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The New York State Department of Taxation and Finance (Tax Department) recently released proposed corporate franchise tax regulations under Article 9-A of the New York Tax Law (N.Y. Comp. Codes and Regs. tit. 20, Subparts 3-1 through 3-6) (Proposed Regulations) which, if adopted, would repeal existing Subparts 3-1 through 3-6 of existing Article 9-A regulations and replace them with new and revised Subparts 3-1 through 3-6. The Proposed Regulations address the following issues: (1) how to compute the tax bases (Subpart 3-1); (2) providing general rules (Subpart 3-2); (3) defining Entire Net Income (ENI) (Subpart 3-3); (4) providing definitions and rules pertaining to investment capital, investment income and other exempt income (Subpart 3-4); (5) providing definitions of business capital and business income (Subpart 3-5); and (6) setting out examples of applying the income and capital tax rules (Subpart 3-6). Below is a summary of each of the subparts of the Proposed Regulations.

The Tax Department indicates in placeholders in the Proposed Regulations that proposed regulations for the remaining subparts of Article 9-A Part 3 that are not addressed in this draft will be separately updated and issued at a later date. Key provisions that were not included in the Proposed Regulations include: (1) rules for calculating capital losses and capital loss carrybacks and carryforwards for New York purposes; (2) rules for calculating net operating losses (NOLs); and (3) rules for attributing interest deductions.

Comments on the Proposed Regulations are due March 5, 2019; however, the Tax Department has indicated that it will accept and consider comments submitted after March 5. Note, the Tax Department's web site provides that the Proposed Regulations should not be relied upon until finalized through the State's Administrative Procedures Act process. The New York City Department of Finance has indicated through its FAQ website that it will likely follow the Proposed Regulations issued by the Tax Department, in general.

Tax Bases (Proposed Regulation Subpart 3-1)

Computation of Tax (Proposed Regulation section 3-1.1)

Corporations subject to business corporation franchise tax under Article 9-A must calculate tax under three different bases and pay on whichever base results in the highest tax. These bases are the business income base tax, the capital base tax, and the fixed dollar minimum tax. Special rules apply for combined groups, domestic internal sales corporations (DISCs), real estate investment trusts (REITs), regulated investment companies (RICs), New York S corporations, and corporate partners.¹

Business income base (Proposed Regulation section 3-1.2)

Under the Proposed Regulations, the business income base is the taxpayer's total business income, apportioned within New York, minus the prior net operating loss (PNOL) conversion subtraction and the NOL deduction. "Business income" is defined as ENI minus other exempt income and investment income.² "Total business income" is the sum of business income and income from presumed investment capital from the immediately preceding tax year required to be added back under Proposed N.Y. Comp. Codes and Regs. tit. 20, Section 3-4.5(a)(2).³ Taxpayers multiply the business income base by the tax rate under N.Y. Tax Law Section 210.1(a).⁴ To calculate total business income of a combined group, the Proposed Regulations require the elimination of all intercorporate dividends and the deferral of all other intercorporate transactions, similar to the manner prescribed by the federal consolidated return regulations issued under IRC Section 1502 governing intercompany transactions.⁵ Nonetheless, there are inconsistencies within the Proposed Regulations and between the Proposed Regulations and the New York Tax Law when it comes to taxpayers' claiming the REIT subtraction modification (discussed below) and including captive REITs in their combined group. Under the Proposed Regulations, taxpayers in this situation cannot eliminate the intercorporate dividends received from captive REIT subsidiaries included in the combined report if such subtraction is claimed.

The combined business income base is the total business income of the combined group, apportioned within New York, minus the combined group's PNOL conversion subtraction and NOL deduction. A combined group's designated agent multiplies the combined business income base by the tax rate in N.Y. Tax Law Section 210.1(a) to calculate the tax measured. However, the business income tax base is not applicable to New York S corporations and DISCs.

