S T A T E O F N E W Y O R K ________________________________________________________________________ 637 2015-2016 Regular Sessions I N S E N A T E (PREFILED) January 7, 2015 ___________ Introduced by Sen. KENNEDY -- read twice and ordered printed, and when printed to be committed to the Committee on Commerce, Economic Devel- opment and Small Business AN ACT to amend the economic development law and the tax law, in relation to establishing the capital investment jobs retention program THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: 1 Section 1. The economic development law is amended by adding a new 2 article 22 to read as follows: 3 ARTICLE 22 4 CAPITAL INVESTMENT JOBS RETENTION PROGRAM 5 SECTION 441. SHORT TITLE. 6 442. DEFINITIONS. 7 443. ELIGIBILITY CRITERIA. 8 444. APPLICATION AND APPROVAL PROCESS. 9 445. CAPITAL INVESTMENT JOBS RETENTION PROGRAM CREDIT. 10 446. POWERS AND DUTIES OF THE COMMISSIONER. 11 447. MAINTENANCE OF RECORDS. 12 448. REPORTING. 13 449. CAP ON TAX CREDIT. 14 450. PENALTIES. 15 S 441. SHORT TITLE. THIS ARTICLE SHALL BE KNOWN AND MAY BE CITED AS 16 THE "CAPITAL INVESTMENT JOBS RETENTION PROGRAM". 17 S 442. DEFINITIONS. FOR THE PURPOSES OF THIS ARTICLE: 18 1. "AGRICULTURE" MEANS BOTH AGRICULTURAL PRODUCTION (ESTABLISHMENTS 19 PERFORMING THE COMPLETE FARM OR RANCH OPERATION, SUCH AS FARM OWNER-OP- 20 ERATORS, TENANT FARM OPERATORS, AND SHARECROPPERS) AND AGRICULTURAL 21 SUPPORT (ESTABLISHMENTS THAT PERFORM ONE OR MORE ACTIVITIES ASSOCIATED 22 WITH FARM OPERATION, SUCH AS SOIL PREPARATION, PLANTING, HARVESTING, AND 23 MANAGEMENT, ON A CONTRACT OR FEE BASIS). EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD03250-02-5 S. 637 2 1 2. "BACK OFFICE OPERATIONS" MEANS A BUSINESS FUNCTION THAT MAY INCLUDE 2 ONE OR MORE OF THE FOLLOWING ACTIVITIES: CUSTOMER SERVICE, INFORMATION 3 TECHNOLOGY AND DATA PROCESSING, HUMAN RESOURCES, ACCOUNTING AND RELATED 4 ADMINISTRATIVE FUNCTIONS. 5 3. "CERTIFICATE OF ELIGIBILITY" MEANS THE DOCUMENT ISSUED BY THE 6 DEPARTMENT TO AN APPLICANT THAT HAS COMPLETED AN APPLICATION TO BE 7 ADMITTED INTO THE CAPITAL INVESTMENT JOBS RETENTION PROGRAM AND HAS BEEN 8 ACCEPTED INTO THE PROGRAM BY THE DEPARTMENT. POSSESSION OF A CERTIFICATE 9 OF ELIGIBILITY DOES NOT BY ITSELF GUARANTEE THE ELIGIBILITY TO CLAIM THE 10 TAX CREDIT. 11 4. "CERTIFICATE OF TAX CREDIT" MEANS THE DOCUMENT ISSUED TO A PARTIC- 12 IPANT BY THE DEPARTMENT, AFTER THE DEPARTMENT HAS VERIFIED THAT THE 13 PARTICIPANT HAS MET ALL APPLICABLE ELIGIBILITY CRITERIA IN THIS ARTICLE. 14 THE CERTIFICATE SHALL BE ISSUED ANNUALLY IF SUCH CRITERIA ARE SATISFIED 15 AND SHALL SPECIFY THE EXACT AMOUNT OF EACH TAX CREDIT UNDER THIS ARTICLE 16 THAT A PARTICIPANT MAY CLAIM, PURSUANT TO SECTION FOUR HUNDRED 17 FORTY-FIVE OF THIS ARTICLE, AND SHALL SPECIFY THE TAXABLE YEAR IN WHICH 18 SUCH CREDIT MAY BE CLAIMED. 19 5. "DISTRIBUTION CENTER" MEANS A LARGE SCALE FACILITY INVOLVING PROC- 20 ESSING, REPACKAGING AND/OR MOVEMENT OF FINISHED OR SEMI-FINISHED GOODS 21 TO RETAIL LOCATIONS ACROSS A MULTI-STATE AREA. 22 6. "FINANCIAL SERVICES DATA CENTERS" OR "FINANCIAL SERVICES CUSTOMER 23 BACK OFFICE OPERATIONS" MEANS OPERATIONS THAT MANAGE THE DATA OR 24 ACCOUNTS OF EXISTING CUSTOMERS OR PROVIDE PRODUCT OR SERVICE INFORMATION 25 AND SUPPORT TO CUSTOMERS OF FINANCIAL SERVICES COMPANIES, INCLUDING 26 BANKS, OTHER LENDERS, SECURITIES AND COMMODITIES BROKERS AND DEALERS, 27 INVESTMENT BANKS, PORTFOLIO MANAGERS, TRUST OFFICES, AND INSURANCE 28 COMPANIES. 29 7. "IMPACTED JOBS" MEANS JOBS EXISTING AT A BUSINESS ENTERPRISE AT A 30 LOCATION OR LOCATIONS WITHIN THE COUNTY DECLARED AN EMERGENCY BY THE 31 GOVERNOR ON THE DAY IMMEDIATELY PRECEDING THE DAY ON WHICH THE EVENT 32 LEADING TO THE EMERGENCY DECLARATION BY THE GOVERNOR OCCURRED. 