Section 11-704. Exemptions and deductions from base rent

a. The following
  shall be exempt from the payment of the tax imposed by this chapter:
    1. The state of New York,  or  any  public  corporation  (including  a
  public corporation created pursuant to agreement or compact with another
  state  or  the  Dominion  of  Canada),  improvement  district  or  other
  political subdivision of the state;
    2. The United  States  of  America,  insofar  as  it  is  immune  from
  taxation;
    3.  The United Nations or other world-wide international organizations
  of which the United States of America is a member;
    4. Any corporation, or association, or trust, or community chest, fund
  or  foundation,  organized  and  operated  exclusively  for   religious,
  charitable, or educational purposes, or for the prevention of cruelty to
  children  or animals, and no part of the net earnings of which inures to
  the benefit of any private shareholder or individual and no  substantial
  part  of the activities of which is carrying on propaganda, or otherwise
  attempting to influence legislation; provided, however, that nothing  in
  this  paragraph  shall  include an organization operated for the primary
  purpose of carrying on a trade or business for profit,  whether  or  not
  all of its profits are payable to one or more organizations described in
  this paragraph;
    5.  Any  tenant  who  would  be  subject  to  taxes under this chapter
  aggregating not more than one dollar for a tax year with respect to  all
  taxable premises used by the tenant; and
    6.  Any tenant located in the "World Trade Center Area," as defined as
  follows: the area in the borough of Manhattan bounded by  Church  Street
  on  the  east  starting at the intersection of Liberty Street and Church
  Street; running northerly along the center line of Church Street to  the
  intersection  of  Church Street and Vesey Street; running westerly along
  the center line of Vesey Street to the intersection of Vesey Street  and
  West  Broadway; running northerly along the center line of West Broadway
  to the  intersection  of  West  Broadway  and  Barclay  Street;  running
  westerly  along the center line of Barclay Street to the intersection of
  Barclay Street and Washington Street; running southerly along the center
  line of Washington Street to the intersection of Washington  Street  and
  Vesey  Street; running westerly along the center line of Vesey Street to
  the intersection of Vesey Street  and  West  Street;  running  southerly
  along  the center line of West Street to the intersection of West Street
  and Liberty Street; running easterly along the center  line  of  Liberty
  Street  to  the  intersection  of  Liberty Street and Washington Street;
  running southerly along the center line  of  Washington  Street  to  the
  intersection  of  Washington  Street and Albany Street; running easterly
  along the center line of Albany Street to  the  intersection  of  Albany
  Street  and Greenwich Street; running northerly along the center line of
  Greenwich Street to Liberty  Street;  and  running  easterly  along  the
  center  line of Liberty Street to the intersection of Liberty Street and
  Church Street.
    b. (1) A tenant who uses premises for no more than fourteen days in  a
  tax year whether or not consecutive, where his or her agreement with his
  or  her  landlord  does  not require him or her to pay rent for a longer
  period shall be exempt from the payment  of  the  tax  imposed  by  this
  chapter in respect to the rent paid by him or her for such premises.
    (2)  A tenant whose base rent, (i) for tax years beginning on or after
  June first, nineteen hundred eighty-one and  ending  on  or  before  May
  thirty-first,  nineteen  hundred  eighty-four,  is not in excess of four
  thousand nine hundred ninety-nine dollars per year,  (ii)  for  the  tax
  year  beginning  June first, nineteen hundred eighty-four and ending May
  thirty-first, nineteen hundred eighty-five, is not in  excess  of  seven

  thousand  nine hundred ninety-nine dollars per year, (iii) for tax years
  beginning on or after  June  first,  nineteen  hundred  eighty-five  and
  ending  on  or before May thirty-first, nineteen hundred ninety-four, is
  not in excess of ten thousand nine hundred ninety-nine dollars per year,
  (iv) for the tax year beginning June first, nineteen hundred ninety-four
  and  ending  May  thirty-first,  nineteen hundred ninety-five, is not in
  excess of twenty thousand nine hundred ninety-nine dollars per year, (v)
  for the tax year beginning June first, nineteen hundred ninety-five  and
  ending  May  thirty-first, nineteen hundred ninety-six, is not in excess
  of thirty thousand nine hundred ninety-nine dollars per year,  (vi)  for
  the  tax  year  beginning  June  first,  nineteen hundred ninety-six and
  ending May thirty-first, nineteen hundred ninety-seven, is not in excess
  of thirty-nine thousand nine hundred ninety-nine dollars per year, (vii)
  for tax years  beginning  on  or  after  June  first,  nineteen  hundred
  ninety-seven  and ending on or before May thirty-first, two thousand, is
  not in excess of ninety-nine thousand nine hundred  ninety-nine  dollars
  per  year,  calculated  without  regard  to  any  reduction in base rent
  allowed by paragraph two of subdivision h of this  section,  (viii)  for
  the  period  beginning  June  first,  two  thousand  and ending November
  thirtieth, two thousand, is not in excess of ninety-nine  thousand  nine
  hundred  ninety-nine  dollars per year, calculated without regard to any
  reduction in base rent allowed by paragraph two of subdivision h of this
  section, (ix) for the period beginning December first, two thousand  and
  ending  May  thirty-first,  two  thousand  one,  is not in excess of one
  hundred forty-nine thousand nine hundred ninety-nine dollars  per  year,
  calculated  without  regard  to  any  reduction  in base rent allowed by
  paragraph two of subdivision h of this section, and (x)  for  tax  years
  beginning  on or after June first, two thousand one, is not in excess of
