penalties and interest 16 thereon stated in such decision plus the costs and charges which may 17 accrue against him or her in the prosecution of the proceeding, in which 18 event such person shall not be required to deposit such vault charge, 19 penalties and interest as a condition precedent to the application. 20 § 11-2708 Refunds. a. In the manner provided in this section, the 21 commissioner of finance shall refund or credit, without interest, any 22 vault charge, penalty or interest erroneously, illegally or unconstitu- 23 tionally collected or paid if application to the commissioner of finance 24 for such refund shall be made within one year from the payment thereof. 25 Whenever a refund is made or denied by the commissioner of finance, he 26 or she shall state his or her reason therefor and give notice thereof to 27 the applicant in writing. Such application may be made by the owner of 28 the premises, or other person, who has actually paid the vault charge. 29 The commissioner of finance may, in lieu of any refund required to be 30 made, allow credit therefor on payments due from the applicant. 31 b. Any determination of the commissioner of finance denying a refund 32 or credit pursuant to subdivision a of this section shall be final and 33 irrevocable unless the applicant for such refund or credit, within nine- 34 ty days from the mailing of notice of such determination, or, if the 35 commissioner of finance has established a conciliation procedure pursu- 36 ant to section 11-124 of the code of the preceding municipality and the 37 applicant has requested a conciliation conference in accordance there- 38 with, within ninety days from the mailing of a conciliation decision or 39 the date of the commissioner's confirmation of the discontinuance of the 40 conciliation proceeding, both (1) serves a petition upon the commission- 41 er of finance and (2) files a petition with the tax appeals tribunal for 42 a hearing. Such petition for a refund or credit, made as provided in 43 this section, shall be deemed an application for a revision of any vault 44 charge, penalty or interest complained of. Such hearing and any appeal 45 to the tax appeals tribunal sitting en banc from the decision rendered 46 in such hearing shall be conducted in the manner and subject to the 47 requirements prescribed by the tax appeals tribunal pursuant to sections 48 one hundred sixty-eight through one hundred seventy-two of the charter 49 of the preceding municipality as it existed January first, nineteen 50 hundred ninety-four. After such hearing, the tax appeals tribunal shall 51 give notice of its decision to the applicant and to the commissioner of 52 finance. The applicant shall be entitled to review such decision of the 53 tax appeals tribunal sitting en banc by a proceeding pursuant to article 54 seventy-eight of the civil practice law and rules, provided such 55 proceeding is instituted within four months after the giving of the 56 notice of such decision, and provided, in the case of an application by

S. 8578 1123

1 a person against whom the vault charge is assessed, that a final deter- 2 mination of the vault charge due was not previously made. Such a 3 proceeding shall not be instituted by a person against whom the vault 4 charge is assessed unless an undertaking is filed with the commissioner 5 of finance in such amount and with such sureties as a justice of the 6 supreme court shall approve to the effect that if such proceeding be 7 dismissed or the vault charge confirmed, such person will pay all costs 8 and charges which may accrue in the prosecution of such proceeding. 9 c. A person shall not be entitled to a revision, refund or credit 10 under this section of a vault charge, interest or penalty which had been 11 determined to be due pursuant to the provisions of section 11-2707 of 12 this chapter where he or she has had a hearing or an opportunity for a 13 hearing, as provided in said section, or has failed to avail himself or 14 herself of the remedies therein provided. No refund or credit shall be 15 made of annual vault charge, interest or penalty paid after a determi- 16 nation by the commissioner of finance made pursuant to section 11-2707 17 of this chapter unless it be found that such determination was errone- 18 ous, illegal or unconstitutional or otherwise improper, by the tax 19 appeals tribunal after a hearing or on the commissioner's own motion, 20 or, if such tax appeals tribunal affirms in whole or in part the deter- 21 mination of the commissioner of finance, in a proceeding under article 22 seventy-eight of the civil practice law and rules, pursuant to the 23 provisions of said section, in which event refund or credit without 24 interest shall be made of the vault charge, interest or penalty found to 25 have been overpaid. 26 § 11-2709 Reserves. In cases where the person or persons liable for 27 the vault charge imposed by this chapter has applied for a refund and 28 has instituted a proceeding under article seventy-eight of the civil 29 practice law and rules to review a determination adverse to him or her 30 on his or her application for refund, the comptroller shall set up 31 appropriate reserves to meet any decision adverse to the city. 32 § 11-2710 Remedies exclusive. The remedies provided by sections 33 11-2707 and 11-2708 of this chapter shall be the exclusive remedies 34 available to any person for the review of the liability imposed under 35 this chapter, and no determination or proposed determination of an annu- 36 al vault charge or determination on any application for refund by the 37 commissioner of finance, nor any decision by the tax appeals tribunal or 38 any of its administrative law judges, shall be enjoined or reviewed by 39 an action for declaratory judgment, an action for money had and received 40 or by any action or proceeding other than, in the case of a decision by 41 the tax appeals tribunal sitting en banc, a proceeding in the nature of 42 a certiorari proceeding under article seventy-eight of the civil prac- 43 tice law and rules; provided, however, that a person liable for the 44 annual vault charge may proceed by declaratory judgment if he or she 45 institutes suit within thirty days after a deficiency assessment is made 46 and pays the amount of the deficiency assessment to the commissioner of 47 finance prior to the institution of such suit and posts a bond for costs 48 as provided in section 11-2707 of this chapter. 49 § 11-2711 Proceedings to recover annual vault charge. a. Whenever any 50 person shall fail to pay any vault charge, penalty or interest imposed 51 by this chapter as provided in this chapter, the corporation counsel 52 shall, upon the request of the commissioner of finance bring, or cause 53 to be brought, an action to enforce the payment of the same on behalf of 54 the city of Staten Island in any court of the state of New York or of 55 any other state or of the United States.

S. 8578 1124

1 b. As an additional remedy or as an alternate remedy, the commissioner 2 of finance may issue a warrant, directed to the city sheriff, commanding 3 him or her to levy upon and sell the real and personal property of the 4 person liable for vault charges which may be found within the city for 5 the payment of the amount thereof, with any penalties and interest, and 6 the cost of executing the warrant, and to return such warrant to the 7 commissioner of finance and to pay to him or her the money collected by 8 virtue thereof within sixty days after the receipt of such warrant. The 9 city sheriff shall within five days after the receipt of the warrant 10 file with the county clerk a copy thereof, and thereupon such clerk 11 shall enter in the judgment docket the name of the person mentioned in 12 the warrant and the amount of the vault charge, penalty and interest for 13 which the warrant is issued and the date when such copy is filed. Ther- 14 eupon the amount of such warrant so docketed shall become a lien upon 15 the title to and interest in real and personal property of the person 16 against whom the warrant is issued. The city sheriff shall then proceed 17 upon the warrant in the same manner, and with like effect, as that 18 provided by law in respect to executions issued against property upon 19 judgments of a court of record and for services in executing the warrant 20 he or she shall be entitled to the same fees, which he or she may 21 collect in the same manner. In the discretion of the commissioner of 22 finance a warrant of like terms, force and effect may be issued and 23 directed to an officer or employee of the department of finance, and in 24 the execution thereof such officer or employee shall have all the powers 25 conferred by law upon sheriffs, but shall be entitled to no fee or 26 compensation in excess of the actual expenses paid in the performance of 27 such duty. If a warrant is returned not satisfied in full, the commis- 28 sioner of finance may from time to time issue new warrants and shall 29 also have the same remedies to enforce the amount due thereunder as if 30 the city had recovered judgment therefor and execution thereon had been 31 returned unsatisfied. 32 c. In addition to any other lien provided for in this section, the 33 annual vault charge imposed by this chapter shall become a lien, binding 34 upon the premises immediately adjoining such vault, on the date such 35 charge is required to be paid until the same is paid in full. 36 d. The commissioner of finance, if he or she finds that the interests 37 of the city will not thereby be jeopardized, and upon such conditions as 38 the commissioner of finance may require, may release any property from 39 the lien of any warrant or vacate such warrant for unpaid vault charges, 40 additions to vault charges, penalties and interest filed pursuant to 41 subdivision b of this section, and such release or vacating of the 42 warrant may be recorded in the office of any recording officer in which 43 such warrant has been filed. The clerk shall thereupon cancel and 44 discharge as of the original date of docketing the vacated warrant. 45 § 11-2712 General powers of the commissioner of finance. In addition 46 to all other powers granted to the commissioner of finance in this chap- 47 ter, he or she is hereby authorized and empowered: 48 1. To make, adopt and amend rules and regulations appropriate to the 49 carrying out of this chapter and the purpose thereof; 50 2. To extend, for cause shown, the time for filing any return for a 51 period not exceeding sixty days; and to compromise disputed claims in 52 connection with the vault charges imposed under this chapter; 53 3. To delegate his or her functions under this chapter to a deputy 54 commissioner of finance or any employee or employees of the department 55 of finance;

S. 8578 1125

1 4. To prescribe methods for determining the size, dimensions, depth 2 and extent of street occupancy of a vault; to set forth the manner of 3 computing the vault charges under this chapter; to prescribe standards 4 or methods, by regulation or otherwise, for determining whether a vault 5 has been made unavailable for use or occupancy; and the commissioner of 6 finance or his or her designated employees or agents shall have power to 7 inspect premises for the purpose of determining the extent, if any, of 8 liability imposed by this chapter. 9 5. To require any owner of premises or licensee or other person using, 10 occupying or maintaining a vault to obtain from the commissioner of 11 finance a certificate stating the dimensions and depth of the vault and 12 that the vault charge thereon has been paid and to exhibit the same to 13 duly authorized employees at the premises or real property adjoining the 14 said vault, and to keep such records, and for such length of time, as 15 may be required for the proper administration of this chapter, and to 16 furnish such records to the commissioner of finance upon request; 17 6. To assess, reassess, determine, revise and readjust the vault 18 charges imposed under this chapter; 19 7. Where he or she has exercised his or her authorized power to 20 require the filing of a certificate signed by a city surveyor specifying 21 the dimensions of a vault and the owner of the premises has failed to 22 comply, he or she may obtain such certificate and, in such situation, 23 the necessary expense of obtaining such certificate shall constitute a 24 lien against such premises until paid. 25 8. The commissioner of finance or his or her designated employees or 26 agents shall have power to inspect premises for the purpose of determin- 27 ing the extent, if any, of liability imposed by this chapter. 28 § 11-2713 Administration of oaths and compelling testimony. a. The 29 commissioner of finance, his or her employees duly designated and 30 authorized by the commissioner, the tax appeals tribunal and any of its 31 duly designated and authorized employees shall have power to administer 32 oaths and take affidavits in relation to any matter or proceeding in the 33 exercise of their powers and duties under this chapter. The commissioner 34 of finance and the tax appeals tribunal shall have power to subpoena and 35 require the attendance of witnesses and the production of books, papers 36 and documents to secure information pertinent to the performance of the 37 duties of the commissioner or of the tax appeals tribunal under this 38 chapter and of the enforcement of this chapter and to examine them in 39 relation thereto, and to issue commissions for the examination of 40 witnesses who are out of the state or unable to attend before such 41 commissioner or the tax appeals tribunal or excused from attendance. 42 b. A justice of the supreme court either in court or at chambers shall 43 have power summarily to enforce by proper proceedings the attendance and 44 testimony of witnesses and the production and examination of books, 45 papers and documents called for by the subpoena of the commissioner of 46 finance or the tax appeals tribunal under this chapter. 47 c. Cross-reference; criminal penalties. For failure to obey subpoenas 48 or for testifying falsely, see section 11-4007 of this title; for 49 supplying false or fraudulent information, see section 11-4009 of this 50 title. 51 d. The officers who serve the summons or subpoena of the commissioner 52 of finance or the tax appeals tribunal under this chapter and witnesses 53 attending in response thereto shall be entitled to the same fees as are 54 allowed to officers and witnesses in civil cases in courts of record, 55 except as otherwise provided under this chapter. Such officers shall be 56 the city sheriff and his or her duly appointed deputies or any officers

S. 8578 1126

1 or employees of the department of finance or the tax appeals tribunal, 2 designated to serve such process. 3 § 11-2714 Interest and penalties. (a) Interest on underpayments. If 4 any annual vault charge is not paid on or before the last date 5 prescribed for payment, without regard to any extension of time granted 6 for payment, interest on such amount at the rate set by the commissioner 7 of finance pursuant to subdivision (g) of this section, or, if no rate 8 is set, at the rate of seven and one-half percent per annum, shall be 9 paid for the period from such last date to the date of payment. In 10 computing the amount of interest to be paid, such interest shall be 11 compounded daily. Interest under this subdivision shall not be paid if 12 the amount thereof is less than one dollar. 13 (b) (1) Failure to file return. (A) In case of failure to file a 14 return under this chapter on or before the prescribed date, determined 15 with regard to any extension of time for filing, unless it is shown that 16 such failure is due to reasonable cause and not due to willful neglect, 17 there shall be added to the amount required to be shown as vault charge 18 on such return five percent of the amount of such charge if the failure 19 is for not more than one month, with an additional five percent for each 20 additional month or fraction thereof during which such failure contin- 21 ues, not exceeding twenty-five percent in the aggregate. 22 (B) In the case of a failure to file a vault charge return within 23 sixty days of the date prescribed for filing of such return, determined 24 with regard to any extension of time for filing, unless it is shown that 25 such failure is due to reasonable cause and not due to willful neglect, 26 the addition to the vault charge under subparagraph (A) of this para- 27 graph shall not be less than the lesser of one hundred dollars or one 28 hundred percent of the amount required to be shown as vault charge on 29 such return. 30 (C) For purposes of this paragraph, the amount of vault charge 31 required to be shown on the return shall be reduced by the amount of any 32 part of the charge which is paid on or before the date prescribed for 33 payment of the charge and by the amount of any credit against the charge 34 which may be claimed upon the return. 35 (2) Failure to pay vault charge shown on return. In case of failure to 36 pay the amount shown as vault charge on a return required to be filed 37 under this chapter on or before the prescribed date, determined with 38 regard to any extension of time for payment, unless it is shown that 39 such failure is due to reasonable cause and not due to willful neglect, 40 there shall be added to the amount shown as vault charge on such return 41 one-half of one percent of the amount of such charge if the failure is 42 not for more than one month, with an additional one-half of one percent 43 for each additional month or fraction thereof during which such failure 44 continues, not exceeding twenty-five percent in the aggregate. For the 45 purpose of computing the addition for any month the amount of vault 46 charge shown on the return shall be reduced by the amount of any part of 47 the charge which is paid on or before the beginning of such month and by 48 the amount of any credit against the charge which may be claimed upon 49 the return. If the amount of vault charge required to be shown on a 50 return is less than the amount shown as such charge on such return, this 51 paragraph shall be applied by substituting such lower amount. 52 (3) Failure to pay vault charge required to be shown on return. In 53 case of failure to pay any amount in respect of any vault charge 54 required to be shown on a return required to be filed under this chapter 55 which is not so shown, including a determination made pursuant to 56 section 11-1106 of this title, within ten days of the date of a notice

S. 8578 1127

1 and demand therefor, unless it is shown that such failure is due to 2 reasonable cause and not due to willful neglect, there shall be added to 3 the amount of vault charge stated in such notice and demand one-half of 4 one percent of such charge if the failure is not for more than one 5 month, with an additional one-half of one percent for each additional 6 month or fraction thereof during which such failure continues, not 7 exceeding twenty-five percent in the aggregate. For the purpose of 8 computing the addition for any month, the amount of vault charge stated 9 in the notice and demand shall be reduced by the amount of any part of 10 the charge which is paid before the beginning of such month. 11 (4) Limitations on additions. 12 (A) With respect to any return, the amount of the addition under para- 13 graph one of this subdivision shall be reduced by the amount of the 14 addition under paragraph two of this subdivision for any month to which 15 an addition applies under both paragraphs one and two. In any case 16 described in subparagraph (B) of paragraph one of this subdivision, the 17 amount of the addition under such paragraph one shall not be reduced 18 below the amount provided in such subparagraph. 19 (B) With respect to any return, the maximum amount of the addition 20 permitted under paragraph three of this subdivision shall be reduced by 21 the amount of the addition under paragraph one of this subdivision, 22 determined without regard to subparagraph (B) of such paragraph one, 23 which is attributable to the charge for which the notice and demand is 24 made and which is not paid within ten days of such notice and demand. 25 (c) Underpayment due to negligence. (1) If any part of an underpayment 26 of a vault charge is due to negligence or intentional disregard of this 27 chapter or any rules or regulations pursuant thereto, but without intent 28 to defraud, there shall be added to the charge a penalty equal to five 29 percent of the underpayment. 30 (2) There shall be added to the charge, in addition to the amount 31 determined under paragraph one of this subdivision, an amount equal to 32 fifty percent of the interest payable under subdivision (a) of this 33 section with respect to the portion of the underpayment described in 34 such paragraph one which is attributable to the negligence or inten- 35 tional disregard referred to in such paragraph one, for the period 36 beginning on the last date prescribed by law for payment of such under- 37 payment, determined without regard to any extension, and ending on the 38 date of the assessment of the charge, or, if earlier, the date of the 39 payment of the charge. 40 (d) Underpayment due to fraud. (1) If any part of an underpayment of a 41 vault charge is due to fraud, there shall be added to the charge a 42 penalty equal to fifty percent of the underpayment. 43 (2) There shall be added to the charge, in addition to the penalty 44 determined under paragraph one of this subdivision, an amount equal to 45 fifty percent of the interest payable under subdivision (a) of this 46 section with respect to the portion of the underpayment described in 47 such paragraph one which is attributable to fraud, for the period begin- 48 ning on the last day prescribed by law for payment of such underpayment, 49 determined without regard to any extension, and ending on the date of 50 the assessment of the charge, or, if earlier, the date of the payment of 51 the charge. 52 (3) The penalty under this subdivision shall be in lieu of any other 53 addition to the vault charge imposed by subdivision (b) or (c) of this 54 section. 55 (e) Additional penalty. Any person who, with fraudulent intent, shall 56 fail to pay any vault charge imposed by this chapter, or to make,

S. 8578 1128

1 render, sign or certify any return, or to supply any information within 2 the time required by or under this chapter, shall be liable for a penal- 3 ty of not more than one thousand dollars, in addition to any other 4 amounts required under this chapter to be imposed, assessed and 5 collected by the commissioner of finance. The commissioner of finance 6 shall have the power, in his or her discretion, to waive, reduce or 7 compromise any penalty under this subdivision. 8 (f) The interest and penalties imposed by this section shall be paid 9 and disposed of in the same manner as other revenues from this chapter. 10 Unpaid interest and penalties may be enforced in the same manner as the 11 vault charge imposed by this chapter. 12 (g)(1) Authority to set interest rates. The commissioner of finance, 13 shall set the rate of interest to be paid pursuant to subdivision (a) of 14 this section, but if no such rate of interest is set, such rate shall be 15 deemed to be set at seven and one-half percent per annum. Such rate 16 shall be the rate prescribed in paragraph two of this subdivision but 17 shall not be less than seven and one-half percent per annum. Any such 18 rate set by the commissioner of finance shall apply to vault charges, or 19 any portion thereof, which remain or become due on or after the date on 20 which such rate becomes effective and shall apply only with respect to 21 interest computed or computable for periods or portions of periods 22 occurring in the period in which such rate is in effect. 23 (2) General rule. The rate of interest set under this subdivision 24 shall be the sum of (i) the federal short-term rate as provided under 25 paragraph three of this subdivision, plus (ii) five percentage points. 26 (3) Federal short-term rate. For purposes of this subdivision: 27 (A) The federal short-term rate for any month shall be the federal 28 short-term rate determined by the United States secretary of the treas- 29 ury during such month in accordance with subsection (d) of section 30 twelve hundred seventy-four of the internal revenue code for use in 31 connection with section six thousand six hundred twenty-one of the 32 internal revenue code. Any such rate shall be rounded to the nearest 33 full percent, or, if a multiple of one-half of one percent, such rate 34 shall be increased to the next highest full percent. 35 (B) Period during which rate applies. 36 (i) In general. Except as provided in clause (ii) of this subpara- 37 graph, the federal short-term rate for the first month in each calendar 38 quarter shall apply during the first calendar quarter beginning after 39 such month. 40 (ii) Special rule for the month of September, nineteen hundred eight- 41 y-nine. The federal short-term rate for the month of April, nineteen 42 hundred eighty-nine shall apply with respect to setting the rate of 43 interest for the month of September, nineteen hundred eighty-nine. 44 (4) Publication of interest rate. The commissioner of finance shall 45 cause to be published in the City Record, and give other appropriate 46 general notice of, the interest rate to be set under this subdivision no 47 later than twenty days preceding the first day of the calendar quarter 48 during which such interest rate applies. The setting and publication of 49 such interest rate shall not be included within paragraph (a) of subdi- 50 vision five of section one thousand forty-one of the city charter of the 51 preceding municipality as it existed January first, nineteen hundred 52 ninety-four relating to the definition of a rule. 53 (h) Miscellaneous. (1) The certificate of the commissioner of finance 54 to the effect that a vault charge has not been paid, that a vault has 55 not been licensed, that a return has not been filed, that access has not

S. 8578 1129

1 been allowed, or that information has not been supplied pursuant to the 2 provisions of this chapter, shall be presumptive evidence thereof. 3 (2) Cross-reference: For criminal penalties, see chapter forty of this 4 title. 5 § 11-2715 Notices and limitations of time. a. Any notice authorized 6 or required under the provisions of this chapter may be given to the 7 person for whom it is intended by mailing it in a postpaid envelope 8 addressed to such person at the address given in the return filed by him 9 or her pursuant to the provisions of this chapter or in any application 10 made by him or her or, if no such return has been filed or application 11 made, then to the address of the premises immediately adjoining the 12 vault. The mailing of a notice as in this subdivision provided, shall 13 be presumptive evidence of the receipt of the same by the person to whom 14 addressed. Any period of time which is determined according to the 15 provisions of this chapter by the giving of notice shall commence to run 16 from the date of mailing of such notice as in this subdivision provided. 17 b. The provisions of the civil practice law and rules or any other law 18 relative to limitations of time for the enforcement of a civil remedy 19 shall not apply to any proceeding or action taken by the city to 20 appraise, assess, determine, levy or enforce the collection of any vault 21 charge or penalty provided by this chapter. However, except in the case 22 of a wilfully false or fraudulent return with intent to evade the vault 23 charge, no assessment shall be made after the expiration of more than 24 three years from the date of such return; provided, however, that where 25 no return has been filed as provided by law, the annual vault charge may 26 be assessed at any time. 27 c. Where, before the expiration of the period prescribed in this 28 section for the assessment of an additional vault charge, a person has 29 consented in writing that such period be extended, the amount of such 30 additional vault charge due may be determined at any time within such 31 extended period. The period so extended may be further extended by 32 subsequent consents in writing made before the expiration of the 33 extended period. 34 d. If any return, claim, statement, notice, application, or other 35 document required to be filed, or any payment required to be made, with- 36 in a prescribed period or on or before a prescribed date under authority 37 of any provision of this chapter is, after such period or such date, 38 delivered by United States mail to the commissioner of finance, the tax 39 appeals tribunal, bureau, office, officer or person with which or with 40 whom such document is required to be filed, or to which or to whom such 41 payment is required to be made, the date of the United States postmark 42 stamped on the envelope shall be deemed to be the date of delivery. 43 This subdivision shall apply only if the postmark date falls within the 44 prescribed period or on or before the prescribed date for the filing of 45 such document, or for making the payment, including any extension grant- 46 ed for such filing or payment, and only if such document or payment was 47 deposited in the mail, postage prepaid, properly addressed to the 48 commissioner of finance, the tax appeals tribunal, bureau, office, offi- 49 cer or person with which or with whom the document is required to be 50 filed or to which or to whom such payment is required to be made. If any 51 document is sent by United States registered mail, such registration 52 shall be prima facie evidence that such document was delivered to the 53 commissioner of finance, the tax appeals tribunal, bureau, office, offi- 54 cer or person to which or to whom addressed, and the date of registra- 55 tion shall be deemed the postmark date. The commissioner of finance and, 56 where relevant, the tax appeals tribunal are authorized to provide by

S. 8578 1130

1 regulation the extent to which, such provisions with respect to prima 2 facie evidence of delivery and the postmark date, shall apply to certi- 3 fied mail. This subdivision shall apply in the case of postmarks not 4 made by the United States postal service only if and to the extent 5 provided by regulation of the commissioner of finance or, where rele- 6 vant, the tax appeals tribunal. 7 e. When the last day prescribed under authority of this chapter, 8 including any extension of time, for performing any act falls on a 9 Saturday, Sunday or legal holiday in the state, the performance of such 10 act shall be considered timely if it is performed on the next succeeding 11 day which is not a Saturday, Sunday or legal holiday. 12 § 11-2715.1 Vault charge amnesty program. a. Notwithstanding any other 13 provision of law to the contrary, there is hereby established a nine- 14 month amnesty program, beginning January first, nineteen hundred eight- 15 y-nine and ending September thirtieth, nineteen hundred eighty-nine 16 (hereinafter referred to as the "amnesty period"), for all persons owing 17 the annual vault charge imposed by this chapter. Such amnesty program 18 shall be administered by the commissioner of finance and shall apply to 19 liabilities for annual vault charge years ending prior to June first, 20 nineteen hundred eighty-nine. 21 b. (1) A person seeking amnesty pursuant to this section must, during 22 the amnesty period, file a written application therefor with the commis- 23 sioner of finance, on a form prescribed by the commissioner, and must 24 provide such information as the commissioner may require. In order to 25 qualify for amnesty, such person must pay all annual vault charges for 26 which he or she is liable. Upon payment by such person to the commis- 27 sioner of all such charges as provided in this subdivision, the commis- 28 sioner shall waive any applicable penalties and interest, and no civil, 29 administrative or criminal action or proceeding shall be brought against 30 such person with respect to the charges so paid. In addition, the 31 commissioner shall release the lien binding upon the premises immediate- 32 ly adjoining the vault pursuant to subdivision c of section 11-2711 of 33 this chapter for charges which became payable prior to the time such 34 person acquired title to the premises. Failure to pay all charges as 35 provided in this subdivision shall invalidate any amnesty granted pursu- 36 ant to this section. 37 (2) In the case of any vault adjoining premises owned by a person who 38 (A) prior to January first, nineteen hundred eighty-nine, paid all annu- 39 al vault charges and interest and penalties for which he or she was 40 liable, and (B) is otherwise in full compliance with this chapter, the 41 commissioner of finance shall release the lien binding upon the premises 42 immediately adjoining the vault pursuant to subdivision c of section 43 11-2711 of this chapter for charges which became payable prior to the 44 time such person acquired title to the premises. 45 c. Amnesty shall not be granted to any person subject to the annual 46 vault charge who is a party to any civil litigation which is pending on 47 the date of such person's application in any court of this state or the 48 United States for nonpayment or other delinquency in relation to the 49 annual vault charge. A civil litigation shall not be deemed to be pend- 50 ing if such person withdraws from such litigation prior to the granting 51 of amnesty. 52 d. No refund or credit shall be granted of any penalty or interest 53 paid prior to the time the person subject to the annual vault charge 54 makes a request for amnesty pursuant to subdivision b of this section.

S. 8578 1131

1 e. Unless the commissioner of finance on his or her own motion rede- 2 termines the amount of the annual vault charge, no refund or credit 3 shall be granted of any charges paid under this section. 4 f. The commissioner of finance shall formulate such regulations as are 5 necessary, issue forms and instructions, and take any and all other 6 actions necessary to implement the provisions of this section. Further- 7 more, prior to and throughout the duration of the amnesty period, the 8 commissioner of finance shall implement a plan for prominently announc- 9 ing and explaining the amnesty program. Such plan shall be reasonably 10 calculated to inform all property owners who may be liable for vault 11 charges and may include written announcements sent in tax bills and 12 other mailings done by the city of Staten Island to property owners, 13 public service announcements, advertisements in newspapers of general 14 circulation and notification of community boards. The plan shall 15 include, but not be limited to, information which explains the determi- 16 nation of vault size and charge. 17 § 11-2715.3 Severability. If any clause, sentence, paragraph, section 18 or part of this chapter or the application thereof to any person or 19 circumstance shall for any reason be adjudged by a court of competent 20 jurisdiction to be invalid, such judgment shall not affect, impair or 21 invalidate the remainder of this chapter or the application thereof to 22 other persons or circumstances, but shall be confined in its operation 23 to the clause, sentence, paragraph, section or part thereof directly 24 involved in the controversy in which such judgment shall have been 25 rendered and to the person or circumstance involved. 26 § 11-2716 Construction and enforcement. This chapter shall be 27 construed and enforced in conformity with chapter nine hundred forty- 28 nine of the laws of nineteen hundred sixty-two, pursuant to which it is 29 enacted. 30 § 11-2717 Effective date. This chapter shall take effect July first, 31 nineteen hundred sixty-two and shall remain in effect so long as the 32 power of the city to adopt such laws for revenue purposes shall exist.

