Support Jobs with Tax Credits

Section 1. The economic development law is amended by adding a new article 23 to read as follows:

ARTICLE 23

CAPITAL INVESTMENT JOBS RETENTION PROGRAM Section 450. Short title.

451. Definitions.

452. Eligibility criteria.

453. Application and approval process.

454. Capital investment jobs retention program credit.

455. Powers and duties of the commissioner.

456. Maintenance of records.

457. Reporting.

458. Cap on tax credit.

459. Penalties.

§ 450. Short title. This article shall be known and may be cited as the "capital investment jobs retention program".

§ 451. Definitions. For the purposes of this article:

1. "Agriculture" means both agricultural production (establishments performing the complete farm or ranch operation, such as farm owner-operators, tenant farm operators, and sharecroppers) and agricultural support (establishments that perform one or more activities associated with farm operation, such as soil preparation, planting, harvesting, and management, on a contract or fee basis).

EXPLANATION--Matter in italics (underscored) is new; matter in brackets

[ ] is old law to be omitted.

LBD02705-01-9

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2. "Back office operations" means a business function that may include one or more of the following activities: customer service, information technology and data processing, human resources, accounting and related administrative functions.

3. "Certificate of eligibility" means the document issued by the department to an applicant that has completed an application to be admitted into the capital investment jobs retention program and has been accepted into the program by the department. Possession of a certificate of eligibility does not by itself guarantee the eligibility to claim the tax credit.

4. "Certificate of tax credit" means the document issued to a participant by the department, after the department has verified that the participant has met all applicable eligibility criteria in this article. The certificate shall be issued annually if such criteria are satisfied and shall specify the exact amount of each tax credit under this article that a participant may claim, pursuant to section four hundred fiftyfour of this article, and shall specify the taxable year in which such credit may be claimed.

5. "Distribution center" means a large scale facility involving processing, repackaging and/or movement of finished or semi-finished goods to retail locations across a multi-state area.

6. "Financial services data centers" or "financial services customer back office operations" means operations that manage the data or accounts of existing customers or provide product or service information and support to customers of financial services companies, including banks, other lenders, securities and commodities brokers and dealers, investment banks, portfolio managers, trust offices, and insurance companies.

7. "Impacted jobs" means jobs existing at a business enterprise at a location or locations within the county declared an emergency by the governor on the day immediately preceding the day on which the event leading to the emergency declaration by the governor occurred.

8. "Manufacturing" means the process of working raw materials into products suitable for use or which gives new shapes, new quality or new combinations to matter which has already gone through some artificial process by the use of machinery, tools, appliances, or other similar equipment. "Manufacturing" does not include an operation that involves only the assembly of components, provided, however, the assembly of motor vehicles or other high value-added products shall be considered manufacturing.

9. "Participant" means a business entity that:

(a) has completed an application prescribed by the department to be admitted into the program;

(b) has been issued a certificate of eligibility by the department;

(c) has demonstrated that it meets the eligibility criteria in section four hundred fifty-two and subdivision two of section four hundred fifty-three of this article; and

(d) has been certified as a participant by the commissioner.

10. "Preliminary schedule of benefits" means the maximum aggregate amount of the tax credit that a participant in the empire state jobs retention program is eligible to receive pursuant to this article. The schedule shall indicate the annual amount of the credit a participant may claim in each of its ten years of eligibility. The preliminary schedule of benefits shall be issued by the department when the department approves the application for admission into the program. The commission-

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er may amend that schedule, provided that the commissioner complies with the credit caps in section three hundred fifty-nine of this chapter.

11. "Project site" means a single location from which operations are conducted and manufacturers may designate multiple locations consisting of one or more integrated buildings or structures within a fifteen-mile radius as one project site.

12. "Related person" means a related person pursuant to subparagraph (c) of paragraph three of subsection (b) of section four hundred sixtyfive of the internal revenue code.

13. "Scientific research and development" means conducting research and experimental development in the physical, engineering, and life sciences, including but not limited to agriculture, electronics, environmental, biology, botany, biotechnology, computers, chemistry, food, fisheries, forests, geology, health, mathematics, medicine, oceanography, pharmacy, physics, veterinary, and other allied subjects. For the purposes of this article, scientific research and development does not include medical or veterinary laboratory testing facilities.

14. "Software development" means the creation of coded computer instructions and includes new media as defined by the commissioner in regulations.

