S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   2499
 
                        2019-2020 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             January 23, 2019
                                ___________
 
 Introduced  by M. of A. GANTT -- read once and referred to the Committee
   on Housing
 
 AN ACT to amend the general municipal law, the public service  law,  the
   tax  law and the real property tax law, in relation to authorizing the
   creation of housing opportunity zones in  certain  cities,  towns  and
   villages within the state

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The general municipal law is amended by adding a new  arti-
 cle 19-AA to read as follows:
                               ARTICLE 19-AA
                 NEW YORK STATE HOUSING OPPORTUNITY ZONES
 SECTION 981.   SHORT TITLE.
         982.   LEGISLATIVE FINDINGS AND DECLARATION.
         983.   DEFINITIONS.
         984.   CRITERIA FOR HOUSING OPPORTUNITY ZONES.
         985.   POWERS OF THE COMMISSIONER.
         986.   PROPERTY TAX RELIEF.
         987.   BUSINESS TAX CREDIT.
         988.   REDUCED ELECTRICITY AND GAS RATES.
         989.   EXEMPTION FROM SALES TAX.
         989-A. WAIVER OF PERMIT FEES.
         989-B. SPECIAL PROVISIONS.
         989-C. MINIMIZATION OF DISPLACEMENT.
   §  981.  SHORT  TITLE. THIS ARTICLE SHALL BE KNOWN AND MAY BE CITED AS
 THE "NEW YORK STATE HOUSING OPPORTUNITY ZONES ACT".
   § 982. LEGISLATIVE FINDINGS AND DECLARATION. THE HIGH COST OF  HOUSING
 IS  NOW A MAJOR PROBLEM FOR THOUSANDS OF NEW YORKERS. COSTS OF ACQUIRING
 OR OCCUPYING ACCEPTABLE HOUSING HAVE INCREASED SIGNIFICANTLY  IN  RECENT
 YEARS.  FOR  TOO MANY HOUSEHOLDS, THE HIGH COST OF SHELTER IS NOT MERELY
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD00304-01-9
              