33 CHAPTER 28 34 CLAIMS AGAINST FIRE INSURANCE PROCEEDS

35 § 11-2801 Claims against fire insurance proceeds. Definitions. 1. As 36 used in this chapter, any inconsistent provision of law notwithstanding, 37 the following terms shall have the following meanings: 38 (a) "Commissioner" means the commissioner of finance. 39 (b) "Real property" means property upon which there is erected any 40 residential, commercial or industrial building or structure except a one 41 or two family residential structure. 42 (c) "Lien" means any lien including liens for taxes, special ad valo- 43 rem levies, special assessments and municipal charges arising by opera- 44 tion of law against property in favor of the city and remaining undisc- 45 harged for a period of one year or more. 46 (d) "Board" means the board created by subdivision five of this 47 section. 48 (e) "Special lien" means a lien upon fire insurance proceeds pursuant 49 to this chapter and chapter seven hundred thirty-eight of the laws of 50 nineteen hundred seventy-seven. 51 (f) "Fund" means the fire insurance proceeds fund created pursuant to 52 subdivision ten of this section. 53 2. The commissioner shall file a notice of intention to claim against 54 the proceeds of fire insurance policies pursuant to section twenty-two

S. 8578 1132

1 of the general municipal law with the state superintendent of insurance 2 for entry in the index of liens maintained by him or her as provided in 3 section three hundred thirty-one of the insurance law. 4 3. Prior to the payment of any proceeds of a policy of insurance for 5 damages caused by fire to real property, which policy insures the inter- 6 est of an owner and is issued on real property located within the city, 7 and following notification to the commissioner by an insurer of the 8 filing of a claim for payment of such proceeds, the commissioner shall 9 claim, by serving a certificate of lien, against such proceeds to the 10 extent of any lien, including interest and penalties to the date of the 11 claim, thereon, which claim when made and perfected in the manner 12 provided for in section twenty-two of the general municipal law and 13 section three hundred thirty-one of the insurance law, shall constitute 14 a special lien against such proceeds and shall, as to such proceeds, be 15 prior to all other liens and claims except the claim of a mortgagee of 16 record named in such policy. Notice of the service of the certificate 17 of the special lien shall be given to the insured by certified mail. 18 4. The provisions of this chapter shall not be deemed or construed to 19 alter or impair the right of the city to acquire or enforce any lien 20 against property but shall be in addition to any other power provided by 21 law to acquire or enforce such right. 22 5. The fire insurance proceeds claims board is hereby established to 23 administer the provisions of subdivisions six through thirteen of this 24 section. The board shall consist of the first deputy mayor, who shall 25 be chairperson, the commissioner of buildings, the commissioner of hous- 26 ing preservation and development, and the commissioner of finance, each 27 of whom shall have the power to designate an alternate to represent him 28 or her at board meetings with all the rights and powers, including the 29 right to vote, reserved to all board members, provided that such desig- 30 nation shall be in writing to the chairperson. So far as practicable and 31 subject to the approval of the mayor, the services of all other city 32 departments and agencies shall be made available by their respective 33 heads to the board for the carrying out of its functions. Each member 34 shall serve without additional compensation except for expenses actually 35 incurred. 36 6. Whenever the proceeds of policy of fire insurance which will be or 37 has been paid to the city instead of an insured, all or part of such 38 proceeds may be paid or released to the insured if the insured satisfies 39 the board that the affected premises have been or will be repaired or 40 restored, that such repairs or restoration are in the public interest, 41 and the insured is issued and complies with a certificate of the board 42 pursuant to this chapter. To secure such payment or release of proceeds 43 the insured must notify the board within forty-five days after the mail- 44 ing to the insured of a notice of the service of the certificate of 45 special lien pursuant to subdivision three of this section, of the 46 intention to restore or repair the affected premises and must file with 47 the board a completed application with all required supporting documen- 48 tation pursuant to subdivision seven of this section within sixty days 49 thereafter, unless the board grants an extension for a stated period of 50 time. 51 7. The release or return to the insured of any amounts to which he or 52 she or it would otherwise be entitled to claim shall be subject to the 53 following conditions: 54 (a) Such release or return shall be subject to the repair or restora- 55 tion of the affected premises, in accordance with applicable building

S. 8578 1133

1 laws, to the condition it was in prior to the time the lien of the city 2 arose, or to an improved condition. 3 (b) The insured shall file with the board an application in affidavit 4 form, with such supporting documentation as the board shall require, 5 containing the following: 6 (i) A complete description of the nature and extent of the damage to 7 the insured premises and of the condition of the premises prior to the 8 time the lien of the city arose; 9 (ii) A complete description of the nature of the repairs or restora- 10 tion to be undertaken and the cost thereof; 11 (iii) A statement as to the source of funds needed to complete such 12 repairs or restoration if the insurance proceeds are not sufficient 13 therefor; 14 (iv) The name and address of each contractor who will effect such 15 repairs or restoration; 16 (v) An estimated time schedule showing how long the repairs or resto- 17 ration, and each phase thereof, will take; and 18 (vi) Such other information as may be required by the board to enable 19 it to determine whether the repairs or restoration are in the public 20 interest and will be or have been timely and properly made. 21 (c) Upon a preliminary approval by the board of an application pursu- 22 ant to paragraph (b) of this subdivision, the board may issue a certif- 23 icate, to be signed by the chairperson or his or her designee; evidenc- 24 ing the right of release to the insured of amounts representing 25 insurance proceeds, upon such conditions as may be set forth therein. 26 The repairs or restoration required by the board shall be completed in 27 compliance with the terms and conditions of the certificate prior to the 28 release or return of any part of the insurance proceeds, provided howev- 29 er that the board may, upon the written request of the insured and in 30 its sole discretion, approve a prior release of such proceeds or a 31 portion thereof, in a lump sum or in installments, where the insured 32 certifies and demonstrates that such release is required to permit such 33 repairs or restoration to go forward. Any such insurance proceeds 34 released or returned prior to the completion of the repairs or restora- 35 tion required by the board may be paid directly to the contractor or 36 contractors responsible for making such repairs or restoration. Such 37 payment shall, to the extent thereof, release the board from further 38 liability to the insured. 39 8. If the insured: (i) fails to notify the city of his or her or its 40 intention to repair or restore the affected premises as required in 41 subdivision six of this section, (ii) fails to file a completed applica- 42 tion pursuant to this chapter, or (iii) fails to obtain a certificate 43 from the board or comply therewith within the time set forth, the right 44 of the insured to assert a claim against the insurance proceeds, except 45 to the extent they exceed the amount of the lien, shall terminate. 46 9. Until such termination, any insurance proceeds received by the city 47 shall be deposited in a special fund and shall be retained therein. 48 Upon termination of the insured's right to claim against the proceeds, 49 the proceeds and any interest accrued thereon shall be applied to the 50 liens affecting the premises in a manner determined by the board and may 51 be transferred to the general fund. 52 10. There shall be established in the office of the commissioner a 53 fund for the deposit of fire insurance proceeds to be held and applied 54 in accordance with this chapter. Such funds shall not be held together 55 with the general tax levies in the general fund.

S. 8578 1134

1 11. The lien or liens against the affected premises upon which the 2 special lien against proceeds is based shall continue in full force and 3 effect except to the extent that such lien or liens are or have been 4 paid. 5 12. The board may, pursuant to this chapter, release, compromise or 6 adjust the special lien upon insurance proceeds created by this chapter. 7 Any certificate issued by such board pursuant to this chapter shall be 8 for the purpose of preserving and evidencing the right of release of the 9 special lien created by this chapter, shall be subject solely to the 10 provisions of this chapter, and shall not be deemed to be a contract 11 subject to city regulation. Any repair or restoration performed in 12 anticipation of a release of insurance proceeds shall not be deemed to 13 be a public work or municipal project nor to have been done pursuant to 14 a municipal contract. 15 13. The board shall be empowered to promulgate rules and regulations 16 and to adopt approved forms to be used by applicants.

17 CHAPTER 40 18 CRIMES AND OTHER OFFENSES: SEIZURES AND FORFEITURES

19 § 11-4001 Definitions. (a) As used in this chapter, the term "person" 20 shall include, but shall not be limited to, an individual, corporation 21 (including a dissolved corporation), partnership, association, trust or 22 estate. 23 (b) As used in this chapter, the term "person" shall also include an 24 officer, employee or agent of a corporation; a member, employee or agent 25 of a partnership or association; an employee or agent of an individual 26 proprietorship; an employee or agent of an estate or trust; or a fiduci- 27 ary. 28 (c) As used in this chapter, the term "felony" and the term "misdemea- 29 nor" shall have the same meaning as they have in the penal law, and the 30 disposition of such offenses and the sentences imposed therefor shall be 31 as provided in such law, except: (1) notwithstanding the provisions of 32 paragraph a of subdivision one of section 80.00 and paragraph (a) of 33 subdivision one of section 80.10 of the penal law relating to the fine 34 for a felony, the court may impose a fine not to exceed the greater of 35 double the amount of the underpaid tax liability resulting from the 36 commission of the crime or fifty thousand dollars, or, in the case of a 37 corporation the fine may not exceed the greater of double the amount of 38 the underpaid tax liability resulting from the commission of the crime 39 or two hundred fifty thousand dollars, and (2) notwithstanding the 40 provisions of subdivision one of section 80.05 and paragraph (b) of 41 subdivision one of section 80.10 of the penal law relating to the fine 42 for a class A misdemeanor, the court may impose a fine not to exceed ten 43 thousand dollars, except that in the case of a corporation the fine may 44 not exceed twenty thousand dollars. 45 (d) As used in this chapter: 46 (1) "city" shall mean the city of Staten Island; and 47 (2) "state" shall mean the state of New York. 48 § 11-4002 Tax fraud acts. (a) As used in this chapter, "tax fraud act" 49 means willfully engaging in an act or acts or willfully causing another 50 to engage in an act or acts pursuant to which a person: 51 (1) fails to make, render, sign, certify, or file any return or report 52 required under the provisions of any designated chapter of this title or 53 any rule or regulation promulgated thereunder within the time required

S. 8578 1135

1 by or under the provisions of any designated chapter of this title or 2 such rule or regulation; 3 (2) knowing that a return, report, statement or other document under 4 any designated chapter of this title contains any materially false or 5 fraudulent information, or omits any material information, files or 6 submits that return, report, statement or document with the city or the 7 state, or with any public office or public officer of the city or the 8 state; 9 (3) knowingly supplies or submits materially false or fraudulent 10 information in connection with any return, audit, investigation, or 11 proceeding or fails to supply information within the time required by or 12 under the provisions of any designated chapter of this title or any rule 13 or regulation promulgated under any designated chapter of this title; 14 (4) engages in any scheme to defraud the city or the state or a 15 government instrumentality of the city or of the state by false or frau- 16 dulent pretenses, representations or promises as to any material matter, 17 in connection with any tax imposed under any designated chapter of this 18 title or any matter under any designated chapter of this title; 19 (5) fails to remit any tax collected in the name of the city or the 20 state or on behalf of the city or the state when such collection is 21 required under any designated chapter of this title; 22 (6) fails to collect any tax required to be collected under chapter 23 twelve, thirteen, twenty-three-A, twenty-three-B or twenty-five of this 24 title; 25 (7) with intent to evade any tax imposed under any designated chapter 26 of this title, fails to pay such tax; or 27 (8) issues an exemption certificate, interdistributor sales certif- 28 icate, resale certificate, or any other document capable of evidencing a 29 claim that taxes imposed under a designated chapter of this title do not 30 apply to a transaction, which he or she does not believe to be true and 31 correct as to any material matter, which omits any material information, 32 or which is false, fraudulent, or counterfeit. 33 (b) For purposes of this section, the term "willfully" shall mean 34 acting with either intent to defraud, intent to evade the payment of 35 taxes or intent to avoid a requirement of this title, a lawful require- 36 ment of the commissioner or a known legal duty. 37 (c) For purposes of this chapter, the term "designated chapter" shall 38 mean chapter five, six, seven, eight, nine, eleven, twelve, thirteen, 39 fourteen, fifteen, twenty-one, twenty-two, twenty-three-A, twenty-four, 40 twenty-five or twenty-seven of this title. 41 § 11-4003 City criminal tax fraud in the fifth degree. A person 42 commits city criminal tax fraud in the fifth degree when he or she 43 commits a tax fraud act. City criminal tax fraud in the fifth degree is 44 a class A misdemeanor. 45 § 11-4004 City criminal tax fraud in the fourth degree. A person 46 commits city criminal tax fraud in the fourth degree when he or she 47 commits a tax fraud act or acts and, with the intent to evade any tax 48 due under any designated chapter of this title, or to defraud the city 49 or the state or any instrumentality of the city or the state, the person 50 pays the city or the state or any public office or public officer of the 51 city or the state or any instrumentality of the city or state, whether 52 by means of underpayment or receipt of refund or both, in a period of 53 not more than one year in excess of three thousand dollars less than the 54 tax liability that is due. City criminal tax fraud in the fourth degree 55 is a class E felony.

S. 8578 1136

1 § 11-4005 City criminal tax fraud in the third degree. A person 2 commits city criminal tax fraud in the third degree when he or she 3 commits a tax fraud act or acts and, with the intent to evade any tax 4 due under any designated chapter of this title, or to defraud the city 5 or the state or any instrumentality of the city or the state, the person 6 pays the city or the state or any public office or public officer of the 7 city or the state or any instrumentality of the city or state, whether 8 by means of underpayment or receipt of refund or both, in a period of 9 not more than one year in excess of ten thousand dollars less than the 10 tax liability that is due. City criminal tax fraud in the third degree 11 is a class D felony. 12 § 11-4006 City criminal tax fraud in the second degree. A person 13 commits city criminal tax fraud in the second degree when he or she 14 commits a tax fraud act or acts and, with the intent to evade any tax 15 due under any designated chapter of this title, or to defraud the city 16 or the state or any instrumentality of the city or the state, the person 17 pays the city or the state or any public office or public officer of the 18 city or the state or any instrumentality of the city or state, whether 19 by means of underpayment or receipt of refund or both, in a period of 20 not more than one year in excess of fifty thousand dollars less than the 21 tax liability that is due. City criminal tax fraud in the second degree 22 is a class C felony. 23 § 11-4007 City criminal tax fraud in the first degree. A person 24 commits city criminal tax fraud in the first degree when he or she 25 commits a tax fraud act or acts and, with the intent to evade any tax 26 due under any designated chapter of this title, or to defraud the city 27 or the state or any instrumentality of the city or the state, the person 28 pays the city or the state or any public office or public officer of the 29 city or the state or any instrumentality of the city or state, whether 30 by means of underpayment or receipt of refund or both, in a period of 31 not more than one year in excess of one million dollars less than the 32 tax liability that is due. City criminal tax fraud in the first degree 33 is a class B felony. 34 § 11-4008 Aggregation. For purposes of this chapter, the payments due 35 and not paid under any designated chapter of this title pursuant to a 36 common scheme or plan or due and not paid, within one year, may be 37 charged in a single count, and the amount of underpaid tax liability 38 incurred, within one year, may be aggregated in a single count. 39 § 11-4009 Non-preemption; penal law anticipatory offenses and accesso- 40 rial liability apply. (a) Unless expressly stated otherwise, the penal- 41 ties provided in this chapter or under any other chapter of this title 42 shall not preclude prosecution for any offense under the penal law or 43 any other criminal statute. 44 (b) The offenses specified in title G of the penal law and the 45 provisions of article twenty of the penal law are applicable to all 46 offenses defined in this chapter. 47 § 11-4010 Failure to obey subpoenas; false testimony. (a) Any person 48 who, being duly subpoenaed, pursuant to chapter five, six, seven, eight, 49 nine, eleven, twelve, thirteen, fourteen, fifteen, twenty-one, twenty- 50 two, twenty-four, twenty-five or twenty-seven of this title or the 51 provisions of the civil practice law and rules, in connection with a 52 matter arising under any of such chapters, to attend as a witness or to 53 produce books, accounts, records, memoranda, documents or other papers, 54 (i) fails or refuses to attend without lawful excuse, (ii) refuses to be 55 sworn, (iii) refuses to answer any material and proper question, or (iv) 56 refuses, after reasonable notice, to produce books, papers and documents

S. 8578 1137

1 in his or her possession or under his or her control which constitute 2 material and proper evidence shall be guilty of a misdemeanor. 3 (b) Any person who shall testify falsely in any material matter pend- 4 ing before the commissioner of finance with respect to any of the chap- 5 ters specified in subdivision (a) of this section shall be guilty of and 6 punishable for perjury. 7 § 11-4011 Failure to file bond. Any person willfully failing to file a 8 bond where such filing is required pursuant to section 11-1203, 11-1304 9 or 11-2505 of this title shall be guilty of a misdemeanor. (a) Any 10 person who willfully attempts in any manner to evade or defeat any tax 11 imposed by chapter thirteen of this title or payment thereof where such 12 tax is unpaid on ten thousand cigarettes or more or has previously been 13 convicted two or more times of a crime set forth in this chapter relat- 14 ing to cigarette taxes; shall be guilty of a class E felony. 15 (b) Any person, other than an agent so authorized by the commissioner 16 of finance, who possesses or transports for the purpose of sale any 17 unstamped or unlawfully stamped packages of cigarettes subject to tax 18 under chapter thirteen of this title, or who sells or offers for sale 19 unstamped or unlawfully stamped packages of cigarettes in violation of 20 the provisions of such chapter shall be guilty of a misdemeanor. Any 21 person who violates the provisions of this subdivision after having 22 previously been convicted of a violation of this subdivision within the 23 preceding five years shall be guilty of a class E felony. 24 (c) (1) Any person, other than an agent so authorized by the commis- 25 sioner of finance, who willfully possesses or transports for the purpose 26 of sale ten thousand or more cigarettes subject to the tax imposed by 27 chapter thirteen of this title in any unstamped or unlawfully stamped 28 packages or who willfully sells or offers for sale ten thousand or more 29 cigarettes in any unstamped or unlawfully stamped packages in violation 30 of such chapter shall be guilty of a class E felony. 31 (2) Any person, other than an agent appointed by the commissioner of 32 finance, who willfully possesses or transports for the purpose of sale 33 thirty thousand or more cigarettes subject to the tax imposed by chapter 34 thirteen of this title in any unstamped or unlawfully stamped packages 35 or who willfully sells or offers for sale thirty thousand or more ciga- 36 rettes in any unstamped or unlawfully stamped packages in violation of 37 such chapter shall be guilty of a class D felony. 38 (d) For the purposes of this section, the possession or transportation 39 within this city by any person, other than an agent, at any one time of 40 five thousand or more cigarettes in unstamped or unlawfully stamped 41 packages shall be presumptive evidence that such cigarettes are 42 possessed or transported for the purpose of sale and are subject to the 43 tax imposed by chapter thirteen of this title. With respect to such 44 possession or transportation, any provisions of chapter thirteen of this 45 title providing for a time period during which a use tax imposed by such 46 chapter may be paid on unstamped cigarettes or unlawfully or improperly 47 stamped cigarettes or during which such cigarettes may be returned to an 48 agent shall not apply. The possession within this city of more than four 49 hundred cigarettes in unstamped or unlawfully stamped packages by any 50 person other than an agent at any one time shall be presumptive evidence 51 that such cigarettes are subject to tax as provided by chapter thirteen 52 of this title. 53 (e) Nothing in this section shall apply to common or contract carriers 54 or warehouseman while engaged in lawfully transporting or storing 55 unstamped packages of cigarettes as merchandise, nor to any employee of 56 such carrier or warehouseman acting within the scope of his employment,

S. 8578 1138

1 nor to public officers or employees in the performance of their official 2 duties requiring possession or control of unstamped or unlawfully 3 stamped packages of cigarettes, nor to temporary incidental possession 4 by employees or agents of persons lawfully entitled to possession, not 5 to persons whose possession is for the purpose of aiding police officers 6 in performing their duties. 7 (f) Any willful act or omission, other than those described in section 8 11-4002 of this chapter or subdivision (a), (b), (c), (d), (e) or (g) of 9 this section, by any person which constitutes a violation of any 10 provision of chapter thirteen of this title or subchapter one of chapter 11 two of title twenty of the code of the preceding municipality shall 12 constitute a misdemeanor. 13 (g) Any person who falsely or fraudulently makes, alters or counter- 14 feits any stamp prescribed by the commissioner of finance under the 15 provisions of chapter thirteen of this title, or causes or procures to 16 be falsely or fraudulently made, altered or counterfeited any such 17 stamp, or knowingly and willfully utters, purchases, passes or tenders 18 as true any such false, altered or counterfeited stamp, or knowingly and 19 willfully possess any cigarettes in packages bearing any such false, 20 altered or counterfeited stamp, and any person who knowingly and will- 21 fully makes, causes to be made, purchases or receives any device for 22 forging or counterfeiting any stamp, prescribed by the commissioner of 23 finance under the provisions of chapter thirteen of this title, or who 24 knowingly and willfully possesses any such device, shall be guilty of a 25 class E felony. For the purposes of this subdivision, the words "stamp 26 prescribed by the commissioner of finance" shall include a stamp, 27 impression or imprint made by a metering machine, the design of which 28 has been approved by the commissioner of finance and the state tax 29 commission. 30 § 11-4012.1 Tobacco products tax. (a) Attempt to evade or defeat tax. 31 Any person who willfully attempts in any manner to evade or defeat any 32 tax imposed by section 11-1302.1 of this chapter or the payment thereof 33 shall, in addition to any other penalties provided by law, be guilty of 34 a misdemeanor. 35 (b) Any willful act or omission with respect to the tax imposed by 36 section 11-1302.1 of this chapter, with the exception of those described 37 in subdivision (a) of this section, by any person which constitutes a 38 violation of any provision of chapter thirteen of this title or chapter 39 two of title twenty of the code of the preceding municipality shall 40 constitute a misdemeanor. 41 § 11-4014 Tax on commercial motor vehicles and motor vehicles for 42 transportation of passengers. (a) Any person who counterfeits or forges, 43 or causes or procures to be counterfeited or forged, or aids or assists 44 in counterfeiting or forging, by any way, art, or means, any stamp, 45 indicia of payment or indicia that no tax is payable authorized by chap- 46 ter eight of this title, or who knowingly acquires, possesses, disposes 47 of or uses such a counterfeited or forged stamp, indicia of payment or 48 indicia that no tax is payable, or who transfers a stamp, indicia of 49 payment or indicia that no tax is payable where such a transfer is not 50 authorized by such chapter shall be guilty of a misdemeanor. 51 (b) The owner or driver of any motor vehicle subject to the tax 52 imposed by chapter eight who, upon demand, shall fail to exhibit the 53 stamp or other indicia of payment of the tax to the commissioner of 54 finance, his duly authorized agent or employee, or any police officer of 55 this city or state, as required by subdivision a of section 11-809 of 56 this chapter, shall be guilty of a misdemeanor.

S. 8578 1139

1 § 11-4015 Tax on owners of motor vehicles. (a) Any person who counter- 2 feits or forges, or causes or procures to be counterfeited or forged, or 3 aids or assists in counterfeiting or forging, by any way, art, or means, 4 any receipt or other document evidencing payment or exemption from the 5 tax imposed by chapter twenty-two of this title, or who knowingly 6 acquires, possesses, disposes of or uses such a counterfeited or forged 7 receipt or other document, shall be guilty of a misdemeanor. 8 (b) Any person who uses, operates or parks or permits the use, opera- 9 tion or parking upon any public highway or street of a motor vehicle 10 owned by him or her or under his or her control for which the tax 11 imposed by chapter twenty-two of this title has not been paid in accord- 12 ance with the provisions of such chapter and the regulations prescribed 13 thereunder shall be guilty of a misdemeanor. For the purpose of this 14 subdivision any person using, operating or parking a motor vehicle shall 15 be presumed to be doing so with the permission of the owner of such 16 motor vehicle. 17 (c) To the extent that any other section of this chapter is applicable 18 to the tax imposed by chapter twenty-two of this title, any reference in 19 such section to the commissioner of finance shall be deemed a reference 20 to the commissioner of motor vehicles or to the commissioner of finance 21 if designated as his or her agent. 22 § 11-4016 Hotel room occupancy tax. (a) Any person who willfully fails 23 to file a registration certificate as required pursuant to the 24 provisions of chapter twenty-five of this title and such data in 25 connection therewith as the commissioner of finance by regulation or 26 otherwise may require, or willfully fails to display or surrender a 27 certificate of authority as required by chapter twenty-five of this 28 title, or willfully assigns or transfers such certificate of authority, 29 shall be guilty of a misdemeanor, provided, however, that the provisions 30 of this subdivision shall not apply to a failure to surrender a certif- 31 icate of authority which is required to be surrendered where business 32 never commenced. 33 (b) Any person who willfully fails to charge separately the tax 34 imposed under chapter twenty-five of this title or willfully fails to 35 state such tax separately on any bill, statement, memorandum or receipt 36 issued or employed by such person upon which the tax is required to be 37 stated separately as provided in such chapter, or who shall refer or 38 cause reference to be made to this tax in a form or manner other than 39 required by such chapter, shall be guilty of a misdemeanor. 40 § 11-4017 Violation of secrecy provisions. Any person who violates the 41 provisions of subdivision a of section 11-1214, subdivision (a) of 42 section 11-2415, subdivision a of section 11-2115, subdivision a of 43 section 11-1516, subdivision a of section 11-818, subdivision a of 44 section 11-716, subdivision a of section 11-2215, subdivision a of 45 section 11-1116, subdivision one of section 11-688, subdivision one of 46 section 11-538, subdivision a of section 11-2516, or subdivision a of 47 section 11-1414 of this title shall be guilty of a misdemeanor. 48 § 11-4018 Other offenses. (a) Any person who willfully fails to keep 49 or retain any records required to be kept or retained by chapter seven, 50 twelve, fourteen, twenty-one, twenty-two, twenty-four or twenty-seven of 51 this title shall be guilty of a misdemeanor. 52 (b) Any person willfully simulating, altering, defacing, destroying or 53 removing any evidence of the filing of a return or the payment of a tax 54 provided for in chapter twenty-one of this title shall be guilty of a 55 misdemeanor.

S. 8578 1140

1 (c) Any person failing to file a certificate of registration or infor- 2 mation registration certificate as required by chapter eight of this 3 title shall be guilty of a misdemeanor. 4 (d) Any person refusing access to personnel authorized by the commis- 5 sioner of finance to inspect any vault or any premises concerning which 6 a return or information return may be required under chapter twenty-sev- 7 en of this title shall be guilty of a misdemeanor. 8 § 11-4019 Jurisdiction. For purposes of the taxes imposed by chapter 9 five or six of this title, any prosecution under this chapter may be 10 conducted in any county where the person against whom a violation or 11 violations of any of the provisions of this chapter are charged resides 12 or has a place of business, or from which such person received any 13 income, or in any county in which any such violation is committed. 14 (a) Notwithstanding any other provision of law, the corporation coun- 15 sel shall have concurrent jurisdiction with any district attorney in the 16 prosecution of any offenses under this chapter. 17 (b) Notwithstanding any other provision of law, the attorney general 18 shall have concurrent jurisdiction with the corporation counsel and with 19 any district attorney in the prosecution of any offenses under this 20 chapter relating to the tax imposed by chapter thirteen of this title, 21 as well as any offenses arising out of such prosecution. 22 § 11-4020 Disposition of fines. All fines levied under this chapter 23 shall be paid to the commissioner of finance and deposited in the gener- 24 al fund of the city. 25 § 11-4021 Seizure and forfeiture of cigarettes. (a) Whenever a police 26 officer designated in section 1.20 of the criminal procedure law or a 27 peace officer designated in subdivision five of section 2.10 of such 28 law, acting pursuant to his or her special duties, shall discover any 29 cigarettes subject to any tax provided by chapter thirteen of this 30 title, and upon which the tax has not been paid or the stamps not 31 affixed as required by such chapter, they are hereby authorized and 32 empowered forthwith to seize and take possession of such cigarettes, 33 together with any vending machine or receptacle in which they are held 34 for sale. Such cigarettes, vending machine or receptacle seized by a 35 police officer or such peace officer shall be turned over to the commis- 36 sioner of finance. 37 (b) The seized cigarettes and any vending machine or receptacle seized 38 therewith, but not the money contained in such vending machine or recep- 39 tacle shall thereupon be forfeited to the city, unless the person from 40 whom the seizure is made, or the owner of such seized cigarettes, vend- 41 ing machine or receptacle, or any other person having an interest in 42 such property, shall within ten days of such seizure, apply to the 43 commissioner of finance for a hearing to determine the propriety of the 44 seizure, or unless the commissioner of finance shall on his or her own 45 motion release the seized cigarettes, vending machine or receptacle. 46 After such hearing the commissioner of finance shall give notice of his 47 or her decision to the petitioner. The decision of the commissioner 48 shall be reviewable for error, illegality, unconstitutionality or any 49 other reason whatsoever by a proceeding under article seventy-eight of 50 the civil practice law and rules if application therefor is made to the 51 supreme court within thirty days after the giving of the notice of such 52 decision. Such proceeding shall not be instituted unless there shall 53 first be filed with the commissioner of finance an undertaking, issued 54 by a surety company authorized to transact business in New York state 55 and approved by the superintendent of insurance of New York state as to 56 solvency and responsibility, in such amount as a justice of the supreme

S. 8578 1141

1 court shall approve, to the effect that if such proceeding be dismissed, 2 or the seizure confirmed, the petitioner will pay all costs and charges 3 which may accrue in the prosecution of the proceeding. 4 (c) The commissioner of finance may, within a reasonable time after 5 the forfeiture to the city of such vending machines or receptacles, upon 6 publication of a notice to such effect for at least five successive 7 days, in a newspaper published or circulated in the city, sell such 8 forfeited vending machines or receptacles at public sale and pay the 9 proceeds into the treasury of the city to the credit of the general 10 fund. Such seized vending machines or receptacles may be sold prior to 11 forfeiture if the owner of the seized property consents to the sale. 12 Notwithstanding any other provision of this section, the commissioner of 13 finance may enter into an agreement with the state tax commission to 14 provide for the disposition between the city and state of the proceeds 15 from any such sale. The commissioner of finance may also transfer any 16 seized cigarettes to the state for destruction. All cigarettes forfeited 17 to the state shall be destroyed or used for law enforcement purposes, 18 except that cigarettes that violate, or are suspected of violating, 19 federal trademark laws or import laws shall not be used for law enforce- 20 ment purposes. If the commissioner determines the cigarettes may not be 21 used for law enforcement purposes, the commissioner of finance must, 22 within a reasonable time after the forfeiture to the city of such ciga- 23 rettes, upon publication of a notice to such effect for at least five 24 successive days, prior to destruction, in a newspaper published or 25 circulated in the city, destroy such forfeited cigarettes. Such commis- 26 sioner may, prior to any destruction of cigarettes, permit the true 27 holder of the trademark rights in the cigarettes to inspect such 28 forfeited cigarettes in order to assist in any investigation regarding 29 such cigarettes. 30 (d) In the alternative, the commissioner of finance, on reasonable 31 notice by mail or otherwise, may permit the person from whom said ciga- 32 rettes were seized to redeem the said cigarettes, and any vending 33 machine or receptacle seized therewith, or may permit the owner of any 34 such cigarettes, vending machine or receptacle to redeem the same, by 35 the payment of the tax due, plus a penalty of fifty percent thereof, 36 plus interest on the amount of tax due for each month or fraction there- 37 of after such tax became due, determined without regard to any extension 38 of time for filing or paying, at the rate applicable under subdivision d 39 of section 11-1317 of this title and the costs incurred in such proceed- 40 ing, which total payment shall not be less than five dollars; provided, 41 however, that such seizure and sale or redemption shall not be deemed to 42 relieve any person from fine or imprisonment provided for in this chap- 43 ter for violation of any provisions of this chapter or chapter thirteen 44 of this title. 45 (e) In the alternative, the commissioner of finance may dispose of any 46 cigarettes seized pursuant to this section, except those that violate, 47 or are suspected of violating, federal trademark laws or import laws, by 48 transferring them to the department of correction for sale to or use by 49 incarcerated individuals in such institutions. 50 § 11-4022 Filing of documents. For purposes of the prosecution of 51 offenses under the provisions of this title, reports, returns, state- 52 ments, other documents or other information required to be filed with or 53 delivered to the commissioner of finance shall include such items which 54 under the provisions of this title are required to be recorded or filed 55 with, served upon or delivered to another person, including, but not 56 limited to, a recording officer of any county within the state, county

S. 8578 1142

1 clerk, any other governmental agency or entity, or other entity in its 2 capacity as an agent of the commissioner of finance. 3 § 11-4023 Authority to seal premises. (a) If any person has been 4 finally determined to have engaged in the acts described in subdivision 5 (b) of this section, the commissioner of finance shall be authorized to 6 order: 7 (1) the sealing of any premises operated by such person where such 8 acts occurred; and 9 (2) the removal, sealing or making inoperable of any devices, items or 10 goods used in connection with any of such acts. 11 (b) The following acts shall serve as the basis for a sealing order 12 pursuant to this section: 13 (1) the violation of subdivision a or b of section 11-1303 of this 14 title or section 17-703 or 20-202 of the code of the preceding munici- 15 pality on at least two occasions within a three-year period; or 16 (2) the violation of any provision of chapter thirteen of this title 17 or any of sections 17-703, 17-703.2, 17-704, 17-705, subdivision a or b 18 of section 17-706, 17-715 or 20-202 of the code of the preceding munici- 19 pality on at least three occasions within a three-year period; or 20 (3) the violation of any provision of section 10-203 of the code of 21 the preceding municipality on at least two occasions within a three-year 22 period. 23 (c) Orders of the commissioner to seal premises. (1) Orders of the 24 commissioner issued pursuant to this section shall be posted at the 25 premises at which the acts described in subdivision (b) of this section 26 have occurred. 27 (2) Ten days after the date of such posting, and upon the written 28 directive of the commissioner, police officers designated in section 29 1.20 of the criminal procedure law and peace officers employed by the 30 department of finance, including but not limited to the sheriff, under- 31 sheriff and deputy sheriffs of the city of New York designated as peace 32 officers in subdivision two of section 2.10 of the criminal procedure 33 law, are authorized to act upon and enforce such orders. 34 (3) Any devices, items or goods removed pursuant to this section, 35 shall be stored in a garage, pound or other place of safety and the 36 owner or other person lawfully entitled to the possession of such 37 devices, items or goods may be charged with reasonable costs for removal 38 and storage payable prior to the release of such devices, items or goods 39 to such owner or such other person. 40 (4) The owner or other person lawfully entitled to reclaim the 41 devices, items or goods described in paragraph three of this subdivision 42 shall reclaim such devices, items or goods. If such owner or such other 43 person does not reclaim such devices, items or goods within ninety days 44 of their removal, such devices, items or goods shall be subject to 45 forfeiture upon notice and judicial determination in accordance with 46 provisions of law. Upon forfeiture the department shall, upon a public 47 notice of at least five days, sell such forfeited devices, items or 48 goods at public sale. The net proceeds of such sale, after deduction of 49 the lawful expenses incurred, shall be paid into the general fund of the 50 city. 51 (d) Unsealing of premises. The commissioner shall order that any prem- 52 ises which are sealed pursuant to this section shall be unsealed and 53 that any devices, items or goods removed, sealed or otherwise made inop- 54 erable pursuant to this section shall be released, unsealed or made 55 operable upon:

S. 8578 1143

1 (1) payment of all outstanding cigarette taxes and civil penalties and 2 all reasonable costs for removal and storage; and 3 (2) the expiration of a period of time from the date of enforcement of 4 the order to be determined by the commissioner not to exceed sixty days. 5 (e) Any person aggrieved by an order issued pursuant to this section 6 may seek judicial review of such order through a proceeding pursuant to 7 article seventy-eight of the civil practice law and rules. 8 (f) Removal of seal. Any person who removes the seal on any premises 9 or removes the seal on or makes operable any devices, items or goods 10 sealed or otherwise made inoperable in accordance with an order of the 11 commissioner shall be guilty of a misdemeanor. 12 § 11-4024 Seizure and forfeiture of taxed and lawfully stamped ciga- 13 rettes sold or possessed by unlicensed retail or wholesale dealers, 14 flavored tobacco products, flavored electronic cigarettes and flavored 15 e-liquid. (a) Whenever a police officer designated in section 1.20 of 16 the criminal procedure law or a peace officer employed by the department 17 of finance, including but not limited to the sheriff, undersheriff or 18 deputy sheriffs of the city of New York designated as peace officers in 19 subdivision two of section 2.10 of the criminal procedure law, shall 20 discover (1) any cigarettes subject to any tax provided by chapter thir- 21 teen of this title, and upon which the tax has been paid and the stamps 22 affixed as required by such chapter, but such cigarettes are sold, 23 offered for sale or possessed by a person in violation of section 24 11-1303 of this code or section 17-703 or 20-202 of the code of the 25 preceding municipality, or (2) any flavored tobacco product that is 26 sold, offered for sale or possessed with intent to sell in violation of 27 section 17-715 of the code of the preceding municipality, he or she is 28 hereby authorized and empowered forthwith to seize and take possession 29 of such cigarettes or flavored tobacco product, together with any vend- 30 ing machine or receptacle in which such cigarettes or flavored tobacco 31 product are held for sale. Such cigarettes or flavored tobacco product, 32 vending machine or receptacle seized by such police officer or such 33 peace officer shall be turned over to the commissioner of finance. 34 (b) The seized cigarettes or flavored tobacco product and any vending 35 machine or receptacle seized therewith, but not the money contained in 36 such vending machine or receptacle, shall thereupon be forfeited to the 37 city, unless the person from whom the seizure is made, or the owner of 38 such seized cigarettes, flavored tobacco product, vending machine or 39 receptacle, or any other person having an interest in such property, 40 shall within ten days of such seizure, apply to the commissioner of 41 finance for a hearing to determine the propriety of the seizure, or 42 unless the commissioner of finance shall on his or her own motion 43 release the seized cigarettes, flavored tobacco product, vending machine 44 or receptacle. After such hearing the commissioner of finance shall give 45 notice of his or her decision to the petitioner. The decision of the 46 commissioner shall be reviewable for error, illegality, unconstitution- 47 ality or any other reason whatsoever by a proceeding under article 48 seventy-eight of the civil practice law and rules. 49 (c) The commissioner of finance may, within a reasonable time after 50 the forfeiture to the city of such vending machine or receptacle under 51 this section, upon publication of a notice to such effect for at least 52 five successive days, in a newspaper published or circulated in the 53 city, sell such forfeited vending machine or receptacle at public sale 54 and pay the proceeds into the general fund of the city. Such seized 55 vending machine or receptacle may be sold prior to forfeiture if the 56 owner of the seized property consents to the sale. Cigarettes or

S. 8578 1144

1 flavored tobacco product forfeited to the city under this section shall 2 be destroyed or used for law enforcement purposes, except that ciga- 3 rettes that violate, or are suspected of violating, federal trademark 4 laws or import laws shall not be used for law enforcement purposes. If 5 the commissioner determines the cigarettes forfeited under this section 6 may not be used for law enforcement purposes, the commissioner of 7 finance must, within a reasonable time after the forfeiture to the city 8 of such cigarettes, upon publication of a notice to such effect for at 9 least five successive days, prior to destruction, in a newspaper 10 published or circulated in the city, destroy such forfeited cigarettes. 11 (d) In the alternative, the commissioner of finance, on reasonable 12 notice by mail or otherwise, may permit the person from whom a seizure 13 of cigarettes or flavored tobacco product under this section was made, 14 to redeem any vending machine or receptacle seized with such cigarettes 15 or flavored tobacco product, or may permit the owner of any such vending 16 machine or receptacle to redeem the same, upon the payment of any civil 17 penalty imposed pursuant to chapter seven of title seventeen or subchap- 18 ter one of chapter two of title twenty of the code of the preceding 19 municipality and the costs incurred in such proceeding. 20 (e) For purposes of this section, a flavored tobacco product means a 21 flavored tobacco product, flavored electronic cigarette or flavored 22 e-liquid. 23 § 11-4025 Seizure and forfeiture of untaxed tobacco products. (a) 24 Whenever a police officer designated in section 1.20 of the criminal 25 procedure law or a peace officer employed by the department of finance, 26 including but not limited to the sheriff, undersheriff or deputy sher- 27 iffs of the city designated as peace officers in subdivision two of 28 section 2.10 of the criminal procedure law, discovers any tobacco 29 products subject to any tax provided by chapter thirteen of this title, 30 and upon which the tax has not been paid, he or she is hereby authorized 31 and empowered forthwith to seize and take possession of such tobacco 32 products, together with any vending machine or receptacle in which such 33 tobacco products are held for sale. Such tobacco products, vending 34 machine or receptacle seized by such police officer or such peace offi- 35 cer shall be turned over to the commissioner of finance. 36 (b) The seized tobacco products and any vending machine or receptacle 37 seized therewith, but not the money contained in such vending machine or 38 receptacle, shall thereupon be forfeited to the city, unless the person 39 from whom the seizure is made, or the owner of such seized tobacco 40 products, vending machine or receptacle, or any other person having an 41 interest in such property, shall within ten days of such seizure, apply 42 to the commissioner of finance for a hearing to determine the propriety 43 of the seizure, or unless the commissioner of finance shall on his or 44 her own motion release the seized tobacco products, vending machine or 45 receptacle. After such hearing the commissioner of finance shall give 46 notice of his or her decision to the petitioner. The decision of the 47 commissioner shall be reviewable for error, illegality, unconstitution- 48 ality or any other reason whatsoever by a proceeding under article 49 seventy-eight of the civil practice law and rules. 50 (c) The commissioner of finance may, within a reasonable time after 51 the forfeiture to the city of such vending machine or receptacle under 52 this section, upon publication of a notice to such effect for at least 53 five successive days, in a newspaper published or circulated in the 54 city, sell such forfeited vending machine or receptacle at public sale 55 and pay the proceeds into the general fund of the city. Such seized 56 vending machine or receptacle may be sold prior to forfeiture if the

S. 8578 1145

1 owner of the seized property consents to the sale. Tobacco products 2 forfeited to the city under this section shall be destroyed or used for 3 law enforcement purposes, except that tobacco products that violate, or 4 are suspected of violating, federal trademark laws or import laws shall 5 not be used for law enforcement purposes. If the commissioner determines 6 the tobacco products forfeited under this section may not be used for 7 law enforcement purposes, the commissioner of finance must, within a 8 reasonable time after the forfeiture to the city of such cigarettes, 9 upon publication of a notice to such effect for at least five successive 10 days, prior to destruction, in a newspaper published or circulated in 11 the city, destroy such forfeited tobacco products. 12 (d) In the alternative, the commissioner of finance, on reasonable 13 notice by mail or otherwise, may permit the person from whom a seizure 14 of tobacco products under this section was made, to redeem any vending 15 machine or receptacle seized with such tobacco products, or may permit 16 the owner of any such vending machine or receptacle to redeem the same, 17 upon the payment of any civil penalty imposed pursuant to chapter seven 18 of title seventeen or subchapter one of chapter two of title twenty of 19 the code of the preceding municipality and the costs incurred in such 20 proceeding. 21 § 11-4026 Seizure and forfeiture of taxed tobacco products sold or 22 possessed by unlicensed retail or wholesale dealers other than flavored 23 tobacco products subject to seizure under section 11-4024 of this chap- 24 ter. 25 (a) Whenever a police officer designated in section 1.20 of the crimi- 26 nal procedure law or a peace officer employed by the department of 27 finance, including but not limited to the sheriff, undersheriff or depu- 28 ty sheriffs of the city designated as peace officers in subdivision two 29 of section 2.10 of the criminal procedure law, discovers any tobacco 30 products, other than flavored tobacco products, subject to any tax 31 provided by chapter thirteen of this title, and upon which the tax has 32 been paid, but such tobacco products are sold, offered for sale or 33 possessed by a person in violation of section 11-1303 of this code or 34 section 17-703 or 20-202 of the code of the preceding municipality, he 35 or she is hereby authorized and empowered forthwith to seize and take 36 possession of such tobacco products, together with any vending machine 37 or receptacle in which such tobacco products are held for sale. Such 38 tobacco products, vending machine or receptacle seized by such police 39 officer or such peace officer shall be turned over to the commissioner 40 of finance. 41 (b) The seized tobacco products and any vending machine or receptacle 42 seized therewith, but not the money contained in such vending machine or 43 receptacle, shall thereupon be forfeited to the city, unless the person 44 from whom the seizure is made, or the owner of such seized tobacco 45 products, vending machine or receptacle, or any other person having an 46 interest in such property, shall within ten days of such seizure, apply 47 to the commissioner of finance for a hearing to determine the propriety 48 of the seizure, or unless the commissioner of finance shall on his or 49 her own motion release the seized tobacco products, vending machine or 50 receptacle. After such hearing the commissioner of finance shall give 51 notice of his or her decision to the petitioner. The decision of the 52 commissioner shall be reviewable for error, illegality, unconstitution- 53 ality or any other reason whatsoever by a proceeding under article 54 seventy-eight of the civil practice law and rules. 55 (c) The commissioner of finance may, within a reasonable time after 56 the forfeiture to the city of such vending machine or receptacle under

S. 8578 1146

1 this section, upon publication of a notice to such effect for at least 2 five successive days, in a newspaper published or circulated in the 3 city, sell such forfeited vending machine or receptacle at public sale 4 and pay the proceeds into the general fund of the city. Such seized 5 vending machine or receptacle may be sold prior to forfeiture if the 6 owner of the seized property consents to the sale. Tobacco products 7 forfeited to the city under this section shall be destroyed or used for 8 law enforcement purposes, except that tobacco products that violate, or 9 are suspected of violating, federal trademark laws or import laws shall 10 not be used for law enforcement purposes. If the commissioner determines 11 the tobacco products forfeited under this section may not be used for 12 law enforcement purposes, the commissioner of finance must, within a 13 reasonable time after the forfeiture to the city of such tobacco 14 products, upon publication of a notice to such effect for at least five 15 successive days, prior to destruction, in a newspaper published or 16 circulated in the city, destroy such forfeited tobacco products. 17 (d) In the alternative, the commissioner of finance, on reasonable 18 notice by mail or otherwise, may permit the person from whom a seizure 19 of tobacco products under this section was made, to redeem any vending 20 machine or receptacle seized with such tobacco products, or may permit 21 the owner of any such vending machine or receptacle to redeem the same, 22 upon the payment of any civil penalty imposed pursuant to chapter seven 23 of title seventeen or subchapter one of chapter two of title twenty of 24 the code of the preceding municipality and the costs incurred in such 25 proceeding. 26 Title 12 - Personnel and Labor 27 § 12-101 Office of payroll administration. There shall be within the 28 comptroller's office an office of payroll administration which shall: 29 1. Support the implementation of a computerized payroll management 30 system; 31 2. Maintain the integrity and accuracy of the payroll system; 32 3. Develop uniform procedures for payroll processing and development; 33 4. Distribute and account for payroll and administer payroll 34 deductions; and 35 5. Render services to, and receive information and assistance from, 36 public corporations upon such terms and conditions as may be agreed to 37 by the office and each such corporation. 38 All city agencies shall cooperate with the office as may be necessary 39 and proper to ensure efficient operation of the payroll management 40 system. 41 § 12-102 Executive director; staff. The comptroller shall appoint an 42 executive director of payroll administration. Within the appropriations 43 therefor, the office shall employ such other officers and employees as 44 may be required to perform its duties.

45 Title 13 - Reserved

46 Title 14 - Police

47 § 14-101 Definitions. As used in this title, the following terms have 48 the following meanings: 49 1. Civil enforcement. The term "civil enforcement" means the issuance 50 of a civil summons. 51 2. Civil summons. The term "civil summons" means a civil notice of 52 violation.

S. 8578 1147

1 3. Commissioner. The term "commissioner" means the commissioner of the 2 department. 3 4. Criminal enforcement. The term "criminal enforcement" means the 4 charging of a misdemeanor or violation. 5 5. Criminal summons. The term "criminal summons" means an appearance 6 ticket issued by the department pursuant to article one hundred fifty of 7 the criminal procedure law that is an accusatory instrument pursuant to 8 article one hundred of the criminal procedural law, and returnable to 9 the criminal court. 10 6. Department. The term "department" means the police department of 11 the city of New York. 12 7. Desk appearance ticket. The term "desk appearance ticket" means an 13 appearance ticket issued by the department pursuant to article one 14 hundred fifty of the criminal procedure law that is not an accusatory 15 instrument pursuant to article one hundred of the criminal procedure 16 law. 17 8. Specified unlawful act. The term "specified unlawful act" means an 18 act that violates any of the following provisions: subdivision b of 19 section 10-125 of the code of the preceding municipality, subdivision 20 one of section 16-118 of the code of the preceding municipality, subdi- 21 vision six of section 16-118 of the code of the preceding municipality 22 with respect to the act of public urination, subdivision a of section 23 24-218 of the code of the preceding municipality, section 18-146 of the 24 code of the preceding municipality, section 18-147 of the code of the 25 preceding municipality, and rules and regulations of the department of 26 parks and recreation described in paragraph nine of subdivision a of 27 section five hundred thirty-three of the charter of the preceding muni- 28 cipality. 29 § 14-102 Composition of force. Until otherwise provided by the mayor, 30 upon the recommendation of the commissioner, the police force in the 31 police department, shall consist of the following ranks of members, to 32 wit: 33 1. Captains of police, not exceeding in number one to each fifty of 34 the total number of police officers, in addition to the number detailed 35 to act as inspectors; 36 2. Lieutenants of police, not exceeding four in number to each fifty 37 of the total number of police officers; 38 3. Sergeants not exceeding six in number to each fifty police offi- 39 cers; 40 4. Surgeons of police, not exceeding forty in number, one of whom 41 shall be chief surgeon; 42 5. A veterinarian; 43 6. Police officers to the number of seven thousand eight hundred thir- 44 ty-nine. 45 § 14-103 Detective bureau. a. The commissioner shall organize and 46 maintain a bureau for detective purposes to be known as the detective 47 bureau and shall, from time to time, detail to service in said bureau as 48 many members of the force as the commissioner may deem necessary and may 49 at any time revoke any such detail. 50 b. Of the members of the force so detailed the commissioner may desig- 51 nate: (1) police officers not exceeding two hundred eighty in number, 52 as detectives of the first grade, who while performing duty in such 53 bureau and while so designated as detectives of the first grade, shall 54 be paid the same salary as lieutenants; and (2) a certain number of 55 police officers, as detectives of the second grade, who while performing 56 duty in such bureau and while so designated as detectives of the second

S. 8578 1148

1 grade, shall be paid the same salary as sergeants; and a certain number 2 of police officers as detectives of the third grade, who while perform- 3 ing duty in such bureau and while so designated as detectives of the 4 third grade shall be paid such salary as may be determined by the mayor. 5 Any person who has received permanent appointment as a police officer 6 and is temporarily assigned to perform the duties of a detective shall, 7 whenever such assignment exceeds eighteen months in duration, be 8 appointed as a detective and receive the compensation ordinarily paid to 9 a detective performing such duties. 10 c. The commissioner may designate lieutenants as commanders of detec- 11 tive squads, and sergeants as supervisors of detective squads, who while 12 performing duty in such bureau and while so designated as commanders of 13 detective squads or supervisors of detective squads shall be paid such 14 salary as may be determined by the mayor. 15 d. Any member of the force detailed to such bureau while so detailed 16 shall retain his or her rank in the force and shall be eligible for 17 promotion the same as if serving in the uniformed force, and the time 18 during which he or she serves in such bureau shall count for all 19 purposes as if served in his or her rank or grade in the uniformed 20 force. 21 e. The commissioner may at his or her pleasure revoke any designation 22 made pursuant to the provision of this section after complying with the 23 provisions of section seventy-five of the civil service law. 24 § 14-104 Juvenile bureau. a. There shall be a bureau in the department 25 organized and maintained for the prevention of crime and delinquency 26 among minors and for the performance of such other duties as the commis- 27 sioner may assign thereto. 28 b. Any member of the force assigned to such juvenile bureau shall 29 retain his or her rank and pay in the force and shall be eligible for 30 promotion as if serving in the uniformed force and the time served in 31 such bureau shall count for all purposes as if served in his or her rank 32 or grade in the uniformed force of the department. 33 § 14-105 Bureau of taxis, limousines and liveries. The purpose of the 34 bureau of taxis, limousines and liveries shall be the continuance, 35 further development and improvement of taxi, limousine and livery 36 service in the city of Staten Island. 37 It shall be the further purpose of the bureau, consonant with the 38 promotion and protection of the public comfort and convenience to adopt 39 and establish an overall public transportation policy governing taxi, 40 coach, limousine and wheelchair accessible van services as it relates to 41 the overall public transportation network of the city; to require the 42 filing of rates, standards of service, standards of insurance and mini- 43 mum coverage; standards for driver safety; standards for equipment safe- 44 ty and design; standards for noise and air pollution control; and to set 45 standards and criteria for the licensing of vehicles, drivers and chauf- 46 feurs, owners and operators engaged in such services. 47 § 14-106 Jurisdiction, powers and duties of the bureau. 1. The juris- 48 diction, powers and duties of the bureau shall include the regulation 49 and supervision of the business and industry of transportation of 50 persons by licensed vehicles for hire in the city. 51 2. Such regulations and supervision shall extend to: 52 (a) The supervision of rates to be charged and collected. 53 (b) The regulation and supervision of standards and conditions of 54 service. 55 (c) The revocation and suspension of licenses for vehicles, other than 56 licenses issued pursuant to state law, provided, however, that taxicab

S. 8578 1149

1 licenses represented by medallions heretofore issued shall in all 2 respects remain valid in accordance with their terms and transferable 3 according to law. 4 3. The bureau or an administrative tribunal which may be established 5 by the police commissioner to adjudicate charges of violations of 6 provisions of the administrative code, rules and regulations promulgated 7 thereunder and public complaints of discrimination or overcharging, 8 shall have the power to enforce its decisions and orders imposing civil 9 penalties, not to exceed ten thousand dollars for each respondent, for 10 violations relating to unlicensed vehicles for hire and unlicensed driv- 11 ers of vehicles for hire and for violations relating to the operation of 12 commuter van services without authorization and the operation of unli- 13 censed commuter vans and unlicensed drivers of commuter vans pursuant to 14 provisions of the administrative code. 15 Before a judgment based upon a default may be so entered the bureau or 16 administrative tribunal shall have first notified the respondent by 17 first class mail in such form as the bureau may direct (a) of the 18 default and order and the penalty imposed; (b) that a judgment will be 19 entered in the civil court of the city; and (c) that entry of such judg- 20 ment may be avoided by requesting a stay of default for good cause and 21 either requesting a hearing or entering a plea pursuant to the rules of 22 the bureau or administrative tribunal within thirty days of the mailing 23 of such notice.

24 Title 15 - Fire Prevention and Control

25 § 15-101 Definitions; bureaus, divisions and offices. 1. For the 26 purposes of this title the following terms shall have the following 27 meanings: 28 (a) "Commissioner" shall mean the fire commissioner. 29 (b) "Department" shall mean the fire department. 30 2. In addition to such other bureaus, divisions and offices as the 31 commissioner may organize pursuant to section eleven hundred two of the 32 charter of the preceding municipality, there shall be in the department: 33 (a) A fire bureau in the charge of the chief of the department which 34 shall have charge of the extinguishment of fires and the necessary and 35 incidental protection of life and property in connection therewith. 36 In such bureau there shall be a bureau of fire prevention and such 37 bureau shall be in the charge of a member of the uniformed force of the 38 department, of a rank above that of captain, to be designated by the 39 commissioner. Such bureau shall perform the duties and exercise the 40 powers of the commissioner in relation to (1) combustibles, chemicals, 41 explosives, flammables, or other dangerous substances, articles, 42 compounds or mixtures, (2) the prevention of fires or danger to life or 43 property therefrom, excluding provisions relating to structural condi- 44 tions and (3) protection against fire and panic, obstruction of aisles, 45 passageways and means of egress, standees, fire protection and fire 46 extinguishing appliances, and fire prevention in licensed places of 47 assembly. In the performance of their official duties, the uniformed and 48 civilian members of the bureau of fire prevention shall have the powers 49 and perform the duties of peace officers, but their power to make 50 arrests and serve process in criminal actions shall be restricted to 51 cases arising under laws relating to (1) the manufacture, storage, sale, 52 transportation or use of combustibles, chemicals, explosives, flammables 53 or other dangerous substances, articles, compounds or mixtures and the 54 control of fire hazards, (2) the prevention of fires or danger to life

S. 8578 1150

1 or property therefrom, excluding provisions relating to structural 2 conditions and (3) fire perils. 3 (b) A chief and deputy chief fire marshal, appointed by the commis- 4 sioner, who shall be members of the department. 5 3. Notwithstanding any inconsistent provision of any general, special 6 or local law, or rule or regulation, a chief of the department shall not 7 serve in any other capacity to the department during his or her term of 8 office of chief. Any person violating the provisions of this section 9 shall be deemed to have vacated the office of chief so held. 10 § 15-102 Commissioner. The head of the fire department shall be the 11 commissioner. The mayor may designate the chief of the fire department 12 to serve as commissioner, and shall exercise the powers and duties of 13 commissioner and shall receive the salary of the commissioner. While 14 serving as commissioner, the chief shall forfeit none of his or her 15 pension rights and privileges as chief or his or her civil service 16 status. 17 The commissioner may appoint deputies, one of whom may perform all the 18 duties and exercise all the powers of the commissioner except appoint- 19 ment or promotion, detail or dismissal of any member of the uniformed 20 force when authorized by instrument in writing to be filed in the 21 offices of the mayor and the comptroller. 22 The commissioner shall be the treasurer of the department and shall 23 file in the office of the comptroller a bond for the faithful perform- 24 ance of his or her duties as treasurer. 25 § 15-103 Powers. The commissioner shall have sole and exclusive power 26 and perform all duties for the government, discipline, management, main- 27 tenance and direction of the fire department and the premises and prop- 28 erty, however the commissioner shall provide written notice with 29 supporting documentation at least forty-five days prior to the permanent 30 closing of any firehouse or permanent removal or relocation of any fire 31 fighting unit to the council members whose districts are served by such 32 facility and to the clerk of the council. The term "permanent" shall 33 mean a time period in excess of six months. 34 The department shall have the sole and exclusive power and authority 35 to extinguish fires at any place within the jurisdiction of the city and 36 still have power and authority to extinguish fires upon any vessel in 37 the port of New York or upon any dock, wharf, pier, warehouse or other 38 structure bordering or adjacent to such port. 39 The commissioner shall have sole and exclusive jurisdiction over the 40 approval of the installation of all containers for combustibles, chemi- 41 cals, explosives, inflammable or other dangerous substances, except 42 storage tanks for oilburning equipment. 43 The commissioner shall have the sole and exclusive power to designate 44 and fix the location of all fire alarm telegraph, signal and alarm 45 stations in the city and to control the same for the purpose of the 46 department; except the commissioner shall give forty-five days notice to 47 council members whose districts are served by such equipment and to the 48 city clerk in the case of removal. 49 § 15-104 Enforcement of fire laws. 1. The commissioner shall have the 50 power and it shall be his or her duty to enforce all laws and the rules 51 and regulations with respect to: 52 (a) the manufacture, storage, sale, transportation or use of combusti- 53 bles, chemicals or dangerous substances; 54 (b) investigation of the cause and origin of fires and suppression of 55 arson; and 56 (c) the prevention of fires or danger to life or property.

S. 8578 1151

1 2. The commissioner shall have the power to cause any building, struc- 2 ture, tunnel, vessel or premises to be inspected for fire hazards by an 3 officer or employee of the department; and to inspect and test any auto- 4 matic or other fire alarm system or fire extinguishing equipment. 5 3. The commissioner shall have the power and it shall be his or her 6 duty to order in writing the remedying of any condition in violation of 7 any regulation which he or she is empowered to enforce. The commissioner 8 may take proceedings for the enforcement of any order of the commission- 9 er which is not complied with within the time fixed in the order for 10 such compliance to be enforced. Every order, requirement, decision or 11 determination of the commissioner shall be in writing. 12 4. The commissioner and his or her deputies and such other officers or 13 employees of the department as are authorized by the commissioner may 14 without fee or hindrance enter and inspect all buildings, premises, 15 vessels, structures and all underground passages of every sort in the 16 city or in the port of New York for compliance with provisions of law or 17 rules and regulations enforced by the department. Any refusal to permit 18 such entry or inspection shall be triable by a judge and punishable by 19 not more than thirty days imprisonment or by a fine of not more than 20 fifty dollars, or both. 21 § 15-105 Other officer. No member of the uniformed force of the fire 22 department shall accept any additional place of public trust or civil 23 emolument. 24 The chief of the fire department shall not serve in any other capacity 25 to the department during his or her term of office or shall be deemed to 26 have vacated the office of chief.

27 Title 16 - Sanitation 28 Chapter 1 29 GENERAL

30 § 16-101 Definitions. When used in this title the following terms 31 shall have the following meanings: 32 1. "Department" shall mean the department of sanitation. 33 2. "Commissioner" shall mean the commissioner of sanitation. 34 3. "Street" includes street, avenue, road, alley, lane, highway, 35 boulevard, concourse, driveway, culvert and crosswalk, and every class 36 of road, square and place, and all parkways and through vehicular park 37 drives except a road within any park or a wharf, pier, bulkhead, or slip 38 by law committed to the custody, and control of the department of ports 39 and terminals. 40 § 16-102 Commissioner. The head of the sanitation department shall be 41 the commissioner. 42 § 16-103 Powers and duties of the commissioner. 1. The commissioner 43 shall have charge and control of and be responsible for all those func- 44 tions and operations of the city relating to the cleanliness of the 45 streets and the disposal of waste, including, without limitation, the 46 following: 47 (a) the sweeping, cleaning, sprinkling, flushing, washing and sanding 48 of the streets; 49 (b) the removal and disposition of ashes, street sweepings, garbage, 50 refuse, rubbish and waste; 51 (c) the removal of ice and snow from the streets; 52 (d) the removal of encumbrances from the streets and the storage or 53 disposal of such encumbrances, except that the mayor may provide by 54 regulation that the removal and storage of household effects or other

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1 chattels shall be a responsibility of the department of general services 2 and contracting; 3 (e) plans, design, construction, operation, repair, maintenance, 4 enlargement and regulation of the use of incinerators, landfills and 5 other plants, facilities and equipment; and 6 (f) recovery and reuse of recyclable material. 7 2. The commissioner may adopt regulations specifying the kind of 8 ashes, garbage, refuse, rubbish or other material or substance that will 9 be collected by the city, the time when it will be collected and the 10 place at which it shall be deposited for collection. 11 3. The regulations shall be enforced by order of the commissioner. 12 Such order shall be addressed to the owner or owners, lessees or occu- 13 pants of the building, structure, enclosure, vessel, place or premises 14 affected thereby. It shall not be necessary to designate such owner or 15 owners, lessees or occupants by name, however the premises shall be 16 designated in the address so that it may be readily identified. 17 § 16-104 Duties and obligations of property owner. The owner of any 18 property shall keep any vacant lot or lots in a clean and sanitary 19 manner and free of debris and other litter at the owner's expense. In 20 the event that an owner of property fails to comply with these 21 provisions, or rules and regulations, the department may provide for 22 cleaning of a vacant lot at the expense of the property owner.

23 Chapter 2 24 SOLID WASTE RECYCLING

25 § 16-301 Short title. Sections 16-301 through 16-324 of this title 26 shall be known and may be cited as the "City of Staten Island Recycling 27 Law". 28 § 16-302 Declaration of policy. It is hereby declared to be the public 29 policy of the city to reduce environmental pollution and dangers to 30 health, to decrease the demand for scarce landfill space, to minimize 31 the size and cost of the proposed resource recovery program, and to 32 encourage the conservation of valuable natural resources and energy. It 33 is the policy of the city to promote the recovery of materials from the 34 city of Staten Island solid waste stream for the purpose of recycling 35 such materials and returning them to the economy. This title shall be 36 liberally construed in order to effectuate the purposes set forth in 37 this section. 38 § 16-303 Definitions. When used in this title: 39 1. "Architectural paint" means interior and exterior architectural 40 coatings, including paints and stains purchased for commercial or resi- 41 dential use, but does not include architectural coatings purchased for 42 industrial use or for use in the manufacture of products. 43 2. "Organic waste" means any material found in the waste stream that 44 can be broken down into, or otherwise become part of, usable compost, 45 such as food scraps, soiled paper, and plant trimmings. As determined by 46 the commissioner, such term may also include disposable plastic food 47 service ware and bags that meet the ASTM International standard specifi- 48 cations for compostable plastics, but shall not include liquids and 49 textiles. 50 3. "Department-managed solid waste" means all solid waste that the 51 department and its contractors collect, all solid waste that the depart- 52 ment receives for free disposal, all solid waste collected for recycling 53 or reuse through special events or programs promoted, operated or funded 54 by the department, and all solid waste diverted from collection by the

S. 8578 1153

1 department that is accepted through non-department infrastructure for 2 recycling or reuse and counted towards the department's recycling goals 3 as set forth in subdivision a of section 16-305 of this chapter. 4 4. "Household" means a single dwelling or a residential unit within a 5 multiple dwelling, hotel, motel, campsite, ranger station, public or 6 private recreation area, or other residence. 7 5. "Household and institutional compostable waste" means any composta- 8 ble waste, excluding yard waste, in or otherwise destined for any waste 9 stream collected by the department. 10 6. "Household hazardous waste" means: 11 a. any household waste that is ignitable, corrosive, reactive or toxic 12 and that, but for its point of generation, would be a hazardous waste 13 under part three hundred seventy-one of title six of the New York code, 14 rules and regulations, as may be amended from time to time, and includes 15 all pesticides, as defined in article thirty-three of the environmental 16 conservation law, and hazardous waste, as defined in section 27-0901 of 17 the environmental conservation law, as such laws may be amended from 18 time to time; and 19 b. any other household waste that the commissioner determines, by 20 rule, to be hazardous and require special handling. 21 7. "Post-collection separation" means the dividing of solid waste into 22 some or all of its component parts after the point of collection. 23 8. "Post-consumer material" means those products generated by a busi- 24 ness or a consumer which have served their intended end uses, and which 25 have been separated or diverted from solid waste for the purposes of 26 collection, recycling and disposition. 27 9. "Private carter" means any person required to be licensed or 28 permitted pursuant to chapter one of title sixteen-A of the code of the 29 preceding municipality. 30 10. "Publicly accessible textile drop-off bin" means any enclosed 31 container that allows for members of the public to deposit textiles into 32 such container for reuse or recycling in accordance with the textile 33 reuse and recycling program established by section 16-310.1 of this 34 chapter. 35 11. "Recyclable materials" means solid waste that may be separated, 36 collected, processed, marketed and returned to the economy in the form 37 of raw paper, plastic, yard waste and any other solid waste required to 38 be recycled or composted pursuant to this chapter, solid waste collected 39 for recycling or reuse through special events or programs promoted, 40 operated or funded by the department, and solid waste accepted through 41 non-department infrastructure for recycling or reuse. 42 12. "Recycled" or "recycling" means any process by which recyclable 43 materials are separated, collected, processed, marketed and returned to 44 the economy in the form of raw materials or products. 45 13. "Recycling center" means any facility operated to facilitate the 46 separation, collection, processing or marketing of recyclable materials 47 for reuse or sale. 48 14. "Recycling district" means any borough or smaller geographic area 49 the commissioner deems appropriate for the purpose of implementing this 50 chapter. 51 15. "Rigid plastic container" means any plastic container having a 52 semi-flexible or inflexible finite shape or form that is capable of 53 maintaining its shape while holding other products and is designed to 54 hold food, beverages, and consumer household products, including, but 55 not limited to, the following types of containers: plastic bottles, 56 plastic jugs, plastic tubs, plastic trays, plastic cups, plastic buck-

S. 8578 1154

1 ets, plastic crates and plastic flower pots, and any other rigid plastic 2 material that the commissioner may designate by rule, but not including 3 containers made of polystyrene foam. 4 16. "Solid waste" means all putrescible and non-putrescible materials 5 or substances, except as described in paragraph c of this subdivision, 6 that are discarded or rejected as being spent, useless, worthless or in 7 excess to the owners at the time of such discard or rejection, including 8 but not limited to, garbage, refuse, industrial and commercial waste, 9 rubbish, tires, ashes, contained gaseous material, incinerator residue, 10 construction and demolition debris, discarded automobiles and offal. 11 a. A material is discarded if it is abandoned by being: 12 i. disposed of; 13 ii. burned or incinerated, including being burned as a fuel for the 14 purpose of recovering useable energy; or 15 iii. accumulated, stored, or physically, chemically or biologically 16 treated, other than burned or incinerated, instead of or before being 17 disposed of. 18 b. A material is disposed of if it is discharged, deposited, injected, 19 dumped, spilled, leaked, or placed into or on any land or water so that 20 such material or any constituent thereof may enter the environment or be 21 emitted into the air or discharged into groundwater or surface water. 22 c. The following are not solid waste for the purpose of this chapter: 23 i. domestic sewage; 24 ii. any mixture of domestic sewage and other wastes that passes 25 through a sewer system to a publicly owned treatment works for treat- 26 ment, except (A) any material that is introduced into such system in 27 order to avoid the provisions of this chapter or the state regulations 28 promulgated to regulate solid waste management facilities pursuant to 6 29 NYCRR part 360 or (B) food waste; 30 iii. industrial wastewater discharges that are actual point source 31 discharges subject to permits under article seventeen of the environ- 32 mental conservation law; industrial wastewaters while they are being 33 collected, stored, or treated before discharge and sludges that are 34 generated by industrial wastewater treatment are solid wastes; 35 iv. irrigation return flows; 36 v. radioactive materials that are source, special nuclear, or by-pro- 37 duct material as defined by the Atomic Energy Act of 1954, as amended, 38 42 U.S.C. § 2011 et seq.; 39 vi. materials subject to in-situ mining techniques which are not 40 removed from the ground as part of the extraction process; 41 vii. hazardous waste as defined in section 27-0901 of the environ- 42 mental conservation law; and 43 viii. regulated medical waste or other medical waste as described in 44 section 16-120.1 of this title. 45 17. "Source separation" means the dividing of solid waste into some or 46 all of its component parts at the point of generation. 47 18. "Yard waste" means leaves, grass clippings, garden debris, and 48 vegetative residue that is recognizable as part of a plant or vegetable, 49 small or chipped branches, and similar material.

