Bill Text: NY A07985 | 2011-2012 | General Assembly | Amended
NOTE: There are more recent revisions of this legislation. Read Latest Draft
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
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--A
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
AN ACT to amend the tax law, in relation to program six certified capi-
tal companies
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-
15 ipation instruments such as options or warrants, provided however, in
16 the case of certified capital programs three, four [and], five[,] AND
17 SIX that any such debt instrument have a maturity of at least twenty-
18 four months from the date such debt is incurred; and further provided
19 that a certified capital company, after the investment and assuming full
20 conversion and exercise of any equity participation instruments, shall
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD10508-07-1
A. 7985--A 2
1 not own more than fifty percent of the voting equity of the qualified
2 business, except in the case of a follow-on investment where a specific
3 exemption is granted by the department under subparagraph (D) of para-
4 graph one of subdivision (c) of this section OR AN INVESTMENT IN A QUAL-
5 IFIED SEED FUND BY A PROGRAM SIX CERTIFIED CAPITAL COMPANY. Further-
6 more, except in the case of a follow-on investment, if a certified
7 capital company owns more than fifteen percent of the equity in a compa-
8 ny or has a seat on the board of directors of such company, then a
9 certified capital company cannot invest in such company unless the
10 following conditions are met: (i) at least one other investor who is not
11 an affiliate of the certified capital company participates in the same
12 round of investment on the same terms and conditions as the certified
13 capital company; and (ii) the certified capital company and its affil-
14 iates invest no more than fifty percent of the total investment made in
15 that round of investment.
16 S 3. Subdivision (a) of section 11 of the tax law is amended by adding
17 two new paragraphs 17 and 18 to read as follows:
18 17. "QUALIFIED SEED FUND" - ANY FUND THAT HAS BEEN CERTIFIED BY THE
19 SUPERINTENDENT AS SUCH BY RULE OR REGULATION. THE SUPERINTENDENT MAY
20 CERTIFY PARTNERSHIPS, CORPORATIONS, TRUSTS OR LIMITED LIABILITY COMPA-
21 NIES, ORGANIZED ON A FOR-PROFIT BASIS, WHICH SUBMIT AN APPLICATION TO BE
22 DESIGNATED AS A QUALIFIED SEED FUND OPERATOR IF SUCH APPLICANT IS
23 LOCATED, HEADQUARTERED AND LICENSED OR REGISTERED TO CONDUCT BUSINESS IN
24 NEW YORK.
25 18. "MATCH" - A CASH INVESTMENT IN OR LOAN TO A QUALIFIED BUSINESS
26 MADE NO MORE THAN THREE MONTHS BEFORE OR SIX MONTHS AFTER AN INVESTMENT
27 OF CERTIFIED CAPITAL BY A CERTIFIED CAPITAL COMPANY PROGRAM SIX IN SUCH
28 QUALIFIED BUSINESS, OTHER THAN AN INVESTMENT MADE WITH CERTIFIED CAPI-
29 TAL. THE TERM SHALL ALSO INCLUDE CASH INVESTED IN OR LENT TO A QUALIFIED
30 BUSINESS BY A CERTIFIED CAPITAL COMPANY THAT HAS INVESTED ONE HUNDRED
31 PERCENT OF ITS CERTIFIED CAPITAL IN QUALIFIED BUSINESSES.
32 S 4. Paragraph 9 of subdivision (b) of section 11 of the tax law, as
33 amended by section 19 of part A of chapter 63 of the laws of 2005, is
34 amended to read as follows:
35 (9) The superintendent shall start accepting applications to become a
36 certified capital company in certified capital company program two by
37 November first, nineteen hundred ninety-nine, and shall start accepting
38 applications to become a certified capital company in certified capital
39 company program three by August first, two thousand, and shall begin
40 accepting applications to become a certified capital company in certi-
41 fied capital company program four by the later of August first, two
42 thousand four or not more than sixty days after the effective date of
43 section one of part D of chapter fifty-nine of the laws of two thousand
44 four and shall begin accepting applications to become a certified capi-
45 tal company in certified capital company program five by the later of
46 July first, two thousand five or not more than sixty days after the
47 effective date of the chapter of the laws of two thousand five which
48 amended this paragraph, AND SHALL BEGIN ACCEPTING APPLICATIONS TO BECOME
49 A CERTIFIED CAPITAL COMPANY IN PROGRAM SIX BY JULY FIRST, TWO THOUSAND
50 ELEVEN OR NOT MORE THAN SIXTY DAYS AFTER THE EFFECTIVE DATE OF THE CHAP-
51 TER OF THE LAWS OF TWO THOUSAND ELEVEN WHICH AMENDED THIS PARAGRAPH.
52 S 5. Subparagraph (A) of paragraph 1 of subdivision (c) of section 11
53 of the tax law, as amended by section 19 of part A of chapter 63 of the
54 laws of 2005, is amended to read as follows:
55 (A) Within two years after the starting date of a specific certified
56 capital company program of a certified capital company, at least twen-
A. 7985--A 3
1 ty-five percent of its certified capital allocable to such certified
2 capital company program must be placed in qualified investments AND IN
3 THE CASE OF PROGRAM SIX, AT LEAST TEN PERCENT OF ITS CERTIFIED CAPITAL
4 MUST HAVE BEEN PLACED IN QUALIFIED SEED FUNDS. ALL QUALIFIED INVESTMENTS
5 MADE IN QUALIFIED SEED FUNDS UNDER PROGRAM SIX SHALL COUNT TOWARDS THE
6 TWENTY-FIVE PERCENT INVESTMENT REQUIREMENT OF THIS SUBPARAGRAPH.
7 S 6. Subparagraph (C) of paragraph 1 of subdivision (c) of section 11
8 of the tax law, as amended by section 19 of part A of chapter 63 of the
9 laws of 2005, is amended to read as follows:
10 (C) Within four years after the starting date of a specific certified
11 capital company program of a certified capital company, at least fifty
12 percent of its certified capital allocable to such certified capital
13 company program must be placed in qualified investments, at least fifty
14 percent of which must have been placed in early stage businesses, except
15 that in the case of program four and any subsequent program, at least
16 twenty-five percent of which must have been placed in early stage busi-
17 nesses and an additional twenty-five percent of which must have been
18 placed in start-up businesses, and except that in the case of qualified
19 investments made in qualified businesses located in empire zones estab-
20 lished pursuant to article eighteen-B of the general municipal law under
21 the provisions of certified capital company program three, program four
22 and program five from allocations of certified capital made specifically
23 for such targeted investments in such zones, the requirement for quali-
24 fied investments in early stage and start-up businesses shall not apply.