 A. 2499                             2
 
 SERIOUS, IT IS TOO OFTEN AN INSURMOUNTABLE BARRIER TO THE ACHIEVEMENT OF
 A SAFE AND DECENT PLACE IN WHICH TO LIVE.
   IT  IS  HEREBY  FOUND  AND DECLARED THAT THERE EXISTS WITHIN THE STATE
 CERTAIN AREAS CHARACTERIZED BY A SEVERE SHORTAGE  OF  SAFE,  DECENT  AND
 AFFORDABLE HOUSING, DILAPIDATED AND ABANDONED RESIDENTIAL STRUCTURES AND
 SHRINKING  TAX  BASES. MOREOVER, IT IS FOUND THAT THE LACK OF HOUSING IN
 THESE AREAS THREATENS  EMPLOYMENT  GROWTH  PROSPECTS  AND  THAT  WITHOUT
 ADEQUATE  PROVISION  OF  HOUSING  AND THE SATISFACTION OF HOUSING NEEDS,
 THESE REGIONS OF THE STATE MAY NOT RETAIN SKILLED LABOR AND SUSTAIN  THE
 GROWTH IN EMPLOYMENT AND OUTPUT OF WHICH THEY ARE CAPABLE.
   §  983.  DEFINITIONS. 1. "COMMISSIONER" SHALL MEAN THE COMMISSIONER OF
 HOUSING AND COMMUNITY RENEWAL.
   2. "SUBSTANTIAL REHABILITATION" SHALL MEAN THE IMPROVEMENT OF A  RESI-
 DENTIAL  PROPERTY  WITH  THE  ASSISTANCE  OF  ANY FORM OF PUBLIC HOUSING
 MONIES TO A DECENT, SAFE AND SANITARY CONDITION IN ACCORDANCE WITH STAN-
 DARDS AS SHALL BE PROMULGATED BY THE COMMISSIONER. SUBSTANTIAL REHABILI-
 TATION MAY VARY IN DEGREE FROM GUTTING AND EXTENSIVE  RECONSTRUCTION  TO
 THE  CURE  OF SUBSTANTIAL ACCUMULATION OF DEFERRED MAINTENANCE. COSMETIC
 IMPROVEMENTS ALONE SHALL NOT QUALIFY AS SUBSTANTIAL REHABILITATION.
   § 984. CRITERIA FOR HOUSING OPPORTUNITY  ZONES.  TO  BE  ELIGIBLE  FOR
 DESIGNATION  BY  THE COMMISSIONER AS A HOUSING OPPORTUNITY ZONE, AN AREA
 MUST  BE  CHARACTERIZED  BY  A  SIGNIFICANT  AMOUNT  OF   DETERIORATING,
 SUBSTANDARD,  VACANT  OR  ABANDONED  RESIDENTIAL BUILDINGS WHICH ARE NOT
 BEING ADEQUATELY REPAIRED, RENOVATED, UPGRADED, MODERNIZED OR  REHABILI-
 TATED  UNDER  EXISTING  PROGRAMS  SO AS TO PROVIDE AN ADEQUATE SUPPLY OF
 SAFE AND DECENT HOUSING AT COSTS WHICH THE RESIDENTS  OF  THE  AREA  CAN
 REASONABLY AFFORD, A HIGH VACANCY RATE, A LARGE NUMBER OF HOMELESS FAMI-