  two hundred forty-nine thousand nine  hundred  ninety-nine  dollars  per
  year, calculated without regard to any reduction in base rent allowed by
  paragraph two of subdivision h of this section, shall be exempt from the
  payment  of  the  tax imposed by this chapter with respect to such rent,
  provided, however, that where the base rent of  such  tenant  is  for  a
  period of less than one year, such base rent shall, for purposes of this
  paragraph,  be  determined  as if it had been on an equivalent basis for
  the  entire  year;  and  provided,  further,  that   for   purposes   of
  subparagraphs  (viii)  and  (ix)  of  this  paragraph, base rent for the
  period specified in each  of  such  subparagraphs  shall  be  separately
  annualized  as if it had been on an equivalent basis for an entire year,
  irrespective of the actual base rent for  the  tax  year  including  the
  period  specified  in  such  subparagraph. Notwithstanding the preceding
  sentence, (xi) a tenant whose base rent for the tax year beginning  June
  first,   nineteen  hundred  eighty-four  and  ending  May  thirty-first,
  nineteen hundred eighty-five, is at least  eight  thousand  dollars  per
  year, but not in excess of ten thousand nine hundred ninety-nine dollars
  per  year,  shall  be exempt from the payment of the tax imposed by this
  chapter with respect to such rent  for  the  period  beginning  December
  first,   nineteen  hundred  eighty-four  and  ending  May  thirty-first,
  nineteen hundred eighty-five, and (xii) a tenant whose base rent for the
  tax year beginning June first, nineteen hundred ninety-five  and  ending
  May  thirty-first,  nineteen  hundred ninety-six, is at least thirty-one
  thousand dollars per year, but not in  excess  of  thirty-nine  thousand
  nine  hundred  ninety-nine  dollars  per  year, shall be exempt from the
  payment of the tax imposed by this chapter with respect to such rent for
  the period beginning September first, nineteen hundred  ninety-five  and
  ending May thirty-first, nineteen hundred ninety-six.

    c.  Base  rent  shall  be reduced by the amount of the taxpayer's rent
  for, or  reasonably  ascribable  to,  the  taxpayer's  own  use  of  the
  premises:
    1. As premises used for railroad transportation purposes.
    2. As premises used for air transportation purposes.
    3. As piers insofar as such premises are used in interstate or foreign
  commerce.
    4.  Which  are  located  in,  upon,  above or under any public street,
  highway or  other  public  place,  and  which  are  defined  as  special
  franchise property in the real property tax law.
    5.  Which are taxed pursuant to subchapter one of chapter twenty-two-A
  or chapter twenty of this title to the extent  that  such  premises  are
  subject to, and during the period that they are subject to, such tax.
    6.  Which  are taxed pursuant to subdivision b or c of section 11-1005
  of chapter ten of this title.
    7. Which are advertising signs, advertising space, vending machines or
  newsstands  within  or  attached  to  stations,  platforms,   stairways,
  entranceways,  passageways,  mezzanines  or  tracks  of  a rapid transit
  subway or elevated railroad  operated  by  the  New  York  city  transit
  authority  when  the  rent  of the tenant or of the tenant's landlord is
  payable to such authority.
    8. As premises used for omnibus transportation purposes.
    9. As premises used for retail sales purposes where such premises  are
  located in the area in the borough of Manhattan bounded by Murray Street
  on  the  north  starting  at  the intersection of West Street and Murray
  Street; running  easterly  along  the  center  line  of  Murray  Street,
  connecting  through  City  Hall  Park  with the center line of Frankfort
  Street and running easterly along the  center  lines  of  Frankfort  and
  Dover  Streets  to  the  intersection  of Dover Street and South Street;
  running southerly along the center line of South Street to Peter  Minuit
  Plaza; connecting through Peter Minuit Plaza to the center line of State
  Street  and  running northwesterly along the center line of State Street
  to the intersection of State Street and Battery Place; running  westerly
  along  the  center  line of Battery Place to the intersection of Battery
  Place and West Street; and running northerly along the  center  line  of
  West  Street  to  the intersection of West Street and Murray Street. Any
  tax lot which is partly located inside such area shall be deemed  to  be
  entirely located inside such area.
    d.  A  tenant  who  uses  taxable  premises  for renting to others for
  residential purposes to the extent of seventy-five per centum or more of
  the rentable floor space shall be exempt from the tax  imposed  by  this
  chapter in respect to the rent paid for such premises from the time that
  construction  thereof  commences, provided, however, that this paragraph
  shall not be applicable to hotels, apartment hotels or lodging houses as
  defined in former title V of chapter forty-six of the code.
    e. (1) A tenant who uses taxable premises for a  dramatic  or  musical
  arts  performance  for less than four weeks where there is no indication
  prior to or at  the  time  that  such  performance  commences  that  the
  performance  is  intended  to continue for less than four weeks shall be
  exempt from the tax imposed by this chapter with  respect  to  the  rent
  paid for such taxable premises.
    (2)  (i) Notwithstanding any other provision of law to the contrary, a
  tenant who uses taxable premises for the production and performance of a
  theatrical work shall be exempt from the tax  imposed  by  this  chapter
  with respect to the rent paid for such taxable premises for a period not
  exceeding  fifty-two  weeks beginning on the date that the production of
  such  theatrical  work   commences,   provided,   however,   that   this

  subparagraph  shall  not  apply to any theatrical work the production of
  which commenced prior to June first, nineteen hundred ninety-five.