25 AN INVESTMENT IN A QUALIFIED SEED FUND SHALL COUNT TOWARDS THE REQUIRE-
26 MENT UNDER PROGRAM SIX FOR QUALIFIED INVESTMENTS IN EARLY STAGE BUSI-
27 NESSES.
28 S 7. Subparagraph (D) of paragraph 1 of subdivision (c) of section 11
29 of the tax law, as amended by section 19 of part A of chapter 63 of the
30 laws of 2005, is amended to read as follows:
31 (D) A certified capital company, at least fifteen working days prior
32 to making a proposed investment in a specific business, shall certify in
33 writing to the superintendent that (i) the business in which it proposes
34 to invest meets the definition of a qualified business as set forth in
35 subdivision (a) of this section or, in the case of a follow-on invest-
36 ment, that such business continues to meet the requirements set forth in
37 subparagraphs (A) and (C) of paragraph seven of subdivision (a) of this
38 section and, in either case, an explanation of its determination that
39 the business meets such requirements, [and] (ii) with respect to certi-
40 fied capital company program three, program four and program five,
41 whether or not such business is located in an empire zone established
42 pursuant to article eighteen-B of the general municipal law or in an
43 underserved area outside an empire zone AND (III) WITH RESPECT TO CERTI-
44 FIED CAPITAL COMPANY PROGRAM SIX, WHETHER OR NOT SUCH INVESTMENT IS IN A
45 QUALIFIED SEED FUND. The certification to the superintendent shall
46 include a sworn statement from the business in which the certified capi-
47 tal company proposes to invest, which statement shall evidence the
48 intention of the business to maintain its headquarters in New York and
49 conduct its primary business operations in the state of New York after
50 its receipt of the investment by the certified capital company. If the
51 superintendent determines that the business does not meet the definition
52 of a qualified business, or, in the case of a follow-on investment, that
53 such business does not meet the requirements set forth in subparagraphs
54 (A) and (C) of paragraph seven of subdivision (a) of this section, then
55 it shall, within the fifteen working day period prior to the making of
56 the proposed investment, notify the certified capital company of its
A. 7985--A 4
1 determination and provide an explanation thereof, provided, however,
2 that the department may, upon written request of a certified capital
3 company and at the discretion of the department, grant, in writing, an
4 exemption to the percentage limitations of paragraph ten of subdivision
5 (a) of this section.
6 S 8. Subparagraph (F) of paragraph 1 of subdivision (c) of section 11
7 of the tax law, as amended by section 19 of part A of chapter 63 of the
8 laws of 2005, is amended to read as follows:
9 (F) If within ten years after the starting date of certified capital
10 company program four [or], program five OR PROGRAM SIX, and within
11 twelve years after the starting date of certified capital company
12 programs one, two, and three, one hundred percent of the certified capi-
13 tal allocable to a certified capital company participating in [such]
14 program ONE, TWO, THREE, FOUR OR FIVE has not been placed in qualified
15 investments AND, WITH RESPECT TO PROGRAM SIX, ONE HUNDRED PERCENT OF THE
16 CERTIFIED CAPITAL HAS NOT BEEN PLACED IN QUALIFIED INVESTMENTS WITH TEN
17 PERCENT OF SUCH AMOUNT BEING PLACED IN QUALIFIED SEED FUNDS, the specif-
18 ic certified capital company shall no longer be permitted to receive
19 management fees; provided that such restriction shall not apply (i) with
20 respect to certified capital company programs one, two, and three, to
21 any certified capital company that has not, prior to October thirty-
22 first, two thousand four, received, as opposed to accrued, any manage-
23 ment fees, or (ii) with respect to any certified capital company
24 program, to a certified capital company in which at least fifty percent
25 of the voting stock, capital, membership interests, or other beneficial
26 ownership interests, as the case may be, are owned by an entity that is
27 managed, directly or indirectly, by a non-profit corporation.
28 S 9. Paragraph 1 of subdivision (c) of section 11 of the tax law is
29 amended by adding a new subparagraph (G) to read as follows:
30 (G) IF WITHIN ONE YEAR OF THE STARTING DATE OF CERTIFIED CAPITAL
31 COMPANY PROGRAM SIX, THE CERTIFIED CAPITAL COMPANY HAS NOT ACHIEVED A
32 MATCH OF AT LEAST ONE HUNDRED PERCENT OF THE AMOUNT OF QUALIFIED INVEST-
33 MENTS MADE BY SUCH CERTIFIED CAPITAL COMPANY WITH PROGRAM SIX CERTIFIED
34 CAPITAL AS OF SUCH DATE, THE SPECIFIC CERTIFIED CAPITAL COMPANY SHALL
35 NOT BE PERMITTED TO RECEIVE MANAGEMENT FEES UNTIL IT HAS ACHIEVED SUCH
36 MATCH. IF WITHIN THREE YEARS OF THE STARTING DATE OF CERTIFIED CAPITAL
37 COMPANY PROGRAM SIX, THE CERTIFIED CAPITAL COMPANY HAS NOT ACHIEVED A
38 MATCH OF AT LEAST ONE HUNDRED PERCENT OF THE AMOUNT OF QUALIFIED INVEST-
39 MENTS MADE BY SUCH CERTIFIED CAPITAL COMPANY WITH PROGRAM SIX CERTIFIED
40 CAPITAL COMPANY AS OF SUCH DATE, THE SPECIFIC CERTIFIED CAPITAL COMPANY
41 SHALL NOT BE PERMITTED TO RECEIVE MANAGEMENT FEES UNTIL IT HAS ACHIEVED
42 SUCH MATCH. IF WITHIN FIVE YEARS OF THE STARTING DATE OF CERTIFIED CAPI-
43 TAL COMPANY PROGRAM SIX, THE CERTIFIED CAPITAL COMPANY HAS NOT ACHIEVED
44 A MATCH OF AT LEAST ONE HUNDRED PERCENT OF THE AMOUNT OF QUALIFIED
45 INVESTMENTS MADE BY SUCH CERTIFIED CAPITAL COMPANY WITH PROGRAM SIX
46 CERTIFIED CAPITAL COMPANY AS OF SUCH DATE, THE SPECIFIC CERTIFIED CAPI-
47 TAL COMPANY SHALL NOT BE PERMITTED TO RECEIVE MANAGEMENT FEES UNTIL IT
48 HAS ACHIEVED SUCH MATCH.
49 S 10. Subparagraph (A) of paragraph 6 of subdivision (c) of section
50 11 of the tax law, as amended by section 19 of part A of chapter 63 of
51 the laws of 2005, is amended to read as follows:
52 (A) As soon as practicable after the receipt of certified capital or
53 an irrevocable funding commitment subject only to the receipt of an
54 allocation pursuant to subdivision (h) of this section, (i) the name of
55 each certified investor from which the certified capital was received,
56 including such certified investor's insurance tax identification number;
A. 7985--A 5
1 (ii) the amount of each certified investor's investment of certified
2 capital; and (iii) the date on which the certified capital was received.