 LIES  OR  INDIVIDUALS AND GENERAL ECONOMIC DISTRESS. THE LACK OF ANY ONE
 FACTOR IN A PARTICULAR REGION SHALL NOT BE DETERMINATIVE IN  THE  DESIG-
 NATION PROCESS. THE DESIGNATION OF ONE HOUSING OPPORTUNITY ZONE WITHIN A
 PARTICULAR  REGION SHALL NOT PRECLUDE OTHER AREAS WITHIN THE REGION FROM
 BEING SO DESIGNATED AS WELL, AS LONG AS THE APPROPRIATE  CRITERIA  EXIST
 WITHIN THE AREA TO SUPPORT SUCH A DESIGNATION.
   § 985. POWERS OF THE COMMISSIONER. THE COMMISSIONER SHALL:
   1. AFTER CONSULTATION WITH THE DIRECTOR OF THE BUDGET, THE CHIEF EXEC-
 UTIVE  OFFICER  OF  THE STATE OF NEW YORK MORTGAGE AGENCY, THE EXECUTIVE
 DIRECTOR OF THE HOUSING FINANCE AGENCY,  THE  SECRETARY  OF  STATE,  THE
 COMMISSIONER  OF  TAXATION AND FINANCE AND THE EXECUTIVE DIRECTOR OF THE
 STATE OFFICE OF RURAL  AFFAIRS,  PROMULGATE  REGULATIONS  GOVERNING  (A)
 CRITERIA  OF  ELIGIBILITY  FOR HOUSING OPPORTUNITY ZONE DESIGNATION, (B)
 THE APPLICATION PROCESS, (C) THE ELIGIBILITY OF BUSINESS ENTERPRISES FOR
 BENEFITS REFERRED TO IN SECTION NINE HUNDRED EIGHTY-SEVEN OF THIS  ARTI-
 CLE AND (D) STANDARDS DEFINING WHAT COMPRISES SUBSTANTIAL REHABILITATION
 AS USED IN THIS ARTICLE;
   2. RECEIVE AND REVIEW APPLICATIONS FOR DESIGNATION OF AREAS AS HOUSING
 OPPORTUNITY ZONES;
   3.  SOLICIT  AND  REVIEW THE OPINIONS OF LOCAL OFFICIALS AS TO WHETHER
 PARTICULAR AREAS SHOULD BE DESIGNATED AS HOUSING OPPORTUNITY ZONES; AND
   4. MAKE FINAL DETERMINATIONS OF AREAS AS  HOUSING  OPPORTUNITY  ZONES,
 PROVIDED,  HOWEVER,  THAT  ALL SUCH ZONES SHALL MEET THE REQUIREMENTS OF
 THIS ARTICLE.
   § 986. PROPERTY TAX RELIEF. ALL NEW RESIDENTIAL CONSTRUCTION INVOLVING
 THE ASSISTANCE OF ANY FORM OF  PUBLIC  HOUSING  MONIES  AND  SUBSTANTIAL
 REHABILITATION  OF  RESIDENTIAL UNITS WITH THE ASSISTANCE OF ANY FORM OF
 PUBLIC HOUSING MONIES COMPLETED SUBSEQUENT TO THE DESIGNATION OF AN AREA
 AS A HOUSING OPPORTUNITY ZONE SHALL BE ENTITLED  TO  AN  EXEMPTION  FROM