50 Chapter 3 51 CITYWIDE RECYCLING PROGRAM

52 § 16-305 Recycling of department-managed solid waste. 1. a. The 53 following recycling percentage goals are established for the recycling 54 of department-managed solid waste:

S. 8578 1155

1 i. by July first, two thousand eleven, sixteen percent of department- 2 managed solid waste; 3 ii. by July first, two thousand thirteen, nineteen percent of depart- 4 ment-managed solid waste; 5 iii. by July first, two thousand fourteen, twenty-one percent of 6 department-managed solid waste; 7 iv. by July first, two thousand sixteen, twenty-four percent of 8 department-managed solid waste; 9 v. by July first, two thousand eighteen, twenty-seven percent of 10 department-managed solid waste; 11 vi. by July first, two thousand nineteen, thirty percent of depart- 12 ment-managed solid waste; and 13 vii. by July first, two thousand twenty, thirty-three percent of 14 department-managed solid waste. 15 b. In addition, the following recycling goals are established for 16 curbside and containerized waste collected by the department: 17 i. By July first, two thousand eleven, sixteen percent of curbside and 18 containerized waste collected by the department; 19 ii. By July first, two thousand thirteen, eighteen percent of curbside 20 and containerized waste collected by the department; 21 iii. By July first, two thousand fourteen, nineteen percent of curb- 22 side and containerized waste collected by the department; 23 iv. By July first, two thousand sixteen, twenty-one percent of curb- 24 side and containerized waste collected by the department; 25 v. By July first, two thousand eighteen, twenty-three percent of curb- 26 side and containerized waste collected by the department; 27 vi. By July first, two thousand nineteen, twenty-four percent of curb- 28 side and containerized waste collected by the department; and 29 vii. By July first, two thousand twenty, twenty-five percent of curb- 30 side and containerized waste collected by the department. 31 2. The commissioner shall adopt and implement rules designating at 32 least six recyclable materials, including plastics to the extent 33 required in subdivision three of this section and yard waste to the 34 extent required in section 16-308 of this chapter and organic waste to 35 the extent required in section 16-308.1 of this chapter, contained in 36 department-managed solid waste and requiring households to source sepa- 37 rate such designated materials. 38 3. a. Prior to commencing delivery of department-managed recyclable 39 materials to the designated recycling processing facility at the South 40 Brooklyn Marine Terminal, the commissioner shall designate as recyclable 41 materials, and require the source separation of, rigid plastic contain- 42 ers. 43 b. If the commissioner, in his or her discretion, determines that the 44 cost to the city of recycling rigid plastic containers required to be 45 designated as recyclable materials pursuant to paragraph a of this 46 subdivision is not reasonable in comparison with the cost of recycling 47 only metal, glass and plastic and have been designated as recyclable 48 materials, the commissioner shall within ten business days notify and 49 provide documentation to the council of the factors relied upon to make 50 such determination and shall not be required to designate any such rigid 51 plastic containers as recyclable materials. 52 c. If the commissioner determines that the cost to the city of recycl- 53 ing rigid plastic containers is not reasonable in comparison with the 54 cost of recycling only metal, glass and plastic that have been desig- 55 nated as recyclable materials, the commissioner shall annually reevalu- 56 ate the cost to the city of designating such rigid plastic containers as

S. 8578 1156

1 recyclable materials, and shall annually make a new determination as to 2 whether the cost of designating such containers as recyclable materials 3 is reasonable in comparison with the cost of recycling only metal, glass 4 and plastic that have been designated as recyclable materials and shall 5 report such evaluations to the council. The department shall not 6 promulgate rules designating rigid plastic containers as recyclable 7 materials, and need not conduct outreach or education relating thereto 8 if, pursuant to paragraph b of this subdivision, the commissioner deter- 9 mines that the cost to the city of recycling rigid plastic containers is 10 not reasonable in comparison with the cost of recycling only metal, 11 glass and plastic that have been designated as recyclable materials. 12 d. Immediately following the promulgation of rules designating rigid 13 plastic containers as recyclable materials, the department shall under- 14 take outreach and education, in cooperation with any other agency or 15 entity designated for that purpose by the commissioner, to inform resi- 16 dents of such new designation and to provide instruction on compliance 17 with the requirements of this subdivision and the rules promulgated 18 pursuant thereto. 19 4. The commissioner shall adopt and implement rules establishing 20 procedures requiring the placement of the designated materials at the 21 curbside, in specialized containers, or in any other manner the commis- 22 sioner determines, to facilitate the collection of such materials in a 23 manner that enables them to be recycled. Under such rules, no person 24 shall be liable for incorrectly placing a non-designated rigid plastic 25 container in the recycling stream. 26 5. Where the department provides solid waste collection services to a 27 building containing at least four and no more than eight dwelling units, 28 the commissioner shall adopt and implement rules requiring the owner, 29 net lessee or person in charge of such building to: 30 a. provide for the residents, where practicable, a designated area 31 and, where appropriate, containers in which to store the source sepa- 32 rated or other designated recyclable materials to be collected by the 33 department; and 34 b. inform all residents of the requirements of this chapter and the 35 rules promulgated pursuant thereto by, at a minimum, posting 36 instructions on source separation in or near the designated recycling 37 area and making available to each resident at the inception of a lease, 38 where applicable, a department-issued guide to recycling, which shall be 39 made available to the owner, net lessee or person in charge of such 40 building by the department pursuant to section 16-315 of this chapter in 41 print form or on the department's website, or in an alternative guide 42 containing similar information to the guide required by section 16-315 43 of this chapter. 44 If reasonably accessible space for the storage of source separated or 45 other designated recyclable materials is not available in such building, 46 and such space is available behind the building's property line, such 47 space behind the property line may be designated as the area for the 48 storage of source separated or other designated recyclable materials. If 49 no such space is available, the owner, net lessee or person in charge of 50 such building shall post instructions on recycling and source separation 51 in or near a designated area that is visible to all residents in the 52 building. 53 With respect to solid waste generated by households in the aforesaid 54 buildings, the obligations of an owner, net lessee or person in charge 55 of such building under this chapter shall be limited to those set forth

S. 8578 1157

1 in this subdivision and subdivisions four and seven of this section or 2 rules promulgated pursuant to such subdivisions. 3 6. Where the department provides solid waste collection services to a 4 building containing nine or more dwelling units, the commissioner shall 5 adopt and implement rules requiring the owner, net lessee or person in 6 charge of such building to: 7 a. provide for the residents a designated area and, where appropriate, 8 containers in which to store the source separated or other designated 9 recyclable materials to be collected by the department; 10 b. inform all residents of the requirements of this chapter and the 11 rules promulgated pursuant thereto by, at a minimum, posting 12 instructions on source separation in or near the designated recycling 13 area, and making available to each resident at the inception of a lease, 14 a department-issued guide to recycling, which shall be made available to 15 the owner, net lessee or person in charge of such building by the 16 department pursuant to section 16-315 of this chapter in print form or 17 on the department's website, or in an alternative guide containing simi- 18 lar information to the guide required by section 16-315 of this chapter; 19 and 20 c. remove non-designated materials from the containers of designated 21 source separated recyclable materials before such containers are placed 22 at the curbside for collection and ensure that the designated materials 23 are placed at the curbside in the manner prescribed by the department. 24 With respect to solid waste generated by households in the aforesaid 25 buildings, the obligations of an owner, net lessee or person in charge 26 of such building under this chapter shall be limited to those set forth 27 in this subdivision and subdivisions four and seven of this section or 28 rules promulgated pursuant to such subdivisions. 29 7. The commissioner shall adopt and implement rules for any building 30 containing four or more dwelling units in which the amount of designated 31 materials placed out for collection is significantly less than what can 32 reasonably be expected from such building. These rules shall require 33 residential generators, including tenants, owners, net lessees or 34 persons in charge of such building to use transparent bags or such other 35 means of disposal the commissioner deems appropriate to dispose of solid 36 waste other than the designated recyclable materials. Upon request of 37 the owner, net lessee or person in charge of such building, and if the 38 commissioner determines that such owner, net lessee or person in charge 39 of such building has complied with this subdivision, subdivision four of 40 this section and, as applicable, subdivision five or subdivision six of 41 this section or rules promulgated pursuant to such subdivisions and that 42 the amount of designated materials placed out for collection remains 43 significantly less than what can reasonably be expected from such build- 44 ing, the department may develop a schedule to conduct random inspections 45 to facilitate compliance with the provisions of this chapter by tenants 46 of such building, provided that lawful inspections may occur at reason- 47 able times without notice to ensure compliance by the tenants, owner, 48 net lessee or person in charge of such building. 49 8. a. In calculating the extent to which the department has met the 50 recycling percentage goals set forth in paragraph a of subdivision one 51 of this section, the department shall include in its calculations all 52 curbside and institutional recycling it collects, including materials 53 collected from households, schools, not-for-profit institutions and city 54 agencies, and all recyclable materials collected as part of the public 55 space recycling program pursuant to section 16-310 of this chapter, and 56 may include yard waste collected pursuant to section 16-308 of this

S. 8578 1158

1 chapter and any other material collected for composting pursuant to this 2 chapter, Christmas trees collected pursuant to section 16-309 of this 3 chapter, clothing and textiles donated or collected pursuant to section 4 16-310.1 of this chapter, household hazardous waste diverted pursuant to 5 section 16-310.3 of this chapter, rechargeable batteries collected 6 pursuant to chapter four of title eleven of the code of the preceding 7 municipality, beverage containers returned within the city pursuant to 8 title ten of article twenty-seven of the environmental conservation law, 9 electronic waste collected within the city or otherwise diverted from 10 the city's waste stream, including such waste collected or diverted 11 pursuant to title twenty-six of article twenty-seven of the environ- 12 mental conservation law, and plastic bags collected within the city or 13 otherwise diverted from the city's waste stream, including such plastic 14 bags collected or diverted pursuant to title twenty-seven of article 15 twenty-seven of the environmental conservation law. Only recyclable 16 materials specifically enumerated in this paragraph shall be counted for 17 purposes of calculating the extent to which the department has met the 18 recycling percentage goals set forth in paragraph a of subdivision one 19 of this section. 20 b. In calculating the extent to which the department has met the recy- 21 cling percentage goals set forth in paragraph b of subdivision one of 22 this section, the department shall include in its calculations all curb- 23 side and institutional recycling it collects, including materials 24 collected from households, schools, not-for-profit institutions and city 25 agencies, and all recyclable materials collected as part of the public 26 space recycling program pursuant to section 16-310 of this chapter. 27 c. In calculating the extent to which the department has met the recy- 28 cling percentage goals set forth in paragraphs a and b of subdivision 29 one of this section, the department shall not include recycling of aban- 30 doned vehicles or recycling from lot cleaning operations, asphalt and 31 mill tailings, construction and demolition debris or other commercial 32 recycling programs. The commissioner shall not designate any such mate- 33 rials as recyclable materials under this section for purposes of calcu- 34 lating the extent to which the department has met such recycling 35 percentage goals. 36 d. In calculating the percent of the department-managed solid waste 37 stream recycled in connection with the percentage goals set forth in 38 paragraph a of subdivision one of this section, the department shall 39 ensure that any quantity of material counted as recycled must be fully 40 included in the calculation of the city's total department-managed solid 41 waste stream. 42 e. All data used to make calculations pursuant to paragraphs a and b 43 of this subdivision shall be made available on the department's website 44 in raw form disaggregated by material type and using a non-proprietary 45 format on a monthly basis, or, if such data is not generated by the 46 department, within one month from the date that the department receives 47 reports of such information. 48 9. In the event that the department does not meet any recycling 49 percentage goal set forth in paragraphs a or b of subdivision one of 50 this section by the dates specified therein, the department shall, with- 51 in sixty days of the date for meeting such goal, expand recycling 52 outreach and education and shall take such other appropriate measures 53 including, but not limited to, directing such outreach and education to 54 the neighborhoods and community districts in which recycling diversion 55 rates fall below the median city recycling diversion rate and consulting 56 with the council to explore additional measures to meet the recycling

S. 8578 1159

1 percentage goals set forth in such subdivision. In expanding recycling 2 outreach and education, the department may work with other agencies or 3 entities designated for that purpose by the commissioner. 4 10. In the event that the department is unable to achieve two consec- 5 utive recycling percentage goals set forth in paragraphs a and b of 6 subdivision one of this section by the dates specified therein, in addi- 7 tion to the requirements of subdivision nine of this section, the 8 commissioner shall retain a special advisor, who shall be selected by 9 the mayor and the speaker, provided that the commissioner need not 10 retain such special advisor more than once every three years. Within one 11 hundred twenty days of such retention, such adviser shall submit a 12 report to the mayor and council recommending additional measures that 13 may be taken by the city following such report in order to meet such 14 recycling percentage goals. 15 § 16-305.1 Weekly collection of designated recyclable materials. 1. 16 Weekly collection of designated recyclable materials shall be maintained 17 in all local service delivery districts. 18 2. Effective July first, two thousand nine, and notwithstanding any 19 inconsistent provision of this chapter, the department shall be author- 20 ized, by written order of the commissioner, to implement and maintain 21 alternate week collection of designated recyclable materials in all 22 local service delivery districts, provided that the department may, by 23 written order of the commissioner, provide for more frequent collection 24 of designated recyclable materials in designated local service delivery 25 districts. Any such written order of the commissioner implementing 26 alternate week collection shall expire no later than March thirty-first, 27 two thousand ten. 28 3. For purposes of this section "designated recyclable materials" 29 shall mean solid waste that has been designated by the commissioner as 30 recyclable pursuant to section 16-305, section 16-307, or section 31 16-308.1 of this chapter. 32 4. Nothing in this section shall be construed to require collection of 33 designated recyclable materials in such parts of the city or during such 34 times of the year that such materials are not otherwise collected. 35 § 16-306 Private carter-collected waste. 1. The commissioner shall 36 adopt and implement rules designating recyclable materials that consti- 37 tute in the aggregate at least one-half of all solid waste collected by 38 private carters, and additional materials if the commissioner determines 39 that economic markets exist for them. Pursuant to subdivision two of 40 this section, such rules shall require generators of private carter-col- 41 lected waste to source separate some or all of the designated materials 42 and to arrange for lawful collection for recycling, reuse or sale for 43 reuse by private carters or persons other than private carters of such 44 source separated materials. With regard to designated materials that are 45 not required by such rules to be source separated, generators of private 46 carter-collected waste may source separate these designated materials 47 and, in any event, shall arrange for their lawful collection for recycl- 48 ing, reuse or sale for reuse by private carters or persons other than 49 private carters. If a generator of private carter-collected waste has 50 source separated the designated materials in accordance with the rules 51 and arranged for the lawful collection for recycling, reuse or sale for 52 reuse by private carters or persons other than private carters of such 53 source separated materials and, with regard to designated materials that 54 are not required by such rules to be source separated, arranged for 55 lawful collection for recycling, reuse or sale for reuse by private 56 carters or persons other than private carters, such arrangement shall

S. 8578 1160

1 constitute an affirmative defense to any proceeding brought against the 2 generator pursuant to section 16-324 of this title. 3 2. (a) The rules promulgated pursuant to subdivision one of this 4 section shall require that generators of waste collected by businesses 5 required to be licensed pursuant to section 16-505 of the code of the 6 preceding municipality source separate the designated materials in such 7 manner and to such extent as the commissioner determines to be necessary 8 to minimize contamination and maximize the marketability of such materi- 9 als. However, in promulgating such rules the commissioner shall not 10 require source separation of a material unless the commissioner has 11 determined that an economic market exists for such material. For the 12 purpose of this section, the term "economic market" refers to instances 13 in which the full avoided costs of proper collection, transportation and 14 disposal of source separated materials are equal to or greater than the 15 cost of collection, transportation and sale of said materials less the 16 amount received from the sale of said materials. 17 (b) (i) Any designated carter that collects source separated desig- 18 nated materials in a commercial waste zone pursuant to section 16-1002 19 of the code of the preceding municipality shall provide for the 20 collection of, and ensure the continued separation of, designated mate- 21 rials that have been source separated, provide for the separation of all 22 other designated materials, and provide for recycling of all the desig- 23 nated materials in accordance with the rules of the department and the 24 terms of any agreement entered into pursuant to section 16-1002 of the 25 code of the preceding municipality under which such designated carter is 26 providing such service. 27 (ii) Any person registered by the business integrity commission to 28 remove, collect, or dispose of trade waste generated in the course of 29 operation of such person's business pursuant to subdivision b of section 30 16-505 of the code of the preceding municipality shall provide for the 31 collection of, and ensure the continued separation of, designated mate- 32 rials that have been source separated, provide for the separation of all 33 other designated materials, and provide for recycling of all the desig- 34 nated materials in accordance with the rules promulgated by the business 35 integrity commission pursuant to this section and subject to the penal- 36 ties provided in subdivision a of section 16-515 of the code of the 37 preceding municipality. 38 (c) The commissioner and the chair of the business integrity commis- 39 sion shall have the authority to issue notices of violation for any 40 violation of any rules promulgated pursuant to this section and such 41 notices of violation shall be returnable in a civil action brought in 42 the name of the commissioner or the chair of the business integrity 43 commission before the environmental control board which shall impose a 44 penalty not to exceed ten thousand dollars for each such violation. 45 3. The department shall complete a study of commercial recycling in 46 the city no later than January first, two thousand twelve. Such commer- 47 cial recycling study shall focus on the putrescible portion of the 48 commercial waste stream, and shall include, but need not be limited to, 49 the following: (a) an integration of all data on commercial waste in the 50 city collected and transported through transfer stations and recycling 51 processors; (b) an assessment of current practices, operations and 52 compliance with applicable local laws and rules, consistent with the 53 scope of study set forth in the two thousand six Solid Waste Management 54 Plan; (c) estimates of waste composition and recycling diversion rates 55 from research conducted with respect to other jurisdictions; (d) a 56 computer-based model to measure the amount and composition of waste

S. 8578 1161

1 generated by different commercial sectors; (e) recommendations of meth- 2 ods to encourage waste prevention, reuse, recycling and composting for 3 each of the commercial sectors studied, including any recommended chang- 4 es to applicable law; and (f) an assessment of the efficiency of the 5 transportation of commercial waste within the commercial system by, 6 among other things, mapping and monitoring routes along which commercial 7 waste and recycling trucks travel, including long-haul carriers within 8 and outside the city. Following completion of the commercial recycling 9 study, the commissioner shall determine whether any additional studies 10 are necessary in order to improve commercial recycling practices in the 11 city and shall promptly report such determination to the mayor and the 12 council. 13 4. Notwithstanding any other provision of law, nothing in this section 14 shall be construed to (a) supersede, amend or eliminate any obligation 15 of an awardee or designated carter, as such terms are defined in section 16 16-1000 of the code of the preceding municipality, to meet the require- 17 ments set forth in any applicable agreement entered into pursuant to 18 section 16-1002 of the code of the preceding municipality, or (b) other- 19 wise amend or supersede any term of such agreement. 20 § 16-306.1 Organic waste. 1. When used in this section or section 21 16-324 of this chapter: 22 a. "Arena" means an establishment or facility that hosts live sporting 23 or entertainment events. 24 b. "Capacity" means the combined capacity of facilities that are capa- 25 ble of accepting and processing, consistent with the terms of this 26 section and exceeding a nominal amount, organic waste expected to be 27 generated by and collected from designated covered establishments. 28 c. "Catering establishment" means any room, place or space in the 29 city, which is used, leased or hired out for the business of serving 30 food or beverages for a particular function, occasion or event, to which 31 the public is not invited or admitted and wherein music or entertainment 32 is permitted. 33 d. "Covered establishment" means: 34 (i) any location at which a food manufacturer has a floor area of at 35 least twenty-five thousand square feet; 36 (ii) any location at which a food wholesaler has a floor area of at 37 least twenty thousand square feet; 38 (iii) any location at which a retail food store has a floor area of at 39 least ten thousand square feet, or any retail food store that is part of 40 a chain of three or more retail food stores that have a combined floor 41 area space of at least ten thousand square feet and that operate under 42 common ownership or control and receive waste collection from the same 43 private carter; 44 (iv) arenas or stadiums having a seating capacity of at least fifteen 45 thousand persons; 46 (v) any food service establishment that is part of a chain of two or 47 more food service establishments that have a combined floor area of at 48 least eight thousand square feet and that: (1) operate under common 49 ownership or control; (2) are individually franchised outlets of a 50 parent business; or (3) do business under the same corporate name, 51 provided that the requirements of subparagraph (i) of paragraph a of 52 subdivision three of this section shall not apply to any such food 53 service establishment when the building or premises in which such food 54 service establishment is located is in compliance with such requirement 55 pursuant to paragraph h of this definition;

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1 (vi) any location at which a food service establishment has a floor 2 area of at least seven thousand square feet, provided that the require- 3 ments of subparagraph (i) of paragraph a of subdivision three of this 4 section shall not apply to any such location when the building or prem- 5 ises containing such location is in compliance with such requirement 6 pursuant to paragraph g of this subdivision; 7 (vii) any building or premises where food service establishments 8 having a total combined floor area of at least eight thousand square 9 feet are located and where the owner of the building or premises, or its 10 agent, arranges or contracts with a private carter for the removal of 11 waste from food service establishments having no less than eight thou- 12 sand square feet of such building or premises, provided that any such 13 food service establishments shall comply with the requirements of 14 subparagraphs (ii), (iii) and (iv) of paragraph a of subdivision three 15 of this section, but such requirements shall not apply to the owner or 16 agent of any such building or premises; 17 (viii) any location at which a food preparation establishment has a 18 floor area of at least six thousand square feet; 19 (ix) any catering establishment that is required to provide for the 20 removal of waste pursuant to section 16-116 of the code of the preceding 21 municipality whenever the anticipated attendance for any particular 22 event is greater than one hundred persons; 23 (x) any food service establishments located within and providing food 24 to one or more hotels totaling at least one hundred sleeping rooms; and 25 (xi) sponsors of a temporary public event. 26 e. "Designated area" means within a one hundred mile radius of the 27 city. 28 f. "Food manufacturer" means any establishment that processes or 29 fabricates food products from raw materials for commercial purposes, 30 provided that it shall not include any establishment engaged solely in 31 the warehousing, distribution or retail sale of product. 32 g. "Food preparation establishment" means a business that is primarily 33 engaged in providing food or food services for a temporary, fixed time, 34 or based on contractual arrangements for a specified period of time at 35 locations other than such establishment's permanent place of business. 36 h. "Food service establishment" means any premises or part of a prem- 37 ises that is required to provide for the removal of waste pursuant to 38 section 16-116 of the code of the preceding municipality where food is 39 provided directly to the consumer, whether such food is provided free of 40 charge or sold, and whether consumption occurs on or off the premises. 41 Food service establishment shall include, but not be limited to, full- 42 service restaurants, fast food restaurants, cafes, delicatessens, coffee 43 shops, and business, institutional or government agency cafeterias, but 44 shall not include retail food stores, convenience stores, pharmacies, 45 and mobile food vending units, as such term is defined in section 89.03 46 of the health code. Food service establishment shall also not include 47 any premises or place of business where the sole or primary source of 48 food is a refreshment counter where the available food is limited to 49 items such as beverages, prepackaged items, and snacks. 50 i. "Food wholesaler" means any establishment primarily engaged in the 51 wholesale distribution of groceries and related products including, but 52 not limited to, packaged frozen food, dairy products, poultry products, 53 confectioneries, fish and seafood, meat products, and fresh fruits and 54 vegetables but shall not apply to establishments that handle only pre- 55 packaged, non-perishable foods.

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1 j. "Hotel" shall have the same meaning as set forth in section 27-2004 2 of the housing maintenance code. 3 k. "In vessel composting" means a process in which organic waste is 4 enclosed in a drum, silo, bin, tunnel, reactor, or other container for 5 the purpose of producing compost, maintained under controlled conditions 6 of temperature and moisture and where air-borne emissions are 7 controlled. 8 l. "Organic waste" shall have the same meaning as set forth in section 9 16-303 of this title, except that for purposes of this section, organic 10 waste shall not include food that is donated to a third party, food that 11 is sold to farmers for feedstock, and meat by-products that are sold to 12 a rendering company. 13 m. "Private carter" means a business licensed by the business integri- 14 ty commission pursuant to title sixteen-A of the code of the preceding 15 municipality. 16 n. "Retail food store" means any establishment or section of an estab- 17 lishment where food and food products offered to the consumer are 18 intended for off-premises consumption, but shall exclude convenience 19 stores, pharmacies, greenmarkets or farmers' markets and food service 20 establishments. 21 o. "Sponsor of a temporary public event" means the applicant for a 22 street activity permit pursuant to chapter one of title fifty of the 23 rules of the city of New York, or any successor provision, for any 24 activity on a public street, street curb lane, sidewalk or pedestrian 25 island or plaza with an anticipated attendance of greater than five 26 hundred persons per day where the activity will interfere with or 27 obstruct the regular use of the location by pedestrian or vehicular 28 traffic. Such term shall not include activities conducted pursuant to a 29 valid film permit, demonstrations, parades or block parties. 30 p. "Stadium" means an establishment or facility that hosts live sport- 31 ing or entertainment events. 32 2. The commissioner shall, on a regular basis and no less than annual- 33 ly, evaluate the capacity of all facilities within the designated area 34 and the cost of processing organic waste by composting, aerobic or anae- 35 robic digestion, or any other method of processing organic waste that 36 the department approves by rule. If the commissioner determines that 37 there is sufficient capacity and that the cost of processing organic 38 waste consistent with this section is competitive with the cost of 39 disposing of organic waste by landfill or incineration, he or she shall 40 designate by rule all covered establishments or a subset of covered 41 establishments, based on any criteria, among such covered establish- 42 ments, that generate a quantity of organic waste that would not exceed 43 the evaluated capacity. All such designated covered establishments shall 44 comply with the requirements of subdivision three of this section begin- 45 ning no later than six months following such designation. In addition, 46 the commissioner shall include in his or her evaluation the capacity of 47 any facilities outside of the designated area that have arrangements or 48 contracts with transfer stations or private carters to accept and proc- 49 ess organic waste generated by and collected from covered establish- 50 ments. 51 3. a. Each designated covered establishment shall: 52 (i) either (1) ensure collection by a private carter of all organic 53 waste generated by such establishment for purposes of composting, aero- 54 bic or anaerobic digestion, or any other method of processing organic 55 waste that the department approves by rule, (2) transport its own organ- 56 ic waste to a facility that provides for composting, aerobic or anaero-

S. 8578 1164

1 bic digestion, or any other method of processing organic waste that the 2 department approves by rule, provided that the covered establishment 3 first obtains a registration issued by the business integrity commission 4 pursuant to subdivision b of section 16-505 of the code of the preceding 5 municipality, or (3) provide for on-site in vessel composting, aerobic 6 or anaerobic digestion, or any other method of processing organic waste 7 that the department approves by rule for some or all of the organic 8 waste it generates on its premises, provided that it arranges for the 9 collection or transport of the remainder of such organic waste, if any, 10 in accordance with clause one or two of this subparagraph; 11 (ii) post a sign, which shall be in addition to any other sign 12 required to be posted pursuant to this code, that states clearly and 13 legibly the trade or business name, address, and telephone number of, 14 and the day and time of pickup by, the private carter that collects the 15 covered establishment's organic waste, that such covered establishment 16 transports its own organic waste, or that such covered establishment 17 provides for on-site processing for all of the organic waste it gener- 18 ates on its premises, provided that: 19 (1) such sign shall be prominently displayed by affixing it to a 20 window near the principal entrance to the covered establishment so as to 21 be easily visible from outside the building or, if this is not possible, 22 prominently displayed inside the covered establishment near the princi- 23 pal entrance; 24 (2) catering establishments shall not be required to display on such 25 sign the day and time of the pickup by the private carter that collects 26 the establishment's organic waste; and 27 (3) this paragraph shall not apply to sponsors of temporary public 28 events; 29 (iii) provide separate bins for the disposal of organic waste in any 30 area where such organic waste is generated and disposed of; and 31 (iv) post instructions on the proper separation of organic waste where 32 such instructions will be visible to persons who are disposing of organ- 33 ic waste, provided that this subparagraph shall not apply to sponsors of 34 temporary public events. 35 b. Any covered establishment that arranges for the collection by a 36 private carter of its organic waste pursuant to this subdivision shall 37 not commingle such organic waste with other designated and non-designat- 38 ed recyclable material or solid waste, and shall place such organic 39 waste out for collection by a private carter in a container or contain- 40 ers that (i) has a lid and a latch that keeps the lid closed and is 41 resistant to tampering by rodents or other wildlife, (ii) has the capac- 42 ity that meets the disposal needs of the covered establishment and its 43 private carter, (iii) is compatible with the private carter's hauling 44 collection practices, and (iv) is closed and latched at the time it is 45 placed out for collection. 46 4. Any private carter that collects source separated organic waste 47 shall either: 48 a. deliver collected organic waste to a transfer station that has 49 represented that it will deliver such organic waste to a facility for 50 purposes of composting, aerobic or anaerobic digestion, or any other 51 method of processing organic waste that the department approves by rule; 52 or 53 b. deliver such organic waste directly to a facility for purposes of 54 composting, aerobic or anaerobic digestion, or any other method of proc- 55 essing organic waste that the department approves by rule.