    (ii)  For purposes of this paragraph, the term "theatrical work" shall
  mean a performance or repetition thereof in a theater of a live dramatic
  performance (whether or not musical in  part)  that  contains  sustained
  plots  or recognizable thematic material, including so-called legitimate
  theater plays or musicals, dramas, melodramas,  comedies,  compilations,
  farces or reviews, provided that such performance is intended to be open
  to  the  public for at least two weeks. The term "theatrical work" shall
  not include performances of any  kind  in  a  roof  garden,  cabaret  or
  similar  place,  circuses, ice skating shows, aqua shows, variety shows,
  magic  shows,  animal  acts,  concerts,  industrial  shows  or   similar
  performances,  or  radio or television performances, whether or not such
  performances are pre-recorded for later broadcast.
    f. (1) A tenant who is an  eligible  business  and  has  obtained  the
  certifications  required  by paragraph four of this subdivision shall be
  permitted to reduce his or her base  rent  for  particular  premises  to
  which  he  or  she  has relocated by an amount determined by multiplying
  such base rent by a fraction the numerator of which  is  the  number  of
  eligible  aggregate  employment  shares  maintained  by such tenant with
  respect to such premises in the tax year for which  such  tenant  claims
  the  reduction  and  the  denominator  of which is a number equal to the
  number of aggregate employment shares maintained by such tenant in  such
  premises  in  the  tax  year  for which such tenant claims the reduction
  allowed by this subdivision, provided, however,  that  such  denominator
  shall  not  exceed  the  highest  number  of aggregate employment shares
  maintained by such tenant in such premises  in  any  of  the  tax  years
  described  below  which  commence  prior to or concurrently with the tax
  year for  which  such  tenant  claims  the  reduction  allowed  by  this
  subdivision: (i) the tax year during which such tenant relocates to such
  particular  premises;  and  (ii) each of the three tax years immediately
  succeeding the tax year during  which  such  tenant  relocates  to  such
  premises. Base rent for a particular premises may be reduced as provided
  in  this  subdivision for the tax year during which the tenant relocates
  to such premises and for any of the twelve  immediately  succeeding  tax
  years  during  which  the tenant maintains eligible aggregate employment
  shares with respect to such  premises,  provided,  however,  that  there
  shall be no such reduction with respect to base rent for any part of the
  tax  year  preceding  the  date  of  relocation  to  such  premises, and
  provided, further, however, in the twelfth  succeeding  tax  year  there
  shall  be  a  reduction  only  with  respect to base rent for the period
  (commencing on the first day of such tax year) equal to  the  difference
  between  the  total number of days in the tax year of relocation and the
  number of days in such  tax  year  of  relocation  commencing  with  and
  following  the  date  of  relocation,  and provided, further, that there
  shall be no such reduction with respect  to  premises  used  for  retail
  activity or hotel services.
    (2)  (i)  For purposes of this subdivision, the terms "eligible area,"
  "eligible aggregate employment shares,"  "relocate,"  "retail  activity"
  and  "hotel services" shall have the meanings ascribed by section 22-621
  of the code, provided that whenever the term "taxable year"  appears  in
  such  section 22-621, such term shall be read as "tax year," as the term
  "tax year" is defined in subdivision twelve of section  11-701  of  this
  chapter  except  when  the  taxable year referred to is the taxable year
  immediately  preceding  the  taxable  year  during  which  such   tenant
  relocates.
    (ii)  For  purposes  of this subdivision, the term "eligible business"
  shall have the meaning ascribed by section 22-621 of the code,  provided

  that  such  term  shall  in addition include any person subject to a tax
  imposed under subchapter four of chapter  six  of  this  title  and  any
  person  who  is  an  insurance  corporation  as  defined  in section one
  thousand  five  hundred  of  the tax law, which: (A) has been conducting
  substantial business  operations  at  one  or  more  business  locations
  outside  the  eligible  area  for  the  twenty-four  consecutive  months
  immediately preceding  the  taxable  year  during  which  such  eligible
  business  relocates;  and  (B)  on or after May twenty-seventh, nineteen
  hundred eighty-seven relocates all or part of such business  operations;
  and  (C)  on  or after May twenty-seventh, nineteen hundred eighty-seven
  first enters into a lease for the premises to which it  relocates  or  a
  parcel on which will be constructed such premises.
    (3)  The  reduction  allowed  by this subdivision may be claimed on an
  estimated basis on the returns filed for the tax periods ending  on  the
  last  days  of August, November and February of each year if, and to the
  extent, permitted by regulations  promulgated  by  the  commissioner  of
  finance.