 A. 2499                             3
 
 PROPERTY  TAXES  AS  PROVIDED FOR IN THE REAL PROPERTY TAX LAW; PROVIDED
 THAT SUCH NEW CONSTRUCTION OR SUBSTANTIAL REHABILITATION IS  DONE  TO  A
 UNIT LOCATED WITHIN SUCH ZONE.
   §  987.  BUSINESS TAX CREDIT. BUSINESS ENTERPRISES WHICH INVEST IN NEW
 CONSTRUCTION INVOLVING THE ASSISTANCE OF  ANY  FORM  OF  PUBLIC  HOUSING
 MONIES  OR  SUBSTANTIAL  REHABILITATION  OF  RESIDENTIAL  UNITS WITH THE
 ASSISTANCE OF ANY FORM OF PUBLIC HOUSING MONIES LOCATED WITHIN A HOUSING
 OPPORTUNITY ZONE SHALL BE ENTITLED TO A TAX CREDIT PURSUANT TO  SUBPARA-
 GRAPH  (I)  OF  PARAGRAPH  (B) OF SUBDIVISION ONE OF SECTION TWO HUNDRED
 TEN-B AND SUBPARAGRAPH (A) OF PARAGRAPH TWO OF SUBSECTION (A) OF SECTION
 SIX HUNDRED SIX OF THE TAX LAW,  PROVIDED,  THAT  SAID  CONSTRUCTION  OR
 REHABILITATION  MUST  PRODUCE A RATIO OF AT LEAST ONE UNIT OF HOUSING AT
 AN AFFORDABLE RATE FOR EVERY TWO UNITS  THAT  ARE  TO  BE  SOLD  AT  THE
 PREVAILING  MARKET RATE IN THE HOUSING OPPORTUNITY ZONE. AFFORDABLE RATE
 SHALL BE DEFINED AS THE RATE DESCRIBED IN THE HOUSING PROGRAM  USED  AND
 WHICH  HAS  SERVED AS THE SOURCE OF THE PUBLIC HOUSING MONIES APPLIED TO
 THE SPECIFIC PROJECTS BUILT OR REHABILITATED IN THE HOUSING  OPPORTUNITY
 ZONE.
   § 988. REDUCED ELECTRICITY AND GAS RATES. EACH UTILITY PROVIDING ELEC-
 TRIC  SERVICE,  GAS SERVICE OR BOTH, OTHER THAN A UTILITY OWNED OR OPER-
 ATED BY A MUNICIPALITY, SHALL BE REQUIRED TO PROVIDE A REDUCED  RATE  AS
 PROVIDED  FOR IN SECTION SIXTY-FIVE-C OF THE PUBLIC SERVICE LAW TO RESI-
 DENTIAL CUSTOMERS RESIDING IN HOUSING OPPORTUNITY ZONE RESIDENTIAL UNITS
 WHICH WERE NEWLY CONSTRUCTED WITH THE ASSISTANCE OF ANY FORM  OF  PUBLIC
 HOUSING  MONIES  OR  WHICH  WERE  SUBSTANTIALLY  REHABILITATED  WITH THE
 ASSISTANCE OF ANY FORM OF PUBLIC HOUSING MONIES SUBSEQUENT TO THE DESIG-
 NATION OF THE AREA AS A HOUSING OPPORTUNITY ZONE.
   §  989.  EXEMPTION  FROM  SALES  TAX.  ALL  MATERIALS  USED   IN   THE
 CONSTRUCTION  INVOLVING  THE  ASSISTANCE  OF  ANY FORM OF PUBLIC HOUSING
 MONIES OR SUBSTANTIAL REHABILITATION WITH THE ASSISTANCE OF ANY FORM  OF
 PUBLIC  HOUSING  MONIES  OF  HOUSING  OPPORTUNITY ZONE RESIDENTIAL UNITS
 SHALL BE EXEMPT FROM ALL STATE AND LOCAL SALES TAXES.
   § 989-A. WAIVER OF PERMIT FEES. ALL PERMIT FEES REQUIRED BY THE  STATE
 OR  LOCALITY  FOR ANY PHASE OF THE CONSTRUCTION OR SUBSTANTIAL REHABILI-
 TATION OF HOUSING OPPORTUNITY ZONE RESIDENTIAL UNITS WHICH HAVE RECEIVED
 ASSISTANCE OF ANY FORM OF PUBLIC HOUSING MONIES SHALL BE WAIVED IN TOTAL
 BY THE STATE OR THE LOCALITY.
   § 989-B. SPECIAL PROVISIONS. EACH RESIDENTIAL  UNIT  CONSTRUCTED  WITH
 THE  ASSISTANCE  OF  ANY  FORM OF PUBLIC HOUSING MONIES OR SUBSTANTIALLY
 REHABILITATED WITH THE ASSISTANCE OF ANY FORM OF PUBLIC  HOUSING  MONIES
 WITHIN  A  HOUSING OPPORTUNITY ZONE SHALL BE READILY ADAPTABLE TO A UNIT
 WHICH IS COMPLETELY ACCESSIBLE BY PERSONS WITH HANDICAPPING CONDITIONS.
   § 989-C. MINIMIZATION OF DISPLACEMENT. EACH LOCALITY WITHIN  A  DESIG-
 NATED HOUSING OPPORTUNITY ZONE SHALL USE ITS BEST EFFORTS TO ENSURE THAT
 NEW  CONSTRUCTION AND SUBSTANTIAL REHABILITATION ARE CARRIED OUT IN SUCH
 A MANNER AS TO MINIMIZE THE LIKELIHOOD OF ANY  INVOLUNTARY  PHYSICAL  OR
 ECONOMIC  DISPLACEMENT  OF  TENANTS  AND  OWNERS  WHO RESIDE IN DWELLING
 ACCOMMODATIONS WHICH  ARE  THE  SUBJECT  OF  SUCH  NEW  CONSTRUCTION  OR
 SUBSTANTIAL REHABILITATION.
   § 2. The public service law is amended by adding a new section 65-c to
 read as follows:
   §  65-C.  REDUCED  ELECTRIC AND GAS RATES FOR HOUSING OPPORTUNITY ZONE
 RESIDENTIAL UNITS. 1. THE TERM "REDUCED RATE" SHALL MEAN  A  TWENTY-FIVE
 PERCENT REDUCTION PRIOR TO THE IMPOSITION OF GROSS RECEIPTS TAXES PURSU-
 ANT  TO  SECTION ONE HUNDRED EIGHTY-SIX-A OF THE TAX LAW AND SALES TAXES