33 8. "MANUFACTURING" MEANS THE PROCESS OF WORKING RAW MATERIALS INTO 34 PRODUCTS SUITABLE FOR USE OR WHICH GIVES NEW SHAPES, NEW QUALITY OR NEW 35 COMBINATIONS TO MATTER WHICH HAS ALREADY GONE THROUGH SOME ARTIFICIAL 36 PROCESS BY THE USE OF MACHINERY, TOOLS, APPLIANCES, OR OTHER SIMILAR 37 EQUIPMENT. "MANUFACTURING" DOES NOT INCLUDE AN OPERATION THAT INVOLVES 38 ONLY THE ASSEMBLY OF COMPONENTS, PROVIDED, HOWEVER, THE ASSEMBLY OF 39 MOTOR VEHICLES OR OTHER HIGH VALUE-ADDED PRODUCTS SHALL BE CONSIDERED 40 MANUFACTURING. 41 9. "PARTICIPANT" MEANS A BUSINESS ENTITY THAT: 42 (A) HAS COMPLETED AN APPLICATION PRESCRIBED BY THE DEPARTMENT TO BE 43 ADMITTED INTO THE PROGRAM; 44 (B) HAS BEEN ISSUED A CERTIFICATE OF ELIGIBILITY BY THE DEPARTMENT; 45 (C) HAS DEMONSTRATED THAT IT MEETS THE ELIGIBILITY CRITERIA IN SECTION 46 FOUR HUNDRED FORTY-THREE AND SUBDIVISION TWO OF SECTION FOUR HUNDRED 47 FORTY-FOUR OF THIS ARTICLE; AND 48 (D) HAS BEEN CERTIFIED AS A PARTICIPANT BY THE COMMISSIONER. 49 10. "PRELIMINARY SCHEDULE OF BENEFITS" MEANS THE MAXIMUM AGGREGATE 50 AMOUNT OF THE TAX CREDIT THAT A PARTICIPANT IN THE EMPIRE STATE JOBS 51 RETENTION PROGRAM IS ELIGIBLE TO RECEIVE PURSUANT TO THIS ARTICLE. THE 52 SCHEDULE SHALL INDICATE THE ANNUAL AMOUNT OF THE CREDIT A PARTICIPANT 53 MAY CLAIM IN EACH OF ITS TEN YEARS OF ELIGIBILITY. THE PRELIMINARY SCHE- 54 DULE OF BENEFITS SHALL BE ISSUED BY THE DEPARTMENT WHEN THE DEPARTMENT 55 APPROVES THE APPLICATION FOR ADMISSION INTO THE PROGRAM. THE COMMISSION- S. 637 3 1 ER MAY AMEND THAT SCHEDULE, PROVIDED THAT THE COMMISSIONER COMPLIES WITH 2 THE CREDIT CAPS IN SECTION THREE HUNDRED FIFTY-NINE OF THIS CHAPTER. 3 11. "PROJECT SITE" MEANS A SINGLE LOCATION FROM WHICH OPERATIONS ARE 4 CONDUCTED AND MANUFACTURERS MAY DESIGNATE MULTIPLE LOCATIONS CONSISTING 5 OF ONE OR MORE INTEGRATED BUILDINGS OR STRUCTURES WITHIN A FIFTEEN-MILE 6 RADIUS AS ONE PROJECT SITE. 7 12. "RELATED PERSON" MEANS A RELATED PERSON PURSUANT TO SUBPARAGRAPH 8 (C) OF PARAGRAPH THREE OF SUBSECTION (B) OF SECTION FOUR HUNDRED SIXTY- 9 FIVE OF THE INTERNAL REVENUE CODE. 10 13. "SCIENTIFIC RESEARCH AND DEVELOPMENT" MEANS CONDUCTING RESEARCH 11 AND EXPERIMENTAL DEVELOPMENT IN THE PHYSICAL, ENGINEERING, AND LIFE 12 SCIENCES, INCLUDING BUT NOT LIMITED TO AGRICULTURE, ELECTRONICS, ENVI- 13 RONMENTAL, BIOLOGY, BOTANY, BIOTECHNOLOGY, COMPUTERS, CHEMISTRY, FOOD, 14 FISHERIES, FORESTS, GEOLOGY, HEALTH, MATHEMATICS, MEDICINE, OCEANOGRA- 15 PHY, PHARMACY, PHYSICS, VETERINARY, AND OTHER ALLIED SUBJECTS. FOR THE 16 PURPOSES OF THIS ARTICLE, SCIENTIFIC RESEARCH AND DEVELOPMENT DOES NOT 17 INCLUDE MEDICAL OR VETERINARY LABORATORY TESTING FACILITIES. 18 14. "SOFTWARE DEVELOPMENT" MEANS THE CREATION OF CODED COMPUTER 19 INSTRUCTIONS AND INCLUDES NEW MEDIA AS DEFINED BY THE COMMISSIONER IN 20 REGULATIONS. 21 S 443. ELIGIBILITY CRITERIA. 1. TO BE A PARTICIPANT IN THE CAPITAL 22 INVESTMENT JOBS RETENTION PROGRAM, A BUSINESS ENTITY SHALL: 23 (A) OPERATE IN NEW YORK STATE PREDOMINANTLY: 24 (I) AS A FINANCIAL SERVICES DATA CENTER OR A FINANCIAL SERVICES BACK 25 OFFICE OPERATION; 26 (II) IN MANUFACTURING; 27 (III) IN SOFTWARE DEVELOPMENT AND NEW MEDIA; 28 (IV) IN SCIENTIFIC RESEARCH AND DEVELOPMENT; 29 (V) IN AGRICULTURE; 30 (VI) IN THE CREATION OR EXPANSION OF BACK OFFICE OPERATIONS IN THE 31 STATE; OR 32 (VII) IN A DISTRIBUTION CENTER. 