Bill Text: NY A07985 | 2011-2012 | General Assembly | Amended
Bill Title: Relates to program six certified capital companies; relates to requirements for qualification for program six; relates to tax credits for such program; relates to the maximum amount of certified capital in such program.
Spectrum: Partisan Bill (Democrat 27-0)
Status: (Vetoed) 2011-12-12 - tabled [A07985 Detail]
Download: New_York-2011-A07985-Amended.html
S T A T E O F N E W Y O R K
________________________________________________________________________
7985--B
2011-2012 Regular Sessions
I N A S S E M B L Y
May 25, 2011
___________
Introduced by M. of A. SILVER, MORELLE, SCHIMMINGER, LUPARDO, SCARBOR-
OUGH, MAGNARELLI, CASTRO, CAHILL, GUNTHER, GABRYSZAK, M. MILLER,
SCHROEDER, WEPRIN, SIMOTAS, WEISENBERG, MILLMAN, GALEF, HOYT, ZEBROW-
SKI, JAFFEE, P. RIVERA -- Multi-Sponsored by -- M. of A. ABBATE, BREN-
NAN, CAMARA, GIBSON, MAGEE, MARKEY -- read once and referred to the
Committee on Ways and Means -- committee discharged, bill amended,
ordered reprinted as amended and recommitted to said committee --
reported and referred to the Committee on Rules -- Rules Committee
discharged, bill amended, ordered reprinted as amended and recommitted
to the Committee on Rules
AN ACT to amend the tax law, in relation to program six certified capi-
tal companies and to repeal section 84 of part A of chapter 62 of the
laws of 2011 relating to constituting chapter 18-A of the consolidated
laws relating to financial services, relating to making certain
provisions permanent
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
1 Section 1. The opening paragraph of paragraph 7 of subdivision (a) of
2 section 11 of the tax law, as amended by section 19 of part A of chapter
3 63 of the laws of 2005, is amended to read as follows:
4 "Qualified business" - A QUALIFIED SEED FUND OR an independently owned
5 and operated business that meets all of the following conditions as of
6 the time of the first investment in the business:
7 S 2. Paragraph 10 of subdivision (a) of section 11 of the tax law, as
8 amended by section 19 of part A of chapter 63 of the laws of 2005, is
9 amended to read as follows:
10 (10) "Qualified investment" - the investment of cash by a certified
11 capital company in a qualified business for the purchase of any debt,
12 equity or hybrid security, of any nature and description whatever,
13 including a debt instrument or security which has the characteristics of
14 debt but which provides for conversion into equity or equity partic-
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD10508-12-1
A. 7985--B 2
1 ipation instruments such as options or warrants, provided however, in
2 the case of certified capital programs three, four [and], five[,] AND
3 SIX that any such debt instrument have a maturity of at least twenty-
4 four months from the date such debt is incurred; and further provided
5 that a certified capital company, after the investment and assuming full
6 conversion and exercise of any equity participation instruments, shall
7 not own more than fifty percent of the voting equity of the qualified
8 business, except in the case of a follow-on investment where a specific
9 exemption is granted by the department under subparagraph (D) of para-
10 graph one of subdivision (c) of this section OR AN INVESTMENT IN A QUAL-
11 IFIED SEED FUND BY A PROGRAM SIX CERTIFIED CAPITAL COMPANY. Further-
12 more, except in the case of a follow-on investment, if a certified
13 capital company owns more than fifteen percent of the equity in a compa-
14 ny or has a seat on the board of directors of such company, then a
15 certified capital company cannot invest in such company unless the
16 following conditions are met: (i) at least one other investor who is not
17 an affiliate of the certified capital company participates in the same
18 round of investment on the same terms and conditions as the certified
19 capital company; and (ii) the certified capital company and its affil-
20 iates invest no more than fifty percent of the total investment made in
21 that round of investment.