 A. 2499                             4
 
 PURSUANT TO ARTICLE TWENTY-EIGHT OF THE TAX LAW, IN THE  MONTHLY  AMOUNT
 BILLED TO AN ELIGIBLE CUSTOMER FOR ELECTRICITY, GAS OR BOTH.
   2.  A  UTILITY  SHALL  HAVE  A  CREDIT  AGAINST THE GROSS RECEIPTS TAX
 IMPOSED BY SECTION ONE HUNDRED EIGHTY-SIX-A OF THE TAX LAW IN THE AMOUNT
 OF ONE HUNDRED PERCENT OF ANY LOSS OF  REVENUE  IT  INCURS  DUE  TO  THE
 IMPLEMENTATION OF ITS REDUCED RATE.
   §  3.  The  tax  law is amended by adding a new section 4-a to read as
 follows:
   § 4-A. TAX CREDIT; REDUCED ELECTRIC AND GAS  RATES.    NOTWITHSTANDING
 ANY  OTHER  PROVISION  OF GENERAL, SPECIAL OR LOCAL LAW TO THE CONTRARY,
 ELECTRIC OR GAS UTILITY LIABLE FOR A TAX ASSESSED OR LEVIED BY THE STATE
 PURSUANT TO THE PROVISIONS OF SECTION ONE HUNDRED EIGHTY-SIX-A  OF  THIS
 CHAPTER  SHALL  HAVE  A CREDIT AGAINST ANY SUCH TAX IN THE AMOUNT OF ONE
 HUNDRED PERCENT OF ANY LOSS OF REVENUE ANY SUCH UTILITY HAS INCURRED  AS
 TO  THE  IMPLEMENTATION  OF A REDUCED RATE PURSUANT TO THE PROVISIONS OF
 SECTION SIXTY-FIVE-C OF THE PUBLIC  SERVICE  LAW.  THE  COMMISSIONER  IS
 HEREBY  AUTHORIZED  TO  ADOPT  RULES  AND  REGULATIONS  TO IMPLEMENT THE
 PROVISIONS OF THIS SECTION.
   § 4. Subparagraph (i) of paragraph (b) of  subdivision  1  of  section
 210-B of the tax law, as amended by section 2 of part P of chapter 59 of
 the laws of 2017, is amended to read as follows:
   (i)  A  credit shall be allowed under this subdivision with respect to
 tangible personal property and other tangible property, including build-
 ings and structural components  of  buildings,  which  are:  depreciable
 pursuant  to  section  one  hundred  sixty-seven of the internal revenue
 code, have a useful life of four years or more, are acquired by purchase
 as defined in section one  hundred  seventy-nine  (d)  of  the  internal
 revenue code, have a situs in this state and are (A) principally used by
 the  taxpayer  in  the production of goods by manufacturing, processing,
 assembling, refining, mining, extracting, farming,  agriculture,  horti-
 culture, floriculture, viticulture [or], commercial fishing, OR ELIGIBLE
 BUSINESS  ENTERPRISE  AS  DETERMINED  BY THE COMMISSIONER OF HOUSING AND
 COMMUNITY RENEWAL PURSUANT TO SECTION NINE HUNDRED  EIGHTY-FIVE  OF  THE
 GENERAL  MUNICIPAL LAW, (B) industrial waste treatment facilities or air
 pollution control facilities, used in the taxpayer's trade or  business,
 (C)  research  and  development property, or (D) principally used in the
 ordinary course of the taxpayer's trade or business as a broker or deal-
 er in connection with the purchase or sale (which shall include but  not
 be  limited  to the issuance, entering into, assumption, offset, assign-
 ment, termination, or transfer) of stocks, bonds or other securities  as
 defined  in  section  four  hundred  seventy-five (c)(2) of the Internal
 Revenue Code, or of commodities  as  defined  in  section  four  hundred
 seventy-five  (e)  of the Internal Revenue Code, (E) principally used in
 the ordinary course of the taxpayer's trade  or  business  of  providing
 investment  advisory  services  for  a  regulated  investment company as
 defined in section eight hundred fifty-one of the Internal Revenue Code,
 or lending, loan arrangement or loan origination services  to  customers
 in  connection with the purchase or sale (which shall include but not be
 limited to the issuance, entering into, assumption, offset,  assignment,
 termination,  or  transfer)  of  securities  as  defined in section four
 hundred seventy-five (c)(2) of the Internal Revenue Code, (F) principal-
 ly used in the ordinary course of the taxpayer's business as an exchange
 registered as a national  securities  exchange  within  the  meaning  of
 sections  3(a)(1)  and  6(a) of the Securities Exchange Act of 1934 or a
 board of trade as defined  in  subparagraph  one  of  paragraph  (a)  of
 section fourteen hundred ten of the not-for-profit corporation law or as