33 (B) INVEST AT LEAST FIFTY MILLION DOLLARS IN FIXED ASSETS FOR MANUFAC- 34 TURING OPERATIONS OR TWENTY MILLION IN FIXED ASSETS FOR SIGNIFICANT 35 CORPORATE ADMINISTRATIVE FUNCTIONS AT THE PROJECT SITE. SUCH INVESTMENT 36 SHALL BE COMPLETED WITHIN THE THREE CONSECUTIVE CALENDAR YEARS PRECEDING 37 THE TAXABLE YEAR IN WHICH SUCH PARTICIPANT FIRST CLAIMS THE TAX CREDIT 38 SET FORTH IN THIS ARTICLE. IN CALCULATING SUCH INVESTMENT, THE PARTIC- 39 IPANT MAY NOT INCLUDE: 40 (I) PAYMENTS MADE FOR THE ACQUISITION OF PERSONAL PROPERTY THROUGH 41 OPERATING LEASES, 42 (II) PAYMENTS MADE TO RELATED MEMBERS, INCLUDING, BUT NOT LIMITED TO 43 RELATED ENTITIES, COMPONENT MEMBERS, OR PERSONS TO OR FROM WHOM THERE IS 44 ATTRIBUTION OF STOCK OWNERSHIP, 45 (III) ELECTED CONSOLIDATED TAXPAYERS, OR 46 (IV) PERSONS TREATED AS SINGLE TAXPAYERS KNOWN AS COMBINED TAXPAYERS. 47 (C) AGREE TO MAINTAIN OPERATIONS AT THE PROJECT SITE FOR AT LEAST THE 48 GREATER OF: 49 (I) THE TERM OF THE TAX CREDIT PLUS THREE YEARS, OR 50 (II) SEVEN YEARS. 51 (D) DEMONSTRATE TO THE COMMISSIONER THAT: 52 (I) IT IS ECONOMICALLY SOUND AND POSSESSES THE FINANCIAL CAPABILITY TO 53 COMPLETE THE REQUIRED CAPITAL INVESTMENT, AND 54 (II) THE TAX CREDIT PROVIDED FOR IN THIS ARTICLE IS A MAJOR FACTOR IN 55 ITS DETERMINATION TO BEGIN, CONTINUE AND COMPLETE THE CAPITAL INVESTMENT 56 PROJECT. S. 637 4 1 (E) PROVIDE THE COMMISSIONER WITH A LETTER OF SUPPORT FROM THE LOCAL 2 COMMUNITY IN WHICH THE PROJECT IS LOCATED. 3 2. WHEN DETERMINING WHETHER AN APPLICANT IS OPERATING PREDOMINANTLY IN 4 ONE OF THE INDUSTRIES LISTED IN SUBDIVISION ONE OF THIS SECTION, THE 5 COMMISSIONER SHALL EXAMINE THE NATURE OF THE BUSINESS ACTIVITY AT THE 6 LOCATION FOR THE PROPOSED PROJECT AND WILL MAKE ELIGIBILITY DETERMI- 7 NATIONS BASED ON SUCH ACTIVITY. 8 3. FOR THE PURPOSES OF THIS ARTICLE, IN ORDER TO PARTICIPATE IN THE 9 CAPITAL INVESTMENT JOBS RETENTION PROGRAM, A BUSINESS ENTITY OPERATING 10 IN ONE OF THE STRATEGIC INDUSTRIES LISTED IN SUBDIVISION ONE OF THIS 11 SECTION: 12 (A) SHALL EMPLOY AT LEAST TWO HUNDRED FULL-TIME EQUIVALENT JOBS AT THE 13 PROJECT SITE DURING THE TIME FOR WHICH THE TAX CREDIT IS GRANTED, AND 14 (B) SHALL CONTINUE TO EMPLOY AT LEAST TWO HUNDRED FULL-TIME EQUIVALENT 15 EMPLOYEES FOR THE DURATION OF THE AGREEMENT ENTERED INTO WITH THE EMPIRE 16 STATE DEVELOPMENT CORPORATION; PROVIDED, HOWEVER, THAT THE BUSINESS 17 ENTITY SHALL NOT INCLUDE FULL-TIME EQUIVALENT POSITIONS WHOSE EXISTENCE 18 ARE PREDICATED UPON THE ASSISTANCE OFFERED BY THE TAX CREDIT. 19 4. AN INTRASTATE RELOCATION PROJECT, A NOT-FOR-PROFIT BUSINESS ENTITY, 20 A BUSINESS ENTITY WHOSE PRIMARY FUNCTION IS THE PROVISION OF SERVICES 21 INCLUDING PERSONAL SERVICES, BUSINESS SERVICES, OR THE PROVISION OF 22 UTILITIES, A BUSINESS ENTITY ENGAGED PREDOMINANTLY IN THE RETAIL OR 23 ENTERTAINMENT INDUSTRY, OR A COMPANY ENGAGED IN THE GENERATION OR 24 DISTRIBUTION OF ELECTRICITY, THE DISTRIBUTION OF NATURAL GAS, OR THE 25 PRODUCTION OF STEAM ASSOCIATED WITH THE GENERATION OF ELECTRICITY ARE 26 NOT ELIGIBLE TO RECEIVE THE TAX CREDIT DESCRIBED IN THIS ARTICLE. 27 5. A BUSINESS ENTITY MUST BE IN COMPLIANCE WITH ALL WORKER PROTECTION 28 AND ENVIRONMENTAL LAWS AND REGULATIONS. IN ADDITION, A BUSINESS ENTITY 29 MAY NOT OWE PAST DUE STATE TAXES. IN ADDITION, A BUSINESS ENTITY MUST 30 NOT OWE LOCAL PROPERTY TAXES FOR ANY YEAR PRIOR TO THE YEAR IN WHICH IT 31 APPLIES TO PARTICIPATE IN THE CAPITAL INVESTMENT JOBS RETENTION PROGRAM. 32 S 444. APPLICATION AND APPROVAL PROCESS. 1. A BUSINESS ENTERPRISE 33 SHALL SUBMIT A COMPLETED APPLICATION AS PRESCRIBED BY THE COMMISSIONER. 34 SUCH COMPLETED APPLICATION SHALL BE SUBMITTED TO THE COMMISSIONER WITHIN 35 ONE HUNDRED EIGHTY DAYS OF THE ENACTMENT OF THIS ARTICLE. 