    (4)  No tenant shall be authorized to receive a reduction in base rent
  subject to tax under the  provisions  of  this  subdivision,  until  the
  premises  with  respect to which it is claiming a reduction in base rent
  meet the requirements in the definition of eligible premises  and  until
  it  has  obtained  a  certification  of eligibility from the mayor or an
  agency designated by the mayor, and an  annual  certification  from  the
  mayor  or an agency designated by the mayor as to the number of eligible
  aggregate employment shares maintained by such tenant which may  qualify
  for  obtaining  a  base  rent  reduction  for the tenant's tax year. Any
  written documentation submitted to the mayor or such agency or  agencies
  in  order  to  obtain  any  such certification shall be deemed a written
  instrument for purposes of section 175.00 of the penal law.  Application
  fees  for  such  certifications shall be determined by the mayor or such
  agency or agencies. No certification of eligibility shall be  issued  to
  an   eligible   business  on  or  after  July  first,  nineteen  hundred
  ninety-nine unless  such  business  meets  the  requirements  of  either
  subparagraph (a) or (b) below:
    (a)  (1)  prior  to  such  date such business has purchased, leased or
  entered into a contract to purchase or lease particular  premises  or  a
  parcel  on which will be constructed such premises or already owned such
  premises or parcel;
    (2) prior to such  date  improvements  have  been  commenced  on  such
  premises  or  parcel  which  improvements  will meet the requirements of
  subdivision (e) of section 22-621 of this code relating to  expenditures
  for improvements;
    (3) prior to such date such business submits a preliminary application
  for  a  certification  of  eligibility  to  such mayor or such agency or
  agencies with respect  to  a  proposed  relocation  to  such  particular
  premises; and
    (4) such business relocates to such particular premises not later than
  thirty-six  months  or, in a case in which the expenditures made for the
  improvements specified in clause two of this subparagraph are in  excess
  of  fifty  million  dollars  within  seventy-two months from the date of
  submission of such preliminary application; or
    (b) (1) not later than June thirtieth, two thousand two, such business
  has purchased, leased or entered into a contract to  purchase  or  lease
  particular  premises wholly contained in a building in which at least an
  aggregate of forty per centum  or  two  hundred  thousand  square  feet,
  whichever is less, of the nonresidential floor area of such building has
  been  purchased or leased by a business or businesses which meet or will
  meet the requirements of subparagraph (a) of this paragraph with respect

  to such floor area and which are or will become certified as eligible to
  receive a credit under section 22-622 of this code with respect to  such
  floor area;
    (2)  not  later  than  June thirtieth, two thousand two, such business
  submits a preliminary application for a certification of eligibility  to
  such  mayor  or  such  agency  or  agencies  with  respect to a proposed
  relocation to such particular premises; and
    (3) not later than June thirtieth, two  thousand  two,  such  business
  relocates to such particular premises.
    Any  tenant subject to a tax imposed under chapter five, or subchapter
  two or three of chapter six, of this title obtaining a certification  of
  eligibility  pursuant  to  subdivision (b) of section 22-622 of the code
  shall be deemed  to  have  obtained  the  certification  of  eligibility
  required by this paragraph.
    g.  Whenever  the  rent  paid  by a tenant for his or her occupancy of
  taxable premises is measured in whole or in part by the  gross  receipts
  from  the  tenant's  sales  within such place, the tenant's rent, to the
  extent paid on the basis of such gross receipts, shall be deemed not  to
  exceed fifteen percent of such gross receipts.
    h.  (1)  In the case of any taxable premises located in the borough of
  Manhattan north of the center line of  ninety-sixth  street  or  in  the
  boroughs of the Bronx, Brooklyn, Queens and Staten Island, the base rent
  for  such  premises  shall  be  reduced  by  ten  percent for the period
  beginning on January first, nineteen hundred eighty-six and  ending  May
  thirty-first,  nineteen  hundred eighty-seven, by twenty percent for the
  period beginning June first, nineteen hundred  eighty-seven  and  ending
  May  thirty-first,  nineteen  hundred eighty-nine, and by thirty percent
  for the period beginning June first, nineteen  hundred  eighty-nine  and
  ending August thirty-first, nineteen hundred ninety-five, such reduction
  to  be made after all other exemptions and deductions authorized by this
  chapter have been taken. For periods beginning September first, nineteen
  hundred ninety-five and thereafter, a tenant of taxable premises located
  in that part of the city specified in the preceding  sentence  shall  be
  exempt  from the payment of the tax imposed by this chapter with respect
  to the rent for such taxable premises.
    (2) In the case of any taxable premises  located  in  the  borough  of
  Manhattan south of the center line of ninety-sixth street, the base rent
  for such premises shall be reduced by (i) fifteen percent for the period
  beginning  March  first,  nineteen  hundred  ninety-six  and  ending May
  thirty-first, nineteen hundred ninety-six, (ii) twenty-five percent  for
  the  period beginning June first, nineteen hundred ninety-six and ending
  August  thirty-first,   nineteen   hundred   ninety-eight,   and   (iii)
  thirty-five  percent  for  periods  beginning  September first, nineteen
  hundred ninety-eight and thereafter, such reduction to be made after all
  other exemptions and deductions authorized by  this  chapter  have  been
  taken.
    i.  (1)  (a)  (i) For purposes of, and to the extent relevant to, this
  subdivision, the following terms shall, except to the extent hereinafter
  modified, have the definitions assigned to such terms  in  section  four
  hundred ninety-nine-a of the real property tax law, and such definitions
  shall apply with the same force and effect as if they had been set forth
  in  full  in this subdivision: "abatement zone," "aggregate floor area,"
  "applicant," "department of finance," "eligible building,"  "eligibility
  period,"  "eligible premises," "expansion premises," "expansion tenant,"
  "governmental agency," "landlord," "lease commencement date," "mixed-use
  building," "new tenant," "person," "relocation area," "renewal  tenant,"
  "rent commencement date," "subtenant" and "tenant."

    (ii)  For  purposes  of  this subdivision, the definitions assigned by
  clause (i) of  this  subparagraph  to  the  terms  "eligible  premises,"
  "expansion  tenant," "landlord," "new tenant" and "renewal tenant" shall
  be modified as follows:
    (A)  whenever  the  term  "eligible  building"  appears in any of such
  definitions, such term, notwithstanding anything to the contrary,  shall
  be  deemed  to  include  an  eligible government-owned building and, for
  purposes of subparagraph (b-2) of paragraph two of subdivision i of this
  section, a non-residential or mixed-use building located  south  of  the
  center  line  of Canal Street in the borough of Manhattan, regardless of
  when it  received  its  initial  certificate  of  occupancy  or  initial
  temporary  certificate  of  occupancy  and  regardless  of  when  it was
  constructed and shall be deemed to include an eligible  government-owned
  building; and
    (B)  a reference in any of such definitions to a lease which meets the
  eligibility requirements of section four hundred  ninety-nine-c  of  the
  real property tax law shall be deemed to include, in the case of a lease
  of  premises  in  an  eligible  government-owned building, a lease which
  meets  the  eligibility  requirements  of   paragraph   four   of   this
  subdivision.