 A. 2499                             5
 
 an  entity  that is wholly owned by one or more such national securities
 exchanges or boards of trade and that provides automation  or  technical
 services thereto, or (G) principally used as a qualified film production
 facility  including  qualified film production facilities having a situs
 in an empire zone designated as such pursuant to article  eighteen-B  of
 the general municipal law, where the taxpayer is providing three or more
 services  to  any  qualified film production company using the facility,
 including such services as a studio lighting  grid,  lighting  and  grip
 equipment,  multi-line  phone  service, broadband information technology
 access, industrial scale electrical capacity,  food  services,  security
 services, and heating, ventilation and air conditioning. For purposes of
 clauses  (D),  (E) and (F) of this subparagraph, property purchased by a
 taxpayer affiliated with a regulated broker, dealer, registered  invest-
 ment advisor, national securities exchange or board of trade, is allowed
 a  credit  under  this subdivision if the property is used by its affil-
 iated regulated broker, dealer, registered investment advisor,  national
 securities  exchange  or board of trade in accordance with this subdivi-
 sion. For purposes of determining if the property is principally used in
 qualifying uses, the uses by the taxpayer described in clauses  (D)  and
 (E) of this subparagraph may be aggregated. In addition, the uses by the
 taxpayer, its affiliated regulated broker, dealer and registered invest-
 ment  advisor  under  either or both of those clauses may be aggregated.
 Provided, however, a taxpayer shall not be allowed the  credit  provided
 by  clauses (D), (E) and (F) of this subparagraph unless the property is
 first placed in service before October first, two thousand  fifteen  and
 (i)  eighty  percent or more of the employees performing the administra-
 tive and support functions resulting from or related to  the  qualifying
 uses  of  such  equipment  are located in this state or (ii) the average
 number of employees that perform the administrative  and  support  func-
 tions resulting from or related to the qualifying uses of such equipment
 and  are  located  in  this  state during the taxable year for which the
 credit is claimed is equal to or greater than ninety-five percent of the
 average number of employees that perform these functions and are located
 in this state during the thirty-six  months  immediately  preceding  the
 year  for  which the credit is claimed, or (iii) the number of employees
 located in this state during the taxable year for which  the  credit  is
 claimed  is  equal  to  or  greater than ninety percent of the number of
 employees located in  this  state  on  December  thirty-first,  nineteen
 hundred ninety-eight or, if the taxpayer was not a calendar year taxpay-
 er  in  nineteen hundred ninety-eight, the last day of its first taxable
 year ending after December thirty-first, nineteen hundred  ninety-eight.
 If  the  taxpayer becomes subject to tax in this state after the taxable
 year beginning in nineteen hundred ninety-eight, then  the  taxpayer  is
 not  required  to  satisfy the employment test provided in the preceding
 sentence of this subparagraph for its first taxable year.  For  purposes
 of  clause  (iii) of this subparagraph the employment test will be based
 on the number of employees located in this state on the last day of  the
 first  taxable year the taxpayer is subject to tax in this state. If the
 uses of the property must be aggregated to determine whether the proper-
 ty is principally used in qualifying uses, then  either  each  affiliate
 using  the property must satisfy this employment test or this employment
 test must be satisfied through the aggregation of the employees  of  the
 taxpayer,  its  affiliated  regulated  broker,  dealer,  and  registered
 investment adviser using the property. For purposes  of  clause  (A)  of
 this subparagraph, tangible personal property and other tangible proper-
 ty  shall  not  include property principally used by the taxpayer in the