36 2. AS PART OF SUCH APPLICATION, EACH BUSINESS ENTERPRISE SHALL: 37 (A) AGREE TO ALLOW THE DEPARTMENT OF TAXATION AND FINANCE TO SHARE ITS 38 TAX INFORMATION WITH THE DEPARTMENT. HOWEVER, ANY INFORMATION SHARED AS 39 A RESULT OF THIS AGREEMENT SHALL NOT BE AVAILABLE FOR DISCLOSURE OR 40 INSPECTION UNDER THE STATE FREEDOM OF INFORMATION LAW. 41 (B) AGREE TO ALLOW THE DEPARTMENT OF LABOR TO SHARE ITS TAX AND 42 EMPLOYER INFORMATION WITH THE DEPARTMENT. HOWEVER, ANY INFORMATION 43 SHARED AS A RESULT OF THIS AGREEMENT SHALL NOT BE AVAILABLE FOR DISCLO- 44 SURE OR INSPECTION UNDER THE STATE FREEDOM OF INFORMATION LAW. 45 (C) ALLOW THE DEPARTMENT AND ITS AGENTS ACCESS TO ANY AND ALL BOOKS 46 AND RECORDS THE DEPARTMENT MAY REQUIRE TO MONITOR COMPLIANCE. 47 (D) AGREE TO BE PERMANENTLY DISQUALIFIED FOR EMPIRE ZONE TAX BENEFITS 48 AT ANY LOCATION OR LOCATIONS THAT QUALIFY FOR CAPITAL INVESTMENT JOBS 49 RETENTION PROGRAM BENEFITS IF ADMITTED INTO THE CAPITAL INVESTMENT JOBS 50 RETENTION PROGRAM. 51 (E) PROVIDE THE FOLLOWING INFORMATION TO THE DEPARTMENT UPON REQUEST: 52 (I) A PLAN OUTLINING THE SCHEDULE FOR MEETING THE JOBS RETENTION 53 REQUIREMENTS AS SET FORTH IN SUBDIVISION THREE OF SECTION FOUR HUNDRED 54 FORTY-THREE OF THIS ARTICLE. SUCH PLAN MUST INCLUDE DETAILS ON JOBS 55 TITLES AND EXPECTED SALARIES; S. 637 5 1 (II) THE PRIOR THREE YEARS OF FEDERAL AND STATE INCOME OR FRANCHISE 2 TAX RETURNS, UNEMPLOYMENT INSURANCE QUARTERLY RETURNS, REAL PROPERTY TAX 3 BILLS AND AUDITED FINANCIAL STATEMENTS; AND 4 (III) THE EMPLOYER IDENTIFICATION OR SOCIAL SECURITY NUMBERS FOR ALL 5 RELATED PERSONS TO THE APPLICANT, INCLUDING THOSE OF ANY MEMBERS OF A 6 LIMITED LIABILITY COMPANY OR PARTNERS IN A PARTNERSHIP. 7 (F) PROVIDE A CLEAR AND DETAILED PRESENTATION OF ALL RELATED PERSONS 8 TO THE APPLICANT TO ASSURE THE DEPARTMENT THAT JOBS ARE NOT BEING SHIFT- 9 ED WITHIN THE STATE. 10 (G) CERTIFY, UNDER PENALTY OF PERJURY, THAT IT IS IN SUBSTANTIAL 11 COMPLIANCE WITH ALL ENVIRONMENTAL, WORKER PROTECTION, AND LOCAL, STATE, 12 AND FEDERAL TAX LAWS. 13 3. AFTER REVIEWING A BUSINESS ENTERPRISE'S COMPLETED APPLICATION AND 14 DETERMINING THAT THE BUSINESS ENTERPRISE WILL MEET THE CONDITIONS SET 15 FORTH IN SUBDIVISION THREE OF SECTION FOUR HUNDRED FORTY-THREE OF THIS 16 ARTICLE, THE DEPARTMENT MAY ADMIT THE APPLICANT INTO THE PROGRAM AND 17 PROVIDE THE APPLICANT WITH A CERTIFICATE OF ELIGIBILITY AND A PRELIMI- 18 NARY SCHEDULE OF BENEFITS BY YEAR BASED ON THE APPLICANT'S PROJECTIONS 19 AS SET FORTH IN ITS APPLICATION. THIS PRELIMINARY SCHEDULE OF BENEFITS 20 DELINEATES THE MAXIMUM POSSIBLE BENEFITS AN APPLICANT MAY RECEIVE. 21 4. IN ORDER TO BECOME A PARTICIPANT IN THE PROGRAM, AN APPLICANT SHALL 22 SUBMIT EVIDENCE THAT IT SATISFIES THE ELIGIBILITY CRITERIA SPECIFIED IN 23 SECTION FOUR HUNDRED FORTY-THREE OF THIS ARTICLE AND SUBDIVISION TWO OF 24 THIS SECTION IN SUCH FORM AS THE COMMISSIONER MAY PRESCRIBE. AFTER 25 REVIEWING SUCH EVIDENCE AND FINDING IT SUFFICIENT, THE DEPARTMENT SHALL 26 CERTIFY THE APPLICANT AS A PARTICIPANT AND ISSUE TO THAT PARTICIPANT A 27 CERTIFICATE OF TAX CREDIT FOR ONE TAXABLE YEAR. TO RECEIVE A CERTIFICATE 28 OF TAX CREDIT FOR SUBSEQUENT TAXABLE YEARS, THE PARTICIPANT MUST SUBMIT 29 TO THE DEPARTMENT A PERFORMANCE REPORT DEMONSTRATING THAT THE PARTIC- 30 IPANT CONTINUES TO SATISFY THE ELIGIBILITY CRITERIA SPECIFIED IN SECTION 31 FOUR HUNDRED FORTY-THREE OF THIS ARTICLE AND SUBDIVISION TWO OF THIS 32 SECTION. 33 5. A PARTICIPANT MAY CLAIM TAX BENEFITS COMMENCING IN THE FIRST TAXA- 34 BLE YEAR THAT THE BUSINESS ENTERPRISE RECEIVES A CERTIFICATE OF TAX 35 CREDIT OR THE FIRST TAXABLE YEAR LISTED ON ITS PRELIMINARY SCHEDULE OF 36 BENEFITS, WHICHEVER IS LATER. A PARTICIPANT MAY CLAIM SUCH BENEFITS FOR 37 THE NEXT NINE CONSECUTIVE TAXABLE YEARS, PROVIDED THAT THE PARTICIPANT 38 DEMONSTRATES TO THE DEPARTMENT THAT IT CONTINUES TO SATISFY THE ELIGI- 39 BILITY CRITERIA SPECIFIED IN SECTION FOUR HUNDRED FORTY-THREE OF THIS 40 ARTICLE AND SUBDIVISION TWO OF THIS SECTION IN EACH OF THOSE TAXABLE 41 YEARS. 