3 Provided, however, that requests for allocation of tax credits with
4 respect to certified capital company program two by certified capital
5 companies on behalf of their certified investors which are received by
6 the superintendent on or before March first, two thousand shall be
7 treated as having been received on March first, two thousand for tax
8 credits to be utilized in two thousand one, and if satisfactory, shall
9 be given equal priority for allocation, and provided, however, that
10 requests for allocation of tax credits with respect to certified capital
11 company program three by certified capital companies on behalf of their
12 certified investors which are received by the superintendent on or
13 before December first, two thousand shall be treated as having been
14 received on December first, two thousand for tax credits to be utilized
15 in two thousand two, and if satisfactory, shall be given equal priority
16 for allocation, and provided, however, that requests for allocation of
17 tax credits with respect to certified capital company program four by
18 certified capital companies on behalf of their certified investors which
19 are received by the superintendent on or before December first, two
20 thousand four shall be treated as having been received on December
21 first, two thousand four for tax credits to be utilized in two thousand
22 six, and if satisfactory, shall be given equal priority for allocation,
23 and provided, however, that requests for allocation of tax credits with
24 respect to certified capital company program five by certified capital
25 companies on behalf of their certified investors which are received by
26 the superintendent on or before the later of (i) November first, two
27 thousand five and (ii) the one hundred twentieth day after the date on
28 which the superintendent began accepting applications for certification
29 in connection with certified capital company program five pursuant to
30 paragraph nine of subdivision (b) of this section shall be treated as
31 having been received on such later date for tax credits to be utilized
32 in two thousand seven, and if satisfactory, shall be given equal priori-
33 ty for allocation, AND PROVIDED, HOWEVER, THAT REQUESTS FOR ALLOCATION
34 OF TAX CREDITS WITH RESPECT TO CERTIFIED CAPITAL COMPANY PROGRAM SIX BY
35 CERTIFIED CAPITAL COMPANIES ON BEHALF OF THEIR CERTIFIED INVESTORS WHICH
36 ARE RECEIVED BY THE SUPERINTENDENT ON OR BEFORE THE LATER OF (I) NOVEM-
37 BER FIRST, TWO THOUSAND ELEVEN AND (II) THE ONE HUNDRED TWENTIETH DAY
38 AFTER THE DATE ON WHICH THE SUPERINTENDENT BEGAN ACCEPTING APPLICATIONS
39 FOR CERTIFICATION IN CONNECTION WITH CERTIFIED CAPITAL PROGRAM SIX
40 PURSUANT TO PARAGRAPH NINE OF SUBDIVISION (B) OF THIS SECTION SHALL BE
41 TREATED AS HAVING BEEN RECEIVED ON SUCH LATER DATE FOR TAX CREDITS TO BE
42 UTILIZED IN TWO THOUSAND FIFTEEN, AND IF SATISFACTORY, SHALL BE GIVEN
43 EQUAL PRIORITY FOR ALLOCATION.
44 S 11. Subparagraph (B) of paragraph 6 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 (B) On an annual basis, on or before January thirty-first of each
48 year, (i) the amount of the certified capital company's certified capi-
49 tal at the end of the immediately preceding year; (ii) whether or not
50 the certified capital company has invested more than fifteen percent of
51 its total certified capital in any one business; (iii) all qualified
52 investments that the certified capital company made during the previous
53 calendar year, including the number of employees of each qualified busi-
54 ness in which it has made investments at the time of such investment and
55 as of December first of the preceding calendar year. For any qualified
56 business where the certified capital company no longer has an invest-
A. 7985--A 6
1 ment, the certified capital company shall provide employment figures for
2 such company as of the last day before the investment was terminated.
3 Such report shall provide a separate accounting by each certified capi-
4 tal company program; [and] (iv) all qualified investments made in empire
5 zones and underserved areas outside such empire zones as required under
6 certified capital company program three, certified capital company
7 program four and certified capital company program five; AND (V) WITH
8 RESPECT TO CERTIFIED CAPITAL COMPANY PROGRAM SIX, ALL QUALIFIED INVEST-
9 MENTS MADE IN UNDERSERVED AREAS, ALL QUALIFIED INVESTMENTS MADE IN QUAL-
10 IFIED SEED FUNDS, INCLUDING THE NUMBER OF EMPLOYEES OF EACH BUSINESS IN
11 WHICH A QUALIFIED SEED FUND HAS MADE INVESTMENTS AT THE TIME OF SUCH
12 INVESTMENT AND AS OF DECEMBER FIRST OF THE PRECEDING CALENDAR YEAR AND
13 THE MATCH ACHIEVED BY THE CERTIFIED CAPITAL COMPANY. FOR ANY BUSINESS
14 WHERE THE QUALIFIED SEED FUND NO LONGER HAS AN INVESTMENT, THE CERTIFIED
15 CAPITAL COMPANY SHALL PROVIDE EMPLOYMENT FIGURES FOR SUCH COMPANY AS OF
16 THE LAST DAY BEFORE THE INVESTMENT WAS TERMINATED.
17 S 12. Paragraph 1 of subdivision (d) of section 11 of the tax law, as
18 amended by section 19 of part A of chapter 63 of the laws of 2005, is
19 amended to read as follows:
20 (1) A certified capital company may make qualified distributions at
21 any time. In order for a certified capital company to make a distrib-
22 ution other than a qualified distribution from a certified capital
23 company program, to its equity holders, either (A) the aggregate cumula-
24 tive amount of all qualified investments for such program must equal or
25 exceed one hundred percent of its certified capital allocable to such
26 certified capital company program AND WITH RESPECT TO PROGRAM SIX, THE
27 CERTIFIED CAPITAL COMPANY MUST HAVE ACHIEVED A MATCH OF AT LEAST NINETY
28 PERCENT OF THE CERTIFIED CAPITAL ALLOCABLE TO SUCH CERTIFIED CAPITAL
29 COMPANY, or (B) it must have received written authorization to make such
30 distribution from the superintendent. In no event, however, shall any
31 such distribution to its equity holders, other than a qualified distrib-
32 ution, be made by a certified capital company from a certified capital
33 company program unless an amount equal cumulatively to at least ninety
34 percent of its certified capital of such program is invested in compa-
35 nies that conduct their principal business operations in New York state.