S. 8578 1165

1 5. Any transfer station that receives source separated organic waste 2 pursuant to this section shall deliver or have delivered such organic 3 waste directly to a facility that accepts organic waste for purposes of 4 composting, aerobic or anaerobic digestion, or any other method of proc- 5 essing organic waste that the department approves by rule. This subdivi- 6 sion shall not apply to waste that cannot be processed at an organic 7 waste processing facility. 8 6. The provisions of this section relating to private carters shall be 9 enforced by the business integrity commission and the department. The 10 provisions of this section relating to covered establishments shall be 11 enforced by the department, the department of health and mental hygiene, 12 and the department of consumer and worker protection. 13 7. The department, the business integrity commission, the department 14 of health and mental hygiene, and the department of consumer affairs may 15 promulgate any rules necessary to implement this section, including, but 16 not limited to, rules establishing reporting requirements sufficient to 17 demonstrate compliance with this chapter. 18 8. Any person who owns or operates two or fewer food service estab- 19 lishments may request, and the commissioner shall grant, a waiver of the 20 requirements of this section if: a. no single food service establishment 21 has a floor area of at least seven thousand square feet; b. the food 22 service establishment or establishments are individually franchised 23 outlets of a parent business covered by paragraph d of the definition of 24 "covered establishment" set forth in subdivision one of this section; 25 and c. the owner or operator establishes that such food service estab- 26 lishment or establishments do not receive private carting services 27 through a general carting agreement between a parent business and a 28 private carter. Such waiver shall be valid for twelve months and shall 29 be renewable upon application to the commissioner via the department's 30 website. 31 § 16-307 City agency waste. 1. The commissioner shall adopt, amend and 32 implement rules, as necessary, governing the source separation or post- 33 collection separation, collection, processing, marketing, and sale of 34 designated recyclable materials including, but not limited to, desig- 35 nated metal, glass, plastic and paper generated by any agency, as such 36 term is defined in section 1-112 of the code of the preceding munici- 37 pality. 38 2. Every agency shall, no later than July first, two thousand eleven, 39 prepare and submit to the commissioner for approval, a waste prevention, 40 reuse and recycling plan. Such plan shall provide for the source sepa- 41 ration of designated metal, glass, plastic and paper, and such other 42 designated recyclable materials as the commissioner deems appropriate, 43 in all offices and buildings occupied by agencies that receive 44 collection service from the department and, to the extent practicable, 45 in those that receive private carter collection. Such plans shall 46 provide for the source separation of designated recyclable materials in 47 the lobbies of such offices or buildings that receive department 48 collection, unless the placement of bins for the source separation of 49 designated recyclable materials would be in violation of any other 50 provision of law, and, to the extent practicable, in the lobbies of such 51 offices or buildings that receive private carter collection. Each agency 52 shall designate a lead recycling or sustainability coordinator to over- 53 see implementation of such plans. If an agency has offices in more than 54 one city-owned building, then such agency shall designate one assistant 55 coordinator for each building in which such agency has offices, except

S. 8578 1166

1 the building in which the lead coordinator has his or her office, to 2 assist the agency's lead coordinator. 3 3. On or before July first, two thousand twelve and annually thereaft- 4 er, every lead recycling or sustainability coordinator shall submit a 5 report to the head of his or her respective agency and to the commis- 6 sioner, summarizing actions taken to implement the waste prevention, 7 reuse and recycling plan for the previous twelve-month reporting period, 8 proposed actions to be taken to implement such plan, and updates or 9 changes to any information included in such plan. The department shall 10 consolidate the information contained in all reports prepared pursuant 11 to this subdivision as part of the department's annual zero waste report 12 required pursuant to subdivision b of section 16-316.5 of the code of 13 the preceding municipality. 14 § 16-307.1 School recycling. 1. The chancellor of the department of 15 education shall designate a sustainability director for the department 16 of education, who shall be responsible for (a) setting policies, guide- 17 lines and goals to promote waste prevention, reuse and recycling prac- 18 tices, and (b) coordinating the department of education's waste 19 prevention, reuse and recycling program in all school buildings, charter 20 school locations, office buildings, and any other facilities under the 21 jurisdiction of the department of education that receive department 22 collection service. 23 2. The chancellor of the department of education shall promulgate such 24 rules as may be necessary to require that each school building, charter 25 school location, office building, and any other facility under the 26 jurisdiction of the department of education that receives department 27 collection service, develop a site-specific waste prevention, reuse and 28 recycling plan. Each such plan shall be implemented by January first, 29 two thousand eleven. Such plan shall include, at a minimum, a require- 30 ment that each classroom maintain a separate receptacle, container or 31 bin for the collection of designated recyclable paper, and that such 32 receptacle, container or bin be appropriately labeled or decorated with 33 recycling information. Such plan shall also provide that separate recep- 34 tacles, containers or bins for the collection of designated metal, glass 35 and plastic be appropriately labeled or decorated with recycling infor- 36 mation and be placed as close as practicable to school entrances, unless 37 the placement of such bins would be in violation of any other provision 38 of law, and in locations within schools where food and beverages are 39 routinely consumed. 40 3. The principal of each school under the jurisdiction of the depart- 41 ment of education shall designate a sustainability coordinator for his 42 or her school who shall be responsible for implementing his or her 43 school's waste prevention, reuse and recycling plan. The principal or 44 the sustainability coordinator shall complete, and submit to the depart- 45 ment of education sustainability director and to the chancellor, an 46 annual survey regarding such school's compliance with its waste 47 prevention, reuse and recycling plan. 48 4. The chancellor shall submit a report to the commissioner by January 49 first of each year regarding compliance with the requirements of this 50 section for the preceding July first through June thirtieth. The depart- 51 ment shall include the chancellor's report as part of the department's 52 annual zero waste report required pursuant to subdivision b of section 53 16-316.5 of the code of the preceding municipality. 54 5. The department shall distribute a model school waste prevention, 55 reuse and recycling plan to all primary and secondary schools not under 56 the jurisdiction of the department of education that receive department

S. 8578 1167

1 collection service. All such primary and secondary schools shall desig- 2 nate a sustainability coordinator for each such school, and develop a 3 site-specific waste prevention, reuse and recycling plan. Each such plan 4 shall be implemented by January first, two thousand eleven. Such plan 5 shall include, at a minimum, a requirement that each room used primarily 6 as a classroom for students between kindergarten and the twelfth grade 7 maintain a separate receptacle, container or bin for the collection of 8 designated recyclable paper, and that such receptacle, container or bin 9 be appropriately labeled or decorated with recycling information. Such 10 plan shall also provide that separate receptacles, containers or bins 11 for the collection of designated metal, glass and plastic be appropri- 12 ately labeled or decorated with recycling information and be placed as 13 close as practicable to school entrances, unless the placement of such 14 bins would be in violation of any other provision of law. Such bins 15 shall also be placed in centralized locations within such schools where 16 food and beverages are routinely consumed, other than classrooms, such 17 as cafeterias and lunchrooms, or, if such school lacks a cafeteria or 18 lunchroom, in a location readily accessible to all students in such 19 school. 20 § 16-307.2 City agency food waste prevention plans. 1. Definitions. 21 As used in this section, the following terms have the following mean- 22 ings: 23 a. Covered agency. The term "covered agency" means an agency that has 24 entered into at least one food purchase contract within the previous 25 twelve months. 26 b. Food purchase contract. The term "food purchase contract" means: 27 (i) a contract entered into by an agency in excess of the small purchase 28 limits established by the procurement policy board, the principal 29 purpose of which is to provide food, provided that such contract author- 30 izes purchases only by the agency that entered into such contract, or 31 (ii) a purchase order for food the value of which exceeds one hundred 32 thousand dollars, made by an agency against an existing contract. 33 c. Surplus food. The term "surplus food" means any food obtained 34 through a food purchase contract that is not used for the purpose for 35 which it was purchased and that would otherwise be discarded. 36 2. Agency food waste prevention plan. Every covered agency shall, no 37 later than October first, two thousand twenty-one, prepare and submit to 38 the commissioner for approval, a food waste prevention plan. Any agency 39 that becomes a covered agency after October first, two thousand twenty- 40 one shall prepare and submit to the commissioner for approval, a food 41 waste prevention plan within ninety days of becoming a covered agency. 42 The commissioner shall submit each approved agency food waste prevention 43 plan to the speaker of the council not later than seven days after such 44 approval. Such plan shall conform to all applicable provisions of law 45 and, at a minimum: 46 a. Establish guidelines for how to identify surplus food that may be 47 safely donated; 48 b. Identify methods to reduce the amount of surplus food, including 49 the utilization of the food donation web portal described in section 50 16-497 of the code of the preceding municipality, when appropriate; 51 c. Set forth procedures for the safe, efficient donation of surplus 52 food; and 53 d. Include any other provisions necessary to facilitate the reduction 54 of surplus food and the donation of surplus food. 55 3. Food waste prevention coordinator. Upon approval of an agency's 56 food waste prevention plan by the commissioner, each covered agency

S. 8578 1168

1 shall designate a coordinator to oversee implementation of the plan 2 required by subdivision two of this section. 3 4. Report. a. On or before January first, two thousand twenty-two, and 4 annually thereafter for the previous twelve-month reporting period, each 5 covered agency shall submit a report to the commissioner. Such report 6 shall include, at a minimum: 7 i. A summary of the actions taken to implement the agency's food waste 8 prevention plan; 9 ii. Any proposed additional actions to be taken to implement such 10 plan; and 11 iii. Any updates or changes to any information included in such plan. 12 b. The department shall consolidate the information contained in all 13 reports prepared pursuant to this subdivision and include such informa- 14 tion as part of the department's annual zero waste report required 15 pursuant to subdivision b of section 16-316.5 of the code of the preced- 16 ing municipality. 17 § 16-307.3 School food waste. 1. Definitions. As used in this section, 18 the following terms have the following meanings: 19 a. Chancellor. The term "chancellor" means the chancellor of the city 20 school district of the city of New York. 21 b. Food purchase contract. The term "food purchase contract" means any 22 purchase order or contract entered into by the department of education, 23 the principal purpose of which is to provide food, and the value of 24 which exceeds one hundred thousand dollars. 25 c. School. The term "school" means a school of the city school 26 district of the city of New York. 27 d. Surplus food. The term "surplus food" means any food obtained 28 through a food purchase contract that is not used for the purpose for 29 which it was purchased and that would otherwise be discarded. 30 2. Food waste prevention plan. No later than October first, two thou- 31 sand twenty-one, the chancellor shall prepare and submit to the commis- 32 sioner a food waste prevention plan. Preparation of such food waste 33 prevention plan shall provide school sustainability coordinators desig- 34 nated pursuant to subdivision three of section 16-307.1 of this chapter 35 an opportunity to offer ideas concerning food waste prevention. Such 36 plan shall conform to all applicable provisions of law and include, but 37 need not be limited to, the following information: 38 a. Guidelines for how to identify surplus food that may be safely 39 donated; 40 b. Any methods the chancellor has identified to reduce the amount of 41 surplus food in schools; 42 c. Any procedures the chancellor has identified that would allow the 43 department of education or a school to donate surplus food safely and 44 efficiently; and 45 d. Any barriers the chancellor has identified that would prevent the 46 safe and efficient donation of surplus food. 47 3. Review by commissioner. The commissioner shall review the plan 48 required pursuant to subdivision two of this section within ninety days 49 of its submission and shall submit recommendations on the plan to the 50 chancellor. The commissioner shall simultaneously submit a copy of the 51 chancellor's plan and the commissioner's recommendations to the speaker 52 of the council. 53 4. Report. On or before February first, two thousand twenty-two, the 54 chancellor shall submit a report to the commissioner. Such report shall 55 include, at a minimum:

S. 8578 1169

1 a. A summary of actions taken to implement the food waste prevention 2 plan; 3 b. A summary of actions that the chancellor proposes be taken to 4 implement such plan; and 5 c. Any updates or changes to any information included in such plan. 6 § 16-308 Organic waste. 1. The commissioner shall provide for the 7 source separation, collection and composting of yard waste, unless the 8 generator otherwise provides for recycling or storage for composting or 9 mulching. In addition, the commissioner shall provide for the collection 10 and composting of yard waste generated and source separated at residen- 11 tial properties owned or operated by the New York city housing authori- 12 ty. There shall be operated by or on behalf of the department one or 13 more yard waste composting facilities through which the department shall 14 compost yard waste collected by or delivered to the department pursuant 15 to this section. In order to comply with this provision, the department 16 may utilize the services of privately-owned or operated facilities. The 17 department shall also work in consultation with the composting facility 18 siting task force established by the two thousand six solid waste 19 management plan to identify additional locations to site yard waste 20 composting facilities with the goal of establishing at least one such 21 composting facility in each borough where the department conducts yard 22 waste composting collection. 23 2. Any city agency, or person under contract with a city agency, that 24 generates a substantial amount of yard waste shall, in coordination with 25 the department, provide for the source separation, collection and 26 composting of such yard waste. Unless otherwise provided by law, the 27 department shall accept for composting any city agency yard waste source 28 separated for department collection pursuant to this subdivision. 29 3. No landfill, waste transfer station, intermodal facility, incinera- 30 tor or resource recovery facility owned, operated or used by the depart- 31 ment shall accept truck loads of department-managed waste primarily 32 composed of yard waste for final disposal, except that composted yard 33 waste may be used as part of the final vegetative cover for a department 34 landfill. 35 4. All city agencies responsible for the maintenance of public lands 36 shall to the maximum extent practicable and feasible give preference to 37 the use of compost materials derived from the city's yard waste in all 38 land maintenance activities. 39 5. Generators of yard waste, except those identified in subdivision 40 seven of this section, shall separate, tie, bundle, or place into bags 41 or receptacles, in accordance with rules promulgated by the commission- 42 er, any yard waste set out for collection by the department pursuant to 43 subdivision two of this section. The commissioner shall notify all resi- 44 dents in districts that receive yard waste collection by the department 45 of such pre-collection procedures, and undertake any other action neces- 46 sary to effectuate the purposes of this subdivision. 47 6. No person engaged in a business that generates yard waste shall 48 leave such yard waste for collection by the department, or disperse such 49 yard waste in or about the curb or street. Any person engaged in a busi- 50 ness that generates yard waste shall be required to collect and dispose 51 of such yard waste at a permitted composting facility; provided, howev- 52 er, that if the department, by written order of the commissioner, deter- 53 mines that there is insufficient capacity at permitted composting facil- 54 ities within the city, then such yard waste may be disposed of at any 55 appropriately permitted solid waste management facility.

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1 7. Each permitted composting facility within the city, including those 2 operated by city agencies, shall annually report to the commissioner the 3 amount of yard waste and any other organic waste collected and disposed 4 of by weight at such composting facility. All such reports shall be 5 submitted prior to February first of each calendar year and shall 6 contain the amount collected and disposed of for the previous calendar 7 year. The department shall consolidate the information contained in all 8 reports prepared pursuant to this subdivision and include such informa- 9 tion as part of the department's annual zero waste report required 10 pursuant to subdivision b of section 16-316.5 of the code of the preced- 11 ing municipality. 12 8. No person residing in a district where the department provides 13 residential yard waste composting collection pursuant to subdivision two 14 of this section shall dispose of grass clippings as regular waste for 15 collection by the department during the period of time when the depart- 16 ment conducts such composting collection. The department shall conduct 17 outreach and education to inform residents within such districts of the 18 dates when it will conduct yard waste composting collection. No person 19 residing in a district where the department provides residential yard 20 waste composting collection shall be held liable for a violation of this 21 subdivision during the first year the department provides such residen- 22 tial yard waste composting collection. 23 § 16-308.1 Curbside organics collection. 1. Organics collection 24 program. The department shall establish a mandatory citywide curbside 25 organics collection program for the diversion of organic waste in 26 accordance with this section. Such program shall be implemented by no 27 later than: 28 a. October second, two thousand twenty-three, for residential proper- 29 ties in no less than thirty sanitation districts, as determined by the 30 commissioner by rule. 31 b. October seventh, two thousand twenty-four, for residential proper- 32 ties in all remaining sanitation districts. 33 2. Implementation plan. No later than July first, two thousand twen- 34 ty-three, the department shall develop, submit to the mayor and speaker 35 of the council, and post on the department's website a curbside organics 36 collection implementation plan. Such plan shall include information 37 related to, at minimum: 38 a. How the department will implement such program; 39 b. The education and outreach program required pursuant to subdivision 40 five of this section; and 41 c. How the department will distribute necessary materials, including 42 rodent-proof organics collection bins, at no cost to residential build- 43 ing owners, and a timeline for such distribution. 44 3. End use of collected organic waste. In the next solid waste manage- 45 ment plan prepared pursuant to section 27-0107 of the environmental 46 conservation law and presented to the council pursuant to section 16-140 47 of the code of the preceding municipality following the effective date 48 of this section, the department shall include a plan to maximize the 49 usable composting of organic waste collected pursuant to this section. 50 Such plan for the usable composting of organic waste shall describe the 51 amount of organic waste collected and sent to composting facilities to 52 be processed into usable compost pursuant to this section. 53 4. Reporting. The department shall report by weight the total amount 54 of organic waste diverted pursuant to this section during the previous 55 year, disaggregated by sanitation district. Such report shall be

S. 8578 1171

1 included as part of the department's annual zero waste report required 2 pursuant to section 16-316.5 of the code of the preceding municipality. 3 5. Education and outreach. The department shall develop an outreach 4 and education program to educate residents, building owners, and staff 5 of residential buildings on the curbside organics collection program 6 established pursuant to this section. Materials used for such outreach 7 and education program shall be available in all designated citywide 8 languages, as defined in section 23-1101 of the code of the preceding 9 municipality, and any additional languages as determined by the depart- 10 ment in consultation with local community organizations. No later than 11 two months prior to the implementation of the curbside organics 12 collection program for residential properties in a sanitation district 13 pursuant to subdivision one of this section, the department shall 14 distribute such materials to residents, building owners, and community 15 based organizations in such district. Such materials shall also be made 16 available on the department's website. Such materials shall include: 17 a. A detailed explanation of organic waste and the benefits of curb- 18 side organics collection; 19 b. Information on how the curbside organics collection program will be 20 implemented and instructions for how to properly source separate organic 21 waste; and 22 c. Any other information as determined by the commissioner. 23 6. Rules. The commissioner shall adopt and implement rules as neces- 24 sary to effectuate this section. Such rules may include, but need not be 25 limited to, the designation of organic waste as a recyclable material 26 pursuant to subdivision two of section 16-305 of this chapter, proce- 27 dures requiring the placement of organic waste at the curbside, in 28 specialized containers or in another manner determined by the commis- 29 sioner pursuant to subdivision four of such section, and the implementa- 30 tion and enforcement of this section and such rules in buildings 31 containing four or more dwelling units pursuant to subdivisions five, 32 six and seven of section 16-305 of this chapter. 33 7. Penalty. A residential building owner who violates this section 34 shall be liable for a civil penalty as set forth in section 16-324 of 35 this title, except that prior to April first, two thousand twenty-five, 36 a residential building owner who violates this section shall be issued a 37 written warning that a violation has been observed, provided that noth- 38 ing in this subdivision shall preclude the department from enforcing any 39 rules relating to yard waste separation promulgated pursuant to section 40 16-308 of this chapter. 41 § 16-308.2 Organic waste drop off sites. 1. Definitions. As used in 42 this section, the following terms have the following meanings: 43 a. Community partner. The term "community partner" means a not-for- 44 profit organization, community garden or other similar organization that 45 operates or makes available to the public an organic waste drop off 46 site. 47 b. Community scale composting facility. The term "community scale 48 composting facility" means a physical location operated by a not-for- 49 profit organization that engages in composting, through a registration 50 or agreement with the department, but that is not of sufficient size so 51 as to be required to obtain a permit for the operation of such facility 52 from the New York state department of environmental conservation. 53 c. Organic waste drop off site. The term "organic waste drop off site" 54 means a physical location for the collection of organic waste from 55 members of the public.

S. 8578 1172

1 2. Except as provided in subdivision three of this section, no later 2 than April first, two thousand twenty-four, the department, in consulta- 3 tion with community partners, shall ensure that no less than thirty 4 organic waste drop off sites are established and operational throughout 5 the city, provided that no less than three such sites are established in 6 each borough. Each such site shall have a minimum of twenty hours avail- 7 able per week for individuals to drop off organic waste, except that 8 organic waste drop off sites operated by community partners shall be 9 open for a minimum of five hours per week, and each such organic waste 10 drop off site shall be located in a geographic area that is easily 11 accessible, including for persons with disabilities, and in close prox- 12 imity to public transportation, provided, however, an organic waste drop 13 off site operated by a community partner may be operated on a seasonal 14 basis. 15 3. For the purposes of subdivision two of this section, an organic 16 waste drop off site may be a community scale composting facility or a 17 drop off site operated by the department, including co-location with a 18 recycling center, as required pursuant to section 16-310.3 of this chap- 19 ter. 20 4. No later than January first, two thousand twenty-six, the depart- 21 ment shall review the requirements of subdivision two of this section 22 and submit to the mayor and the speaker of the council a recommendation 23 as to whether such drop off sites should be continued. 24 5. Site information. The department shall post on its website informa- 25 tion about each organic waste drop off site established pursuant to this 26 section. Such information shall include each such site's address, 27 contact information, hours of operation and services provided. Where 28 applicable, such information shall also be clearly posted in a publicly 29 visible location at the entrance to each such site. 30 6. Education and outreach. The department, in consultation with any 31 agency or office designated by the mayor, shall develop an education and 32 outreach program to inform residents about the organic waste drop off 33 sites and community scale composting facilities established pursuant to 34 this section. Such education and outreach shall include the information 35 set forth in subdivision five of this section. Any educational or 36 outreach materials developed pursuant to this section, as well as any 37 other educational materials on recycling that the commissioner deems 38 relevant, shall be available in all designated citywide languages, as 39 defined in section 23-1101 of the code of the preceding municipality, 40 and supplied to each organic waste drop off site. The department shall 41 also perform outreach to community partners and other not-for-profit 42 organizations to provide them with information on how the public can 43 engage in opportunities to work with the department to open and operate 44 organic waste drop off sites and community scale composting facilities. 45 7. Reporting. The department shall report annually on the operation of 46 organic waste drop off sites. Such report shall be included as part of 47 the department's annual zero waste report required pursuant to section 48 16-316.5 of the code of the preceding municipality. Such report shall 49 include, at a minimum, the following information, disaggregated by 50 organic waste drop off site where feasible: 51 a. The total amount of material collected at such site; 52 b. The number of individuals who used such site during the reporting 53 period; 54 c. The number of full-time and part-time staff members working at such 55 site, if any; and

S. 8578 1173

1 d. Where the organic waste collected at such site was processed 2 following collection. 3 § 16-309 Christmas trees. The commissioner shall establish and imple- 4 ment a curbside collection system for Christmas trees during a minimum 5 of two weeks in January of each year and provide for the composting or 6 recycling of the Christmas trees the department collects or receives for 7 disposal. 8 § 16-310 Public space recycling. 1. The department shall expand its 9 public space recycling program by increasing the number of public space 10 recycling receptacles for the collection of recyclable materials includ- 11 ing, but not limited to, metal, glass, plastic and paper designated as 12 recyclable materials by the commissioner, to a cumulative total of at 13 least five hundred public space recycling receptacles, and to a cumula- 14 tive total of at least one thousand public space recycling receptacles, 15 at public locations in the city, which shall be in or near public parks, 16 transit hubs, or commercial locations with high-pedestrian traffic. As 17 part of such expansion, the department shall place public space recycl- 18 ing receptacles in all business improvement districts that provide 19 public litter basket maintenance. Whenever practicable, public space 20 recycling receptacles placed pursuant to this section shall be placed 21 adjacent to public litter baskets. 22 2. Notwithstanding the provisions of subdivision one of this section, 23 the department shall not be required to expand the public space recycl- 24 ing program beyond existing or newly-established collection routes that 25 can be efficiently serviced by the department. The commissioner shall 26 have the authority to remove any public space recycling receptacle 27 placed pursuant to this section, provided that the department replaces 28 any such public space recycling receptacle, within thirty days of 29 removal, with additional public space recycling receptacles at the same 30 or in a different location on a one-to-one basis. 31 3. No person responsible for removing or transporting recyclable mate- 32 rials placed in public space recycling receptacles shall commingle such 33 recyclable materials with non-recyclable materials or otherwise improp- 34 erly dispose of such recyclable materials. 35 4. The department shall report the total number of public space recy- 36 cling receptacles added during the relevant reporting year, and the 37 locations in which they were placed. Such report shall be included as 38 part of the department's annual zero waste report required pursuant to 39 subdivision b of section 16-316.5 of the code of the preceding munici- 40 pality. 41 5. The department may enter into sponsorship or partnership agreements 42 with entities such as for-profit and not-for-profit corporations and 43 district management associations established in accordance with section 44 25-414 of the code of the preceding municipality to further the goals of 45 this chapter. 46 § 16-310.1 Textile reuse and recycling program. 1. On or before Janu- 47 ary first, two thousand eleven, the department shall establish a city- 48 wide textile reuse and recycling program that shall, at a minimum, 49 provide for the recovery of textiles by placing department-approved 50 publicly accessible textile drop-off bins at appropriate locations on 51 city property or property maintained by the city and organizing public 52 textile reuse and recycling sites throughout the city that provide 53 convenient drop-off locations for all city residents. In addition, the 54 commissioner shall explore opportunities to work cooperatively with 55 private entities, including, but not limited to, not-for-profit corpo- 56 rations and religious institutions, to promote expanded siting of

S. 8578 1174

1 publicly accessible textile drop-off bins on private property throughout 2 the city. The department shall consider using department personnel or 3 facilities in order to implement the provisions of this section. 4 2. No publicly accessible textile drop-off bin placed pursuant to this 5 section shall be placed on city property or property maintained by the 6 city, or on a public sidewalk or roadway, unless otherwise authorized by 7 the city. No publicly accessible textile drop-off bin shall be placed on 8 private property without the written permission of the property owner or 9 the property owner's authorized agent. The owner or other person respon- 10 sible for each such bin shall report at least every three months to the 11 department the amount of textiles collected in such bin by weight. Each 12 publicly accessible textile drop-off bin shall prominently display on 13 the front and on at least one other side of the bin, the name, address 14 and telephone number of the owner or other person responsible for the 15 bin. This information shall be printed in characters that are plainly 16 visible. In no event shall a post office box be considered an acceptable 17 address for purposes of this subdivision. 18 3. The department shall report by weight the amount of textiles 19 collected in publicly accessible textile drop-off bins located on city 20 property or property maintained by the city, through public textile 21 reuse and recycling sites pursuant to subdivision one of this section 22 and in publicly accessible textile drop-off bins maintained on private 23 property. Such report shall be included as part of the department's 24 annual zero waste report required pursuant to subdivision b of section 25 16-316.5 of the code of the preceding municipality. 26 § 16-310.2 Paint stewardship program. 1. The commissioner shall estab- 27 lish a voluntary paint stewardship program under which manufacturers of 28 architectural paint, in cooperation with distributors of architectural 29 paint and retail establishments that sell, or offer for sale, architec- 30 tural paint in the city, may establish a collection or other reclamation 31 system to collect architectural paint from consumers for reuse, recycl- 32 ing or environmentally sound disposal. 33 2. The commissioner shall provide assistance or guidance to partic- 34 ipating architectural paint manufacturers, distributors and retail 35 establishments in developing and implementing strategies to reduce the 36 quantity of architectural paint in the waste stream, promote the reuse 37 of architectural paint that would otherwise be discarded and disseminate 38 information regarding options to recycle architectural paint including, 39 but not limited to, posting information regarding the voluntary paint 40 stewardship program on the department's website. 41 § 16-310.3 Community recycling. 1. Community recycling centers. No 42 later than December thirty-first, two thousand twenty-four, the depart- 43 ment shall ensure that at least two community recycling centers are 44 established and operational in each borough. Each such center shall be 45 available for drop offs at least twenty-four hours per week, including 46 weekends. Such centers shall be located in geographic areas that are 47 easily accessible, including for persons with disabilities, and shall be 48 in close proximity to public transportation and public housing develop- 49 ments, where practicable. Any organic waste drop off site provided for 50 by local law may be co-located within such a center. 51 2. Community recycling events. No later than September thirtieth, two 52 thousand twenty-three, and annually thereafter, the department shall 53 host no less than one community recycling event in each community 54 district. Each such event shall be located in a geographic area that is 55 easily accessible, including for persons with disabilities, and in close 56 proximity to public transportation and public housing developments,

S. 8578 1175

1 where practicable. Such events may be co-located with other sanitation 2 services. Community recycling events required by this subdivision shall 3 be in addition to any recycling event operated by an entity or organiza- 4 tion other than the department, provided that any recycling event oper- 5 ated pursuant to a contract with the department shall be considered to 6 be hosted by the department for purposes of this section. 7 3. Materials collected. Each community recycling center and community 8 recycling event shall accept, to the extent practicable, inorganic mate- 9 rial that is not collected through regular curbside collection but that 10 can be recycled or reused. One community recycling center per borough 11 shall also accept hazardous material, as practicable and as defined by 12 the department, that should not be disposed of as curbside waste. 13 4. Community recycling center and event information. The department 14 shall make available on the department's website, and distribute to each 15 local community board, the following information about the community 16 recycling centers and community recycling events required by this 17 section: 18 a. Location, including street address and borough; 19 b. Contact information; 20 c. Hours of operation; and 21 d. Services provided. 22 5. Education and outreach. The department, in consultation with any 23 agency identified by the mayor, shall develop an outreach and education 24 program to inform residents about community recycling centers and commu- 25 nity recycling events, including their locations, contact information, 26 hours of operation, and the services they provide. 27 6. Reporting. The department shall report annually on the operation 28 community recycling centers and community recycling events required 29 pursuant to this section. Such report shall be included as part of the 30 department's annual waste diversion report required pursuant to section 31 16-316.5 of the code of the preceding municipality. Such report shall 32 include, but need not be limited to, the following information, disag- 33 gregated by community recycling center and community recycling event, 34 where feasible: 35 a. The number of individuals utilizing such centers and events; 36 b. The material collected at each such center and event, disaggregated 37 by material type; 38 c. The number of full-time and part-time staff persons working at each 39 such center and event; 40 d. Where each type of material collected is sent; and 41 e. A description of the education programs offered to the public. 42 § 16-311. Recycling outreach and education. 1. The department shall 43 provide instruction and materials for residential building owners, net 44 lessees or persons in charge of such buildings, and their employees and 45 residents, in order to improve compliance with the provisions of this 46 chapter. 47 2. The commissioner shall establish a recycling education program that 48 shall include recycling instructional workshops, training curricula and 49 other relevant materials for residential building owners, net lessees or 50 persons in charge of such buildings, and their employees and residents, 51 including an internet-based recycling tutorial. Such program shall also 52 provide instructional workshops, training curricula, and other relevant 53 material to employees of city agencies, including a leaf and yard waste 54 training program for employees of any such agencies that generate 55 significant leaf and yard waste. The commissioner may utilize a private

S. 8578 1176

1 entity or not-for-profit corporation to assist with the establishment or 2 performance of such program. 3 § 16-312 Processing recyclable materials. The commissioner shall 4 establish procedures and standards for processing recyclable materials 5 designated pursuant to section 16-305 of this chapter in city owned or 6 operated recycling centers, city owned or operated transfer stations or 7 any city owned or operated facility that renders recyclable materials 8 suitable for reuse or marketing and sale. The commissioner shall annu- 9 ally review such procedures and standards and make any changes necessary 10 to conform to the requirements of the marketplace. 11 § 16-313 Marketing recyclable materials. The department shall estab- 12 lish procedures, standards and strategies to market the recyclable mate- 13 rials designated pursuant to section 16-305 of this chapter, including 14 but not limited to maintaining a list of prospective buyers, establish- 15 ing contact with prospective buyers, entering into contracts with 16 buyers, and reviewing and making any necessary changes in collecting or 17 processing the materials to improve their marketability. 18 § 16-314 Recycling program revisions. The commissioner shall annually 19 review the recycling program and all rules promulgated thereunder, and 20 shall make the necessary revisions to improve the efficiency of collect- 21 ing, processing, marketing and selling the materials recycled pursuant 22 to this title. These revisions may include designating additional 23 recyclable materials. The commissioner shall not delete designated mate- 24 rials without designating additional materials so that the total quanti- 25 ty, by weight, of all designated recyclable materials collected, proc- 26 essed, marketed and sold does not decrease. 27 Where the commissioner determines that it is appropriate to delete a 28 designated material, the department shall provide notice of such 29 deletion to the mayor and the council, including the reason for such 30 deletion, and shall provide any relevant data supporting such decision. 31 § 16-315 Notice, education and research programs. 1. In addition to 32 the notice requirements of this code, within thirty days of the effec- 33 tive date of any rules promulgated pursuant to this title, and as 34 frequently thereafter as the commissioner deems necessary, the depart- 35 ment shall notify all persons occupying residential, commercial and 36 industrial premises affected by the rules, of the requirements of the 37 rules, by posting notices containing recycling information in public 38 places where such notices are customarily placed and, in the commission- 39 er's discretion, employing any other means of notification deemed neces- 40 sary and appropriate. 41 2. The commissioner shall compile relevant recycling, reuse and 42 composting information, including material available on the department's 43 website, to create and make available a guide to the city's residential 44 recycling program. Such guide shall, at a minimum, summarize and explain 45 the laws and rules governing curbside recycling, list the collection 46 locations and collection dates for non-curbside collected recyclable 47 materials such as household hazardous waste and textiles, and provide 48 detailed information and instructions on how to recycle any materials 49 not collected by the department for which non-city or non-department 50 recycling programs exist. Such guide shall be made available to resi- 51 dential building owners, or the net lessees or persons in charge of such 52 buildings, community boards, not-for-profit organizations, public 53 schools, and other relevant agencies and entities, and shall also be 54 made available on the department website. The commissioner shall update 55 the recycling guide biennially, or as necessary, based on changes to

S. 8578 1177

1 recycling laws, rules or other relevant information to be included ther- 2 ein. 3 3. The department shall develop and implement an educational program, 4 in conjunction with the department of education, private schools, labor 5 organizations, businesses, neighborhood organizations, and other inter- 6 ested and affected parties, and using flyers, print and electronic 7 advertising, public events, promotional activities, public service 8 announcements, and such other techniques as the commissioner determines 9 to be useful, to assure the greatest possible level of compliance with 10 the provisions of this title. The educational program shall encourage 11 waste reduction, the reuse of materials, the purchase of recyclable 12 products, and participation in city and private recycling activities. 13 4. The department shall perform such research and development activ- 14 ities, in cooperation with other city agencies, and public and private 15 institutions, as the commissioner determines to be helpful in implement- 16 ing the city's recycling program. Such research shall include, but not 17 be limited to, investigation into the use of cooperative marketing 18 programs, material recovery facilities, recycling as an economic devel- 19 opment tool, export promotion, tax credits and exemptions for market 20 promotion.