22 S 3. Subdivision (a) of section 11 of the tax law is amended by adding
23 two new paragraphs 17 and 18 to read as follows:
24 17. "QUALIFIED SEED FUND" - IS ANY FUND THAT HAS BEEN CERTIFIED BY THE
25 SUPERINTENDENT AS SUCH BY RULE OR REGULATION. THE SUPERINTENDENT MAY
26 CERTIFY PARTNERSHIPS, CORPORATIONS, TRUSTS, OR LIMITED LIABILITY COMPA-
27 NIES ORGANIZED ON A FOR-PROFIT BASIS, OR NOT-FOR-PROFIT FUNDS, WHICH
28 SUBMIT AN APPLICATION TO BE DESIGNATED AS A QUALIFIED SEED FUND OPERATOR
29 IF SUCH APPLICANT IS LOCATED, HEADQUARTERED AND LICENSED OR REGISTERED
30 TO CONDUCT BUSINESS IN NEW YORK. QUALIFIED SEED FUNDS SHALL BE UNDER
31 EXPERIENCED PROFESSIONAL MANAGEMENT FAMILIAR WITH SEED CAPITAL INVEST-
32 MENT, APPROPRIATE BUSINESS PRACTICES AND TECHNOLOGY-ORIENTED PRODUCTS
33 AND SERVICES, AND FORMED FOR THE PURPOSE OF PROVIDING PRIVATE EQUITY TO
34 TECHNOLOGY-BASED COMPANIES IN THEIR FORMATIVE STAGES AND INVEST IN QUAL-
35 IFIED ENTERPRISES LOCATED WITHIN NEW YORK STATE. QUALIFIED SEED FUNDS
36 MUST DEMONSTRATE (A) CAPACITY TO PERFORM DUE DILIGENCE IN MAKING INVEST-
37 MENT DECISIONS AND TO PROVIDE MANAGEMENT EXPERTISE AND OTHER VALUE-ADDED
38 SERVICES; (B) FINANCIAL RESOURCES FOR IDENTIFYING AND INVESTING
39 SEED-STAGE COMPANIES; AND (C) ABILITY TO EVALUATE EMERGING TECHNOLOGY
40 COMMERCIALIZATION.
41 18. "MATCH" - A CASH INVESTMENT IN OR LOAN TO A QUALIFIED BUSINESS
42 MADE NO MORE THAN THREE MONTHS BEFORE OR SIX MONTHS AFTER AN INVESTMENT
43 OF CERTIFIED CAPITAL BY A CERTIFIED CAPITAL COMPANY PROGRAM SIX IN SUCH
44 QUALIFIED BUSINESS, OTHER THAN AN INVESTMENT MADE WITH CERTIFIED CAPI-
45 TAL. THE TERM SHALL ALSO INCLUDE CASH INVESTED IN OR LENT TO A QUALIFIED
46 BUSINESS BY A CERTIFIED CAPITAL COMPANY THAT HAS INVESTED ONE HUNDRED
47 PERCENT OF ITS CERTIFIED CAPITAL IN QUALIFIED BUSINESSES.
48 S 4. Paragraph 9 of subdivision (b) of section 11 of the tax law, as
49 amended by section 19 of part A of chapter 63 of the laws of 2005, is
50 amended to read as follows:
51 (9) The superintendent shall start accepting applications to become a
52 certified capital company in certified capital company program two by
53 November first, nineteen hundred ninety-nine, and shall start accepting
54 applications to become a certified capital company in certified capital
55 company program three by August first, two thousand, and shall begin
56 accepting applications to become a certified capital company in certi-
A. 7985--B 3
1 fied capital company program four by the later of August first, two
2 thousand four or not more than sixty days after the effective date of
3 section one of part D of chapter fifty-nine of the laws of two thousand
4 four and shall begin accepting applications to become a certified capi-
5 tal company in certified capital company program five by the later of
6 July first, two thousand five or not more than sixty days after the
7 effective date of the chapter of the laws of two thousand five which
8 amended this paragraph, AND SHALL BEGIN ACCEPTING APPLICATIONS TO BECOME
9 A CERTIFIED CAPITAL COMPANY IN PROGRAM SIX BY JULY FIRST, TWO THOUSAND
10 ELEVEN OR NOT MORE THAN SIXTY DAYS AFTER THE EFFECTIVE DATE OF THE CHAP-
11 TER OF THE LAWS OF TWO THOUSAND ELEVEN WHICH AMENDED THIS PARAGRAPH.
12 S 5. Subparagraph (A) of paragraph 1 of subdivision (c) of section 11
13 of the tax law, as amended by section 19 of part A of chapter 63 of the
14 laws of 2005, is amended to read as follows:
15 (A) Within two years after the starting date of a specific certified
16 capital company program of a certified capital company, at least twen-
17 ty-five percent of its certified capital allocable to such certified
18 capital company program must be placed in qualified investments AND IN
19 THE CASE OF PROGRAM SIX, AT LEAST TEN PERCENT OF ITS CERTIFIED CAPITAL
20 MUST HAVE BEEN PLACED IN QUALIFIED SEED FUNDS. ALL QUALIFIED INVESTMENTS
21 MADE IN QUALIFIED SEED FUNDS UNDER PROGRAM SIX SHALL COUNT TOWARDS THE
22 TWENTY-FIVE PERCENT INVESTMENT REQUIREMENT OF THIS SUBPARAGRAPH.
23 S 6. Subparagraph (C) of paragraph 1 of subdivision (c) of section 11
24 of the tax law, as amended by section 19 of part A of chapter 63 of the
25 laws of 2005, is amended to read as follows:
26 (C) Within four years after the starting date of a specific certified
27 capital company program of a certified capital company, at least fifty
28 percent of its certified capital allocable to such certified capital
29 company program must be placed in qualified investments, at least fifty
30 percent of which must have been placed in early stage businesses, except
31 that in the case of program four and any subsequent program, at least
32 twenty-five percent of which must have been placed in early stage busi-
33 nesses and an additional twenty-five percent of which must have been
34 placed in start-up businesses, and except that in the case of qualified
35 investments made in qualified businesses located in empire zones estab-
36 lished pursuant to article eighteen-B of the general municipal law under
37 the provisions of certified capital company program three, program four
38 and program five from allocations of certified capital made specifically
39 for such targeted investments in such zones, the requirement for quali-
40 fied investments in early stage and start-up businesses shall not apply.
41 AN INVESTMENT IN A QUALIFIED SEED FUND SHALL COUNT TOWARDS THE REQUIRE-
42 MENT UNDER PROGRAM SIX FOR QUALIFIED INVESTMENTS IN EARLY STAGE BUSI-
43 NESSES.
44 S 7. Subparagraph (D) of paragraph 1 of subdivision (c) of section 11
45 of the tax law, as amended by section 19 of part A of chapter 63 of the
46 laws of 2005, is amended to read as follows:
47 (D) A certified capital company, at least fifteen working days prior
48 to making a proposed investment in a specific business, shall certify in
49 writing to the superintendent that (i) the business in which it proposes
50 to invest meets the definition of a qualified business as set forth in
51 subdivision (a) of this section or, in the case of a follow-on invest-
52 ment, that such business continues to meet the requirements set forth in
53 subparagraphs (A) and (C) of paragraph seven of subdivision (a) of this
54 section and, in either case, an explanation of its determination that
55 the business meets such requirements, [and] (ii) with respect to certi-
56 fied capital company program three, program four and program five,
A. 7985--B 4
1 whether or not such business is located in an empire zone established
2 pursuant to article eighteen-B of the general municipal law or in an
3 underserved area outside an empire zone AND (III) WITH RESPECT TO CERTI-
4 FIED CAPITAL COMPANY PROGRAM SIX, WHETHER OR NOT SUCH INVESTMENT IS IN A
5 QUALIFIED SEED FUND. The certification to the superintendent shall
6 include a sworn statement from the business in which the certified capi-
7 tal company proposes to invest, which statement shall evidence the
8 intention of the business to maintain its headquarters in New York and
9 conduct its primary business operations in the state of New York after
10 its receipt of the investment by the certified capital company. If the
11 superintendent determines that the business does not meet the definition
12 of a qualified business, or, in the case of a follow-on investment, that
13 such business does not meet the requirements set forth in subparagraphs
14 (A) and (C) of paragraph seven of subdivision (a) of this section, then
15 it shall, within the fifteen working day period prior to the making of
16 the proposed investment, notify the certified capital company of its
17 determination and provide an explanation thereof, provided, however,
18 that the department may, upon written request of a certified capital
19 company and at the discretion of the department, grant, in writing, an
20 exemption to the percentage limitations of paragraph ten of subdivision
21 (a) of this section.
22 S 8. Subparagraph (F) of paragraph 1 of subdivision (c) of section 11
23 of the tax law, as amended by section 19 of part A of chapter 63 of the
24 laws of 2005, is amended to read as follows:
25 (F) If within ten years after the starting date of certified capital
26 company program four [or], program five OR PROGRAM SIX, and within
27 twelve years after the starting date of certified capital company
28 programs one, two, and three, one hundred percent of the certified capi-
29 tal allocable to a certified capital company participating in [such]
30 program ONE, TWO, THREE, FOUR OR FIVE has not been placed in qualified
31 investments AND, WITH RESPECT TO PROGRAM SIX, ONE HUNDRED PERCENT OF THE
32 CERTIFIED CAPITAL HAS NOT BEEN PLACED IN QUALIFIED INVESTMENTS WITH TEN
33 PERCENT OF SUCH AMOUNT BEING PLACED IN QUALIFIED SEED FUNDS, the specif-
34 ic certified capital company shall no longer be permitted to receive
35 management fees; provided that such restriction shall not apply (i) with
36 respect to certified capital company programs one, two, and three, to
37 any certified capital company that has not, prior to October thirty-
38 first, two thousand four, received, as opposed to accrued, any manage-
39 ment fees, or (ii) with respect to any certified capital company
40 program, to a certified capital company in which at least fifty percent
41 of the voting stock, capital, membership interests, or other beneficial
42 ownership interests, as the case may be, are owned by an entity that is
43 managed, directly or indirectly, by a non-profit corporation.