 A. 2499                             6
 
 production or distribution of electricity, natural gas after  extraction
 from wells, steam, or water delivered through pipes and mains.
   §  5. Subparagraph (A) of paragraph 2 of subsection (a) of section 606
 of the tax law, as amended by section 3 of part P of chapter 59  of  the
 laws of 2017, is amended to read as follows:
   (A)  A  credit  shall be allowed under this subsection with respect to
 tangible personal property and other tangible property, including build-
 ings and structural components  of  buildings,  which  are:  depreciable
 pursuant  to  section  one  hundred  sixty-seven of the internal revenue
 code, have a useful life of four years or more, are acquired by purchase
 as defined in section one  hundred  seventy-nine  (d)  of  the  internal
 revenue code, have a situs in this state and are (i) principally used by
 the  taxpayer  in  the production of goods by manufacturing, processing,
 assembling, refining, mining, extracting, farming,  agriculture,  horti-
 culture,  floriculture, viticulture [or] , commercial fishing, OR ELIGI-
 BLE BUSINESS ENTERPRISE AS DETERMINED BY THE COMMISSIONER OF HOUSING AND
 COMMUNITY RENEWAL PURSUANT TO SECTION NINE HUNDRED  EIGHTY-FIVE  OF  THE
 GENERAL MUNICIPAL LAW, (ii) industrial waste treatment facilities or air
 pollution  control facilities, used in the taxpayer's trade or business,
 (iii) research and development property, (iv) principally  used  in  the
 ordinary course of the taxpayer's trade or business as a broker or deal-
 er  in connection with the purchase or sale (which shall include but not
 be limited to the issuance, entering into, assumption,  offset,  assign-
 ment,  termination, or transfer) of stocks, bonds or other securities as
 defined in section four hundred  seventy-five  (c)(2)  of  the  Internal
 Revenue  Code,  or  of  commodities  as defined in section 475(e) of the
 Internal Revenue Code, (v) principally used in the  ordinary  course  of
 the  taxpayer's  trade  or  business  of  providing  investment advisory
 services for a regulated investment company as defined in section  eight
 hundred  fifty-one  of  the  Internal  Revenue  Code,  or  lending, loan
 arrangement or loan origination services to customers in connection with
 the purchase or sale (which shall include but  not  be  limited  to  the
 issuance, entering into, assumption, offset, assignment, termination, or
 transfer)  of securities as defined in section four hundred seventy-five
 (c)(2) of the Internal Revenue Code, or (vi) principally used as a qual-
 ified film  production  facility  including  qualified  film  production
 facilities  having a situs in an empire zone designated as such pursuant
 to article eighteen-B of the general municipal law, where  the  taxpayer
 is  providing  three  or  more services to any qualified film production
 company using the facility, including such services as a studio lighting
 grid, lighting and grip equipment, multi-line phone  service,  broadband
 information  technology  access,  industrial  scale electrical capacity,
 food services, security  services,  and  heating,  ventilation  and  air
 conditioning. For purposes of clauses (iv) and (v) of this subparagraph,
 property  purchased  by  a  taxpayer affiliated with a regulated broker,
 dealer, or registered investment adviser is allowed a credit under  this
 subsection  if  the property is used by its affiliated regulated broker,
 dealer  or  registered  investment  adviser  in  accordance  with   this
 subsection.  For  purposes of determining if the property is principally
 used in qualifying uses, the uses by the taxpayer described  in  clauses
 (iv)  and  (v)  of this subparagraph may be aggregated. In addition, the
 uses by the taxpayer, its affiliated regulated broker, dealer and regis-
 tered investment adviser under either or both of those  clauses  may  be
 aggregated. Provided, however, a taxpayer shall not be allowed the cred-
 it  provided  by  clauses  (iv)  and (v) of this subparagraph unless (I)
 eighty percent or more of the employees  performing  the  administrative