Capital tax base (Proposed Regulation section 3-1.3)

The capital base is the portion of the taxpayer's total business capital apportioned within New York.⁶ The capital base is then multiplied by the N.Y. Tax Law Section 210.1(b) capital base rate.⁷ Total business capital is the sum of business capital and any presumed investment capital from the immediately preceding tax year that failed the holding period requirement and is now required to be added back under Proposed N.Y. Comp. Codes and Regs tit. 20, Section 3-4.5(a)(2). A taxpayer determines total business capital by calculating the total of the average value during the report period of all of the taxpayer's assets other than investment capital and stock issued by the taxpayer, minus the average value of liabilities not deducted in computing investment capital.⁸ The capital base tax does not apply to a non-captive RIC, a non-captive REIT, a New York S corporation, or the first two taxable years of a small business taxpayer.⁹

The combined capital base (for combined reports) is the combined total business capital apportioned within New York. To determine combined business capital, all intercorporate stockholdings, intercorporate bills, intercorporate notes receivable and payable, intercorporate accounts receivable and payable, and other intercorporate indebtedness must be eliminated.¹⁰ The designated agent must multiply the combined capital base by the tax rate in N.Y. Tax Law Section 210.1(b) to calculate the combined capital base tax.

The Proposed Regulations indicate that the capital base is the measure of tax if the calculation results in an amount of tax that is greater than or equal to that computed on the business income base tax and greater than the fixed dollar minimum tax. Similar language exists for the fixed dollar minimum tax as well. This guidance seems to suggest that the measure of tax up to the cap on the capital base is a capital tax whereas anything exceeding the capital base tax is an income-based tax.

Fixed dollar minimum tax (Proposed Regulation section 3-1.4)

The amount of the fixed dollar minimum tax varies by taxpayer type and by the amount of New York receipts.¹¹ To calculate it, New York receipts are included in the apportionment factor numerator for the taxable year.¹² For taxable periods less than 12 months, the taxpayer must determine its New York receipts by dividing the receipts for the taxable year by the number of months in the taxable year and multiplying that result by 12.¹³ Additionally, the fixed dollar minimum tax amount under N.Y. Tax Law Section 210(1)(d)(i) is reduced either by 25% if the period for which the taxpayer is subject to tax is more than six months and up to nine months, or by 50% if the period is not more than six months.¹⁴

Although unaddressed by the Tax Law, the form instructions require combined group members, including the designated agent, to compute their own fixed dollar minimum tax based on their own New York receipts on a separate company basis and without considering intercorporate eliminations or deferrals.¹⁵ A combined report must include the fixed dollar minimum tax for each combined group member that is a taxpayer, other than the designated agent, but any corporation included in the combined report that is not a taxpayer is not required to pay a fixed dollar minimum tax.¹⁶

General rules (Proposed Regulation Subpart 3-2)

The general rules subpart of the Proposed Regulations provides regulations related to correcting distortions of income or capital (Proposed regulation section 3-2.1), adjusting tax bases to the period covered by the report (Proposed Regulation section 3-2.2), and fair market value, average value, and use of dollar amounts in computing tax (Proposed Regulation sections 3-2.3, .4 and .5). These provisions are consistent with the current regulations in this area.

ENI (Proposed Regulations Subpart 3-3)

The Proposed Regulations clarify what constitutes federal taxable income (FTI), which is the starting point for computing ENI, for New York purposes. FTI means taxable income as defined in IRC Section 63, and is adjusted by the addition and subtraction modification as required by N.Y. Tax Law Section 208.9. FTI is presumed to be the same as (i) the taxable income the taxpayer is required to report to the U.S. Treasury Department, or (ii) the taxable income that the taxpayer would have been required to report to the U.S. Treasury Department, among other requirements. ENI also will include, for alien corporations, the income, gain or loss that is effectively connected with the conduct of a US trade or business under IRC Section 882.¹⁷ Further, the Tax Department will not allow any specific exemptions or credits that are allowed for federal income tax purposes.¹⁸ Generally, to compute ENI, taxpayers apply the accounting method used in computing taxable income for federal income tax purposes. The Commissioner has discretion to properly reflect a taxpayer's ENI by determining the taxable year or period in which any item of income or deduction will be included, without regard to the taxpayer's accounting method. Examples are provided in this area.