21 Chapter 5 22 RECYCLING ADVISORY BOARDS

23 § 16-317 Citizens' solid waste advisory boards; membership. Within six 24 months of the effective date of this title, the city shall establish a 25 citizens' solid waste advisory board (the "citizens' board"), consisting 26 of no fewer than twenty members who for the first term shall be 27 comprised of the members of the city's citizens' advisory committee on 28 resource recovery and other persons appointed jointly by the mayor and 29 the council members. For each subsequent term, all members shall be 30 appointed jointly by the mayor and the council members. The membership 31 of the citizens' board shall represent community boards, recycling 32 industries, carting industries, environmental organizations, government 33 agencies, labor organizations, business organizations, property owners, 34 tenant organizations and members of the general public. Members shall 35 serve for a term of one year without compensation and shall designate 36 one member to serve as chairperson and one as vice-chairperson. 37 § 16-318 Functions of the citizens' board. 1. The department shall 38 submit to the mayor the portion of the biennial report addressing the 39 city's recycling program that is prepared pursuant to the city's two 40 thousand six solid waste management plan, simultaneous with the 41 submission of such report to the mayor and the council. The mayor shall 42 distribute copies of the plans to each member of the citizens' board. 43 Within ninety days thereafter, the citizens' board shall review the 44 plans, conduct a public hearing on the plans and make written recommen- 45 dations to the mayor, the department and the council with respect to the 46 recycling program. The citizens' board shall also annually advise the 47 mayor and the department with respect to the development, promotion and 48 operation of the recycling program and pursuant to this function shall 49 formulate and recommend: 50 (a) annual recycling goals equal to or greater than those set forth in 51 section 16-305 of this title and the methods proposed to achieve such 52 goals; 53 (b) means to encourage community participation in the recycling 54 program; and

S. 8578 1178

1 (c) means to promote the recycling program and educate the public with 2 regard to the program. 3 2. The citizens' board shall assume all the responsibilities and func- 4 tions of the city's citizens' advisory committee on resource recovery. 5 § 16-319 Citywide recycling advisory board; membership. There shall be 6 a citywide recycling advisory board (the "citywide board") consisting of 7 at least one representative from each citizen's board, five members 8 appointed by the council, and five members appointed by the mayor. The 9 membership of the citywide board shall represent community boards, recy- 10 cling industries, carting industries, environmental organizations, 11 government agencies, labor organizations, business organizations, real 12 property owners, tenant organizations and members of the general public. 13 Members shall serve for a term of one year without compensation and 14 shall designate one member to serve as chairperson and one as vice- 15 chairperson. 16 § 16-320 Functions of the citywide board. The citywide board shall 17 meet at least four times a year to discuss citywide recycling issues, 18 including but not limited to budgetary issues. The citywide board shall 19 annually review the department's recycling program and make recommenda- 20 tions to the mayor and the council concerning improvements to and chang- 21 es in the program. 22 § 16-321 Disclosure requirements. 1. Whenever a person, other than a 23 public servant, appointed to any advisory board created pursuant to this 24 chapter, engages in any business dealings with the department, or 25 engages in business dealings with any other agency that relate to proc- 26 essing or disposal of solid waste or of waste described in paragraph (c) 27 of subdivision fifteen of section 16-303 of this title or to recycling, 28 or has an interest in a firm that is engaged in such business dealings 29 with the department or with such other agency, such person shall, prior 30 to appointment, disclose the nature of such business dealings to the 31 commissioner and to the body or officer appointing such person, and, 32 after appointment, disclose the nature of such business dealings to the 33 commissioner and to all other members of such board; provided that such 34 person need not disclose the amount of such business dealings. 35 2. When used in this section: 36 (a) "Advisory committee" means a committee, council, board or similar 37 entity that is constituted to provide advice or recommendations to the 38 city and which has no authority to take a final action on behalf of the 39 city, to take any action that would have the effect of conditioning, 40 limiting or requiring any final action by any other agency, or to take 41 any action that is authorized by law. 42 (b) "Agency" means a city, county, borough or other office, position, 43 administration, department, division, bureau, board, commission, author- 44 ity, corporation, advisory committee or other agency of government, the 45 expenses of which are paid in whole or in part from the city treasury, 46 and shall include but not be limited to, the council, the offices of 47 each elected official, the department of education, community school 48 boards, community boards, the financial services corporation, the health 49 and hospitals corporation and the public development corporation, but 50 shall not include any court or any corporation or institution maintain- 51 ing or operating a public library, museum, botanical garden, arboretum, 52 tomb, memorial building, aquarium, zoological garden or similar facili- 53 ty. 54 (c) "Blind trust" means a trust in which a candidate for any advisory 55 board created pursuant to this chapter or a member of such board, or the 56 spouse or unemancipated child of such candidate or member, has a benefi-

S. 8578 1179

1 cial interest, the holdings and sources of income of which such candi- 2 date or member and such spouse and unemancipated child have no know- 3 ledge, and the trustee of which shall have independent authority and 4 discretion. 5 (d) "Business dealings" means any transaction involving the sale, 6 purchase, rental, disposition or exchange of any goods, services or 7 property, and any performance of or litigation with respect to any of 8 the foregoing, but shall not include any transaction involving the resi- 9 dence of any candidate for any advisory board created pursuant to this 10 chapter or of any member of such board, or any ministerial matter. 11 (e) "City" means the city of Staten Island and includes an agency of 12 the city. 13 (f) "Elected official" means a person holding office as mayor, comp- 14 troller, public advocate, borough president or member of the council. 15 (g) "Firm" means a sole proprietorship, joint venture, partnership, 16 corporation or any other form of enterprise, but shall not include a 17 public benefit corporation or local development corporation. 18 (h) "Interest" means an ownership interest in a firm or a position 19 with a firm. 20 (i) "Ministerial matter" means an administrative act that is carried 21 out in a prescribed manner and which does not involve substantial 22 personal discretion. 23 (j) "Ownership interest" means an interest in a firm that is held by a 24 candidate for any advisory board created pursuant to this chapter, or by 25 a member of such board, or by the spouse, domestic partner, or unemanci- 26 pated child of such candidate or member, which exceeds five percent of 27 the firm or an investment of twenty-five thousand dollars in cash or 28 other form of commitment, whichever is less, or five percent or twenty- 29 five thousand dollars of the firm's indebtedness, whichever is less, and 30 any lesser interest in a firm when such candidate or member, or such 31 spouse, domestic partner, or unemancipated child, exercises managerial 32 control or responsibility regarding any such firm, but shall not include 33 interests held in any pension plan, deferred compensation plan or mutual 34 fund, the investments of which are not controlled by such candidate or 35 member, or by such spouse, domestic partner, or unemancipated child, or 36 in any blind trust that holds or acquires an ownership interest. 37 (k) "Position" means a position in a firm, such as an officer, direc- 38 tor, trustee, employee or any management position, or as an attorney, 39 agent, broker or consultant to the firm, which does not constitute an 40 ownership interest in the firm. 41 (l) "Public servant" means all officials, officers and employees of 42 the city, including members of community boards and members of advisory 43 committees, except unpaid members of advisory committees shall not be 44 public servants. 45 (m) "Spouse" means a husband or wife of a candidate for any advisory 46 board created pursuant to this chapter or of a member of such board who 47 is not legally separated from such candidate or member. 48 (n) "Unemancipated child" means any son, daughter, step-son or step- 49 daughter who is under the age of eighteen, unmarried and living in the 50 household of a candidate for any advisory board created pursuant to this 51 chapter or of the member of such board.

52 Chapter 7 53 REGULATIONS SUBMITTED TO COUNCIL AND ENFORCEMENT

S. 8578 1180

1 § 16-323 Rules submitted to council. Rules adopted by the commission- 2 er pursuant to this chapter shall become effective only after filing and 3 publication as prescribed by chapter forty-five of the charter of the 4 preceding municipality. In addition, notwithstanding the provisions of 5 chapter forty-five of such charter, prior to adoption by the commission- 6 er of a final rule pursuant to subdivision e of section one thousand 7 forty-three of such charter, and after consideration of relevant 8 comments presented pursuant to subdivision d of such section, the 9 commissioner shall submit to the council the text of the final rule 10 proposed to be published in the city record. The council shall have 11 thirty days from the date of such submission to comment upon such text. 12 The final rule may include revisions in response to comments from the 13 council and shall not be published in the city record before the thir- 14 ty-first day after such submission, unless the speaker of the council 15 authorizes earlier publication. 16 § 16-324 Enforcement. 1. Subject to the provisions of subdivision two 17 of this section, any person who violates this chapter, except section 18 16-306.1 of this title, subdivision seven of section 16-308 of this 19 title, section 16-310.1 of this title or section 16-329 of the code of 20 the preceding municipality, or any rule promulgated pursuant thereto, 21 shall be liable for a civil penalty recoverable in a civil action 22 brought in the name of the commissioner or in a proceeding returnable 23 before the environmental control board, as follows: 24 a. For residential buildings containing fewer than nine dwelling 25 units, the civil penalty shall be in an amount of twenty-five dollars 26 for the first violation, fifty dollars for the second violation commit- 27 ted on a different day within a period of twelve months, and one hundred 28 dollars for the third and each subsequent violation committed on a 29 different day within a period of twelve months, provided that the court 30 before which such civil action is brought or such board may waive the 31 penalty for the first violation upon a showing of good cause. 32 b. For residential buildings containing nine or more dwelling units 33 and commercial, manufacturing or industrial buildings, the civil penalty 34 shall be in an amount of one hundred dollars for the first violation, 35 two hundred dollars for the second violation committed on a different 36 day within a period of twelve months, and four hundred dollars for the 37 third and each subsequent violation committed on a different day within 38 a period of twelve months, provided that the court before which such 39 civil action is brought or such board may waive the penalty for the 40 first violation upon a showing of good cause. The owner, net lessee or 41 person in charge of any residential building of nine or more dwelling 42 units or a commercial, manufacturing or industrial building with respect 43 to which four or more violations were committed on different days within 44 a period of six months shall be classified as a persistent violator. 45 c. For persistent violators only, each container or bag containing 46 solid waste that has not been source separated or placed out for 47 collection in accordance with the rules promulgated by the commissioner 48 pursuant to this chapter shall constitute a separate violation, provided 49 that no more than twenty separate violations are issued on a per bag or 50 per container basis during any twenty-four hour period. Before issuing 51 any such notices of violation to a persistent violator on a per bag or 52 per container basis, the commissioner shall give such violator a reason- 53 able opportunity to correct the condition constituting the violation. 54 d. There shall be a rebuttable presumption that the number of dwelling 55 units designated on a notice of violation issued pursuant to this 56 section reflects the number of dwelling units in the residential build-

S. 8578 1181

1 ing for which the notice of violation was issued. Where such presumption 2 is rebutted, the number of dwelling units on such notice of violation 3 shall be deemed modified accordingly, and in no event shall such notice 4 of violation be dismissed solely on the ground that the number of dwell- 5 ing units on the original notice of violation was incorrectly stated. 6 e. The commissioner or the commissioner's designee shall establish a 7 recycling training program for owners or employees of residential build- 8 ings of nine or more dwelling units for which at least three notices of 9 violation for failing to properly source separate designated recyclable 10 material have been issued within a twelve-month period and which the 11 commissioner determines to be in need of recycling training. Such 12 training program shall require the building owner, or an employee who is 13 primarily responsible for waste disposal or janitorial services for any 14 such building, to attend a training program established by the commis- 15 sioner or the commissioner's designee designed to improve recycling 16 practices at such building and a fee may be imposed on any owner or 17 employee who participates in such training program. Such training 18 program may be held in any location designated by the commissioner or 19 the commissioner's designee, including, in order to facilitate tenant 20 participation, at such building. 21 2. Any person who violates subdivision seven of section 16-308 of this 22 title or any rules promulgated pursuant thereto shall be liable for a 23 civil penalty in the amount of two hundred fifty dollars for the first 24 violation, five hundred dollars for the second violation committed with- 25 in a twelve-month period, and one thousand dollars for the third and 26 each subsequent violation committed within a twelve-month period. 27 3. Any owner or other person responsible for a publicly accessible 28 textile drop-off bin who violates subdivision two of section 16-310.1 of 29 this title shall be liable as follows: 30 a. In the event that a publicly accessible textile drop-off bin is 31 impermissibly placed on city property, or property maintained by the 32 city, or on any public sidewalk or roadway, the owner of the publicly 33 accessible textile drop-off bin, if the address of such owner is ascer- 34 tainable, shall be notified by the department by certified mail, return 35 receipt requested, that such publicly accessible textile drop-off bin 36 must be removed within thirty days from the mailing of such notice. A 37 copy of such notice, regardless of whether the address of such owner or 38 other responsible person is ascertainable, shall also be affixed to the 39 publicly accessible textile drop-off bin. This notice shall state that 40 if the address of the owner or other responsible person is not ascer- 41 tainable and notice is not mailed by the department, such publicly 42 accessible textile drop-off bin shall be removed within thirty days from 43 the affixing of such notice. This notice shall also state that the fail- 44 ure to remove the publicly accessible textile drop-off bin within the 45 designated time period will result in the removal and disposal of the 46 publicly accessible textile drop-off bin by the department. This notice 47 shall also state that if the owner or other responsible person objects 48 to removal on the grounds that the publicly accessible textile drop-off 49 bin is not on city property, or property maintained by the city, or on 50 any public sidewalk or roadway, such owner or other responsible person 51 may send written objection to the department at the address indicated on 52 the notice within twenty days from the mailing of such notice or, if the 53 address of such owner or other responsible person is not ascertainable 54 and notice is not mailed by the department, within twenty days from the 55 affixing of such notice, with proof that the publicly accessible textile 56 drop-off bin is not on city property, or property maintained by the

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1 city, or on any public sidewalk or roadway. Proof that the publicly 2 accessible textile drop-off bin is not on city property, or property 3 maintained by the city, or on any public sidewalk or roadway shall 4 include, but not be limited to, a survey of the property prepared by a 5 licensed surveyor that is certified by the record owner of such proper- 6 ty. 7 b. Any owner or other person responsible for an impermissibly placed 8 publicly accessible textile drop-off bin that fails to respond within 9 twenty days of receipt of such notice under paragraph a of this subdivi- 10 sion or otherwise fails to establish that the publicly accessible 11 textile drop-off bin is not on city property, or property maintained by 12 the city, or on any public sidewalk or roadway pursuant to paragraph a 13 of this subdivision, shall be liable for a civil penalty in the amount 14 of one hundred dollars, recoverable in a proceeding returnable before 15 the environmental control board. 16 4. Any notice of violation or notice of hearing for a violation issued 17 to the owner, net lessee or person in charge of a premises or to a food 18 service establishment, mobile food commissary, store, or manufacturer, 19 as those terms are defined in section 16-329 of the code of the preced- 20 ing municipality, at which or by whom a violation of this chapter or any 21 rule promulgated pursuant thereto is alleged to have occurred or to have 22 been committed shall be served by delivering a copy of the notice there- 23 of at the address maintained in the records of the department of housing 24 preservation and development, the department of finance, or the depart- 25 ment of health and mental hygiene. The notice of violation or notice of 26 hearing may be served by regular mail or in accordance with section one 27 thousand forty-nine-a of the charter of the preceding municipality or, 28 if such notice is served by an agency other than the department, in 29 accordance with the rules of such agency. 30 5. a. Any covered establishment that violates section 16-306.1 of this 31 title or rules of the department, the department of health and mental 32 hygiene, or the department of consumer and worker protection promulgated 33 pursuant thereto shall be liable for a civil penalty recoverable in a 34 civil action brought in the name of the commissioner or the commissioner 35 of health and mental hygiene, or the commissioner of consumer and worker 36 protection, or in a proceeding returnable before any tribunal estab- 37 lished within the office of administrative trials and hearings in the 38 amount of two hundred fifty dollars for the first violation, five 39 hundred dollars for the second violation committed on a different day 40 within a period of twelve months, and one thousand dollars for the third 41 and each subsequent violation committed on different days within a peri- 42 od of twelve months, except that the department, the department of 43 health and mental hygiene, and the department of consumer and worker 44 protection shall not issue a notice of violation, but shall issue a 45 warning, for any violation by a designated covered establishment that 46 occurs during the first twelve months after the commissioner designates 47 such covered establishment pursuant to subdivision two of section 48 16-306.1 of this title. 49 b. Any transfer station that violates section 16-306.1 of this title 50 or rules of the department promulgated pursuant thereto shall be liable 51 for a civil penalty recoverable in a civil action brought in the name of 52 the commissioner or in a proceeding returnable before the environmental 53 control board in the amount of two hundred fifty dollars for the first 54 violation, five hundred dollars for the second violation committed on a 55 different day within a period of twelve months, and one thousand dollars 56 for the third and each subsequent violation committed on different days

S. 8578 1183

1 within a period of twelve months, except that the department shall not 2 issue a notice of violation, but shall issue a warning, for any 3 violation by a designated covered establishment that occurs during the 4 first twelve months after the commissioner designates such covered 5 establishment pursuant to subdivision two of section 16-306.1 of this 6 title. 7 c. Any private carter that violates section 16-306.1 of this title or 8 rules of the business integrity commission promulgated pursuant thereto 9 shall be liable for a civil penalty recoverable in a civil action 10 brought in the name of the chair of the business integrity commission, 11 or in a proceeding brought by the chair of the business integrity 12 commission held in accordance with title sixteen-A of the code of the 13 preceding municipality, except that the chair of the business integrity 14 commission shall not issue a notice of violation, but shall issue a 15 warning, for any violation by a designated covered establishment that 16 occurs during the first twelve months after the commissioner designates 17 such covered establishment pursuant to subdivision two of section 18 16-306.1 of this title. 19 6. Any person who violates section 16-329 of the code of the preceding 20 municipality or any rule promulgated pursuant thereto shall be liable 21 for a civil penalty recoverable in a civil action brought in the name of 22 the commissioner, the commissioner of health and mental hygiene or the 23 commissioner of consumer and worker protection, or in a proceeding 24 before the environmental control board, or any tribunal established 25 within the office of administrative trials and hearings in the amount of 26 one hundred fifty dollars for the first violation, two hundred fifty 27 dollars for the second violation committed on a different day within a 28 period of twelve months, and five hundred dollars for the third and each 29 subsequent violation committed on different days within a period of 30 twelve months.

31 Title 17 - Health

32 § 17-101 Definitions. As used in this title: 33 1. "Board" shall mean the board of health. 34 2. "Commissioner" means the commissioner of the department of health. 35 3. "Department" means the department of health. 36 4. "Health code" means the health code of the city of Staten Island. 37 § 17-102 Department; commissioner. 1. There shall be a department of 38 health, the head of which shall be the commissioner of health. 39 2. The commissioner, with concurrence of the board of health, may 40 adopt a seal for use in the authentication of the orders, proceedings 41 and commissions of the department. 42 3. The commissioner shall be appointed by the mayor and shall be a 43 doctor of medicine and a holder of a degree of master of public health 44 or a degree of master of business administration with concentration in 45 the health field or a degree of master of public administration with 46 concentration in the health field or the equivalent of any one of the 47 specified foregoing degrees received from a college or university and 48 have had at least five years' experience either in public health or 49 administration or in college or university public health teaching or 50 both. 51 § 17-103 Board of health. 1. There shall be in the department a board 52 of health, the chair of which shall be the commissioner. In addition to 53 the chairperson the board shall also consist of four members, two of 54 whom shall be doctors of medicine who shall each have had not less than

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1 ten years' experience in any or all of the following: clinical medicine, 2 public health administration or college or university public health 3 teaching. The other two members need not be physicians. 4 2. The four members other than the chairperson shall serve without 5 compensation and shall be appointed by the mayor, each for a term of 6 eight years. In the case of a vacancy, the mayor shall appoint a member 7 to serve for the unexpired term. 8 3. The commissioner shall designate employees of the department as 9 necessary to service the board including an employee designated by the 10 commissioner to serve as the secretary of the board. 11 4. A member of the board of health, other than the chair, may be 12 removed by the mayor on proof of official misconduct or of negligence in 13 official duties or of conduct in any manner connected with his or her 14 official duties, or of mental or physical inability to perform his or 15 her duties. Prior to removal of a board member for any of the reasons 16 stated above, the member shall be given a copy of the charges against 17 him or her and shall be entitled to a hearing before the mayor and to 18 assistance of counsel at such hearing. 19 § 17-104 Powers and duties of commissioner. 1. The commissioner 20 shall: 21 (a) have all the powers and duties vested in him or her or in the 22 department by this title, except for those vested by law in the board of 23 health or the chief medical examiner. 24 (b) prepare and submit to appropriate governmental authorities short 25 term, intermediate and long range plans and programs designed to meet 26 the needs of the city including the needs for construction and operation 27 of medical and health care facilities, except that the commissioner may 28 not construct or operate a new medical facility until the health systems 29 agency having jurisdiction over that institution has received a copy of 30 the application filed with the commissioner, in the case of private 31 institutions, or all information in form and detail as the health 32 systems agency shall require, in the case of institutions of the city of 33 Staten Island, and it shall have given the commissioner a written deci- 34 sion of approval or disapproval; and 35 (c) not be considered bound by the decision given as described above, 36 but he or she shall not approve any construction, addition or modifica- 37 tion contrary to the health systems agency without first holding a 38 public hearing. 39 2. In reaching decisions pursuant to this section, the commissioner 40 and the health systems agency shall consider: 41 (a) the public need for the existence of the new institution or the 42 construction, addition or modification of an existing institution at the 43 time and place and under the circumstances proposed; 44 (b) the character, competence and standing in the community of the 45 owners and licensees, in the case of private institutions; 46 (c) the financial resources of the institution and its sources of 47 future revenue; 48 (d) the fitness and adequacy of the premises, and equipment, person- 49 nel and standards of care to be used in the operation of the proposed 50 institution; and 51 (e) such other matters as each of them considers pertinent. 52 3. The commissioner may compel the attendance of witnesses in any 53 matter or proceeding before the commissioner. 54 4. The commissioner may assess any penalty prescribed for a violation 55 of or a failure to comply with any provision of this title or any other 56 lawful notice, order or regulation pursuant thereto, which penalty may

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1 be assessed, although not to exceed one thousand dollars, after a hear- 2 ing or an opportunity to be heard. 3 § 17-105 Functions, powers and duties of the department. Except as 4 otherwise provided by law, the department shall have jurisdiction to 5 regulate all matters affecting health in the city and to perform all 6 those functions and operations performed by the city that relate to the 7 health of the people of the city including, but not limited to, the 8 following: 9 1. enforce all provisions of law applicable in the area under the 10 jurisdiction of the department for the preservation of human life; the 11 care, promotion and protection of health and to the necessary health 12 supervision of the purity and wholesomeness of the water supply. The 13 department shall also maintain and operate office health centers, health 14 stations or other facilities which may be required for the preservation 15 of health and the care of the sick; 16 2. exercise its functions, powers and duties in the area extending 17 over the city, the waters adjacent thereto, within the jurisdiction of 18 the city and within the quarantine limits established by law; 19 3. receive and expend funds made available for public health 20 purposes; 21 4. supervise and control the registration of births, fetal deaths and 22 deaths; 23 5. engage in and promote health research for the purpose of improving 24 the quality of medical and health care. In conducting such research the 25 department may conduct medical audits, receive reports on forms 26 prescribed by the department and any information received by the depart- 27 ment with regard to such research shall be kept strictly confidential, 28 used solely for medical or scientific research purposes or for the 29 improvement of the quality of medical care; 30 6. supervise the reporting and control of communicable and chronic 31 diseases and conditions hazardous to life and health; and exercise 32 control over and supervise the abatement of nuisances affecting the 33 public health; 34 7. produce, standardize and distribute certain diagnostic, preventa- 35 tive and therapeutic products and conduct laboratory examinations for 36 the diagnosis, prevention and control of disease; 37 8. promote or provide education in the prevention and control of 38 disease; 39 9. promote or provide diagnostic and therapeutic services for mater- 40 nity and child health, family planning, communicable disease, medical 41 rehabilitation, narcotics addiction and other diseases and conditions 42 affecting public health; 43 10. promote and provide medical and health services for school chil- 44 dren and the ambulant sick and needy persons of the city; 45 11. promote and provide medical and health services for the incarcer- 46 ated individuals of prisons maintained and operated by the city; 47 12. maintain and operate public health centers and clinics as shall 48 be established in the department; 49 13. prior to the sale, closing, abandonment or transfer of a city 50 hospital, hold a public hearing regarding such proposal; and publish 51 notice of such hearing in such daily newspaper published in the city as 52 selected by the commissioner, such publication to take place not less 53 than ten days nor more than thirty days prior to the date fixed for the 54 hearing; 55 14. analyze and monitor hospitals, clinics, nursing homes and homes 56 for the aged, and analyze, evaluate, supervise and regulate clinical

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1 laboratories, blood banks and related facilities providing medical 2 services; 3 15. supervise and regulate the public health aspects of water supply, 4 sewage disposal and water pollution; 5 16. supervise and regulate the public health aspects of the 6 production, processing and distribution of milk, cream and milk 7 products; 8 17. supervise and regulate the public health aspects of the food and 9 drug supply of the city and other businesses or activities affecting 10 public health in the city; 11 18. supervise and regulate the public health aspects of ionizing 12 radiation, handling and disposal of radioactive wastes and the activ- 13 ities within the city affecting radioactive materials, excluding special 14 nuclear materials in quantities sufficient to form a critical mass; and 15 19. supervise and regulate the removal, transportation and disposal of 16 human remains. 17 § 17-106 Chief medical examiner. 1. There shall be in the department 18 an independent office of chief medical examiner, the head of which shall 19 be the chief medical examiner. 20 2. The chief medical examiner shall be appointed by the mayor from the 21 classified civil service and shall be a doctor of medicine and a skilled 22 pathologist and microscopist. The mayor may remove the chief medical 23 examiner upon filing in the office of the personnel director and serving 24 upon the examiner his or her reasons therefor and allowing the officer 25 an opportunity of making a public explanation. 26 3. The commissioner, with respect to the office of chief medical exam- 27 iner, shall exercise certain powers and duties pursuant to this section, 28 but he or she shall not interfere with performance by the chief medical 29 examiner or his or her office. 30 4. The chief medical examiner may appoint and remove such deputy chief 31 medical examiners, assistant medical examiners, junior medical examin- 32 ers, medical investigators, scientific experts and other officers or 33 employees as may be provided for in the budget. 34 All assistant, associate, deputy and junior medical examiners shall 35 possess the same basic qualifications as the chief medical examiner. The 36 medical investigators shall be physicians duly licensed to practice 37 medicine in the state of New York. 38 5. The office of chief medical examiner shall be kept open every day 39 in the year, including Sundays and all legal holidays, and a clerk shall 40 be in attendance at all times during the day and night. 41 6. The chief and all deputy chief, associate, assistant and junior 42 medical examiners and all investigators may administer oaths, take affi- 43 davits, proofs and examinations. 44 7. The chief medical examiner shall have such powers and duties as may 45 be provided by law with respect to bodies of persons dying from criminal 46 violence, casualty, suicide, suddenly when in apparent good health, when 47 unattended by a physician, in a correctional facility or in any suspi- 48 cious or unusual manner or where an application is made for a permit for 49 cremation of the body. 50 8. The chief medical examiner shall keep full and complete records. He 51 or she shall promptly deliver, to the district attorney, copies of all 52 records relating to every death in which, in the opinion of the chief 53 medical examiner, there is any indication of criminality. Such records 54 shall not be open to public inspection. 55 § 17-107 Health code. 1. The health code which is in force in the 56 preceding municipality on the date and time which this title takes

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1 effect and all existing provisions of the health code, including penal- 2 ties affixed for violations, shall continue to be binding and in full 3 force, except as amended from time to time. 4 2. The board of health may add to, alter, amend or replace any part of 5 the health code, and may provide for the enforcement of the health code 6 or any orders made by the commissioner. The board of health shall 7 prescribe in the health code all matters and subjects to which the power 8 and authority of the department extends. 9 3. Any violation of the health code shall be treated and punished as a 10 misdemeanor. 11 § 17-108 Temporary hospitals during epidemic. The board of health, 12 during prevalence of an epidemic or in the presence of great and immi- 13 nent peril to the public health, may take possession of any buildings in 14 the city for temporary hospitals and shall pay a just compensation for 15 any private property so taken. Such temporary hospitals shall be under 16 the control of the commissioner. 17 § 17-109 Permits. The board of health may grant, suspend or revoke 18 permits for businesses and other matters in respect to any subject dealt 19 with in the health code or regulated by the department and the board may 20 prescribe reasonable fees for the issuance of said permits. 21 § 17-110 Declaration of imminent peril. In the presence of great and 22 imminent peril to public health, the board of health shall take such 23 measures and order the department of health to do such acts beyond those 24 duly provided for, in the interests of preservation of the public 25 health. No expenditure shall be incurred in the exercise of such 26 extraordinary power, unless provision is made therefor in the budget or 27 unless such expenditures are financed pursuant to section 107.00 or 28 section 29.00 of the local finance law. Such peril shall exist when and 29 for such period of time as the board of health and the mayor declare. 30 § 17-111 Right of entry. The commissioner and his or her officers may, 31 pursuant to a search warrant when required by law, enter, examine and 32 inspect all vessels, premises, grounds, structures, buildings and under- 33 ground passages for compliance with the provisions of law enforced by 34 the department. 35 § 17-112 Acceptance of private funds. No grants, gifts, devises, 36 legacies or bequests made to the city shall be accepted except with the 37 approval of the commissioner.