44 S 9. Paragraph 1 of subdivision (c) of section 11 of the tax law is
45 amended by adding a new subparagraph (G) to read as follows:
46 (G) IF WITHIN ONE YEAR OF THE STARTING DATE OF CERTIFIED CAPITAL
47 COMPANY PROGRAM SIX, THE CERTIFIED CAPITAL COMPANY HAS NOT ACHIEVED A
48 MATCH OF AT LEAST ONE HUNDRED PERCENT OF THE AMOUNT OF QUALIFIED INVEST-
49 MENTS MADE BY SUCH CERTIFIED CAPITAL COMPANY WITH PROGRAM SIX CERTIFIED
50 CAPITAL AS OF SUCH DATE, THE SPECIFIC CERTIFIED CAPITAL COMPANY SHALL
51 NOT BE PERMITTED TO RECEIVE MANAGEMENT FEES UNTIL IT HAS ACHIEVED SUCH
52 MATCH. IF WITHIN THREE YEARS OF THE STARTING DATE OF CERTIFIED CAPITAL
53 COMPANY PROGRAM SIX, THE CERTIFIED CAPITAL COMPANY HAS NOT ACHIEVED A
54 MATCH OF AT LEAST ONE HUNDRED PERCENT OF THE AMOUNT OF QUALIFIED INVEST-
55 MENTS MADE BY SUCH CERTIFIED CAPITAL COMPANY WITH PROGRAM SIX CERTIFIED
56 CAPITAL COMPANY AS OF SUCH DATE, THE SPECIFIC CERTIFIED CAPITAL COMPANY
A. 7985--B 5
1 SHALL NOT BE PERMITTED TO RECEIVE MANAGEMENT FEES UNTIL IT HAS ACHIEVED
2 SUCH MATCH. IF WITHIN FIVE YEARS OF THE STARTING DATE OF CERTIFIED CAPI-
3 TAL COMPANY PROGRAM SIX, THE CERTIFIED CAPITAL COMPANY HAS NOT ACHIEVED
4 A MATCH OF AT LEAST ONE HUNDRED PERCENT OF THE AMOUNT OF QUALIFIED
5 INVESTMENTS MADE BY SUCH CERTIFIED CAPITAL COMPANY WITH PROGRAM SIX
6 CERTIFIED CAPITAL COMPANY AS OF SUCH DATE, THE SPECIFIC CERTIFIED CAPI-
7 TAL COMPANY SHALL NOT BE PERMITTED TO RECEIVE MANAGEMENT FEES UNTIL IT
8 HAS ACHIEVED SUCH MATCH.
9 S 10. Subparagraph (A) of paragraph 6 of subdivision (c) of section
10 11 of the tax law, as amended by section 19 of part A of chapter 63 of
11 the laws of 2005, is amended to read as follows:
12 (A) As soon as practicable after the receipt of certified capital or
13 an irrevocable funding commitment subject only to the receipt of an
14 allocation pursuant to subdivision (h) of this section, (i) the name of
15 each certified investor from which the certified capital was received,
16 including such certified investor's insurance tax identification number;
17 (ii) the amount of each certified investor's investment of certified
18 capital; and (iii) the date on which the certified capital was received.
19 Provided, however, that requests for allocation of tax credits with
20 respect to certified capital company program two by certified capital
21 companies on behalf of their certified investors which are received by
22 the superintendent on or before March first, two thousand shall be
23 treated as having been received on March first, two thousand for tax
24 credits to be utilized in two thousand one, and if satisfactory, shall
25 be given equal priority for allocation, and provided, however, that
26 requests for allocation of tax credits with respect to certified capital
27 company program three by certified capital companies on behalf of their
28 certified investors which are received by the superintendent on or
29 before December first, two thousand shall be treated as having been
30 received on December first, two thousand for tax credits to be utilized
31 in two thousand two, and if satisfactory, shall be given equal priority
32 for allocation, and provided, however, that requests for allocation of
33 tax credits with respect to certified capital company program four by
34 certified capital companies on behalf of their certified investors which
35 are received by the superintendent on or before December first, two
36 thousand four shall be treated as having been received on December
37 first, two thousand four for tax credits to be utilized in two thousand
38 six, and if satisfactory, shall be given equal priority for allocation,
39 and provided, however, that requests for allocation of tax credits with
40 respect to certified capital company program five by certified capital
41 companies on behalf of their certified investors which are received by
42 the superintendent on or before the later of (i) November first, two
43 thousand five and (ii) the one hundred twentieth day after the date on
44 which the superintendent began accepting applications for certification
45 in connection with certified capital company program five pursuant to
46 paragraph nine of subdivision (b) of this section shall be treated as
47 having been received on such later date for tax credits to be utilized