42 S 445. CAPITAL INVESTMENT JOBS RETENTION PROGRAM CREDIT. 1. A PARTIC- 43 IPANT IN THE CAPITAL INVESTMENT JOBS RETENTION PROGRAM SHALL BE ELIGIBLE 44 TO CLAIM A CREDIT FOR THE IMPACTED JOBS. THE AMOUNT OF SUCH CREDIT SHALL 45 BE EQUAL TO SEVENTY-FIVE PERCENT OF THE NEW YORK STATE INCOME TAXES 46 WITHHELD FROM ELIGIBLE FULL-TIME EMPLOYEES. 47 2. THE TAX CREDIT ESTABLISHED IN THIS SECTION SHALL BE REFUNDABLE AS 48 PROVIDED IN THE TAX LAW. IF A PARTICIPANT FAILS TO SATISFY THE ELIGIBIL- 49 ITY CRITERIA IN ANY ONE YEAR, IT WILL LOSE THE ABILITY TO CLAIM CREDIT 50 FOR THAT YEAR. THE EVENT OF SUCH FAILURE SHALL NOT EXTEND THE ORIGINAL 51 TEN-YEAR ELIGIBILITY PERIOD. 52 3. (A) THE BUSINESS ENTERPRISE SHALL BE ALLOWED TO CLAIM THE CREDIT AS 53 PRESCRIBED IN SECTION FORTY-TWO OF THE TAX LAW; PROVIDED, HOWEVER, A 54 BUSINESS ENTERPRISE SHALL NOT BE ALLOWED TO CLAIM THE CREDIT PRIOR TO 55 TAX YEAR TWO THOUSAND SIXTEEN. S. 637 6 1 (B) ANY INDIVIDUAL THAT IS A MEMBER OR EMPLOYEE OF A PARTICIPANT MAY 2 CLAIM THE PRO RATA SHARE OF THE CREDIT EARNED BY SUCH PARTICIPANT. 3 4. A PARTICIPANT MAY BE ELIGIBLE FOR BENEFITS UNDER THIS ARTICLE AS 4 WELL AS ARTICLE SEVENTEEN OF THIS CHAPTER, PROVIDED THE PARTICIPANT CAN 5 ONLY RECEIVE BENEFITS PURSUANT TO SUBDIVISION TWO OF SECTION THREE 6 HUNDRED FIFTY-FIVE OF THIS CHAPTER FOR COSTS IN EXCESS OF COSTS RECOV- 7 ERED BY INSURANCE. 8 S 446. POWERS AND DUTIES OF THE COMMISSIONER. 1. THE COMMISSIONER 9 SHALL PROMULGATE REGULATIONS ESTABLISHING AN APPLICATION PROCESS AND 10 ELIGIBILITY CRITERIA, THAT WILL BE APPLIED CONSISTENT WITH THE PURPOSES 11 OF THIS ARTICLE, SO AS NOT TO EXCEED THE ANNUAL CAP ON TAX CREDITS SET 12 FORTH IN SECTION THREE HUNDRED FIFTY-NINE OF THIS CHAPTER WHICH, 13 NOTWITHSTANDING ANY PROVISIONS TO THE CONTRARY IN THE STATE ADMINISTRA- 14 TIVE PROCEDURE ACT, MAY BE ADOPTED ON AN EMERGENCY BASIS. SUCH REGU- 15 LATIONS SHALL INCLUDE, BUT NOT BE LIMITED TO, CRITERIA FOR DETERMINING 16 WHETHER A BUSINESS ENTITY IS ECONOMICALLY SOUND AND POSSESSES THE FINAN- 17 CIAL CAPABILITY TO COMPLETE THE REQUIRED CAPITAL INVESTMENT AND WHETHER 18 THE TAX CREDIT PROVIDED FOR IN THIS ARTICLE IS A MAJOR FACTOR IN THE 19 DETERMINATION OF SUCH BUSINESS ENTITY TO BEGIN, CONTINUE AND COMPLETE 20 THE CAPITAL INVESTMENT PROJECT. 21 2. THE COMMISSIONER SHALL, IN CONSULTATION WITH THE DEPARTMENT OF 22 TAXATION AND FINANCE, DEVELOP A CERTIFICATE OF TAX CREDIT THAT SHALL BE 23 ISSUED BY THE COMMISSIONER TO PARTICIPANTS. PARTICIPANTS MAY BE REQUIRED 24 BY THE COMMISSIONER OF TAXATION AND FINANCE TO INCLUDE THE CERTIFICATE 25 OF TAX CREDIT WITH THEIR TAX RETURN TO RECEIVE ANY TAX BENEFITS UNDER 26 THIS ARTICLE. 27 3. THE COMMISSIONER SHALL SOLELY DETERMINE THE ELIGIBILITY OF ANY 28 APPLICANT APPLYING FOR ENTRY INTO THE PROGRAM AND SHALL REMOVE ANY 29 PARTICIPANT FROM THE PROGRAM FOR FAILING TO MEET ANY OF THE REQUIREMENTS 30 SET FORTH IN SUBDIVISION TWO OF SECTION FOUR HUNDRED FORTY-FOUR OF THIS 31 ARTICLE, OR FOR FAILING TO MEET THE JOB RETENTION REQUIREMENTS SET FORTH 32 IN SUBDIVISION THREE OF SECTION FOUR HUNDRED FORTY-THREE OF THIS ARTI- 33 CLE, OR FOR FAILING TO MEET THE REQUIREMENTS OF SUBDIVISION FIVE OF 34 SECTION FOUR HUNDRED FORTY-THREE OF THIS ARTICLE. 35 S 447. MAINTENANCE OF RECORDS. EACH PARTICIPANT SHALL KEEP ALL RELE- 36 VANT RECORDS FOR THE DURATION OF ITS PROGRAM PARTICIPATION PLUS THREE 37 YEARS. 38 S 448. REPORTING. 