Corporations included in a federal consolidated group must each compute FTI for Article 9-A purposes as if the corporations had computed FTI on a separate basis. When a member of a selling consolidated group makes an IRC Section 338(h)(10) election, FTI does not include any gain or loss on the sale or exchange of stock of a target corporation if the member and target corporation file on a combined report for the period including the acquisition date .¹⁹

A combined group will generally be treated as a single corporation in computing combined ENI. All intercorporate dividends must be eliminated (except for dividends from certain DISCs, former DISCs or captive REITs), and all other intercorporate transactions must be deferred. That said, as previously stated, if the taxpayer's combined group includes captive REIT subsidiaries and it claims the REIT subtraction modification (discussed below), then the Proposed Regulations preclude the taxpayer from eliminating any intercorporate dividends received from those captive REIT subsidiaries. Taxpayers should deduct contributions and treat intercorporate profits similar to U.S. Treasury regulations for federal consolidated return purposes.²⁰ Lastly, ENI may be affected by net capital loss carried from another taxable year for federal income tax purposes (IRC Section 1212).²¹

Subtraction modifications for community banks and thrifts (Proposed Regulation section 3-3.3)

The Proposed Regulations require a small thrift institution or qualified community bank that maintained a captive REIT on April 1, 2014 to use a REIT subtraction equal to 160% of the dividends paid deductions allowed to that captive REIT for the taxable year for federal income tax purposes in any year that entity maintains the captive REIT on the last day of the tax year. Taxpayers (or in the case of a combined group, the combined group), claiming this subtraction modification are not allowed to utilize the subtraction modification for qualified residential loan portfolios or the subtraction modification for community banks and small thrifts in any taxable year in which the small thrift institution or qualified community bank maintains that capital REIT.

Alternatively, assuming the REIT modification does not apply, in computing ENI, thrift institutions or qualified community banks that maintain a qualified residential loan portfolio can deduct the amount, if any, by which 32% of its ENI (determined without regard to this subtraction) exceeds the amounts deducted by the taxpayer for bad debts and reserves for losses on loans of banks, minus any amount included in FTI because of a loan recovery. A taxpayer, or in the case of a combined group, the combined group claiming this subtraction modification is not allowed to utilize the captive REIT subtraction modification or the subtraction modification for qualified community banks and small thrifts discussed below.

Assuming neither of the last two subtraction modifications were taken, then, in calculating ENI, a qualified community bank or small thrift institution can deduct an amount, computed by: (1) multiplying the taxpayer's net interest income from loans during the taxable year by a fraction, with the numerator being the gross interest income during the taxable year from qualifying loans and the denominator being the gross interest income during the taxable year from all loans; and (2) multiplying this by 50%.²² The Proposed Regulations provide information on: how to calculate net interest income from loans; how to calculate gross interest expense from loans; how to measure total assets; how "qualifying loans" are defined; and how combined groups calculate the deduction.

Royalty modification (Proposed Regulation section 3-3.4)

For purposes of computing ENI, taxpayers not included in a combined report with a related member must add back royalty payments directly or indirectly paid, accrued or incurred in connection with direct or indirect transactions with at least one related member during the taxable year. An addback is not required if the taxpayer can establish by clear and convincing evidence that an addback exception applies, or the taxpayer and Commissioner agree in writing to alternative adjustments or computations.²³

Investment capital, investment income and other exempt income (Proposed Regulation Subpart 3-4)

Investment capital definition (Proposed Regulation section 3-4.1)