48 in two thousand seven, and if satisfactory, shall be given equal priori-
49 ty for allocation, AND PROVIDED, HOWEVER, THAT REQUESTS FOR ALLOCATION
50 OF TAX CREDITS WITH RESPECT TO CERTIFIED CAPITAL COMPANY PROGRAM SIX BY
51 CERTIFIED CAPITAL COMPANIES ON BEHALF OF THEIR CERTIFIED INVESTORS WHICH
52 ARE RECEIVED BY THE SUPERINTENDENT ON OR BEFORE THE LATER OF (I) NOVEM-
53 BER FIRST, TWO THOUSAND ELEVEN AND (II) THE ONE HUNDRED TWENTIETH DAY
54 AFTER THE DATE ON WHICH THE SUPERINTENDENT BEGAN ACCEPTING APPLICATIONS
55 FOR CERTIFICATION IN CONNECTION WITH CERTIFIED CAPITAL PROGRAM SIX
56 PURSUANT TO PARAGRAPH NINE OF SUBDIVISION (B) OF THIS SECTION SHALL BE
A. 7985--B 6
1 TREATED AS HAVING BEEN RECEIVED ON SUCH LATER DATE FOR TAX CREDITS TO BE
2 UTILIZED IN TWO THOUSAND FIFTEEN, AND IF SATISFACTORY, SHALL BE GIVEN
3 EQUAL PRIORITY FOR ALLOCATION.
4 S 11. Subparagraph (B) of paragraph 6 of subdivision (c) of section 11
5 of the tax law, as amended by section 19 of part A of chapter 63 of the
6 laws of 2005, is amended to read as follows:
7 (B) On an annual basis, on or before January thirty-first of each
8 year, (i) the amount of the certified capital company's certified capi-
9 tal at the end of the immediately preceding year; (ii) whether or not
10 the certified capital company has invested more than fifteen percent of
11 its total certified capital in any one business; (iii) all qualified
12 investments that the certified capital company made during the previous
13 calendar year, including the number of employees of each qualified busi-
14 ness in which it has made investments at the time of such investment and
15 as of December first of the preceding calendar year. For any qualified
16 business where the certified capital company no longer has an invest-
17 ment, the certified capital company shall provide employment figures for
18 such company as of the last day before the investment was terminated.
19 Such report shall provide a separate accounting by each certified capi-
20 tal company program; [and] (iv) all qualified investments made in empire
21 zones and underserved areas outside such empire zones as required under
22 certified capital company program three, certified capital company
23 program four and certified capital company program five; AND (V) WITH
24 RESPECT TO CERTIFIED CAPITAL COMPANY PROGRAM SIX, ALL QUALIFIED INVEST-
25 MENTS MADE IN UNDERSERVED AREAS, ALL QUALIFIED INVESTMENTS MADE IN QUAL-
26 IFIED SEED FUNDS, INCLUDING THE NUMBER OF EMPLOYEES OF EACH BUSINESS IN
27 WHICH A QUALIFIED SEED FUND HAS MADE INVESTMENTS AT THE TIME OF SUCH
28 INVESTMENT AND AS OF DECEMBER FIRST OF THE PRECEDING CALENDAR YEAR AND
29 THE MATCH ACHIEVED BY THE CERTIFIED CAPITAL COMPANY. FOR ANY BUSINESS
30 WHERE THE QUALIFIED SEED FUND NO LONGER HAS AN INVESTMENT, THE CERTIFIED
31 CAPITAL COMPANY SHALL PROVIDE EMPLOYMENT FIGURES FOR SUCH COMPANY AS OF
32 THE LAST DAY BEFORE THE INVESTMENT WAS TERMINATED.
33 S 12. Paragraph 1 of subdivision (d) of section 11 of the tax law, as
34 amended by section 19 of part A of chapter 63 of the laws of 2005, is
35 amended to read as follows:
36 (1) A certified capital company may make qualified distributions at
37 any time. In order for a certified capital company to make a distrib-
38 ution other than a qualified distribution from a certified capital
39 company program, to its equity holders, either (A) the aggregate cumula-
40 tive amount of all qualified investments for such program must equal or
41 exceed one hundred percent of its certified capital allocable to such
42 certified capital company program AND WITH RESPECT TO PROGRAM SIX, THE
43 CERTIFIED CAPITAL COMPANY MUST HAVE ACHIEVED A MATCH OF AT LEAST NINETY
44 PERCENT OF THE CERTIFIED CAPITAL ALLOCABLE TO SUCH CERTIFIED CAPITAL
45 COMPANY, or (B) it must have received written authorization to make such
46 distribution from the superintendent. In no event, however, shall any
47 such distribution to its equity holders, other than a qualified distrib-
48 ution, be made by a certified capital company from a certified capital
49 company program unless an amount equal cumulatively to at least ninety
50 percent of its certified capital of such program is invested in compa-
51 nies that conduct their principal business operations in New York state.