1. (A) IN ORDER TO RECEIVE A TAX CREDIT CERTIFICATE 39 AND TO MAINTAIN ELIGIBILITY FOR THIS TAX CREDIT PROGRAM, THE TAXPAYER 40 MUST SUBMIT AN ANNUAL REPORT TO THE DEPARTMENT OF TAXATION AND FINANCE 41 BY MARCH FIRST OF THE YEAR FOLLOWING ANY YEAR FOR WHICH THE TAX CREDIT 42 IS CLAIMED, THE FIRST REPORT OF WHICH IS DUE MARCH FIRST OF THE YEAR 43 FOLLOWING THE CALENDAR YEAR IN WHICH THE INVESTMENT IS COMPLETED AND THE 44 TAX CREDIT BEGINS. 45 (B) SUCH REPORT SHALL CONTAIN THE NUMBER OF ELIGIBLE FULL-TIME EQUIV- 46 ALENT EMPLOYEES AND THE AMOUNT OF INCOME TAX WITHHELD FROM THOSE EMPLOY- 47 EES, AND THE AMOUNTS PAID TOWARDS THE COMPLETION OF THE CAPITAL INVEST- 48 MENT. ONCE THIS IS VERIFIED BY THE COMMISSIONER OF TAXATION AND FINANCE, 49 THE COMMISSIONER WILL ISSUE A TAX CREDIT CERTIFICATE TO THE TAXPAYER. 50 (C) THE PARTICIPANT MUST THEN SUBMIT THE TAX CREDIT CERTIFICATE WITH 51 THE APPLICABLE STATE TAX RETURN. IF THE TAX CREDIT IS GREATER THAN THE 52 STATE TAX LIABILITY, THE UNUSED PORTION MAY BE CARRIED FORWARD UP TO 53 THREE YEARS. 54 (D) FAILURE TO SUBMIT A COMPLETE AND TIMELY ANNUAL REPORT WILL RESULT 55 IN THE ASSESSMENT OF A FIVE HUNDRED DOLLAR LATE FEE FOR EACH ENSUING 56 CALENDAR MONTH THE REPORT REMAINS INCOMPLETE OR UNFILED. S. 637 7 1 (E) ONCE THE ACTIVE TERM OF THE TAX CREDIT ENDS, A POST-TERM PERIOD, 2 LENGTH TO BE DETERMINED BY THE EMPIRE STATE DEVELOPMENT CORPORATION, 3 WILL REQUIRE ANNUAL REPORTING REQUIREMENTS TO CERTIFY THAT SUBSTANTIAL 4 OPERATIONS REMAIN AT THE PROJECT SITE. 5 2. EACH PARTICIPANT MUST SUBMIT A PERFORMANCE REPORT ANNUALLY, IN SUCH 6 FORM AS THE COMMISSIONER MAY REQUIRE, WITHIN THIRTY DAYS OF THE END OF 7 THEIR TAXABLE YEAR. 8 3. THE COMMISSIONER SHALL PREPARE ON A QUARTERLY BASIS A PROGRAM 9 REPORT FOR POSTING ON THE DEPARTMENT'S WEBSITE. THE FIRST REPORT WILL BE 10 DUE JUNE THIRTIETH, TWO THOUSAND SEVENTEEN, AND EVERY THREE MONTHS THER- 11 EAFTER. SUCH REPORT SHALL INCLUDE, BUT NOT BE LIMITED TO, THE FOLLOW- 12 ING: NUMBER OF APPLICANTS; NUMBER OF PARTICIPANTS APPROVED; NAMES OF 13 PARTICIPANTS; TOTAL AMOUNT OF BENEFITS CERTIFIED; BENEFITS RECEIVED PER 14 PARTICIPANT; TOTAL NUMBER OF RETAINED JOBS; AND SUCH OTHER INFORMATION 15 AS THE COMMISSIONER DETERMINES. 16 S 449. CAP ON TAX CREDIT. 1. THE TOTAL AMOUNT OF TAX CREDITS LISTED ON 17 CERTIFICATES OF TAX CREDIT ISSUED BY THE COMMISSIONER FOR ANY TAXABLE 18 YEAR MAY NOT EXCEED THE FOLLOWING AMOUNTS: 19 (A) FOR 2016, THIRTEEN MILLION DOLLARS. 20 (B) FOR 2017, EIGHTEEN MILLION DOLLARS. 21 (C) FOR 2018, TWENTY-THREE MILLION DOLLARS. 22 (D) FOR 2019, TWENTY-EIGHT MILLION DOLLARS. 23 (E) FOR 2020, THIRTY-THREE MILLION DOLLARS. 24 2. FOR EACH INDIVIDUAL PROJECT, THE EMPIRE STATE DEVELOPMENT CORPO- 25 RATION SHALL APPROVE A SCHEDULE FOR THE MAXIMUM AMOUNT OF CREDITS TO BE 26 ISSUED IN A CALENDAR YEAR. 27 S 450. PENALTIES. 1. IF A PARTICIPANT FAILS TO MAINTAIN THE JOB LEVELS 28 REQUIRED IN SUBDIVISION THREE OF SECTION FOUR HUNDRED FORTY-THREE OF 29 THIS ARTICLE, OR IN ANY OTHER WAY FAILS TO COMPLY WITH THE TERMS, THE 30 EMPIRE STATE DEVELOPMENT CORPORATION MAY TERMINATE OR REDUCE THE BENE- 31 FITS, OR MAY ASK FOR A ONE HUNDRED PERCENT REFUND OF ASSISTANCE 32 RECEIVED. 33 2. IF THE PARTICIPANT FAILS TO COMPLY WITH TERMS DURING THE POST-TERM 34 REPORTING PERIOD, THE EMPIRE STATE DEVELOPMENT CORPORATION MAY REQUIRE A 35 REFUND OF UP TO SEVENTY-FIVE PERCENT OF ASSISTANCE RECEIVED. 