    (b)  When  used in this subdivision, the following terms shall mean or
  include:
    (i) "Eligible government-owned building." A building that would be  an
  eligible  building,  as  such  term  is  defined in section four hundred
  ninety-nine-a of the real property tax law, but for the fact that it  is
  owned by a governmental agency.
    (ii)  "Eligible  taxable premises." Taxable premises that are eligible
  premises or expansion premises.
    (iii) "Eligible tenant." A tenant  with  respect  to  whose  lease  of
  eligible  taxable  premises  there  has  been  issued  a  certificate of
  abatement or a certificate of eligibility.
    (iv) "Base year." The twelve-month period that commences on  the  rent
  commencement date.
    (v)  "Base  rent  for the base year." The total base rent for eligible
  taxable premises for the base year, determined  without  regard  to  the
  special reduction allowed by this subdivision.
    (vi)  "Certificate  of abatement." The certificate of abatement issued
  pursuant to section four hundred ninety-nine-d of the real property  tax
  law.
    (vii)  "Certificate  of  eligibility."  The certificate of eligibility
  issued pursuant to paragraph five of this subdivision.
    (2) (a) An eligible tenant  of  eligible  taxable  premises  shall  be
  allowed  a  special  reduction  in determining the taxable base rent for
  such eligible taxable premises. Such special reduction shall be  allowed
  with respect to the rent for such eligible taxable premises for a period
  not  exceeding sixty months or, with respect to a lease commencing on or
  after April first, nineteen hundred ninety-seven with an  initial  lease
  term  of  less  than  five  years,  but not less than three years, for a
  period  not  exceeding  thirty-six  months,  commencing  on   the   rent
  commencement   date   applicable  to  such  eligible  taxable  premises,
  provided, however, that in no  event  shall  any  special  reduction  be
  allowed  for any period beginning after March thirty-first, two thousand
  sixteen. For purposes of applying such special reduction, the base  rent
  for  the base year shall, where necessary to determine the amount of the
  special reduction allowable with respect to any number of months falling
  within a tax period, be prorated by dividing the base rent for the  base
  year by twelve and multiplying the result by such number of months.

    (a-1)  Notwithstanding paragraph one of this subdivision, for purposes
  of, and to the extent relevant to, the special reduction allowed by this
  subparagraph,  the  definitions  set  forth  in  section  four   hundred
  ninety-nine-aa  of  the  real property tax law shall apply with the same
  force  and  effect  as  if  they  had  been  set  forth  in full in this
  subdivision, except as such definitions  are  hereinafter  modified.  An
  eligible  tenant of eligible taxable premises shall be allowed a special
  reduction in determining the taxable base rent for such eligible taxable
  premises, provided, however, that (i) such eligible taxable premises are
  eligible premises as defined in paragraph  (c)  of  subdivision  ten  of
  section  four  hundred ninety-nine-aa of the real property tax law, (ii)
  such eligible taxable premises are located in the special garment center
  district identified in the abatement zone defined in  paragraph  (c)  of
  subdivision  two  of  section  four  hundred  ninety-nine-aa of the real
  property tax law, (iii) the lease for  such  eligible  taxable  premises
  commences within the eligibility period applicable to the abatement zone
  defined  in  paragraph  (c)  of  subdivision two of section four hundred
  ninety-nine-aa of the real property tax law, (iv)  the  lease  for  such
  eligible  taxable  premises  has an initial lease term of at least three
  years and (v) such special reduction is limited to the  benefit  period,
  as defined in subdivision five of section four hundred ninety-nine-aa of
  the  real property tax law, applicable to a lease commencing on or after
  July first, two thousand five for eligible premises located  within  the
  abatement  zone  defined  in paragraph (c) of subdivision two of section
  four hundred ninety-nine-aa of the real property tax law.
    (a-2) The amount of the  special  reduction  allowed  by  subparagraph
  (a-1) of this paragraph shall be determined as follows:
    (i)  For  the  base year the amount of such special reduction shall be
  equal to the base rent for the base year.
    (ii) For the first through ninth twelve-month  periods  following  the
  base  year  the  amount  of such special reduction shall be equal to the
  lesser of (A) the base rent for each such twelve-month period or (B) the
  base rent for the base year.
    (a-3) When used in this  subdivision,  for  purposes  of  the  special
  reduction allowed by subparagraph (a-1) of this paragraph, the following
  terms shall mean or include:
    (i)  "Eligible  taxable  premises." Taxable premises that are eligible
  premises or expansion premises.
    (ii) "Eligible tenant." A  tenant  with  respect  to  whose  lease  of
  eligible  taxable  premises  there  has  been  issued  a  certificate of
  abatement.
    (iii) "Base year." The twelve-month period that commences on the  rent
  commencement date.
    (iv)  "Base  rent for the base year." The total base rent for eligible
  taxable premises for the  base  year,  determined  without  the  special
  reduction allowed by subparagraph (a-1) of this paragraph.
    (v)  "Certificate  of  abatement." The certificate of abatement issued
  pursuant to section four hundred ninety-nine-dd of the real property tax
  law.
    (b) Except as provided  in  subparagraphs  (b-1)  and  (b-2)  of  this
  paragraph,   the  amount  of  the  special  reduction  allowed  by  this
  subdivision shall be determined as follows:
    (i) For the base year the amount of such special  reduction  shall  be
  equal to the base rent for the base year.