52 S 13. Paragraph 5 of subdivision (e) of section 11 of the tax law, as
53 amended by section 19 of part A of chapter 63 of the laws of 2005, is
54 amended to read as follows:
55 (5) Once a certified capital company has invested an amount cumula-
56 tively equal to one hundred percent of its certified capital with
A. 7985--B 7
1 respect to a particular certified capital company program in qualified
2 investments and has met all other requirements under this subdivision,
3 INCLUDING THE REQUIREMENT THAT A PROGRAM SIX CERTIFIED CAPITAL COMPANY
4 INVEST TEN PERCENT OF ITS CERTIFIED CAPITAL IN QUALIFIED SEED FUNDS AND
5 ACHIEVE A MATCH OF AT LEAST NINETY PERCENT OF THE CERTIFIED CAPITAL
6 ALLOCABLE TO SUCH CERTIFIED CAPITAL COMPANY, the certified capital
7 company shall no longer be subject to regulation by the superintendent
8 and shall no longer be subject to the requirements of subdivision (c) of
9 this section with respect to such program. Upon receiving documented
10 certification by a certified capital company that it has invested, WITH
11 RESPECT TO PROGRAMS ONE, TWO, THREE, FOUR AND FIVE, an amount equal to
12 one hundred percent of its certified capital AND, WITH RESPECT TO
13 PROGRAM SIX, AN AMOUNT EQUAL TO ONE HUNDRED PERCENT OF ITS CERTIFIED
14 CAPITAL WITH TEN PERCENT OF SUCH CERTIFIED CAPITAL INVESTED IN QUALIFIED
15 SEED FUNDS AND, WITH RESPECT TO PROGRAM SIX, ACHIEVED A MATCH OF AT
16 LEAST NINETY PERCENT OF THE CERTIFIED CAPITAL ALLOCABLE TO SUCH CERTI-
17 FIED CAPITAL COMPANY, the department shall have sixty days to notify
18 such certified capital company that it has or has not met such require-
19 ment with a reason for such determination if it has not, in the judgment
20 of the department, met such requirement. If the department does not
21 provide such notification within sixty days, the certified capital
22 company shall then be deemed to have met such requirement.
23 S 14. Subdivision (h) of section 11 of the tax law is amended by
24 adding a new paragraph 6 to read as follows:
25 (6) CERTIFIED CAPITAL COMPANY PROGRAM SIX. THE AGGREGATE AMOUNT OF
26 CERTIFIED CAPITAL FOR WHICH TAXPAYERS MAY BE ALLOCATED AND ALLOWED TAX
27 CREDITS PURSUANT TO THIS PARAGRAPH AND SUBDIVISION (K) OF SECTION
28 FIFTEEN HUNDRED ELEVEN OF THIS CHAPTER MAY NOT EXCEED ONE HUNDRED FIFTY
29 MILLION DOLLARS FOR CALENDAR YEAR TWO THOUSAND FIFTEEN, WHICH CERTIFIED
30 CAPITAL MAY BE INVESTED IN CERTIFIED CAPITAL COMPANIES BEGINNING IN
31 CALENDAR YEAR TWO THOUSAND ELEVEN.
32 DURING ANY CALENDAR YEAR IN WHICH THE LIMITATION DESCRIBED IN THIS
33 PARAGRAPH WILL LIMIT THE AMOUNT OF CERTIFIED CAPITAL, CERTIFIED CAPITAL
34 WILL BE ALLOCATED IN ORDER OF PRIORITY BASED UPON THE DATE OF FILING OF
35 INFORMATION DESCRIBED IN SUBPARAGRAPH (A) OF PARAGRAPH SIX OF SUBDIVI-
36 SION (C) OF THIS SECTION. THE SUPERINTENDENT SHALL ADVISE ANY CERTIFIED
37 CAPITAL COMPANY IN WRITING, WITHIN FIFTEEN DAYS AFTER RECEIVING SUCH
38 FILING, WHETHER THE LIMITATIONS OF THIS PARAGRAPH THEN IN EFFECT WILL BE
39 APPLICABLE WITH RESPECT TO THE INVESTMENTS AND CREDITS DESCRIBED IN SUCH
40 FILING WITH THE SUPERINTENDENT.
41 CERTIFIED CAPITAL MAY BE RAISED BY EACH CERTIFIED CAPITAL COMPANY WITH
42 RESPECT TO CERTIFIED CAPITAL COMPANY PROGRAM SIX AT ANY TIME SUBSEQUENT
43 TO ITS CERTIFICATION DATE, AND CREDITS SHALL BE ALLOCATED TO AND IRREVO-
44 CABLY VESTED BY THE STATE IN CERTIFIED INVESTORS AT THE TIME OF EACH
45 SUCH INVESTMENT AS PROVIDED IN THIS PARAGRAPH, ALTHOUGH SUCH CREDITS
46 SHALL NOT BE FIRST ALLOWED OR INCURRED FOR STATE TAX PURPOSES, UNTIL, AT
47 THE EARLIEST, TAX YEARS BEGINNING IN TWO THOUSAND FIFTEEN. IN ORDER TO
48 SATISFY THE REQUIREMENTS OF PARAGRAPH FIVE OF SUBDIVISION (E) OF THIS
49 SECTION, A CERTIFIED CAPITAL COMPANY MUST HAVE MADE, ON A CUMULATIVE
50 BASIS, (A) AN AMOUNT OF QUALIFIED INVESTMENTS IN QUALIFIED BUSINESSES
51 LOCATED IN UNDERSERVED AREAS EQUAL TO AT LEAST TWO-THIRDS OF THE CERTI-
52 FIED CAPITAL RAISED BY SUCH CERTIFIED CAPITAL COMPANY WITH RESPECT TO
53 CERTIFIED CAPITAL COMPANY PROGRAM SIX, (B) QUALIFIED INVESTMENTS IN
54 QUALIFIED SEED FUNDS IN AN AMOUNT EQUAL TO AT LEAST TEN PERCENT OF THE
55 CERTIFIED CAPITAL RAISED BY SUCH CERTIFIED CAPITAL COMPANY WITH RESPECT
56 TO CERTIFIED CAPITAL COMPANY PROGRAM SIX AND (C) QUALIFIED INVESTMENTS
A. 7985--B 8
1 IN QUALIFIED BUSINESSES THAT ARE INVOLVED IN COMMERCE FOR THE PRIMARY
2 PURPOSE OF DEVELOPING AND MANUFACTURING PRODUCTS AND SYSTEMS COVERED BY
3 THE ACTIVITIES SET FORTH IN PARAGRAPH (B) OF SUBDIVISION ONE OF SECTION
4 THIRTY-ONE HUNDRED TWO-E OF THE PUBLIC AUTHORITIES LAW AND HAVE A RATIO
5 OF RESEARCH AND DEVELOPMENT EXPENDITURES TO NET SALES WHICH EQUALS OR
6 EXCEEDS SIX PERCENT DURING THE FISCAL YEAR IMMEDIATELY PRECEDING THE
7 QUALIFIED INVESTMENT IN AN AMOUNT EQUAL TO AT LEAST THIRTY-THREE PERCENT
8 OF THE CERTIFIED CAPITAL RAISED BY SUCH CERTIFIED CAPITAL COMPANY WITH
9 RESPECT TO PROGRAM SIX; PROVIDED, HOWEVER, THAT ALL QUALIFIED INVEST-
10 MENTS IN QUALIFIED SEED FUNDS SHALL COUNT TOWARD THE AMOUNT REQUIRED BY
11 SUBPARAGRAPH (C) OF THIS PARAGRAPH.
12 S 15. Subdivision (i) of section 11 of the tax law, as amended by
13 section 19 of part A of chapter 63 of the laws of 2005, is amended to
14 read as follows:
15 (i) Maximum certified capital. The maximum amount of certified capital
16 per certified capital company program invested in one or more certified
17 capital companies allowed in any one year to any one certified investor
18 shall not exceed ten million dollars for certified capital company
19 programs one and three, [and] eight million dollars for certified capi-
20 tal company programs two, four and five, AND FIFTEEN MILLION DOLLARS
21 FROM CERTIFIED CAPITAL COMPANY PROGRAM SIX for such year, provided,
22 however, that if the aggregate amount of certified capital for such
23 year, as set forth in subdivision (h) of this section, has not been
24 reached sixty days prior to the end of the year to which such aggregate
25 amount applies, the provisions of this subdivision shall cease to apply
26 for the remainder of such year. In addition, the aggregate amount of tax
27 credits allowed in any taxable year to any affiliated group of taxpayers
28 in relation to certified capital may not exceed such maximum amount,
29 whether or not such taxpayers file a combined return pursuant to subdi-
30 vision (f) of section fifteen hundred fifteen of this chapter. For
31 purposes of the preceding sentence, the term "affiliated group" shall
32 have the same meaning as described in section 1504 of the internal
33 revenue code, except that the references to "at least eighty percent" in
34 such section 1504 shall be read as "more than fifty percent".