The Proposed Regulations define "actual investment capital," "presumed investment capital," and "constitutionally protected investment capital."²⁴ "Actual investment capital" must meet all of the following: (1) stocks that are capital assets (IRC Section 1221) at all times during the tax year in which the taxpayer owned the stock; (2) stocks held by the corporation for investment for more than one year; (3) stock the dispositions of which are or would be treated by the corporation as generating long-term capital gains or losses under the IRC; (4) stocks that are acquired on or after January 1, 2015 and have never been held for sale to customers in the regular course of business at any time by the close of the day on which they were acquired; and (5) stocks that are clearly identified in the corporation's records as held for investment.²⁵ Furthermore, "presumed investment capital" is stock that meets the requirements of "actual investment capital," except that the corporation has held the stock as investment for one year or less at the time the corporation files its original report for the taxpayer year, and is still held at such time.²⁶ Lastly, "constitutionally protected investment capital" are certain stocks, debt obligations and other securities for a corporation incorporated and commercially domiciled outside New York State, the income or gain from which cannot be apportioned to New York State under the U.S. Constitution.²⁷

Investment capital does not include stock in a corporation that is conducting unitary business with the taxpayer, stock in a corporation included in a combined report with a taxpayer under the commonly owned group election, and stock issued by the taxpayer.²⁸ The Proposed Regulations also provide when a corporation's proportional part of the stock owned by the partnership may qualify as investment capital.²⁹ For purposes of combined reports, in determining whether certain stocks, debt obligations, and other securities are constitutionally protected investment capital, commercial domicile would be determined entity by entity. It should be noted that the Tax Department has specifically requested comments on whether this determination should be made by treating the combined group as a single corporation.

To compute investment capital: (1) find the average value of each investment capital item; (2) find each item's net value by subtracting from each item's average value the average liabilities that are directly or indirectly attributable to that item; and (3) add the net values.³⁰ The investment capital amount is deemed to be zero if the result is less than zero. However, it is unclear at which point the "less than zero" determination is made, i.e., after the result of (1) and (2) or after the result determined under (3). Investment capital does not include any investments in stock the income from which is excluded from ENI under N.Y. Tax Law Section 208(9)(c-1).³¹

Stock definition (Proposed Regulation section 3-4.2)

The Proposed Regulations also provide information about when stock in a corporation will be deemed to be treated as equity for federal income tax purposes. The definition of stock is tied to IRC Section 385 and appears to be expanded to include corporate equity instruments similar to stock including, business trust certificates, units in publicly traded partnerships, and shares in a RIC and a REIT. In addition, there are factors to consider when determining whether an interest in a corporation will be considered "deemed stock" and therefore equity. Also, the examples in subpart 3-6 seem to indicate that under certain circumstances a bond may meet the "investment capital" requirements.

Constitutionally protected investment capital (Proposed Regulation section 3-4.3)

Under the U.S. Constitution, New York State cannot apportion income or gain from intangible assets of a corporation incorporated and commercially domiciled outside the state when the income or gain does not have a sufficient connection to the unitary business being carried on in the state. However, an intangible asset's (i.e., debt obligation or other security) income or gain is apportionable where the underlying activities of the intangible income recipient and the income source constitute a unitary business, or where the intangible asset or income from the intangible asset serves an operational function in the taxpayer's business. The asset's use and its relation to the corporation and the corporation's in-state activities determines whether an intangible serves an operational function, with examples provided.³²

In addition, the Proposed Regulations set forth investment capital identification procedures, similar to those provided in the Tax Department's advice in TSB-M-15(4)C,(5)I and TSB-M-15(4.1)C, (5.1)I, and requirements taxpayers must follow when presumed investment capital fails the holding period requirement.³³ This section, unlike the Tax Law but similar to the tax return instructions, allows a taxpayer to file an amended report for the taxable year in which the stock was presumed investment capital to properly classify the capital and income as business capital and income if the holding period requirement is not met, in lieu of the sole statutory option of increasing the taxpayer's business capital and income in the subsequent taxable year. If the taxpayer opts to adjust its business capital and income in the subsequent taxable year, this section provides the following consequence that does not appear in the Tax Law: "[n]o adjustment will be allowed in the immediately succeeding taxable year for excess interest deductions directly or indirectly attributable to the items of investment capital that failed the presumption that were added back to entire net income in the year the presumed investment capital was included in investment capital."