38 Title 18 - Parks

39 § 18-101 Definitions. As used in this title: 40 1. "Commissioner" shall mean the commissioner of the department of 41 parks, recreation and cultural affairs. 42 2. "Department" shall mean the department of parks, recreation and 43 cultural affairs. 44 § 18-102 Commissioner. The head of the department of parks, recre- 45 ation and cultural affairs shall be the commissioner. 46 § 18-103 Powers and duties of commissioner. Except with respect to the 47 functions of the board of education, the commissioner shall have the 48 power and it shall be his or her duty: 49 1. With respect to parks: 50 (a) to manage and care for all parks, squares and public places, the 51 sidewalks immediately adjoining the same and all playgrounds, playground 52 fixtures and other recreation properties, except those within the juris- 53 diction of the board of education;

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1 (b) to prepare for the establishment and improvement of a park system 2 for the city with regard to proper connections with the systems of 3 federal, state and county parks and recreation areas in the city and 4 counties adjacent to the city; and 5 (c) to maintain the beauty and utility of all parks, squares, public 6 places, playgrounds and other recreational properties. 7 2. With respect to recreation: 8 (a) to plan, acquire, construct, improve and merge facilities for the 9 recreation of the public; 10 (b) to plan, develop, conduct and supervise recreation programs for 11 the public; 12 (c) to review and coordinate recreation activities and programs and 13 facilities conducted by agencies of the city and the budget estimates 14 submitted by such other agencies for such activities and make such 15 recommendations to the mayor; and 16 (d) to undertake, subject to the approval of the mayor, and to enter 17 into arrangements with other agencies of the city, state or federal 18 government and to recommend to the mayor such arrangements with private, 19 voluntary or commercial agencies, subject to the law, for the perform- 20 ance of any recreation functions conferred upon the department. 21 3. With respect to cultural affairs: 22 (a) to plan, acquire, design, construct, improve and manage facilities 23 for the conduct of cultural activities by the city and, to the extent 24 possible, to use the resources of other agencies to perform design and 25 planning functions subject to the approval of such agencies; 26 (b) to plan, develop, conduct and supervise such cultural activities; 27 and 28 (c) to foster coordination among city, state and federal agencies, 29 other organizations and institutions with respect to cultural activities 30 in the city. 31 § 18-201 Art commission. There shall be an art commission. All members 32 of the commission shall serve without compensation. The mayor shall 33 appoint and fill vacancies. The chairperson shall be the commissioner of 34 parks, recreation and youth services. The commissioner shall accede to 35 the rights, powers and duties within the city of Staten Island of the 36 preceding arts commission of the city of New York.

37 Title 19 - Transportation

38 § 19-102 Commissioner. There shall be a department of transportation 39 the head of which shall be the commissioner of transportation. 40 § 19-103 Powers and duties of commissioner. The commissioner shall 41 have control over and be responsible for all the functions and oper- 42 ations of the city relating to transportation including, without limita- 43 tion, parking and traffic operations, highway operations, ferries and 44 related facilities and mass transportation facilities. 45 § 19-104 Parking and traffic operations. 1. The commissioner shall 46 make rules and regulations for the conduct of vehicular and pedestrian 47 traffic in the streets, squares, avenues, highways and parkways of the 48 city. Violation of such rules shall be a traffic infraction triable by a 49 judge in criminal court and also may be adjudicated pursuant to this 50 title or pursuant to articles two-A and two-B of the vehicle and traffic 51 law. 52 2. In an emergency, the police commissioner may suspend for a period 53 of forty-eight hours the provision of any rule or procedure and shall 54 immediately notify the commissioner of such suspension.

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1 3. In order to expedite the movement of traffic or to safeguard pedes- 2 trians or property, a police officer may order a person to disregard any 3 traffic signal or any regulation. 4 4. The commissioner shall establish, determine, control, install and 5 maintain the type, design, size and location of any and all signs, 6 signals and other devices indicating street names and other public plac- 7 es, and for guiding, directing or otherwise regulating vehicular and 8 pedestrian traffic. 9 5. The commissioner shall make recommendations to the mayor as to the 10 design and location of lighting devices, poles and fixtures, including 11 intensity of illumination of streets and highways. 12 6. The commissioner shall prepare and submit to the mayor a proposed, 13 comprehensive city traffic plan and the commissioner shall collect and 14 compile traffic data, prepare engineering studies and surveys in regard 15 to vehicular and pedestrian traffic and submit detailed reports to the 16 mayor regarding such data. The commissioner shall also have authority 17 to: (a) submit to the mayor from time to time recommendations and 18 proposals for consideration by the mayor and other city agencies in 19 regard to methods of ameliorating adverse traffic conditions which 20 cannot be remedied by traffic regulations; (b) amend existing regu- 21 lations and rules of any city agency which may affect traffic conditions 22 in the city; (c) propose legislation which may be necessary to imple- 23 ment such proposals; and (d) recommend improvements of existing 24 streets, locations of new streets, highways, parking garages, public 25 parking areas, offstreet loading facilities and other related matters. 26 7. The commissioner shall coordinate efforts of and consider reports 27 of public and private agencies and civic groups with regard to their 28 suggestions on traffic control in the city. The commissioner shall 29 prepare analyses of traffic accidents with a view to determining their 30 causes and means for prevention and shall carry on educational activ- 31 ities for the purpose of promoting traffic safety in the city. 32 8. The commissioner shall establish parking meter zones for on-street 33 and off-street parking; determine type, size and location of parking 34 meters; and fix the fees for parking in public parking areas, except 35 that parking meter zones for both on-street and off-street parking shall 36 not apply to vehicles operated by disabled persons displaying special 37 vehicle identification cards issued by the commissioner. 38 9. The commissioner shall collect fees, fines and penalties for 39 violation of parking rules and shall keep all monies in a special fund 40 to be known as the "traffic improvement fund". The revenues in this 41 special fund shall be used, upon authorization by the council for 42 payment of all costs of purchase, rental, engineering, installation, 43 operation, maintenance and repair of parking meters, the collection of 44 coins, the enforcement of rules pertaining to parking, the collection of 45 fines and penalties for rules violations or the payment of interest on, 46 amortization of, or payment of any indebtedness contracted by the city 47 in connection with the installation and operation of parking meters. Any 48 revenues remaining after such payments are made shall be used for capi- 49 tal and other expenditures to ameliorate traffic conditions of the city. 50 10. The commissioner, in conjunction with the commissioner of finance, 51 may enter into agreements with not more than two financing agencies to 52 provide for the acceptance by the city of credit cards as an alternate 53 means of payment of fines or fees incurred due to violation of any law, 54 rule or regulation with regard to parking of a vehicle. 55 11. The commissioner shall have the power, concurrently with the 56 police department, to enforce laws, rules and regulations with regard to

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1 all movement and conduct of vehicular and pedestrian traffic. The 2 commissioner may employ, hire and retain officers or employees for the 3 purpose of enforcing laws, rules and regulations with regard to regulat- 4 ing and controlling vehicular parking and movement of pedestrian and 5 vehicular traffic. Such officers or agents are authorized to issue and 6 serve tickets, summonses and complaints for traffic infractions. 7 12. The commissioner shall issue, upon application, a special vehicle 8 identification permit to a Staten Island resident certified by the 9 department of health as suffering from a permanent disability seriously 10 impairing mobility, non-residents similarly certified may obtain vehicle 11 identification for purposes of transportation to a school or place of 12 employment in city. All applicants for such permit must possess an oper- 13 ator's or chauffeur's license with any restrictions indicating special 14 restrictions, devices or equipment required for operation of the vehi- 15 cle. 16 § 19-105 Highway operations. The commissioner shall have charge and 17 control of the following functions relating to the construction, mainte- 18 nance and repair of public roads, streets, highways, parkways, bridges 19 and tunnels: (i) regulating, grading, curbing, flagging and guttering of 20 streets, including marginal streets, and the laying of crosswalks; (ii) 21 designing, constructing, resurfacing and repairing all public roads, 22 streets, highways and parkways; (iii) the relaying of all pavement 23 removed for any cause; (iv) the filling of sunken lots, fencing vacant 24 lots, digging down of lots and the licensing of vaults under sidewalks; 25 (v) regulation of the use and transmission of gas, electricity, pneumat- 26 ic power and steam for all purposes in, upon, across, over and under all 27 streets, roads, avenues, parks and all public places; regulation of the 28 construction of electric mains, conduits, conductors and subways in any 29 streets, roads, avenues, parks or public places and the issuance of 30 permits to builders and others to use or open a street; and to open the 31 same for the purpose of carrying on the business of transmitting, 32 conducting, using and selling gas, electricity or steam or for the 33 service of pneumatic tubes, provided, however, this section is not to be 34 seen as to grant permission to open or use the streets except by persons 35 or corporations otherwise duly authorized to carry on such business 36 specified above; (vi) construction, alteration and maintenance of all 37 bridges and tunnels. The commissioner shall issue a report to mayor, 38 city council and city residents about the condition of the bridges and 39 tunnels operated and maintained by the department with such report due 40 on March first, as of December thirty-first of preceding calendar year. 41 The report shall include a description of all capital and revenue budget 42 funds appropriated for rehabilitation and maintenance of bridges and 43 tunnels as well as the program developed by the commissioner for the 44 maintenance of all bridges and tunnels in the city of Staten Island; 45 (vii) removal of encroachments on public roads, streets, highways and 46 parkways, with the exception of weed removal, grass cutting and clipping 47 and other horticultural operations which are to be executed by the parks 48 department, and de-icing and snow removal operations are to be carried 49 out by the department of sanitation; (viii) clearing, grubbing, grading, 50 filling or excavating of vacant lots and other land areas; (ix) instal- 51 lation of metal chain link fences or barriers on overpasses, footbridg- 52 es, bridges or walkways; and (x) designing, constructing and maintaining 53 a lighting system for streets, highways, parks and public places in the 54 city. 55 § 19-106 Ferries and related facilities. The commissioner shall main- 56 tain and operate the ferries of the city. The commissioner shall be

S. 8578 1191

1 responsible for designing, constructing, maintaining or controlling all 2 ferry boats, ferry houses, ferry terminals and equipment; all wharf 3 property and roads or streets adjacent to such wharves, ferry houses or 4 terminals, including parking sites and related facilities. The commis- 5 sioner shall have charge and control of all marine operations within the 6 city and the power to regulate public and private ferry operations orig- 7 inating or terminating in the city. The commissioner shall establish 8 tours of ferry facilities and their related operations as well as tours 9 of the New York harbor at fees to be established by the commissioner and 10 may publicize and advertise the same. The commissioner shall construct, 11 operate and maintain marinas and public boat launching ramps and related 12 ferry facilities and collect fees for the use of such facilities. Fees 13 collected are to be deposited in a special fund for continued mainte- 14 nance, operation or reconstruction of public marine facilities. 15 § 19-107 Mass transportation facilities. The commissioner shall 16 prepare or review plans and recommendations for the nature, 17 construction, location, operation and financing of roads, highways, 18 bridges, tunnels, railroads or other facilities for mass transportation 19 for use, in whole or in part, within the city, whether or not the funds 20 provided for such facilities are derived from the city treasury. The 21 commissioner shall develop and coordinate planning and programming for 22 all forms of mass transportation within Staten Island, whether or not 23 transportation is within the sole operating jurisdiction of Staten 24 Island. The commissioner shall make recommendations to the mayor, the 25 Metropolitan Transportation Authority or any of its subsidiaries, the 26 Port Authority of New York and New Jersey and other city, state and 27 federal agencies concerning the mass transit needs of the city of Staten 28 Island. 29 § 19-108 Duties and obligations of a property owner with regard to 30 sidewalks, fencing or filling of vacant lots or cutting down raised 31 lots. The owner of any property, at his or her own cost shall: 32 1. Install, reconstruct, repave and repair the sidewalk in front of or 33 abutting such property, to include intersection quadrant in the case of 34 corner property; and 35 2. Fence any vacant lot comprising all or part of his or her property 36 and fill any sunken lots on such property or cut down any raised lot or 37 lots comprising all or part of the property whenever the transportation 38 department shall so order. In the event a property owner fails to comply 39 with such order or the provisions of this section, the transportation 40 department may have the work performed at the expense of the owner. 41 § 19-109 Right of entry. The commissioner may enter public or private 42 property for the purpose of making surveys, borings or other investi- 43 gations necessary for the performance of department duties. Refusal to 44 permit such entry shall be triable by the judge in a criminal court of 45 Staten Island.

46 Title 20 - Consumer Affairs

47 § 20-102 Definitions. Wherever used in this title: 48 1. "Commissioner" shall mean the commissioner of consumer and worker 49 protection. 50 2. "Department" shall mean the department of consumer and worker 51 protection. 52 3. "License" shall mean an authorization by the department of consumer 53 and worker protection to carry on various activities within its juris- 54 diction, which may take the form of a license, permit, registration,

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1 certification or such other form as is designated under law, regulation 2 or rule. 3 4. "Organization" shall mean a business entity, including but not 4 limited to a corporation, trust, estate, partnership, cooperative, asso- 5 ciation, firm, club or society. 6 5. "Person" shall mean a natural person or an organization. 7 6. "Trade name" shall mean that name under which an organization or 8 person solicits, engages in, conducts or transacts a business or activ- 9 ity. 10 § 20-103 Powers of the commissioner. 1. The commissioner shall plan, 11 make recommendations, conduct research and develop programs for consumer 12 and worker education and protection, facilitate the exchange of informa- 13 tion in consultation with agencies, federal and state officials, commer- 14 cial interests, private groups and coordinate the consumer and worker 15 protection activities of other city agencies. 16 2. The commissioner shall enforce all laws in relations to weights and 17 measures. 18 3. The commissioner shall have control of granting, issuing, trans- 19 ferring, renewing, revoking, suspending and cancelling of all licenses 20 and permits, except in the cases with respect to which any of said 21 powers are conferred on other persons or agency by laws, and shall 22 collect all fees for licenses. 23 All licenses or permits in effect on the date of establishment shall 24 be continued until their date of expiration or sixty days, whichever 25 shall be longer. Any license or permit expiring within a thirty-day 26 period prior to the date of establishment shall be continued for a peri- 27 od of sixty days. 28 A licensee or permittee must notify and register with the department 29 if the license or permit is to extend beyond sixty days of the date of 30 establishment. 31 4. The commissioner shall enforce all laws relating to advertising and 32 offering for sale and the sale of all commodities, goods, wares and 33 services; in addition he or she shall receive complaints and initiate 34 his or her own investigations and take appropriate action, including 35 referral to a federal or state agency. 36 5. The commissioner shall be authorized to hold public and private 37 hearings, administer oaths, take testimony, serve subpoenas, receive 38 evidence, and to receive, administer, pay over and distribute monies 39 collected in and as a result of actions brought for violations of laws 40 relating to deceptive or unconscionable trade practices.

41 Title 21 - Human Services

42 § 21-102 Commissioner. There shall be a department of human services 43 the head of which shall be the commissioner of human services. 44 § 21-103 Powers and duties. The commissioner shall have the powers 45 and perform the duties of a commissioner of human services under the 46 social services law, provided that no form of outdoor relief shall be 47 dispensed by the city except under the provisions of a state or local 48 law which shall specifically provide the method, manner and conditions 49 of dispensing the same. 50 § 21-104 Public institutions under the commissioner. The commissioner 51 shall control, maintain and operate such institutions as are now or may 52 be put under his or her control. 53 § 21-202 Division for the aging. There shall be within the department 54 a division for the aging.

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1 § 21-203 Power and duties. It shall be the power and duty of the divi- 2 sion for the aging: 3 1. to stimulate community interest in the problems of the aging; 4 2. to promote public awareness of resources available for the aging, 5 and to refer the public to appropriate departments and agencies of the 6 city, state and federal governments for advice, assistance and available 7 services in connection with particular problems; 8 3. to cooperate with and assist local neighborhoods in the develop- 9 ment of programs and the establishment of local offices; 10 4. to disburse available city, state and federal funds to programs 11 throughout the city and, when practical, coordinate such funds with 12 available funding from the private sector; 13 5. to promulgate rules and regulations for the operation of facili- 14 ties, services and programs under its jurisdiction; and 15 6. to maintain, operate and control such programs and facilities, as 16 may be necessary or required for the proper administration of the divi- 17 sion. 18 § 21-301. Division for youth services. 1. There shall be within the 19 department a division for youth services. 20 2. With respect to youth services the commissioner shall have all the 21 powers and duties of a youth bureau as such bureau is described in arti- 22 cle nineteen-A of the executive law and shall in addition have the 23 following powers and duties: 24 (a) to disburse available city, state and federal, and private-sector, 25 when applicable, funds to programs for youth throughout the city; 26 (b) to maintain, operate and control such youth programs and facili- 27 ties as necessary; and 28 (c) to promulgate rules and regulations for the operation of facili- 29 ties, services and programs within the department's jurisdiction. 30 § 21-402 Division of homeless services. There shall be within the 31 department a division of homeless services. 32 § 21-403 Powers and duties; director. 1. The head of the division of 33 homeless services shall be the director. The director shall have the 34 powers and perform the duties of a commissioner of human services under 35 the social services law for the purpose of fulfilling his or her respon- 36 sibilities. 37 2. The director, in the performance of his or her functions, shall: 38 (a) be responsible for transitional housing and services provided by 39 the city for eligible homeless families and individuals. The director 40 shall encourage the participation of and receive proposals from the 41 public and private sectors for the development of transitional housing 42 and services for homeless families and individuals. In performing such 43 duties, the director may develop and issue requests for such proposals 44 and evaluate responses thereto, negotiate, award, and administer 45 contracts, loans or other agreements, and obtain all necessary 46 approvals. For-profit and not-for-profit entities shall be eligible to 47 submit proposals, bid on contracts and other agreements, and apply for 48 grants and loans; 49 (b) plan and implement a redesign and restructuring of the system for 50 the provision of transitional housing and services for homeless families 51 and individuals; 52 (c) in consultation with other appropriate governmental agencies, plan 53 housing for homeless families and individuals; 54 (d) develop programs designed to improve access of homeless families 55 and individuals to existing housing;

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1 (e) maintain, repair and rehabilitate transitional housing owned, 2 operated or managed by the division; 3 (f) establish performance criteria, goals and objectives with respect 4 to contract providers and monitor and evaluate such performance; and 5 (g) in consultation with other appropriate governmental agencies, 6 develop and operate outreach programs to identify and assist families 7 and individuals who are homeless and living in public spaces and partic- 8 ipate in the development of prevention programs to assist families and 9 individuals who are in imminent danger of becoming homeless. 10 3. In addition, the director is authorized, in consultation with 11 appropriate agencies, to provide any other services he or she deems 12 necessary to implement and effectuate the provisions of this title.

13 Title 22 - Economic Development

14 § 22-102 Commissioner. The head of the department shall be the commis- 15 sioner of economic development. 16 § 22-103 Powers and duties of the commissioner. The commissioner shall 17 have charge and control of and be responsible for all functions and 18 operations of the city relating to business and economic development, 19 the enhancement of economic development and financial opportunity for 20 minority and women owned business enterprises and ensuring equal employ- 21 ment opportunity by city contractors. 22 1. Such powers and functions shall include, without limitation, the 23 following: 24 (a) to establish business, industrial and commercial policies, 25 programs and projects which affect the business, industrial, commercial 26 or economic well-being, development, growth and expansion of the econom- 27 ic life of the city; 28 (b) to serve as liaison for the city with local development corpo- 29 rations, other not-for-profit corporations and all other entities 30 involved in economic development within the city; 31 (c) to study, organize, promote, coordinate and carry out within or 32 without the city, activities, projects and programs designed to encour- 33 age, stimulate and foster the well-being, development, growth and expan- 34 sion of business, industry and commerce in the city, and to enhance and 35 protect the economic life of the city; 36 (d) to assist, encourage and promote broadened employee ownership, 37 particularly through the use of employee stock ownership plans and 38 producer cooperatives, by conducting research, outreach and public 39 information programs regarding such ownership; by providing technical 40 assistance to employee groups exploring employee buyouts, and by ensur- 41 ing that firms applying for financial assistance from any entity 42 involved with economic development in the city shall be correctly 43 advised as to the potential advantages of forming an employee stock 44 ownership plan; 45 (e) to serve as a clearinghouse in connection with efforts to devise 46 solutions for problems affecting business, industry or commerce in the 47 city; 48 (f) to promote and encourage the location and development of markets 49 for city products; 50 (g) to promote and encourage the location and development of new busi- 51 ness and industry in the city, as well as the maintenance and expansion 52 of existing business and industry in the city; 53 (h) to promote, coordinate and implement activities, projects and 54 programs designed to attract foreign direct investment and promote over-

S. 8578 1195

1 seas sales by firms in the city, and to otherwise encourage and stimu- 2 late the development of international business, commerce and trade in 3 the city; 4 (i) to administer and promote development of foreign trade zones with- 5 in the city; 6 (j) to study conditions affecting business, industry and commerce in 7 the city, and collect, disseminate and make studies with regard to the 8 information collected; 9 (k) to maintain a business information service in order to assist 10 business and industry in the city and to encourage businesses outside 11 the city to patronize the industrial establishments of the city; 12 (l) to make recommendations to the mayor concerning steps deemed 13 advisable for the promotion and advancement of business prosperity in 14 the city; 15 (m) to publicize the economic advantages and other factors which make 16 the city a desirable location for businesses; 17 (n) to collect, compile and distribute information dealing with the 18 facilities, advantages and attractions of the city and historic and 19 scenic points and places of interest therein; 20 (o) to plan and conduct informational programs and publicity designed 21 to attract tourists, vacationers, visitors and other interested persons 22 to the city and its attractions; 23 (p) to encourage and cooperate with public and private agencies, 24 organizations and groups to publicize the business and commercial advan- 25 tages of the city; 26 (q) to cooperate with and assist any corporation, organization or 27 agency, public or private, the objectives of which include the advance- 28 ment of business, industry prosperity, expansion of existing business, 29 the creation of new job opportunities and provide support for any such 30 efforts or purposes; and 31 (r) to issue permits for the taking of motion pictures, and for the 32 taking of photographs and for the use or operation of television cameras 33 or other transmitting television equipment in, on or about city proper- 34 ty, streets, parks, piers, wharves, docks, bridges or tunnels. 35 2. The commissioner shall have the power and duty to exercise the 36 functions of the city relating to the development, redevelopment, 37 construction, operation, maintenance, management and regulation of 38 public markets, wharf property, waterfront property and airports within 39 the city, including, without limitation, the following: 40 (a) to have charge and control of the public markets of the city, to 41 fix fees for services, licenses and privileges in connection therewith, 42 to rent space and enter into leases therefor, and to regulate all facil- 43 ities in use as public markets for the public health, safety and 44 welfare; 45 (b) to have charge and control of wharf property and waterfront prop- 46 erty owned by the city and of the building, repairing, altering, main- 47 taining, strengthening, protecting, cleaning, dredging and deepening of 48 such property; provided that the commissioner may designate parcels of 49 waterfront property to be managed pursuant to this paragraph and leased 50 pursuant to paragraph (g) of this subdivision, by the commissioner of 51 general services and contracting, provided, any such designation to be 52 made in writing and with approval of the mayor; 53 (c) to have power to enforce with respect to public markets, water- 54 front property and any structures thereon under its jurisdiction, the 55 labor law and other such laws, rules or regulations as may govern any 56 such activities undertaken, as described in paragraph (b) of this subdi-

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1 vision, and to establish and amend fees to be charged for the issuance 2 of such permits or certificates of completion; 3 (d) to have power to regulate waterfront property and any structures 4 on any waterfront property used in conjunction with commerce or naviga- 5 tion; 6 (e) to have power to regulate the use of marginal streets so that they 7 may be used to best advantage in connection with waterfront property and 8 to regulate by license or otherwise the transfer of goods and merchan- 9 dise upon, over or under such streets; 10 (f) to lease, subject to council approval, any wharf property belong- 11 ing to the city for purposes of commerce or in furtherance of naviga- 12 tion; 13 (g) to grant temporary permits, terminable at will, for a period not 14 exceeding three years for purposes of commerce or navigation and not 15 exceeding one year for other purposes; 16 (h) to set aside by order any wharf property owned by the city, which 17 has not been leased, for general wharfage purposes or for a special kind 18 of commerce and to revoke or modify such order at any time; 19 (i) to regulate the charges for wharfage, cranage and dockage of all 20 vessels or floating structures using any wharf property, such rates to 21 be fixed by rules of the commissioner; 22 (j) to sell, subject to the approval of the council, buildings, struc- 23 tures and other improvements on market property to a person leasing such 24 property; 25 (k) to manage and promote the economic development of all airports, 26 airplane landing sites, seaplane bases and heliports owned by the city 27 and to lease such property, provided that no such lease may be author- 28 ized by the commissioner until a public hearing has been held and after 29 publication of notice in a newspaper of general circulation in the city 30 at least thirty days prior to such hearing; 31 (l) to have charge and control of the regulation for the health and 32 safety of the general public at all airports, airplane landing sites, 33 seaplane bases, heliports, marginal streets and parking facilities owned 34 by the city; 35 (m) to establish, amend and enforce rules for the proper care and use 36 of all public markets, wharf property, airports, heliports, airplane 37 landing sites or seaplane bases; the violation or failure to comply with 38 any such enforcement order shall be triable in criminal court and 39 punishable by not more than thirty days' imprisonment or a fine of not 40 less than one hundred dollars nor more than five thousand dollars, or 41 both; 42 (n) to have the exclusive power to regulate all privately owned 43 airports, airplane landing sites, seaplane bases and heliports, the 44 operations out of and into such bases, as well as the control of ground 45 effect craft; 46 (o) to promote and encourage the expansion and development of the city 47 as a center for intrastate, interstate and international freight trans- 48 portation; and 49 (p) to administer and enforce the provisions of the joining resolution 50 of the city in respect to any and all structures on waterfront property 51 used in connection with the furtherance of waterfront commerce on navi- 52 gation. 53 3. With respect to energy matters, the commissioner shall have the 54 power and duty: 55 (a) to plan, formulate, coordinate and advance energy policy for the 56 city;

S. 8578 1197

1 (b) to analyze the energy and fuel needs of the city with respect to 2 all types of energy, to prepare intermediate and long-range plans, goals 3 and programs designed to meet such needs and to establish priorities 4 among them; 5 (c) to develop, implement and manage energy-related programs for 6 economic development and other purposes, including the administration of 7 the public utility service and to exercise all of the functions, powers 8 and duties of such public utility service; and 9 (d) to perform such other responsibilities with respect to energy 10 matters, including responsibilities delegated elsewhere by the city 11 charter, as the mayor shall direct. 12 § 22-104 Waterfront plans. 1. No marginal street bulkhead line, pier- 13 head line or other similar line demarcating the extent of waterfront 14 development may be delineated, established or changed by the commission- 15 er except in accordance with the provisions of the city charter. The 16 commissioner may apply to the department of city planning to incorporate 17 such existing plans for the waterfront into the city map pursuant to the 18 procedure for review and approval of a change to the city map. 19 2. The commissioner may widen, open, construct, abandon or close any 20 marginal street or avenue included in such waterfront plans and shall 21 maintain the widened portion of such street and the widened portion of 22 such street shall not be a public street. Before acting under this 23 subdivision, the commissioner shall make a report to the department of 24 city planning including a map showing the proposed changes, but if the 25 department or, upon appeal of the action of the department, the appeals 26 board does not approve such proposal then it must be approved by the 27 council or the commissioner shall not proceed. 28 § 22-201 Division of economic and financial opportunity. 1. There 29 shall be a division of economic and financial opportunity within the 30 department. 31 2. The purpose of the division shall be to enhance the ability of 32 minority and women owned business enterprises to compete for city 33 contracts, to enhance city agencies' awareness of such enterprises and 34 to ensure their participation in the city procurement process. 35 3. In addition to the other purposes of this section, the division of 36 economic and financial opportunity shall also administer any programs 37 for small or locally-owned business enterprise programs as may be estab- 38 lished by law. 39 § 22-301 Division of labor services. 1. There shall be a division of 40 labor services within the department and the commissioner shall adminis- 41 ter the provisions of this section and enforce a citywide program to 42 ensure that city contractors and subcontractors take appropriate action 43 to ensure that women and minority group members are afforded equal 44 employment opportunities, and that all persons are protected from 45 discrimination prohibited under the provisions of federal, state and 46 local laws regarding recruitment, employment, job assignment, promotion, 47 upgrading, transfer, layoff, termination or rates of compensation. 48 2. The commissioner shall also monitor compliance by contractors with 49 state and federal prevailing wage requirements. 50 § 22-401 The city of Staten Island public utility service. The commis- 51 sioner or his or her designee shall serve as the director of the public 52 utility service established by provisions of the code of the preceding 53 municipality. 54 § 22-402 Authorization for public utility service. Pursuant to article 55 fourteen-A of the general municipal law, the city hereby establishes a 56 public utility service, as such term is defined in section three hundred

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1 sixty of such article, which is authorized to establish, construct, 2 lease, purchase, own, acquire, use or operate facilities within or with- 3 out the territorial limits of the city, for the purpose of furnishing to 4 itself or for compensation to its inhabitants any service similar to 5 that furnished by any public utility company specified in article four 6 of the public service law. For such purpose the city may purchase elec- 7 trical and other forms of energy from the state, or from any state agen- 8 cy, or other municipal corporation, or from any private or public corpo- 9 ration, and may sell or distribute such power to itself and to 10 residential, commercial, industrial and other customers. The city shall 11 possess any and all powers granted to a public utility service pursuant 12 to article fourteen-A of the general municipal law and any other appli- 13 cable provision of law. 14 § 22-403 Acquisition of energy and facilities. The city shall 15 contract for or otherwise purchase or acquire hydroelectric or other 16 forms of energy as shall be available from the power authority of the 17 state of New York, the state, any state agency, any other municipal 18 corporation, or any private or public corporation, and shall arrange to 19 use, lease or acquire the transmission, substation and distribution 20 facilities necessary to furnish such power to the city and, for compen- 21 sation, to residential, commercial, industrial and other customers; 22 provided, however, that the city will not acquire or build any electric 23 or gas transmission or distribution facilities which are parallel to, or 24 duplicative of electric or gas transmission or distribution facilities 25 of any utility companies within the city, nor take any action to impair 26 any agreements, franchises, rights or obligations of any utility company 27 within the city including, to provide safe, adequate and efficient 28 service to conduct its business in the city and to protect its assets 29 unless so authorized by further local law and public referendum. 30 § 22-404 Distribution and sale of energy. The city shall arrange with 31 any utility companies for the distribution of energy through the use, 32 lease, or acquisition of transmission, substation and distribution 33 facilities within the service areas of such companies and for such 34 companies to act on behalf of the city for collection of charges for 35 such energy within such service areas, or for the sale of energy to such 36 companies for resale to customers within the service areas of such 37 companies. 38 § 22-405 Rates. The fixing of rates for furnishing hydroelectric and 39 other forms of energy to residential, commercial, industrial and other 40 customers shall include consideration of (1) the actual cost to the city 41 for the purchase, distribution and delivery of such energy to such 42 customers, (2) the actual expenses necessary for administration of the 43 public utility service, including expenses for research and development, 44 and (3) any other costs or charges allowed under law, including but not 45 limited to, losses of tax revenues resulting from the operation of the 46 public utility service. Such rates shall be computed to provide revenue 47 in an amount not less than that necessary to recover fully such costs 48 and expenses. Such rates shall be subject to approval of the city coun- 49 cil. 50 § 22-406 Municipal energy fund. Revenues received from the operation 51 of the public utility service shall be paid into a fund to be known as 52 the municipal energy fund. The revenues paid into such fund shall not 53 be revenues of the city, and payments from such fund shall be made with- 54 out appropriation and shall not be included in the expense budget of the 55 city. Nothing in this section shall prohibit the city from appropriating 56 expense or capital funds in connection with the public utility service,

S. 8578 1199

1 nor shall payments from the municipal energy fund to the general fund be 2 prohibited. 3 § 22-501 Bureau of ports and trade. There shall be a bureau of ports 4 and trade within the department of economic development. 5 § 22-502 Definitions. As used in this title: 6 1. "Director" shall mean the director of the bureau of ports and 7 trade. 8 2. "Bureau" shall mean the bureau of ports and trade. 9 § 22-503 Director. The head of the bureau shall be the director of 10 ports and trade. 11 § 22-504 Powers and duties of the director. The director shall have 12 the power and duty to: 13 1. exercise the powers of a commissioner of public markets and a city 14 department of public markets under the agriculture and markets law; 15 2. have charge and control of the wharf property and waterfront prop- 16 erty owned by the city to the extent permitted by state law; 17 3. have power to regulate waterfront property and the structures on 18 the property such as wharves, piers, docks and bulkheads; 19 4. (a) have power to enforce, on waterfront property, the labor law 20 and other such laws, rules and regulations as may govern dredging, fill- 21 ing, removal, safety, maintenance, sanitary conditions, use and occupan- 22 cy of such structures on waterfront property; (b) issue permits or 23 certificates of completion in reference thereto; and (c) establish or 24 amend fees to be charged for the issuance of such permits with such fees 25 to be established by rules of the director; 26 5. have power to regulate the use of marginal streets in connection 27 with wharf property and to regulate by license any transfer of goods or 28 merchandise on, over or under such marginal streets; 29 6. enforce provisions of the zoning resolutions of the city in respect 30 to structures used in conjunction with waterfront commerce or naviga- 31 tion; 32 7. lease, subject to approval of or authorization by the city council, 33 any wharf property belonging to the city for purposes of waterfront 34 commerce or in furtherance of navigation; leases shall be for such terms 35 and contain such conditions as provided by law and leases may be sold at 36 public auction; 37 8. grant temporary permits to use and occupy any wharf property 38 belonging to the city, such permits not to exceed one year and to termi- 39 nate at will; 40 9. set aside by order any wharf property belonging to the city, which 41 has not yet been leased, for any special kind of commerce, any class of 42 vessel or for general wharfage purposes; 43 10. regulate charges for wharfage, cranage and dockage of all vessels 44 or floating structures using any wharf property; 45 11. establish, amend and enforce all necessary rules for proper care 46 of all public markets, wharf property, waterfront property, airports, 47 airplane landing sites, seaplane bases and heliports owned by the city; 48 12. sell, subject to approval of or authorization by the city council, 49 buildings, structures and other improvements on market property or wharf 50 property; 51 13. manage and promote the economic development of all airports, 52 airplane landing sites, seaplane bases and heliports owned by the city; 53 14. have charge and control of the regulation for the health and safe- 54 ty of the general public at all airports, airplane landing sites, seap- 55 lane bases, heliports, marginal streets and parking facilities appurten- 56 ant thereto owned by city;

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1 15. have power to regulate all privately owned airports, airplane 2 landing sites and seaplane bases; 3 16. promote, coordinate and implement projects, activities and 4 programs designed to attract foreign investment and overseas sales and 5 to otherwise encourage the development, growth and expansion of interna- 6 tional business, commerce and trade in the city; and 7 17. administer and promote development of foreign trade zones in the 8 city. 9 § 22-505 Waterfront plans. All plans for the waterfront of the city 10 are continued in effect and may be changed by the director pursuant to 11 the procedure provided in this section. 12 The procedure for review and approval of any change to the plans for 13 the water front shall be the same as in the case of a change to the city 14 map and the director may apply to the department of city planning to 15 incorporate plans for the waterfront pursuant to the procedure for 16 review and approval of a change to the city map. 17 The director may widen, open, construct, abandon or close any marginal 18 street or avenue included in any plans for changes and the director 19 shall also maintain such widened portion of such streets. The director 20 may proceed with any proposed changes only if the department of city 21 planning approves the change; however, if the department of city plan- 22 ning does not approve, the director may not proceed unless the city 23 council authorizes, by a two-thirds vote, the director to proceed. 24 The department of city planning shall act on such proposed changes 25 within six weeks from the time of filing with the department of city 26 planning and if it does not act within the six weeks, the director may 27 proceed with the changes.