35 S 16. Subdivision (j) of section 11 of the tax law, as amended by
36 section 19 of part A of chapter 63 of the laws of 2005, is amended to
37 read as follows:
38 (j) Reports. The superintendent shall report to the governor, the
39 temporary president of the senate, and the speaker of the assembly, on
40 or before June first of each year beginning in the year two thousand,
41 the number of certified capital companies holding certified capital; the
42 amount of certified capital invested in each certified capital company;
43 the cumulative amount that each certified capital company has invested
44 as of January first of the year two thousand and the cumulative total
45 each year thereafter; the cumulative amount that the investments of each
46 certified capital company have leveraged in terms of capital invested by
47 other sources of capital in qualified businesses at the same time or
48 subsequent to investments made by a certified capital company in such
49 businesses; the total amount of tax credits granted under this section
50 each year that credits have been awarded under this section and subdivi-
51 sion (k) of section fifteen hundred eleven of this chapter; the perform-
52 ance of each certified capital company with regard to the requirements
53 for recertification set forth in subdivision (c) of this section; the
54 classification of companies in which each certified capital company has
55 invested according to industrial sector and size of company; the total
56 gross number of jobs created by investments made by each certified capi-
A. 7985--B 9
1 tal company using certified capital and the number of jobs retained; the
2 location of companies in which each certified capital company has
3 invested in a manner to indicate if the requirements for qualified
4 investments in qualified businesses located in empire zones established
5 pursuant to article eighteen-B of the general municipal law set forth
6 for programs three, four and five and in underserved areas outside such
7 empire zones have been met; the total gross number of jobs created in
8 empire zones established pursuant to article eighteen-B of the general
9 municipal law and in underserved areas outside such empire zones made by
10 each certified capital company using certified capital in certified
11 capital company programs three, four and five, reported by geographic
12 location of each empire zone and underserved area and the number of jobs
13 retained; and those certified capital companies that have been decerti-
14 fied, or have had their certifications revoked, including the reasons
15 for decertification or revocation; THE LOCATION OF COMPANIES IN WHICH
16 EACH CERTIFIED CAPITAL COMPANY HAS INVESTED IN A MANNER TO INDICATE IF
17 THE REQUIREMENTS FOR QUALIFIED INVESTMENTS IN QUALIFIED BUSINESSES
18 LOCATED IN UNDERSERVED AREAS AS SET FORTH IN PROGRAM SIX; THE TOTAL
19 GROSS NUMBER OF JOBS CREATED IN UNDERSERVED AREAS USING CERTIFIED CAPI-
20 TAL IN CERTIFIED CAPITAL COMPANY PROGRAM SIX AND THE NUMBER OF JOBS
21 RETAINED; THE AMOUNT OF QUALIFIED INVESTMENTS MADE INTO QUALIFIED SEED
22 FUNDS FOR PROGRAM SIX CERTIFIED CAPITAL COMPANIES; THE CLASSIFICATION OF
23 COMPANIES IN WHICH EACH QUALIFIED SEED FUND HAS INVESTED ACCORDING TO
24 INDUSTRIAL SECTOR AND SIZE OF COMPANY; THE TOTAL GROSS NUMBER OF JOBS
25 CREATED BY INVESTMENTS MADE BY EACH QUALIFIED SEED FUND USING THE NUMBER
26 OF JOBS RETAINED.
27 S 17. Paragraph 2 of subdivision (k) of section 1511 of the tax law,
28 as amended by section 2 of part S of chapter 407 of the laws of 1999, is
29 amended to read as follows:
30 (2) Ten percent of such credit shall be allowed in the taxable year to
31 which such investment is allocated pursuant to PARAGRAPHS ONE THROUGH
32 FIVE OF subdivision (h) of section eleven of this chapter and in each of
33 the nine following taxable years. TWENTY-FIVE PERCENT OF SUCH CREDIT
34 SHALL BE ALLOWED IN THE TAXABLE YEAR TO WHICH SUCH INVESTMENT IS ALLO-
35 CATED PURSUANT TO PARAGRAPH SIX OF SUBDIVISION (H) OF SECTION ELEVEN OF
36 THIS CHAPTER AND IN EACH OF THE THREE FOLLOWING TAXABLE YEARS. In addi-
37 tion, in any taxable year subsequent to the taxable year for which
38 [such] ANY investment is so allocated UNDER SUBDIVISION (H), any amount
39 carried forward under paragraphs three and four of this subdivision may
40 be carried forward indefinitely until such credits are utilized.
41 S 18. Section 84 of part A of chapter 62 of the laws of 2011 relating
42 to constituting chapter 18-A of the consolidated laws relating to finan-
43 cial services is REPEALED.
44 S 19. This act shall take effect immediately.