36 S 13. Paragraph 5 of subdivision (e) of section 11 of the tax law, as
37 amended by section 19 of part A of chapter 63 of the laws of 2005, is
38 amended to read as follows:
39 (5) Once a certified capital company has invested an amount cumula-
40 tively equal to one hundred percent of its certified capital with
41 respect to a particular certified capital company program in qualified
42 investments and has met all other requirements under this subdivision,
43 INCLUDING THE REQUIREMENT THAT A PROGRAM SIX CERTIFIED CAPITAL COMPANY
44 INVEST TEN PERCENT OF ITS CERTIFIED CAPITAL IN QUALIFIED SEED FUNDS AND
45 ACHIEVE A MATCH OF AT LEAST NINETY PERCENT OF THE CERTIFIED CAPITAL
46 ALLOCABLE TO SUCH CERTIFIED CAPITAL COMPANY, the certified capital
47 company shall no longer be subject to regulation by the superintendent
48 and shall no longer be subject to the requirements of subdivision (c) of
49 this section with respect to such program. Upon receiving documented
50 certification by a certified capital company that it has invested, WITH
51 RESPECT TO PROGRAMS ONE, TWO, THREE, FOUR AND FIVE, an amount equal to
52 one hundred percent of its certified capital AND, WITH RESPECT TO
53 PROGRAM SIX, AN AMOUNT EQUAL TO ONE HUNDRED PERCENT OF ITS CERTIFIED
54 CAPITAL WITH TEN PERCENT OF SUCH CERTIFIED CAPITAL INVESTED IN QUALIFIED
55 SEED FUNDS AND, WITH RESPECT TO PROGRAM SIX, ACHIEVED A MATCH OF AT
56 LEAST NINETY PERCENT OF THE CERTIFIED CAPITAL ALLOCABLE TO SUCH CERTI-
A. 7985--A 7
1 FIED CAPITAL COMPANY, the department shall have sixty days to notify
2 such certified capital company that it has or has not met such require-
3 ment with a reason for such determination if it has not, in the judgment
4 of the department, met such requirement. If the department does not
5 provide such notification within sixty days, the certified capital
6 company shall then be deemed to have met such requirement.
7 S 14. Subdivision (h) of section 11 of the tax law is amended by
8 adding a new paragraph 6 to read as follows:
9 (6) CERTIFIED CAPITAL COMPANY PROGRAM SIX. THE AGGREGATE AMOUNT OF
10 CERTIFIED CAPITAL FOR WHICH TAXPAYERS MAY BE ALLOCATED AND ALLOWED TAX
11 CREDITS PURSUANT TO THIS PARAGRAPH AND SUBDIVISION (K) OF SECTION
12 FIFTEEN HUNDRED ELEVEN OF THIS CHAPTER MAY NOT EXCEED ONE HUNDRED FIFTY
13 MILLION DOLLARS FOR CALENDAR YEAR TWO THOUSAND FIFTEEN, WHICH CERTIFIED
14 CAPITAL MAY BE INVESTED IN CERTIFIED CAPITAL COMPANIES BEGINNING IN
15 CALENDAR YEAR TWO THOUSAND ELEVEN.
16 DURING ANY CALENDAR YEAR IN WHICH THE LIMITATION DESCRIBED IN THIS
17 PARAGRAPH WILL LIMIT THE AMOUNT OF CERTIFIED CAPITAL, CERTIFIED CAPITAL
18 WILL BE ALLOCATED IN ORDER OF PRIORITY BASED UPON THE DATE OF FILING OF
19 INFORMATION DESCRIBED IN SUBPARAGRAPH (A) OF PARAGRAPH SIX OF SUBDIVI-
20 SION (C) OF THIS SECTION. THE SUPERINTENDENT SHALL ADVISE ANY CERTIFIED
21 CAPITAL COMPANY IN WRITING, WITHIN FIFTEEN DAYS AFTER RECEIVING SUCH
22 FILING, WHETHER THE LIMITATIONS OF THIS PARAGRAPH THEN IN EFFECT WILL BE
23 APPLICABLE WITH RESPECT TO THE INVESTMENTS AND CREDITS DESCRIBED IN SUCH
24 FILING WITH THE SUPERINTENDENT.
25 CERTIFIED CAPITAL MAY BE RAISED BY EACH CERTIFIED CAPITAL COMPANY WITH
26 RESPECT TO CERTIFIED CAPITAL COMPANY PROGRAM SIX AT ANY TIME SUBSEQUENT
27 TO ITS CERTIFICATION DATE, AND CREDITS SHALL BE ALLOCATED TO AND IRREVO-
28 CABLY VESTED BY THE STATE IN CERTIFIED INVESTORS AT THE TIME OF EACH
29 SUCH INVESTMENT AS PROVIDED IN THIS PARAGRAPH, ALTHOUGH SUCH CREDITS
30 SHALL NOT BE FIRST ALLOWED OR INCURRED FOR STATE TAX PURPOSES, UNTIL, AT
31 THE EARLIEST, TAX YEARS BEGINNING IN TWO THOUSAND FIFTEEN. IN ORDER TO
32 SATISFY THE REQUIREMENTS OF PARAGRAPH FIVE OF SUBDIVISION (E) OF THIS
33 SECTION, A CERTIFIED CAPITAL COMPANY MUST HAVE MADE, ON A CUMULATIVE
34 BASIS, (A) AN AMOUNT OF QUALIFIED INVESTMENTS IN QUALIFIED BUSINESSES
35 LOCATED IN UNDERSERVED AREAS EQUAL TO AT LEAST TWO-THIRDS OF THE CERTI-
36 FIED CAPITAL RAISED BY SUCH CERTIFIED CAPITAL COMPANY WITH RESPECT TO
37 CERTIFIED CAPITAL COMPANY PROGRAM SIX, (B) QUALIFIED INVESTMENTS IN
38 QUALIFIED SEED FUNDS IN AN AMOUNT EQUAL TO AT LEAST TEN PERCENT OF THE
39 CERTIFIED CAPITAL RAISED BY SUCH CERTIFIED CAPITAL COMPANY WITH RESPECT
40 TO CERTIFIED CAPITAL COMPANY PROGRAM SIX AND (C) QUALIFIED INVESTMENTS
41 IN QUALIFIED BUSINESSES THAT ARE INVOLVED IN COMMERCE FOR THE PRIMARY
42 PURPOSE OF DEVELOPING AND MANUFACTURING PRODUCTS AND SYSTEMS COVERED BY
43 THE ACTIVITIES SET FORTH IN PARAGRAPH (B) OF SUBDIVISION ONE OF SECTION
44 THIRTY-ONE HUNDRED TWO-E OF THE PUBLIC AUTHORITIES LAW AND HAVE A RATIO
45 OF RESEARCH AND DEVELOPMENT EXPENDITURES TO NET SALES WHICH EQUALS OR
46 EXCEEDS SIX PERCENT DURING THE FISCAL YEAR IMMEDIATELY PRECEDING THE
47 QUALIFIED INVESTMENT IN AN AMOUNT EQUAL TO AT LEAST THIRTY-THREE PERCENT
48 OF THE CERTIFIED CAPITAL RAISED BY SUCH CERTIFIED CAPITAL COMPANY WITH
49 RESPECT TO PROGRAM SIX; PROVIDED, HOWEVER, THAT ALL QUALIFIED INVEST-
50 MENTS IN QUALIFIED SEED FUNDS SHALL COUNT TOWARD THE AMOUNT REQUIRED BY
51 SUBPARAGRAPH (C) OF THIS PARAGRAPH.
52 S 15. Subdivision (i) of section 11 of the tax law, as amended by
53 section 19 of part A of chapter 63 of the laws of 2005, is amended to
54 read as follows:
55 (i) Maximum certified capital. The maximum amount of certified capital
56 per certified capital company program invested in one or more certified
A. 7985--A 8
1 capital companies allowed in any one year to any one certified investor
2 shall not exceed ten million dollars for certified capital company
3 programs one and three, [and] eight million dollars for certified capi-
4 tal company programs two, four and five, AND FIFTEEN MILLION DOLLARS
5 FROM CERTIFIED CAPITAL COMPANY PROGRAM SIX for such year, provided,
6 however, that if the aggregate amount of certified capital for such
7 year, as set forth in subdivision (h) of this section, has not been