Investment income definition (Proposed Regulation section 3-4.6)

"Gross investment income" is income from investment capital, to the extent included in ENI.³⁴ It includes dividends and interest from investment capital, capital gains in excess of capital losses from the sale or exchange of investment capital, and other income from investment capital. Investment income is gross investment income less either interest deductions directly or indirectly attributable to investment capital or gross investment income (N.Y. Comp. Codes and Regs tit. 20, Section 3-4.8) or the safe harbor reduction amount (N.Y. Comp. Codes and Regs tit. 20, Section 3-4.9). (Although these sections are listed in the Proposed Regulations, the text of these will be inserted in the regulations at a later date.)

Investment income cannot exceed ENI minus other exempt income.³⁵ Additionally, unlike the Tax Law but similar to the tax return instructions and other guidance issued by the Tax Department, gross investment income is limited to the greater of income from constitutionally protected investment capital or 8% of the taxpayer's or combined group's ENI. The Proposed Regulations provide ordering rules to determine the make-up of investment income in a given taxable year when the investment income is subject to the gross investment income limitation.³⁶ The ordering is as follows: (1) income from constitutionally protected investment capital; (2) income from actual investment capital; and (3) income from presumed investment capital.

Other exempt income definition (Proposed Regulation section 3-4.7)

Gross other exempt income is the sum of gross exempt controlled foreign corporation (CFC) income, gross exempt cross-article dividends, and gross exempt other unitary corporate dividends. Other exempt income is the sum of exempt CFC income, exempt cross-article dividends, and exempt other unitary corporation dividends, and cannot exceed ENI. Neither gross other exempt income nor other exempt income include any amounts treated as dividends under IRC Section 78.³⁷ The Proposed Regulations provide definitions of CFC stock and exempt CFC income, cross-article stock and exempt cross-article dividends, other unitary corporation stock and exempt other unitary corporation dividends, and gross other exempt income.³⁸

Business capital and business income (Proposed Regulation Subpart 3-5)

Definition of business capital and the capital base (Proposed Regulation section 3-5.1)

Business capital is defined as all assets, other than investment capital and stock issued by the taxpayer, less liabilities not deducted from investment capital. It includes only those assets of income, loss or expense that are properly reflected (or would have been properly reflected if not fully depreciated or expensed, or depreciated or expensed to a nominal amount) in computing ENI for the taxable year.³⁹ It includes cash, CFC stock (except to the extent this stock qualifies as investment capital under Proposed Regulations Subpart 3-4), cross-article corporation stock, other unitary corporation stock, reverse repurchase agreements and securities borrowing agreements (and the underlying securities), real property, tangible personal property, and investments in a federal reserve bank or a federal home loan bank.⁴⁰ Furthermore, total business capital is the sum of business capital and any presumed investment capital from the immediately preceding tax year required to be added back under N.Y. Comp. Codes and Regs. tit. 20, Section 3-4.5(a)(2) of the Proposed Regulations. It is calculated by determining the average value during the period covered by the report of all the assets of the taxpayer, other than investment capital and stock issued by the taxpayer, less the average value of liabilities not deducted in computing investment capital.⁴¹ Lastly, the capital base is the product of total business capital and the business apportionment fraction.