36 S 2. The tax law is amended by adding a new section 42 to read as 37 follows: 38 S 42. CAPITAL INVESTMENT JOBS RETENTION PROGRAM CREDIT. (A) ALLOWANCE 39 OF CREDIT. A TAXPAYER SUBJECT TO TAX UNDER ARTICLE NINE-A, TWENTY-TWO OR 40 THIRTY-THREE OF THIS CHAPTER SHALL BE ALLOWED A CREDIT AGAINST SUCH TAX, 41 PURSUANT TO THE PROVISIONS REFERENCED IN SUBDIVISION (E) OF THIS 42 SECTION. THE AMOUNT OF THE CREDIT, ALLOWABLE FOR TEN CONSECUTIVE TAX 43 YEARS, IS EQUAL TO THE AMOUNT DETERMINED PURSUANT TO SECTION FOUR 44 HUNDRED FORTY-FIVE OF THE ECONOMIC DEVELOPMENT LAW. 45 (B) ELIGIBILITY. TO BE ELIGIBLE FOR THE CAPITAL INVESTMENT JOBS 46 RETENTION CREDIT, THE TAXPAYER SHALL HAVE BEEN ISSUED A CERTIFICATE OF 47 TAX CREDIT BY THE DEPARTMENT OF ECONOMIC DEVELOPMENT PURSUANT TO SUBDI- 48 VISION FOUR OF SECTION FOUR HUNDRED FORTY-FOUR OF THE ECONOMIC DEVELOP- 49 MENT LAW, WHICH CERTIFICATE SHALL SET FORTH THE AMOUNT OF THE CREDIT 50 THAT MAY BE CLAIMED FOR THE TAXABLE YEAR. A TAXPAYER MAY CLAIM SUCH 51 CREDIT FOR UP TO TEN CONSECUTIVE TAXABLE YEARS COMMENCING IN THE FIRST 52 TAXABLE YEAR THAT THE TAXPAYER RECEIVES A CERTIFICATE OF TAX CREDIT OR 53 THE FIRST TAXABLE YEAR LISTED ON ITS PRELIMINARY SCHEDULE OF BENEFITS, 54 WHICHEVER IS LATER. 55 HOWEVER, A TAXPAYER SHALL NOT BE ALLOWED TO CLAIM THE CREDIT PRIOR TO 56 THE TAX YEAR COMMENCING ON OR AFTER JANUARY FIRST, TWO THOUSAND SIXTEEN S. 637 8 1 AND BEFORE JANUARY FIRST, TWO THOUSAND SEVENTEEN. THE TAXPAYER SHALL BE 2 ALLOWED TO CLAIM ONLY THE AMOUNT LISTED ON THE CERTIFICATE OF TAX CREDIT 3 FOR THAT TAXABLE YEAR. SUCH CERTIFICATE, IF REQUIRED BY THE COMMISSION- 4 ER, SHALL BE ATTACHED TO THE TAXPAYER'S RETURN. NO COST OR EXPENSE PAID 5 OR INCURRED BY THE TAXPAYER WHICH IS INCLUDED AS PART OF THE CALCULATION 6 OF THIS CREDIT SHALL BE THE BASIS OF ANY OTHER TAX CREDIT. 7 (C) INFORMATION SHARING. (1) NOTWITHSTANDING ANY PROVISION OF THIS 8 CHAPTER, EMPLOYEES AND OFFICERS OF THE DEPARTMENT OF ECONOMIC DEVELOP- 9 MENT AND THE DEPARTMENT SHALL BE ALLOWED AND ARE DIRECTED TO SHARE AND 10 EXCHANGE: 11 (A) INFORMATION DERIVED FROM TAX RETURNS OR REPORTS THAT IS RELEVANT 12 TO A TAXPAYER'S ELIGIBILITY TO PARTICIPATE IN THE CAPITAL INVESTMENT 13 JOBS RETENTION PROGRAM; 14 (B) INFORMATION REGARDING THE CREDIT APPLIED FOR, ALLOWED OR CLAIMED 15 PURSUANT TO THIS SECTION AND TAXPAYERS WHO ARE APPLYING FOR THE CREDIT 16 OR WHO ARE CLAIMING THE CREDIT; AND 17 (C) INFORMATION CONTAINED IN OR DERIVED FROM CREDIT CLAIM FORMS 18 SUBMITTED TO THE DEPARTMENT AND APPLICATIONS FOR ADMISSION INTO THE 19 CAPITAL INVESTMENT JOBS RETENTION PROGRAM. 20 EXCEPT AS PROVIDED IN PARAGRAPH TWO OF THIS SUBDIVISION, ALL INFORMA- 21 TION EXCHANGED BETWEEN THE DEPARTMENT OF ECONOMIC DEVELOPMENT AND THE 22 DEPARTMENT SHALL NOT BE SUBJECT TO DISCLOSURE OR INSPECTION UNDER THE 23 STATE'S FREEDOM OF INFORMATION LAW. 24 (2) NOTWITHSTANDING ANY PROVISION OF THIS CHAPTER, THE COMMISSIONER OR 25 THE COMMISSIONER'S DESIGNEE IS AUTHORIZED TO RELEASE THE NAME OF EACH 26 TAXPAYER CLAIMING THE CREDIT AND THE AMOUNT OF THE CREDIT EARNED BY EACH 27 TAXPAYER. HOWEVER, IF THE TAXPAYER CLAIMS A CREDIT BECAUSE THE TAXPAYER 28 IS A MEMBER OF A LIMITED LIABILITY COMPANY, A PARTNER IN A PARTNERSHIP 29 OR A SHAREHOLDER IN A SUBCHAPTER S CORPORATION, ONLY THE NAME OF A 30 LIMITED LIABILITY COMPANY, PARTNERSHIP OR SUBCHAPTER S CORPORATION 31 PARTICIPATING IN THE CAPITAL INVESTMENT JOBS RETENTION PROGRAM AND THE 32 AMOUNT OF CREDIT EARNED BY THAT ENTITY MAY BE RELEASED. 33 (D) CREDIT RECAPTURE. IF A CERTIFICATE OF ELIGIBILITY OR A CERTIFICATE 34 OF TAX CREDIT ISSUED BY THE DEPARTMENT OF ECONOMIC DEVELOPMENT UNDER 35 ARTICLE TWENTY-TWO OF THE ECONOMIC DEVELOPMENT LAW IS REVOKED BY SUCH 36 DEPARTMENT, THE AMOUNT OF CREDIT DESCRIBED IN THIS SECTION AND CLAIMED 37 BY THE TAXPAYER PRIOR TO THAT REVOCATION SHALL BE ADDED BACK TO TAX IN 38 THE TAXABLE YEAR IN WHICH ANY SUCH REVOCATION BECOMES FINAL. 