    (ii)  For the first and second twelve-month periods following the base
  year the amount of such special reduction shall be equal to  the  lesser
  of  (A)  the base rent for each such twelve-month period or (B) the base
  rent for the base year.

    (iii) For the third twelve-month period following the  base  year  the
  amount  of  such  special  reduction shall be equal to two-thirds of the
  lesser of (A) the base rent for such twelve-month period or (B) the base
  rent for the base year.
    (iv)  For  the  fourth twelve-month period following the base year the
  amount of such special reduction shall be  equal  to  one-third  of  the
  lesser of (A) the base rent for such twelve-month period or (B) the base
  rent for the base year.
    (b-1)  The amount of the special reduction allowed by this subdivision
  with respect to a lease commencing on or  after  April  first,  nineteen
  hundred ninety-seven with an initial lease term of less than five years,
  but not less than three years, shall be determined as follows:
    (i)  For  the  base year the amount of such special reduction shall be
  equal to the base rent for the base year.
    (ii) For the first twelve-month period following  the  base  year  the
  amount  of  such  special  reduction shall be equal to two-thirds of the
  lesser of (A) the base rent for such twelve-month period or (B) the base
  rent for the base year.
    (iii) For the second twelve-month period following the base  year  the
  amount  of  such  special  reduction  shall be equal to one-third of the
  lesser of (A) the base rent for such twelve-month period or (B) the base
  rent for the base year.
    (b-2) The amount of the special reduction allowed by this  subdivision
  with  respect  to  a lease other than a sublease commencing between July
  first, two thousand five and June thirtieth, two thousand thirteen  with
  an  initial  or  renewal  lease  term  of  at  least five years shall be
  determined as follows:
    (i) For the base year the amount of such special  reduction  shall  be
  equal to the base rent for the base year.
    (ii)  For  the  first,  second,  third and fourth twelve-month periods
  following the base year the amount of such special  reduction  shall  be
  equal  to  the  lesser  of  (A) the base rent for each such twelve-month
  period or (B) the base rent for the base year.
    (c) For purposes of determining (i) whether a tenant is,  pursuant  to
  the provisions of paragraph two of subdivision b of this section, exempt
  from payment of the tax imposed by this chapter with respect to the base
  rent  for  eligible  taxable premises or (ii) whether, and the extent to
  which, a tenant is eligible for  the  credit  allowed  pursuant  to  the
  provisions  of section 11-704.3 of this chapter with respect to eligible
  taxable premises, the term "base rent" as used in such provisions  shall
  be  the  base  rent  as determined prior to the allowance of any special
  reduction allowed by this subdivision.
    (d) Notwithstanding anything to the contrary,  for  purposes  of  this
  subdivision,  expansion  premises  shall  be  treated  as  separate  and
  distinct from any other premises of the expansion  tenant  in  the  same
  eligible building.
    (3) The special reduction allowed by this subdivision shall be allowed
  commencing  on  the  rent commencement date; however, if the date of the
  certificate of abatement or certificate of eligibility is later than the
  rent commencement date, the tenant shall not,  in  the  first  instance,
  claim the special reduction on any return required to be filed for a tax
  period  ending  prior  to  the  date of such certificate of abatement or
  certificate of eligibility. If the date of such certificate of abatement
  or certificate of eligibility falls in a tax period  subsequent  to  the
  tax  period  in  which  the  rent commencement date falls, but both such
  dates fall within the same tax year, the special reduction that was  not
  claimed  in the first instance for any period preceding the date of such
  certificate  of  abatement  or  certificate  of  eligibility  shall   be

  reflected  in  the  final  return  for  the tax year. If the date of the
  certificate of abatement or certificate of eligibility falls in the  tax
  year  following  the tax year in which the rent commencement date falls,
  an  amended  final  return  shall  be filed for such earlier tax year in
  which shall be reflected any special reduction allowable  for  such  tax
  year;  in  addition,  the  final  return  for  such later tax year shall
  reflect any special reduction that was not claimed in the first instance
  for any period in such tax year preceding the date of the certificate of
  abatement or certificate of eligibility.
