What's happening
This bill prohibits corporations that received federal bailout funds and conducted stock buybacks from getting New York state tax credits for three years.
Why it matters
Targets corporations that received federal bailout or stimulus funds. This bill specifically focuses on companies that got federal emergency economic assistance, meaning it addresses behavior by firms who were supported with taxpayer money during crises.
Links corporate behavior to public accountability. By denying state tax credits to companies that used public bailout funds for stock buybacks, the law aims to discourage the use of government support for shareholder enrichment instead of economic stability or job preservation.
Imposes strong penalties for non-compliance. If a company violates this restriction and applies for or receives tax credits anyway, it could face a civil penalty of three times the credit amount, giving the law substantial enforcement teeth.
Signals a broader policy stance. The bill reflects a legislative intent to ensure public funds are not indirectly subsidizing practices (such as stock buybacks) that may not align with broader economic recovery or worker-support goals, potentially influencing corporate decision-making beyond just tax credit eligibility.
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Who cares
Headline styles
Block Tax Breaks for Buybacks
Plain English, a few words. Used as the page title.
Sponsors
1 Co-sponsor
History
- Referred to budget and revenue
- Referred to budget and revenue
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
1093
2025-2026 Regular Sessions
IN SENATE
January 8, 2025
Introduced by Sens. RAMOS, HOYLMAN-SIGAL -- read twice and ordered printed, and when printed to be committed to the Committee on Budget and Revenue
AN ACT to amend the tax law, in relation to prohibiting federal corporate bailout recipients who engage in stock buybacks from receiving New York state tax credits
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. The tax law is amended by adding a new section 212 to read as follows:
§ 212. Certain corporate bailout recipients prohibited from receiving tax credits. 1. A federal emergency economic assistance recipient shall be prohibited from applying for or receiving any New York state tax credit under this chapter within three years of any purchase, redemption, or other reacquisition of its own shares.
2. A federal emergency economic assistance recipient applying for or receiving a tax credit in violation of subdivision one of this section may be subject to a civil penalty of three times the amount of such tax credit. The attorney general may impose such civil penalty on any recipient he or she determines has violated subdivision one of this section.
3. For the purposes of this section, "federal emergency economic assistance recipient" or "recipient" shall mean any corporation that has received federal emergency economic assistance under a program authorized by a federal bailout or stimulus act.
§ 2. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD03143-01-5
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the tax law, in relation to prohibiting federal corpo- rate bailout recipients who engage in stock buybacks from receiving New York state tax credits
Purpose
To prevent a corporation that receives federal bailout assistance from receiving New York state tax credits within three years of buying back its own shares and to allow the attorney general to impose a civil penalty if found in violation of this bill
Summary of provisions
Section 1 Amends the tax law by adding a new section 212 that prohibits federal emergency economic assistance recipients from applying for or receiving any New York state tax credit within three years of any purchase, redemption, or other reacquisition of its own shares. It also subjects any recipient in violation of this section to a penalty amount- ing to three times such tax credit, which may be imposed by the attorney general. This section also defines "federal emergency economic assist- ance recipient."
Section 2 Sets the effective date
Justification
As the COVID-19 pandemic creates the need for corporations to seek federal bailout assistance, companies need to be prevented from using such funds for their own gain by buying back their own stock.
Often, when companies have surplus cash on their balance sheets, they may repurchase their own company's stock to reduce the number of shares in the open market. This method of reducing outstanding shares could potentially raise the value of idle stock, often raising stock prices. Such an increase in value also means an increase in earnings per share (EPS), which is a threshold by which many senior executives' pay are measured. As a result, many such executives will then receive an increase in bonuses.
In times of emergency, funds provided in the form of federal bailout assistance should be used to assist companies' employees with paid sick leave and salary compensation. This bill would create penalties for corporations that buy back their own shares within three years of receiving federal assistance-a large step towards guaranteeing that workers are protected during an emergency instead of the federal bailout being used to enrich executives.
Legislative history
2023-24: S1742 (Ramos) Referred to Budget and Revenue
2021-22: S2756 (Ramos) Referred to Budget and Revenue
2019-20: S8230 (Ramos) Referred to Budget and Revenue / A10291 (Simotas) referred to ways and means
Fiscal impact
TBD
Effective date
Immediately
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.