§ 452. Eligibility criteria. 1. To be a participant in the capital investment jobs retention program, a business entity shall:

(a) operate in New York state predominantly:

(i) as a financial services data center or a financial services back office operation;

(ii) in manufacturing;

(iii) in software development and new media;

(iv) in scientific research and development;

(v) in agriculture;

(vi) in the creation or expansion of back office operations in the state; or

(vii) in a distribution center.

(b) invest at least fifty million dollars in fixed assets for manufacturing operations or twenty million in fixed assets for significant corporate administrative functions at the project site. Such investment shall be completed within the three consecutive calendar years preceding the taxable year in which such participant first claims the tax credit set forth in this article. In calculating such investment, the participant may not include:

(i) payments made for the acquisition of personal property through operating leases,

(ii) payments made to related members, including, but not limited to related entities, component members, or persons to or from whom there is attribution of stock ownership,

(iii) elected consolidated taxpayers, or

(iv) persons treated as single taxpayers known as combined taxpayers.

(c) agree to maintain operations at the project site for at least the greater of:

(i) the term of the tax credit plus three years, or

(ii) seven years.

(d) demonstrate to the commissioner that:

(i) it is economically sound and possesses the financial capability to complete the required capital investment, and

(ii) the tax credit provided for in this article is a major factor in its determination to begin, continue and complete the capital investment project.

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(e) provide the commissioner with a letter of support from the local community in which the project is located.

2. When determining whether an applicant is operating predominantly in one of the industries listed in subdivision one of this section, the commissioner shall examine the nature of the business activity at the location for the proposed project and will make eligibility determinations based on such activity.

3. For the purposes of this article, in order to participate in the capital investment jobs retention program, a business entity operating in one of the strategic industries listed in subdivision one of this section:

(a) shall employ at least two hundred full-time equivalent jobs at the project site during the time for which the tax credit is granted, and

(b) shall continue to employ at least two hundred full-time equivalent employees for the duration of the agreement entered into with the empire state development corporation; provided, however, that the business entity shall not include full-time equivalent positions whose existence are predicated upon the assistance offered by the tax credit.

4. An intrastate relocation project, a not-for-profit business entity, a business entity whose primary function is the provision of services including personal services, business services, or the provision of utilities, a business entity engaged predominantly in the retail or entertainment industry, or a company engaged in the generation or distribution of electricity, the distribution of natural gas, or the production of steam associated with the generation of electricity are not eligible to receive the tax credit described in this article.

5. A business entity must be in compliance with all worker protection and environmental laws and regulations. In addition, a business entity may not owe past due state taxes. In addition, a business entity must not owe local property taxes for any year prior to the year in which it applies to participate in the capital investment jobs retention program.

§ 453. Application and approval process. 1. A business enterprise shall submit a completed application as prescribed by the commissioner. Such completed application shall be submitted to the commissioner within one hundred eighty days of the enactment of this article.

2. As part of such application, each business enterprise shall:

(a) agree to allow the department of taxation and finance to share its tax information with the department. However, any information shared as a result of this agreement shall not be available for disclosure or inspection under the state freedom of information law.

(b) agree to allow the department of labor to share its tax and employer information with the department. However, any information shared as a result of this agreement shall not be available for disclosure or inspection under the state freedom of information law.

(c) allow the department and its agents access to any and all books and records the department may require to monitor compliance.

(d) agree to be permanently disqualified for empire zone tax benefits at any location or locations that qualify for capital investment jobs retention program benefits if admitted into the capital investment jobs retention program.

(e) provide the following information to the department upon request:

(i) a plan outlining the schedule for meeting the jobs retention requirements as set forth in subdivision three of section four hundred fifty-two of this article. Such plan must include details on jobs titles and expected salaries;

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(ii) the prior three years of federal and state income or franchise tax returns, unemployment insurance quarterly returns, real property tax bills and audited financial statements; and

(iii) the employer identification or social security numbers for all related persons to the applicant, including those of any members of a limited liability company or partners in a partnership.

(f) provide a clear and detailed presentation of all related persons to the applicant to assure the department that jobs are not being shifted within the state.

(g) certify, under penalty of perjury, that it is in substantial compliance with all environmental, worker protection, and local, state, and federal tax laws.

3. After reviewing a business enterprise's completed application and determining that the business enterprise will meet the conditions set forth in subdivision three of section four hundred fifty-two of this article, the department may admit the applicant into the program and provide the applicant with a certificate of eligibility and a preliminary schedule of benefits by year based on the applicant's projections as set forth in its application. This preliminary schedule of benefits delineates the maximum possible benefits an applicant may receive.