28 Title 23 - Reserved 29 Title 24 - Environmental Protection

30 § 24-101 Definitions. As used in this title: 31 1. "Commissioner" shall mean the commissioner of the department of 32 environmental protection. 33 2. "Department" shall mean the department of environmental protection. 34 § 24-102 Commissioner. 1. The head of the department of environmental 35 protection shall be the commissioner of environmental protection. 36 2. The commissioner shall have the control of and be responsible for 37 all those functions and operations of the city relating to (a) provision 38 of adequate water supply; (b) disposal of sewage; (c) prevention of air, 39 water and noise pollution; (d) response to emergencies caused by 40 releases or threatened releases of hazardous substances; and (e) 41 collection and management of information concerning the amount, location 42 and nature of hazardous substances. 43 § 24-103 Powers and duties of commissioner. The powers and duties of 44 the commissioner shall include, without limitation, the following: 45 1. Water resources control. (a) The commissioner shall have charge and 46 control, including the power to examine, of (i) all structures and prop- 47 erty connected with the supply and distribution of water for public use, 48 including all fire hydrants and water meters; (ii) furnishing the water 49 supply and maintaining its quality, including ample reserve contingen- 50 cies for future demand; and (iii) making and enforcing rules and regu- 51 lations governing and restricting use of water supply. 52 (b) The commissioner may examine any sources of water supply of 53 private companies supplying any portion of the city and may exercise 54 superintendence, regulation and control in respect thereof.

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1 (c) The commissioner shall regulate and control emissions into water 2 of harmful or objectionable substances, contaminants or pollutants and 3 shall enforce all laws and regulations with respect to such emissions. 4 (d) The commissioner may make investigations and studies as necessary 5 for purpose of enforcement, control or elimination of pollution of the 6 waters and, for such purpose, may compel witnesses and take their testi- 7 mony under oath. 8 2. Sewage control. The commissioner shall have charge and control over 9 location, construction, alteration, repair, maintenance and operation of 10 all public and private sewers, intercepting sewers, disposal plants and 11 drainage systems. 12 The commissioner may adopt regulations with regard to the discharge 13 of sewage, refuse, factory waste and trade waste into the public sewers 14 for such discharge. The commissioner may also restrict, regulate or 15 prohibit the use of public sewers for such discharge and may prescribe 16 civil penalties for the violation thereof. 17 3. Air resources control. The commissioner shall regulate and control 18 the emission into the open air of harmful or objectionable substances, 19 including but not limited to, smoke, soot, dust, fumes, ash, gas vapors 20 and any products of combustion resulting from any fuel burning equip- 21 ment. 22 The commissioner shall enforce all laws, rules and regulations with 23 respect to such emissions. The commissioner shall make investigations 24 and studies as necessary for controlling and eliminating air pollution 25 and may compel witnesses and take their testimony under oath. 26 4. Noise pollution control. The commissioner shall enforce all laws, 27 rules and regulations to eliminate noise pollution. The commissioner 28 shall make investigations, compel witnesses and take their testimony 29 under oath for such purposes. 30 The commissioner shall also undertake studies to determine permissible 31 sound levels and shall correct problems related to noise control. 32 5. Environmental consequences. The commissioner may review and comment 33 upon the environmental consequences of any activity that may have an 34 impact on the physical aspects of the environment and may be responsible 35 for investigating, evaluating and reporting such activities related to 36 fuel supply and demand, alternative sources of energy and resource 37 recovery. 38 6. Energy. The commissioner shall have the power and duty of formulat- 39 ing an energy policy for the city. 40 The commissioner shall analyze the needs of the city with regard to 41 all kinds of energy and fuel needs. The commissioner shall prepare 42 intermediate and long range plans, goals and programs to meet such 43 needs. The commissioner shall also study, organize, promote and carry 44 out activities and programs designed to encourage fuel and energy 45 conservation. 46 7. Emergency response. The commissioner shall (a) respond to emergen- 47 cies caused by releases of hazardous substances into the environment; 48 (b) take measures to protect the public health or welfare; and (c) 49 recover costs of such response measures from the responsible persons. 50 8. Community right-to-know. The commissioner shall (a) have the power 51 to collect, compile and manage information concerning the nature of 52 hazardous substances present in the city, and (b) make such information 53 available to the public and to city personnel responsible for responding 54 to hazardous substance emergencies. 55 § 24-104 Environmental control board. 1. There shall be within the 56 department an environmental control board, the chairperson of which

S. 8578 1202

1 shall be the commissioner, consisting of the commissioners of such 2 departments as the mayor and council shall determine. 3 2. The environmental control board may adopt and amend regulations not 4 inconsistent with any provision of law with regard to (a) regulating 5 emissions or pollutants into the air or waters from any land or water 6 sources, and (b) regulating or prohibiting the installation or 7 construction of any equipment giving forth such emissions or pollutants. 8 3. The board, concurrent with the jurisdiction of the criminal courts 9 of the city, shall enforce the provisions of the city charter, this code 10 and the code of the preceding municipality which relate to (a) cleanli- 11 ness of the streets; (b) disposal of wastes; (c) provision of adequate, 12 pure supply of water; (d) prevention of air, water and noise pollution; 13 (e) regulation of street peddling; (f) prevention of fire and danger to 14 life as designated by the fire commissioner; (g) construction and 15 inspection of structures of the city for sanitary conditions, safety, 16 occupancy and as designated by the buildings and real property commis- 17 sioner; (h) response to emergencies caused by release of hazardous 18 substances; and (i) reporting of all information with regard to amount, 19 labeling and location of all hazardous substances. 20 4. The board shall have concurrent jurisdiction with the board of 21 health to enforce provisions of the health code which the board of 22 health shall designate. 23 § 24-105 Proceedings for violations. The environmental control board 24 shall conduct proceedings for the adjudication of violations of the 25 laws, rules and regulations enforced by the board. 26 The form and wording of notices of violation shall be prescribed by 27 the board. Notices shall contain information advising the persons 28 charged with the manner and the time in which such person has to admit 29 or deny the charges. The notice shall also contain a warning that fail- 30 ure to plead in the time stated may result in a default decision entered 31 against such person, or failure to plead may be deemed an admission of 32 liability and shall be grounds for imposing a maximum penalty. 33 A judgment entered by the board pursuant to this section shall remain 34 in full force and effect for eight years. 35 The board may not enter any final decision or order pursuant to this 36 section unless the notice of violation shall have been served in the 37 manner as is prescribed for service of process by the civil practice law 38 and rules, with certain exceptions.

39 Title 25 - Reserved 40 Title 26 - Housing, Buildings, Construction and Maintenance

41 § 26-101 Definitions. As used in this title: 42 1. "Commissioner" shall mean the commissioner of the department of 43 buildings and real property. 44 2. "Department" shall mean the department of buildings and real prop- 45 erty. 46 3. "Class" refers to the classification of buildings in the building 47 code or other applicable laws and shall also refer to the terms "class" 48 or "kinds" as used in the multiple dwelling law. 49 4. "Division" shall mean the division of housing preservation and 50 development. 51 § 26-102 Commissioner. The head of the department shall be the commis- 52 sioner of buildings and real property. 53 § 26-103 Department functions. The department shall enforce, with 54 respect to buildings and structures, the building code, zoning resol-

S. 8578 1203

1 utions, multiple dwelling law, labor law and other regulations that may 2 govern the construction, alteration, maintenance, use, occupancy, safe- 3 ty, sanitary conditions or inspection of buildings or structures in the 4 city. 5 The department shall perform the functions of the city of Staten 6 Island relating to: 7 1. necessary legal action regarding designation of unsafe buildings or 8 structures and the removal or remedy thereof by demolition or sealing; 9 2. the shoring of unsafe buildings or structures; 10 3. testing and approval of all power-operated cranes, derricks or 11 other hoisting equipment used to raise and lower articles on the outside 12 of buildings, not to include cranes and derricks used in industrial 13 plants or yards; 14 4. location, construction, alteration and removal of signs, either 15 illuminated or non-illuminated, attached to the exterior of any build- 16 ings; 17 5. all surface and sub-surface construction within the curbline, 18 driveways and entrances thereto and the issuance of permits in reference 19 thereto; 20 6. regulation, testing and inspection of gas and electricity used for 21 light, heat or power purposes and all electric, gas and steam meters, 22 electric wires and lights furnished for the city; and 23 7. regulation, inspection and testing of wiring and appliances for 24 light, heat and power in or on any building or structure in the city, 25 except that the jurisdiction of the department shall not extend to 26 waterfront property; which property and structures shall be under the 27 jurisdiction of the department of ports and trade. 28 § 26-104 Powers and duties. 1. There shall be a main office of the 29 department. 30 2. Persons appointed as inspectors to perform functions of the depart- 31 ment shall have such qualifications as prescribed by the commissioner; 32 however, such qualifications shall include: 33 (a) a minimum of five years experience working at a construction 34 trade; 35 (b) a license as a professional engineer or architect issued pursuant 36 to the education law; 37 (c) a minimum of three years experience working at a construction 38 trade and a minimum of two years formal training in a construction 39 program in a college, technical college or trade school; or 40 (d) a minimum of two years experience working at a construction trade 41 or a minimum two years formal education in a construction program in a 42 college, trade or technical school and a minimum of three years partic- 43 ipation in an apprentice inspection program approved by the commissioner 44 and personnel director. 45 3. The commissioner shall have the following powers and duties, with 46 respect to buildings and structures: 47 (a) to examine, approve or disapprove construction or alteration plans 48 for any building or structure and to direct the inspection of such 49 building or structure; 50 (b) to require that the construction or alteration of any building, 51 including the installation or alteration of any service equipment there- 52 in, shall be in accordance with the provisions of laws and regulations 53 applicable thereto; and 54 (c) to issue certificates of occupancy for any building or structure 55 in the city, provided that:

S. 8578 1204

1 (i) no building or structure may be occupied or used until a certif- 2 icate of occupancy has been issued; 3 (ii) if a building or structure for which a certificate of occupancy 4 has not previously been required or issued shall be altered in such a 5 way as to now require a certificate, the building may not be used for 6 any purpose until such certificate is issued; 7 (iii) no buildings altered or converted from one class to another 8 shall be occupied until a certificate has been issued; and, in cases 9 where the alteration did not necessitate the total vacating of the 10 building, the certificate must be issued within thirty days of the 11 completion of such work or the occupancy of the building may not contin- 12 ue; 13 (iv) the certificate of occupancy of a building or structure shall 14 certify that such structure conforms to requirements of all laws, rules 15 and regulations applicable thereto. Every certificate of occupancy 16 shall be binding and remain binding and conclusive upon all agencies and 17 officers of the city, unless vacated or modified by a court of competent 18 jurisdiction or a board of appeals, and upon the department of labor of 19 the state of New York; 20 (v) the commissioner may issue a temporary certificate of occupancy 21 for any part of a building, provided that such temporary use or occupan- 22 cy does not jeopardize life or property; 23 (vi) the commissioner may, in specific cases, permit experimental or 24 demonstration construction to obtain knowledge and information; the 25 commissioner may also submit reports on results thereof to the depart- 26 ment of buildings and real property; and 27 (vii) the commissioner shall have the power and duty to conduct 28 inquiries to assist him or her in his or her department duties where 29 public safety is involved and he or she shall have subpoena power to 30 compel witnesses, administer oaths, and compel production of books, 31 papers and documents. 32 All certificates of occupancy in effect on the date of establishment 33 are continued. 34 § 26-105 Appeals. Appeals may be taken from the decisions of the 35 commissioner to a three person board of appeals to be appointed by the 36 mayor; one of whom shall be an architect and one of whom shall be a 37 professional engineer. 38 § 26-106 Inspection. The commissioner, or any officer of the depart- 39 ment authorized in writing by the commissioner, may enter and inspect 40 any building, structure, enclosure, premises or any part thereof or 41 anything attached thereto. 42 Any refusal to permit such entry or inspection shall be a misdemeanor 43 triable in criminal court and punishable, upon conviction, of not more 44 than thirty days imprisonment, a fine of not more than one hundred 45 dollars, or both. 46 § 26-107 Public buildings and facilities. The department shall: 47 1. have charge and control over the plans and specifications for and 48 the construction of all buildings and facilities paid for in whole or in 49 part from the city treasury; 50 2. manage, alter, rejoin, operate, maintain and clean buildings, 51 facilities and offices leased or occupied for public use by more than 52 one city agency whose management, alteration, repair, operation, mainte- 53 nance or cleaning is paid for in whole or in part from the city treas- 54 ury, and as directed by the mayor, to perform services in space occupied 55 for public use by a single city agency;

S. 8578 1205

1 3. except for the provisions of title five of the code of the preced- 2 ing municipality, employ, when in the commissioner's opinion such 3 services are necessary or desirable, qualified consultants in private 4 practice to aid the commissioner in carrying out his or her duties and 5 responsibilities with respect to public buildings or facilities; such 6 consulting or advisory services shall be performed under the supervision 7 of the commissioner; 8 4. consult with the agencies for whose use the buildings or structures 9 are intended in preparing and considering plans and specifications and 10 in carrying out such plans and specifications, and to consider any 11 recommendations made by such agency. 12 Notwithstanding the provisions of this section, the exercise of the 13 powers and duties set forth herein shall be subject to the jurisdiction 14 of any city agency performing urban renewal and public and publicly-aid- 15 ed housing functions to the extent, and in such areas, as directed by 16 the mayor; 17 5. exercise and perform such other powers and duties as may be 18 prescribed by law or delegated to him or her in relation to laboratory 19 testing of commodities and construction materials. 20 § 26-108 Real property. The department, with respect to real property, 21 shall have power to: 22 1. purchase, lease, condemn or otherwise acquire real property for the 23 city, subject to the joint approval or authorization of the mayor and 24 the council, and to sell, lease, exchange or otherwise dispose of real 25 property of the city, subject to the joint approval or authorization of 26 the mayor and the council; 27 2. assign and reallocate to city agencies space and real property 28 owned or leased by the city, to establish comprehensive and continuing 29 programs and standards for utilization of space owned or leased by the 30 city and to conduct surveys of space utilization; 31 3. manage all real property of the city not used for public purposes, 32 including real property required for a public purpose and not being 33 currently utilized for such purpose, except wharf property; provided, 34 that the commissioner shall be responsible for the management, leasing 35 or permitting of any parcels of wharf property and water front property 36 as provided in any designation made by the commissioner of economic 37 development; 38 4. exercise and perform such other powers and duties as may be 39 prescribed by law or delegated to the commissioner in relation to the 40 acquisition, disposition, management, site selection, assignment, demo- 41 lition or other treatment of real property of the city; 42 5. employ, where desirable, managing agents to manage city properties 43 and collect rents and pay bills; and 44 6. keep, maintain and annually update a master list of leases wherein 45 the city or its agencies is a tenant. 46 § 26-109 Building code. The building code which is in force in the 47 preceding municipality on the date and time when this title takes effect 48 and all existing provisions of the building code, including penalties 49 affixed for violations, shall continue to be binding and in full force, 50 except as amended from time to time by the city of Staten Island. 51 A copy of such code shall be on file in the office of the city clerk. 52 § 26-201 Division of housing preservation and development. There shall 53 be a division of housing preservation and development within the depart- 54 ment. 55 § 26-202 Powers and duties of the division. The division is vested 56 with:

S. 8578 1206

1 1. all functions of the city relating to the rehabilitation, mainte- 2 nance, alteration and improvement of residential buildings and privately 3 owned housing, pursuant to various articles of the private housing 4 finance law; acting as liaison with the New York city rehabilitation 5 mortgage insurance corporation; the execution of emergency repairs to 6 and the sealing, removal and demolition of buildings, structures and 7 private housing and the enforcement of the applicable provisions of the 8 multiple dwelling law or others laws relating to the maintenance, use, 9 occupancy, safety or sanitary condition of any building which is occu- 10 pied, or intended to be occupied, as a home, residence or dwelling 11 place; 12 2. functions and duties with respect to the relocation of tenants of 13 real property and the selection of tenants for publicly owned or public- 14 ly aided housing; 15 3. all functions and duties of the city as related to slum clearance, 16 slum prevention and urban renewal, neighborhood conservation, rehabili- 17 tation and prevention of blighted, deteriorated or unsanitary areas, and 18 public housing, including regulation of rents in housing built with 19 state or local financing; and 20 4. functions, rights and powers granted to or delegated to the housing 21 and redevelopment board, the housing and development administration and 22 the New York city housing authority. 23 § 26-203 Housing preservation and development; commissioner. With 24 respect to matters of housing preservation and development. The commis- 25 sioner shall: 26 1. have the power to establish and administer programs designed to 27 encourage the rehabilitation and preservation of existing housing; 28 2. administer laws authorizing tax exemption or tax abatement and 29 process applications for such abatements and exemptions pursuant to 30 provisions of this code; 31 3. manage and superintend all real property acquired by the city for 32 housing and urban renewal purposes; 33 4. represent the city in carrying out the provisions of the private 34 housing finance law and act as the "supervising agency" pursuant to the 35 private housing finance law; 36 5. represent the city in carrying out the provisions of the general 37 municipal law, including acquiring, leasing or disposing of real proper- 38 ty; 39 6. undertake projects and exercise rights, powers, and privileges of 40 the applicable public housing law; 41 7. impose and collect charges and fees for financing, regulation, 42 supervision and audit of municipality-aided projects and loan programs 43 administered by the commissioner, with such moneys to be set aside in an 44 account for administrative expenses for the department; 45 8. acquire real property on behalf of other city agencies; 46 9. sell, lease, exchange or dispose of residential real property of 47 the city, provided that no such sale shall be authorized without the 48 mayor's and council's approval and until a public hearing has been held 49 and public notice given; 50 10. manage and superintend all residential real property of the city 51 not used for public purposes. The provisions of this subdivision are not 52 applicable to wharf property, real property under jurisdiction of the 53 Metropolitan Transportation Authority or the jurisdiction of the New 54 York city housing authority or the jurisdiction of the Triborough Bridge 55 and Tunnel Authority;

S. 8578 1207

1 11. manage, demolish, seal or otherwise treat residential real proper- 2 ty as necessary; and 3 12. employ professional community and other personnel to manage resi- 4 dential real property. 5 § 26-204 Inspection. 1. Inspections. A housing maintenance inspector 6 shall have such qualifications as prescribed by the department of 7 personnel after consultation with the commissioner. 8 2. Entry. The commissioner or any inspector may enter and inspect any 9 building, structure, enclosure, premises, or any part thereof and 10 refusal to permit such inspection shall be a misdemeanor triable in 11 criminal court, punishable by not more than thirty days imprisonment or 12 a fine of not more than one hundred dollars or both. 13 § 26-205 Acquisitions of real property. No purchase, lease, condemna- 14 tion or acquisition of real property shall be authorized until (i) a 15 public hearing has been held, and (ii) the department shall have 16 received the joint approval or authorization of the mayor and the coun- 17 cil. 18 In the case of acquisition by purchase or condemnation, a hearing as 19 described above shall not be required if a public hearing is already 20 being held with respect to such purchase pursuant to any other require- 21 ment of law.

22 Title 27 - Health and Mental Hygiene

23 § 27-101 Definitions. As used in this title: 24 1. "Commissioner" shall mean the commissioner of the department of 25 health and mental hygiene. 26 2. "Department" shall mean the department of health and mental 27 hygiene. 28 § 27-102 Powers and duties of commissioner. The commissioner shall 29 have the powers and duties of the department which shall include but 30 shall not be limited to: 31 1. Determining the needs of the mentally disabled in the city, which 32 determination shall include the review and evaluation of all mental 33 hygiene services and facilities within the commissioner's jurisdiction; 34 2. Engaging in short-range, intermediate-range and long-range mental 35 hygiene planning; 36 3. Developing and submitting to the mayor and council a program for 37 the delivery of services for the developmentally disabled, including 38 construction and operation of facilities; 39 4. Arranging with the approval of the mayor, for the rendition of 40 services and operation of facilities by other agencies of the city; 41 5. Within the amounts appropriated therefor, entering into contracts 42 for the rendition or operation of services and facilities on a per capi- 43 ta basis or otherwise; 44 6. Within the amounts appropriated therefor, executing such programs 45 and maintaining such facilities as may be authorized under such appro- 46 priations; 47 7. Using the services and facilities of public or private voluntary 48 institutions whenever practical, and encouraging all providers of 49 services to cooperate with or participate in the program, whether by 50 contract or otherwise; 51 8. Implementing and administering an inclusive citywide planning proc- 52 ess for the delivery of services for the developmentally disabled; 53 consistent with applicable law, standards and procedures for community 54 participation at the local community level;

S. 8578 1208

1 9. Encouraging the development and expansion of programs for the 2 prevention, diagnosis, care, treatment, social and vocational rehabili- 3 tation, special education and training of the developmentally disabled 4 and for public education or developmental disability; 5 10. Establishing coordination and cooperation among all providers of 6 services, coordinating the department's program with the program of the 7 state department of mental hygiene so that there is a continuity of care 8 among all providers of services; and seeking to cooperate by mutual 9 agreement with the state department of mental hygiene and their repre- 10 sentatives in preadmission screening and in post-hospital care of 11 persons suffering from developmental disability; 12 11. Making policy and planning for, monitoring, evaluating and exer- 13 cising general supervision over all services and facilities for the 14 developmentally disabled within the commissioner's jurisdiction; and 15 exercising general supervisory authority through the promulgation of 16 appropriate standards consistent with accepted professional practices 17 for care and treatment of patients; 18 12. To the extent necessary, when not inconsistent with any other law, 19 arranging for the visitation, inspection and investigation of all 20 providers of services, by the department or otherwise; 21 13. Conducting such inquiries as may be useful, including investi- 22 gations into individual patient care, in performing the functions of the 23 department and for such purpose the commissioner shall have subpoena 24 power to compel the attendance of witnesses, to administer oaths and to 25 compel the production of books, papers and documents and consistent with 26 the provisions of the mental hygiene law, having access to otherwise 27 confidential patient records, provided such information is requested 28 pursuant to the functions, powers and duties conferred upon the commis- 29 sioner by law; 30 14. Submitting all materials required by the mental hygiene law for 31 purposes of state reimbursement; 32 15. Serving as a member of such state or federally authorized commit- 33 tees as may be appropriate to the discharge of the commissioner's func- 34 tions; 35 16. Performing such other acts as may be necessary and proper to carry 36 out the provisions of this title and the purposes of the mental hygiene 37 law; 38 17. Develop, promote, provide, coordinate and evaluate addiction 39 programs for the prevention of addiction, treatment and rehabilitation 40 for persons addicted to narcotics and other dangerous drugs, including, 41 but not limited to, the following functions: 42 (a) participate in cooperative efforts of federal, state, regional and 43 city agencies and programs dealing with the problems of addiction to 44 narcotics and other dangerous drugs; 45 (b) evaluate present and proposed research designs, demonstration 46 projects, treatment and service programs and other requests related to 47 such prevention and care, before public funds are made available there- 48 for; 49 (c) promote or provide research and demonstration projects designed to 50 obtain information relating to the prevention of addiction and the 51 related treatment provided to drug addicts by public or voluntary 52 private agencies supported by city funds; 53 (d) promote or provide an educational and prevention program to 54 acquaint the public with the problems of addiction;

S. 8578 1209

1 (e) promote or provide treatment agents for persons addicted to 2 narcotics, including, but not limited to, drug free programs, chemother- 3 apeutic programs and a school based drug prevention program; 4 (f) annually report to the city council, by March first as of the 5 preceding December thirty-first, on all treatment agents promoted or 6 provided during the year and proposed to be provided or promoted during 7 the current year, with particular attention given to the balance between 8 the treatment agents and their relative effectiveness; and 9 (g) promote or provide training programs for persons in public or 10 voluntary private agencies and institutions engaged in the prevention, 11 treatment and rehabilitation of persons addicted to narcotics. 12 § 27-103 Functions of the department. Except as otherwise provided by 13 this title and law, the department shall perform all those functions and 14 operations that relate to health and mental hygiene related needs of the 15 people of the city. 16 § 27-104 Construction clause. The provisions of this title shall be 17 carried out subject to and in conjunction with the provisions of the 18 mental hygiene law. 19 § 15-001. The sum of six million dollars ($6,000,000), or so much 20 thereof as may be necessary, is hereby appropriated as an advance out of 21 any moneys in the general fund to the credit of the local assistance 22 account not otherwise appropriated and shall be made immediately avail- 23 able, for the expenses of the city of Staten Island, in carrying out the 24 provisions of this act relating to the transition government and estab- 25 lishment of such city. Notwithstanding any provision of law such moneys 26 shall be payable on the audit and warrant of the comptroller on vouchers 27 certified or approved in the manner prescribed by law. Such advance 28 shall be repaid from funds which shall be withheld by the state comp- 29 troller in equal payments over a period of five years out of the first 30 moneys available for the next succeeding payments of state aid appor- 31 tioned to the city of Staten Island as per capita aid for the support of 32 local government pursuant to section 54 of the state finance law. 33 § 15-002. The sum of one million dollars ($1,000,000), or so much 34 thereof as may be necessary, is hereby appropriated as an advance out of 35 any moneys in the general fund to the credit of the local assistance 36 account not otherwise appropriated and shall be made immediately avail- 37 able, for the expenses of the city school district of the city of Staten 38 Island, in carrying out the provisions of this act relating to the 39 establishment of the city school district of such city. Notwithstanding 40 any provision of law such moneys shall be payable on the audit and 41 warrant of the comptroller on vouchers certified or approved in the 42 manner prescribed by law. Such advance shall be repaid from funds which 43 shall be withheld by the state comptroller in equal payments over a 44 period of five years out of the first moneys available for the next 45 succeeding payments of education aid apportioned to the city of Staten 46 Island as aid for the support of education. 47 § 16-001. Severability. The provisions of this act shall be severable, 48 and if the application of any clause, sentence, paragraph, subdivision, 49 section or part of this act to any person or circumstance shall be 50 adjudged by any court of competent jurisdiction to be invalid, such 51 judgment shall not necessarily affect, impair or invalidate the applica- 52 tion of any such clause, sentence, paragraph, subdivision, section, part 53 of this act or remainder thereof, as the case may be, to any other 54 person or circumstance, but shall be confined in its operation to the 55 clause, sentence, paragraph, subdivision, section or part thereof

S. 8578 1210

1 directly involved in the controversy in which such judgment shall have 2 been rendered. 3 § 17-001. This act shall take effect immediately; provided, however, 4 that: 5 (a) the provisions of sections 7-009, 7-010 and 13-001 of this act 6 shall take effect on the first of January next succeeding the date on 7 which it shall have become a law; 8 (b) the provisions of sections 7-001 through 7-008, 8-001 through 9 8-023, 9-001 through 9-012, 10-001 through 10-008, 11-001 and 12-001 10 through 12-020 of this act shall take effect on the first of July in the 11 second year next succeeding the date on which it shall have become a 12 law; 13 (b-1) the amendments made to subdivisions 8 and 14 of section 2554 of 14 the education law by sections 4-007 and 4-008 of this act, respectively, 15 shall take effect upon the revival of such subdivisions as provided in 16 section 34 of chapter 91 of the laws of 2002, as amended; 17 (c) provided that the amendments to paragraphs (a), (b), (c), (d), 18 (e), and (f) of subdivision 2 of section 209 of the social services law 19 made by section 8-021 of this act shall take effect on the same date and 20 same manner as section 2 of part R of chapter 56 of the laws of 2025, 21 takes effect; 22 (d) the amendments to the second undesignated paragraph of subdivision 23 4 of section 246 of the executive law made by section 8-004 of this act 24 shall be subject to the expiration and reversion of such paragraph 25 pursuant to subdivision (aa) of section 427 of chapter 55 of the laws of 26 1992, as amended, when upon such date the provisions of section 8-004-a 27 of this act shall take effect; and 28 (e) provided that the amendments made to sections 257-c, 262, 266 and 29 267 of the executive law made by sections 8-007, 8-008, 8-009 and 8-010 30 of this act shall not affect the expiration or repeal of such sections 31 and shall be deemed expired and repealed therewith.

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