 A. 2499                             7
 
 and  support  functions resulting from or related to the qualifying uses
 of such equipment are located in this state, or (II) the average  number
 of  employees  that  perform  the  administrative  and support functions
 resulting  from  or related to the qualifying uses of such equipment and
 are located in this state during the taxable year for which  the  credit
 is  claimed is equal to or greater than ninety-five percent of the aver-
 age number of employees that perform these functions and are located  in
 this  state  during the thirty-six months immediately preceding the year
 for which the credit is  claimed,  or  (III)  the  number  of  employees
 located  in  this  state during the taxable year for which the credit is
 claimed is equal to or greater than ninety  percent  of  the  number  of
 employees  located  in  this  state  on  December thirty-first, nineteen
 hundred ninety-eight or, if the taxpayer was not a calendar year taxpay-
 er in nineteen hundred ninety-eight, the last day of its  first  taxable
 year  ending after December thirty-first, nineteen hundred ninety-eight.
 If the taxpayer becomes subject to tax in this state after  the  taxable
 year  beginning  in  nineteen hundred ninety-eight, then the taxpayer is
 not required to satisfy the employment test provided  in  the  preceding
 sentence  of  this  subparagraph  for  its  first  taxable year. For the
 purposes of clause (III) of this subparagraph the employment  test  will
 be  based  on  the number of employees located in this state on the last
 day of the first taxable year the taxpayer is subject  to  tax  in  this
 state.  If  the  uses  of  the  property must be aggregated to determine
 whether the property is principally used in qualifying uses, then either
 each affiliate using the property must satisfy this employment  test  or
 this  employment  test  must be satisfied through the aggregation of the
 employees of the taxpayer, its affiliated regulated broker, dealer,  and
 registered investment adviser using the property. For purposes of clause
 (i)  of this subparagraph, tangible personal property and other tangible
 property shall not include property principally used by the taxpayer  in
 the  production  or  distribution  of  electricity,  natural  gas  after
 extraction from wells, steam,  or  water  delivered  through  pipes  and
 mains.
   §  6.    The  real property tax law is amended by adding a new section
 420-d to read as follows:
   § 420-D. REAL PROPERTY TAX ABATEMENTS. NEWLY CONSTRUCTED  OR  SUBSTAN-
 TIALLY REHABILITATED RESIDENTIAL DWELLINGS LOCATED WITHIN HOUSING OPPOR-
 TUNITY  ZONES  DESIGNATED PURSUANT TO ARTICLE NINETEEN-AA OF THE GENERAL
 MUNICIPAL LAW SHALL BE EXEMPT FROM ALL  TAXES  IMPOSED  BY  A  MUNICIPAL
 CORPORATION,  INCLUDING  THOSE  IMPOSED BY A SCHOOL DISTRICT, OTHER THAN
 ASSESSMENTS FOR LOCAL IMPROVEMENTS,  DURING  CONSTRUCTION  OR  REHABILI-
 TATION,  SO  LONG AS SUCH DWELLING IS USED FOR RESIDENTIAL UNIT PURPOSES
 FOR A PERIOD NOT TO EXCEED TEN YEARS IN THE AGGREGATE AFTER THE  TAXABLE
 STATUS DATE IMMEDIATELY FOLLOWING THE COMPLETION THEREOF, CALCULATED NOT
 TO EXCEED THE FOLLOWING EXEMPTIONS: TWO YEARS OF FULL EXEMPTION FOLLOWED
 BY TWO YEARS OF EXEMPTION FROM EIGHTY PERCENT OF SUCH TAXATION, FOLLOWED
 BY  THREE  YEARS  OF  EXEMPTION  FROM  SIXTY  PERCENT  OF SUCH TAXATION,
 FOLLOWED BY TWO YEARS OF EXEMPTION FROM FORTY PERCENT OF SUCH  TAXATION,
 FOLLOWED BY TWO YEARS OF EXEMPTION FROM TWENTY PERCENT OF SUCH TAXATION;
 PROVIDED THAT TAXES SHALL BE PAID DURING ANY SUCH PERIOD AT LEAST IN THE
 AMOUNT  OF  THE  TAXES PAID ON SUCH LAND AND IMPROVEMENTS THEREON DURING
 THE TAX YEAR PRECEDING THE COMMENCEMENT OF SUCH CONSTRUCTION OR REHABIL-
 ITATION AND THAT THE EXEMPTION  FROM  TAXES  SHALL  NOT  BE  AVAILED  OF
 CONCURRENTLY UNDER ANY OTHER LAW.
   §  7. This act shall take effect on the first of October next succeed-
 ing the date on which it shall have become a law.