    (4)  (a)  With  respect   to   premises   located   in   an   eligible
  government-owned  building,  no special reduction shall be allowed under
  this subdivision unless:
    (i) the landlord enters into a lease for eligible premises with a  new
  tenant or a renewal tenant and:
    (A) the lease commencement date is within the eligibility period; and
    (B)  (I) if, by the sixtieth day following the rent commencement date,
  such new or renewal tenant employs  fifty  or  fewer  employees  in  the
  eligible  premises,  the  initial lease term is for a period of at least
  five years, provided, however, that with respect to a  lease  commencing
  on  or after July first, nineteen hundred ninety-six if, by the sixtieth
  day following the rent commencement date, such  new  or  renewal  tenant
  employs  one  hundred  twenty-five  or  fewer  employees in the eligible
  premises, the initial lease term is for a period of at least five years,
  and provided, further, that with respect to a  lease  commencing  on  or
  after April first, nineteen hundred ninety-seven if, by the sixtieth day
  following the rent commencement date, such new or renewal tenant employs
  one hundred twenty-five or fewer employees in the eligible premises, the
  initial  lease term is for a period of at least three years, or (II) if,
  by the sixtieth day following the rent commencement date,  such  new  or
  renewal  tenant  employs  more  than  fifty  employees  in  the eligible
  premises, the initial lease term is for a period of at least ten  years,
  provided,  however,  that with respect to a lease commencing on or after
  July  first,  nineteen  hundred  ninety-six  if,  by  the  sixtieth  day
  following the rent commencement date, such new or renewal tenant employs
  more  than  one  hundred twenty-five employees in the eligible premises,
  the initial lease term is for a period of at least ten years; or
    (ii) the landlord enters into a lease with  an  expansion  tenant  for
  expansion premises and:
    (A) the lease commencement date is within the eligibility period;
    (B)  if  the  expansion  premises are located in the eligible building
  previously occupied by such expansion tenant, the  lease  term  for  the
  premises  in the eligible building previously occupied by such expansion
  tenant will expire no earlier than the expiration date  of  the  initial
  lease  term  for  the  expansion  premises,  provided  that  where  such
  expansion tenant occupies premises in the eligible building  under  more
  than  one  lease,  the  foregoing  provision  of this subclause shall be
  applied with reference to the lease  for  the  premises  containing  the
  largest  amount  of  square feet, provided, however, that this subclause
  shall not apply to a lease commencing on or after July  first,  nineteen
  hundred ninety-six; and
    (C)  (I) if, by the sixtieth day following the rent commencement date,
  such expansion tenant employs fifty or fewer employees in  the  eligible
  building  in which the expansion premises are located, the initial lease
  term for the expansion premises is for a period of at least five  years,
  provided,  however,  that with respect to a lease commencing on or after
  July  first,  nineteen  hundred  ninety-six  if,  by  the  sixtieth  day
  following  the rent commencement date, such expansion tenant employs one
  hundred twenty-five or fewer employees in the  expansion  premises,  the

  initial  lease  term  for  the  expansion premises is for a period of at
  least five years, and provided, further, that with respect  to  a  lease
  commencing on or after April first, nineteen hundred ninety-seven if, by
  the  sixtieth  day  following the rent commencement date, such expansion
  tenant employs  one  hundred  twenty-five  or  fewer  employees  in  the
  expansion premises, the initial lease term for the expansion premises is
  for  a  period  of at least three years, or (II) if, by the sixtieth day
  following the rent commencement date, such expansion tenant employs more
  than fifty employees in such eligible building, the initial  lease  term
  for  the  expansion  premises  is  for  a  period of at least ten years,
  provided, however, that with respect to a lease commencing on  or  after
  July  first,  nineteen  hundred  ninety-six  if,  by  the  sixtieth  day
  following the rent commencement date, such expansion tenant employs more
  than one hundred twenty-five employees in the  expansion  premises,  the
  initial  lease  term  for  the  expansion premises is for a period of at
  least ten years.
    (b) Notwithstanding anything in this subdivision to the contrary, with
  respect to premises located in an eligible government-owned building, no
  certificate of eligibility shall be  issued  and  no  special  reduction
  shall be allowed under this subdivision if:
    (i)  the  tenant  has  relocated to such premises from any area in the
  borough of Manhattan north of the center line of 96th street or from any
  portion of the boroughs  of  the  Bronx,  Brooklyn,  Queens,  or  Staten
  Island; or
    (ii)  the  lease  for  such  premises provides that during the initial
  lease term required under subparagraph (a) of this paragraph either  the
  landlord  or the tenant may terminate such lease prior to the expiration
  of such required initial  lease  term,  provided  that  such  lease  may
  provide  that either the landlord or the tenant may terminate such lease
  if (A) the other party is in default of any of such party's  obligations
  under  the  lease, (B) the eligible premises are damaged or destroyed by
  fire or other casualty, (C) the eligible premises are rendered  unusable
  for  any  reason not attributable to any act or failure to act of either
  tenant or landlord or (D) the eligible premises are acquired by  eminent
  domain.
    (c)  For  purposes  of  this paragraph, the expiration date of a lease
  shall be determined by the expiration date  set  forth  in  such  lease,
  without  giving  effect  to  any rights of the landlord or the tenant to
  terminate such lease prior to the expiration date set forth therein.
    (5)  (a)  (i)  With  respect  to  premises  located  in  an   eligible
  government-owned   building,   an   application  for  a  certificate  of
  eligibility entitling a tenant to claim the special reduction allowed by
  this subdivision shall be filed by such tenant with  the  department  of
  finance  on  or  after  the  date  on  which  the lease for the eligible
  premises is executed by the landlord and tenant but  in  no  event  more
  than   one   hundred  eighty  days  following  the  later  of  the  rent
  commencement date or the date that chapter four of the laws of  nineteen
  hundred ninety-five became a law, and no such certificate of eligibility
  shall be issued unless such application is filed within such time.
    (ii)  Notwithstanding  clause  (i)  of this subparagraph and any other
  provision of law to the contrary, with respect to a lease commencing  on
  or  after July first, nineteen hundred ninety-six in premises located in
  an eligible government-owned building, an application for a  certificate
  of eligibility entitling a tenant to claim the special reduction allowed
  by this subdivision shall be filed by such tenant with the department of
  finance  on  or  after  the  date  on  which  the lease for the eligible
  premises is executed by the landlord and tenant but  in  no  event  more
  than  one  hundred  eighty  days following the rent commencement date or

  sixty days following the date that the chapter of the laws  of  nineteen
  hundred  ninety-seven  that added this clause became a law, whichever is
  later, and no such certificate of eligibility  shall  be  issued  unless
  such application is filed within such time.