39 (E) CROSS-REFERENCES. FOR APPLICATION OF THE CREDIT PROVIDED FOR IN 40 THIS SECTION, SEE THE FOLLOWING PROVISIONS OF THIS CHAPTER: 41 (1) ARTICLE 9-A: SECTION 210-B, SUBDIVISION 49; 42 (2) ARTICLE 22: SECTION 606, SUBSECTION (CCC); 43 (3) ARTICLE 33, SECTION 1511, SUBDIVISION (DD). 44 S 3. Section 210-B of the tax law is amended by adding a new subdivi- 45 sion 49 to read as follows: 46 49. CAPITAL INVESTMENT JOBS RETENTION PROGRAM CREDIT. (A) ALLOWANCE OF 47 CREDIT. A TAXPAYER WILL BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED 48 IN SECTION FORTY-TWO OF THIS CHAPTER, AGAINST THE TAXES IMPOSED BY THIS 49 ARTICLE. 50 (B) APPLICATION OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBDIVISION 51 FOR ANY TAXABLE YEAR WILL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS 52 THAN THE MINIMUM TAX FIXED BY THIS ARTICLE. HOWEVER, IF THE AMOUNT OF 53 CREDIT ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCES THE 54 TAX TO SUCH AMOUNT, ANY AMOUNT OF CREDIT THUS NOT DEDUCTIBLE IN SUCH 55 TAXABLE YEAR WILL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDITED OR 56 REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF SECTION ONE THOUSAND S. 637 9 1 EIGHTY-SIX OF THIS CHAPTER. PROVIDED, HOWEVER, THE PROVISIONS OF 2 SUBSECTION (C) OF SECTION ONE THOUSAND EIGHTY-EIGHT OF THIS CHAPTER 3 NOTWITHSTANDING, NO INTEREST WILL BE PAID THEREON. 4 S 4. Section 606 of the tax law is amended by adding a new subsection 5 (ccc) to read as follows: 6 (CCC) CAPITAL INVESTMENT JOBS PROGRAM RETENTION CREDIT. (1) ALLOWANCE 7 OF CREDIT. A TAXPAYER SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS 8 PROVIDED IN SECTION FORTY-TWO OF THIS CHAPTER, AGAINST THE TAX IMPOSED 9 BY THIS ARTICLE. 10 (2) APPLICATION OF CREDIT. IF THE AMOUNT OF THE CREDIT ALLOWED UNDER 11 THIS SUBSECTION FOR ANY TAXABLE YEAR EXCEEDS THE TAXPAYER'S TAX FOR SUCH 12 YEAR, THE EXCESS WILL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDITED 13 OR REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF SECTION SIX HUNDRED 14 EIGHTY-SIX OF THIS ARTICLE, PROVIDED, HOWEVER, THAT NO INTEREST WILL BE 15 PAID THEREON. 16 S 5. Subparagraph (B) of paragraph 1 of subsection (i) of section 606 17 of the tax law is amended by adding a new clause (xli) to read as 18 follows: 19 (XLI) CAPITAL INVESTMENT AMOUNT OF CREDIT UNDER SUBDIVISION 20 JOBS RETENTION PROGRAM CREDIT FORTY-NINE OF SECTION TWO HUNDRED 21 TEN-B 22 S 6. Section 1511 of the tax law is amended by adding a new subdivi- 23 sion (dd) to read as follows: 24 (DD) CAPITAL INVESTMENT JOBS RETENTION PROGRAM CREDIT. (1) ALLOWANCE 25 OF CREDIT. A TAXPAYER SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS 26 PROVIDED IN SECTION FORTY-TWO OF THIS CHAPTER, AGAINST THE TAXES IMPOSED 27 BY THIS ARTICLE. 28 (2) APPLICATION OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBDIVISION 29 FOR ANY TAXABLE YEAR WILL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS 30 THAN THE MINIMUM TAX FIXED BY THIS ARTICLE. HOWEVER, IF THE AMOUNT OF 31 CREDIT ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCES THE 32 TAX TO SUCH AMOUNT, ANY AMOUNT OF CREDIT THUS NOT DEDUCTIBLE IN SUCH 33 TAXABLE YEAR WILL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDITED OR 34 REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF SECTION ONE THOUSAND 35 EIGHTY-SIX OF THIS CHAPTER. PROVIDED, HOWEVER, THE PROVISIONS OF 36 SUBSECTION (C) OF SECTION ONE THOUSAND EIGHTY-EIGHT OF THIS CHAPTER 37 NOTWITHSTANDING, NO INTEREST WILL BE PAID THEREON. 38 S 7. This act shall take effect immediately; provided however that 39 sections two, three, four, five and six of this act shall apply to taxa- 40 ble years beginning on and after January 1, 2016.