For combined reports, the combined capital base is the product of the combined total business capital and the business apportionment fraction; all intercorporate stockholdings, intercorporate bills, intercorporate notes receivable and payable, intercorporate accounts receivable and payable and other intercorporate indebtedness must be eliminated.⁴²

Definition of business income and the business income base (Proposed Regulation section 3-5.2)

Business income is ENI minus other exempt income and investment income, and also includes: (1) interest deductions directly or indirectly attributable to gross investment income or investment capital that exceed the amount of gross investment income, and (2) interest deductions directly or indirectly attributable to gross other exempt income that exceed the amount of gross other exempt income.⁴³ Additionally, total business income is the sum of business income and income from presumed investment capital from the immediately preceding tax year required to be added back under N.Y. Comp. Codes and Regs. tit. 20, Section 3-4.5(a)(2) of the Proposed Regulations.⁴⁴

The business income base is equal to: (1) the product of total business income and the business apportionment fraction determined under Subpart 4 of the Proposed Regulations, minus (2) the PNOL conversion subtraction and the NOL deduction.⁴⁵ Lastly, to compute a combined group's total business income, all intercorporate dividends must be eliminated and all other intercorporate transactions must be deferred similar to intercompany transactions regulations under the federal consolidated return rules promulgated under IRC Section 1502.⁴⁶

Income and capital examples (Proposed Regulation Subpart 3-6)

The Proposed Regulations provide 15 examples to illustrate these principles as they apply to investment income and capital. A large focus of this Subpart of the Proposed Regulations, however, is upon examples demonstrating when income is deemed "constitutionally protected investment capital."

Implications

The Proposed Regulations provide some clarity for taxpayers on: computing corporation franchise tax under each tax base; valuing, adjusting and correcting tax base issues; computing ENI; and making calculations and understanding definitions related to investment capital and investment income.

New York taxpayers should note and consider that many of the Proposed Regulations provide the Commissioner with discretion to make various adjustments (e.g., correcting distortions of income or capital, and adjusting the ENI tax base to periods covered the report). Moreover, certain of the Proposed Regulations are not binding on the Commissioner (i.e., to follow federal taxable income as the starting point in computing ENI). However, New York taxpayers do not appear to have similar discretion. Again, as indicated above, comments should be provided to the Tax Department by March 5, 2019. Furthermore, taxpayers are advised that they should not rely upon the Proposed Regulations until they are finalized. Lastly, taxpayers are reminded that New York City has stated it will likely follow the Proposed Regulations.

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ENDNOTES

¹ Proposed N.Y. Comp. Codes and Regs. tit. 20, Section 3-1.1.

² Proposed N.Y. Comp. Codes and Regs. tit. 20, Section 3-5.2(a).

³ Proposed N.Y. Comp. Codes and Regs. tit. 20, Section 3-5.2(b).

⁴ Proposed N.Y. Comp. Codes and Regs. tit. 20, Section 3-1.2(a)(2) and (3).

⁵ Proposed N.Y. Comp. Codes and Regs. tit. 20, Section 3-5.2(c)(2).

⁶ Proposed N.Y. Comp. Codes and Regs. tit. 20, Section 3-1.3(a)(2) and 3-5.1(c)(1).

⁷ Proposed N.Y. Comp. Codes and Regs. tit. 20, Section 3-1.3(a)(3).

⁸ Proposed N.Y. Comp. Codes and Regs. tit. 20, Section 3-5.1(b).

⁹ Proposed N.Y. Comp. Codes and Regs. tit. 20, Section 3-1.3(c).

¹⁰ Proposed N.Y. Comp. Codes and Regs. tit. 20, Section 3-1.3(b)(2) and 3-5.1(c)(2).

¹¹ Proposed N.Y. Comp. Codes and Regs. tit. 20, Section 3-1.4(a).

¹² Proposed N.Y. Comp. Codes and Regs. tit. 20, Section 3-1.4(c).

¹³ Proposed N.Y. Comp. Codes and Regs. tit. 20, Section 3-1.4(d).