    (b) In addition to any other information required by the department of
  finance, such application for a certificate of eligibility shall include
  (i)  an  abstract  of the lease for the eligible taxable premises, which
  shall include the lease commencement date, the  rent  commencement  date
  and the expiration date of such lease, (ii) a statement as to the number
  of  persons employed by the tenant in the eligible taxable premises and,
  where applicable, in the eligible building containing such premises,  by
  the sixtieth day following the rent commencement date, (iii) a statement
  as to the location of all office or retail space in the city occupied by
  the  tenant prior to the execution of the lease for the eligible taxable
  premises and the commencement and expiration dates  of  all  leases  for
  such  office  or  retail  space  located  in  the  abatement  zone. Such
  application shall also state that the tenant agrees to comply  with  and
  be  subject  to  such  rules  as  may be issued from time to time by the
  department of finance.
    (c) The department of finance shall issue a certificate of eligibility
  upon determining that an application filed pursuant  to  this  paragraph
  meets the requirements set forth in this subdivision, provided, however,
  that  no such certificate of eligibility shall be issued if any payments
  in lieu of taxes, water or sewer charges or other lienable  charges  are
  due and owing with respect to such eligible government-owned building at
  the  time  such  application is pending, unless such payments in lieu of
  taxes or charges are at such time  being  paid  in  timely  installments
  pursuant  to a written agreement with the department of finance or other
  appropriate agency.
    (d) The burden of proof shall be on the tenant to show  by  clear  and
  convincing  evidence that the requirements for granting a certificate of
  eligibility have been satisfied. The department of  finance  shall  have
  the authority to require that statements in connection with applications
  pursuant to this paragraph be made under oath.
    (e)  The  department of finance may provide by rule for the payment by
  tenants of premises in eligible government-owned buildings of reasonable
  administrative  charges  or  fees  necessary  to  defray   expenses   in
  connection  with the determination of initial and continuing eligibility
  for the special reduction allowed by this subdivision.
    (6) (a) If an eligible tenant (i) sublets any portion of the  eligible
  taxable premises to any other person, or (ii) otherwise ceases to occupy
  or  use  any  portion of the premises as eligible taxable premises, such
  tenant shall, immediately upon the occurrence of any such  event,  cease
  to  be  eligible  for  the special reduction allowed by this subdivision
  with respect to the portion of the premises which  is  sublet  or  which
  ceases  to  be  occupied  or  used  by  such  tenant as eligible taxable
  premises, and for any period following the occurrence of any such event,
  the special reduction otherwise allowed by  this  subdivision  shall  be
  reduced  by  an  amount  determined  by  multiplying  the amount of such
  special reduction by the percentage of the premises which is  sublet  or
  which  has  ceased  to be occupied or used as eligible taxable premises.
  Such tenant shall give written notice of  the  occurrence  of  any  such
  event  to  the  department of finance within thirty days thereof. If the
  tenant fails to give such notice, an assessment of  any  additional  tax
  that  may become due as a result of the occurrence of any such event may
  be made at any time, notwithstanding anything in section 11-717 of  this
  chapter to the contrary.

    (b) Notwithstanding anything in this chapter to the contrary, a tenant
  claiming  the special reduction allowed by this subdivision shall file a
  return for each tax period with respect to which such special  reduction
  is  claimed.  Each  such  return  shall  contain  a certification by the
  tenant,  in such form as the department of finance may prescribe, to the
  effect that such tenant meets all the requirements of this  subdivision,
  and  no  special  reduction  shall  be  allowed  if such return does not
  contain such certification by such tenant.
    (c) If any  special  reduction  allowed  under  this  subdivision  was
  obtained  by  a  tenant as a result of having made a false or misleading
  statement as to a material fact or having omitted to state any  material
  fact  necessary in order to make such statement not false or misleading,
  no such special reduction shall be allowed and any additional  tax  that
  becomes  due  as  a  result  of such disallowance may be assessed at any
  time, notwithstanding anything in section 11-717 of this chapter to  the
  contrary.  In  addition,  the department of finance may declare any such
  tenant to be ineligible  to  claim  any  special  reduction  under  this
  subdivision  in  the  future  with  respect  to  the  same  or any other
  premises.
    7.  A  determination  by  the  department  of  finance   pursuant   to
  subdivision  six  of  section  four  hundred  ninety-nine-f  of the real
  property tax law to deny, terminate or revoke any abatement applied  for
  or  granted  pursuant to title four of article four of the real property
  tax law based on the relationship between the landlord  and  the  tenant
  shall  not  be  dispositive  of  whether  such  tenant is eligible for a
  special reduction under this subdivision. The department of finance  may
  determine  that  such  tenant  is eligible for a special reduction under
  this subdivision and may issue a  certificate  of  eligibility  to  such
  tenant  in  accordance with the procedures and pursuant to the standards
  applicable  to  a  tenant   of   premises   located   in   an   eligible
  government-owned building, provided, however, that any application filed
  pursuant  to  paragraph  five  of  this  subdivision  by  a tenant whose
  application for a certificate of abatement pursuant  to  title  four  of
  article  four  of the real property tax law was denied by the department
  of  finance  pursuant  to  subdivision  six  of  section  four   hundred
  ninety-nine-f  of  the  real  property tax law based on the relationship
  between the landlord and the tenant, or by a  tenant  whose  application
  for a certificate of abatement pursuant to title four of article four of
  the  real property tax law was granted by the department of finance, but
  whose abatement was terminated or revoked by the department  of  finance
  pursuant to subdivision six of section four hundred ninety-nine-f of the
  real property tax law based on the relationship between the landlord and
  the  tenant,  may  be  deemed  by the department of finance to have been
  filed on the date the application for such certificate of abatement  was
  filed.  This paragraph shall only apply to leases commencing on or after
  April first, nineteen hundred ninety-seven.