¹⁴ Proposed N.Y. Comp. Codes and Regs. tit. 20, Section 3-1.4(d).

¹⁵ Proposed N.Y. Comp. Codes and Regs. tit. 20, Section 3-1.4(b)(2).

¹⁶ Proposed N.Y. Comp. Codes and Regs. tit. 20, Section 3-1.4(b)(1).

¹⁷ Proposed N.Y. Comp. Codes and Regs. tit. 20, Section 3-3.1(a)(2).

¹⁸ Proposed N.Y. Comp. Codes and Regs. tit. 20, Section 3-3.1(a)(3).

¹⁹ Proposed N.Y. Comp. Codes and Regs. tit. 20, Section 3-3.1(b).

²⁰ Proposed N.Y. Comp. Codes and Regs. tit. 20, Section 3-3.1(c).

²¹ Proposed N.Y. Comp. Codes and Regs. tit. 20, Section 3-3.1(d). Draft regulations discussing capital losses and capital loss carrybacks and carry forwards are still expected from the Tax Department.

²² Proposed N.Y. Comp. Codes and Regs. tit. 20, Section 3-3.3(c).

²³ Proposed N.Y. Comp. Codes and Regs. tit. 20, Section 3-3.4.

²⁴ Proposed N.Y. Comp. Codes and Regs. tit. 20, Section 3-4.1(a).

²⁵ Proposed N.Y. Comp. Codes and Regs. tit. 20, Section 3-4.1(a)(1).

²⁶ Proposed N.Y. Comp. Codes and Regs. tit. 20, Section 3-4.1(a)(2).

²⁷ Proposed N.Y. Comp. Codes and Regs. tit. 20, Section 3-4.1(a)(3).

²⁸ Proposed N.Y. Comp. Codes and Regs. tit. 20, Section 3-4.1(a) and (b).

²⁹ Proposed N.Y. Comp. Codes and Regs. tit. 20, Section 3-4.1(b) and (c).

³⁰ Proposed N.Y. Comp. Codes and Regs. tit. 20, Section 3-4.1(d).

³¹ Proposed N.Y. Comp. Codes and Regs. tit. 20, Section 3-4.1(e).

³² Proposed N.Y. Comp. Codes and Regs. tit. 20, Section 3-4.3.

³³ Proposed N.Y. Comp. Codes and Regs. tit. 20, Section 3-4.4 and 3-4.5.

³⁴ Proposed N.Y. Comp. Codes and Regs. tit. 20, Section 3-4.6(a)(1).

³⁵ Proposed N.Y. Comp. Codes and Regs. tit. 20, Section 3-4.6(a).

³⁶ Proposed N.Y. Comp. Codes and Regs. tit. 20, Section 3-4.6(b) and (c).

³⁷ Proposed N.Y. Comp. Codes and Regs. tit. 20, Section 3-4.7(d).

³⁸ Proposed N.Y. Comp. Codes and Regs. tit. 20, Section 3-4.7(a)-(c).

³⁹ Proposed N.Y. Comp. Codes and Regs. tit. 20, Section 3-5.1(a)(1).

⁴⁰ Proposed N.Y. Comp. Codes and Regs. tit. 20, Section 3-5.1(a)(2).

⁴¹ Proposed N.Y. Comp. Codes and Regs. tit. 20, Section 3-5.1(b).

⁴² Proposed N.Y. Comp. Codes and Regs. tit. 20, Section 3-5.1(c).

⁴³ Proposed N.Y. Comp. Codes and Regs. tit. 20, Section 3-5.2(a).

⁴⁴ Proposed N.Y. Comp. Codes and Regs. tit. 20, Section 3-5.2(b).

⁴⁵ Proposed N.Y. Comp. Codes and Regs. tit. 20, Section 3-5.2(c)(1).

⁴⁶ Proposed N.Y. Comp. Codes and Regs. tit. 20, Section 3-5.2(c)(2).