8 reached sixty days prior to the end of the year to which such aggregate
9 amount applies, the provisions of this subdivision shall cease to apply
10 for the remainder of such year. In addition, the aggregate amount of tax
11 credits allowed in any taxable year to any affiliated group of taxpayers
12 in relation to certified capital may not exceed such maximum amount,
13 whether or not such taxpayers file a combined return pursuant to subdi-
14 vision (f) of section fifteen hundred fifteen of this chapter. For
15 purposes of the preceding sentence, the term "affiliated group" shall
16 have the same meaning as described in section 1504 of the internal
17 revenue code, except that the references to "at least eighty percent" in
18 such section 1504 shall be read as "more than fifty percent".
19 S 16. Subdivision (j) of section 11 of the tax law, as amended by
20 section 19 of part A of chapter 63 of the laws of 2005, is amended to
21 read as follows:
22 (j) Reports. The superintendent shall report to the governor, the
23 temporary president of the senate, and the speaker of the assembly, on
24 or before June first of each year beginning in the year two thousand,
25 the number of certified capital companies holding certified capital; the
26 amount of certified capital invested in each certified capital company;
27 the cumulative amount that each certified capital company has invested
28 as of January first of the year two thousand and the cumulative total
29 each year thereafter; the cumulative amount that the investments of each
30 certified capital company have leveraged in terms of capital invested by
31 other sources of capital in qualified businesses at the same time or
32 subsequent to investments made by a certified capital company in such
33 businesses; the total amount of tax credits granted under this section
34 each year that credits have been awarded under this section and subdivi-
35 sion (k) of section fifteen hundred eleven of this chapter; the perform-
36 ance of each certified capital company with regard to the requirements
37 for recertification set forth in subdivision (c) of this section; the
38 classification of companies in which each certified capital company has
39 invested according to industrial sector and size of company; the total
40 gross number of jobs created by investments made by each certified capi-
41 tal company using certified capital and the number of jobs retained; the
42 location of companies in which each certified capital company has
43 invested in a manner to indicate if the requirements for qualified
44 investments in qualified businesses located in empire zones established
45 pursuant to article eighteen-B of the general municipal law set forth
46 for programs three, four and five and in underserved areas outside such
47 empire zones have been met; the total gross number of jobs created in
48 empire zones established pursuant to article eighteen-B of the general
49 municipal law and in underserved areas outside such empire zones made by
50 each certified capital company using certified capital in certified
51 capital company programs three, four and five, reported by geographic
52 location of each empire zone and underserved area and the number of jobs
53 retained; and those certified capital companies that have been decerti-
54 fied, or have had their certifications revoked, including the reasons
55 for decertification or revocation; THE LOCATION OF COMPANIES IN WHICH
56 EACH CERTIFIED CAPITAL COMPANY HAS INVESTED IN A MANNER TO INDICATE IF
A. 7985--A 9
1 THE REQUIREMENTS FOR QUALIFIED INVESTMENTS IN QUALIFIED BUSINESSES
2 LOCATED IN UNDERSERVED AREAS AS SET FORTH IN PROGRAM SIX; THE TOTAL
3 GROSS NUMBER OF JOBS CREATED IN UNDERSERVED AREAS USING CERTIFIED CAPI-
4 TAL IN CERTIFIED CAPITAL COMPANY PROGRAM SIX AND THE NUMBER OF JOBS
5 RETAINED; THE AMOUNT OF QUALIFIED INVESTMENTS MADE INTO QUALIFIED SEED
6 FUNDS FOR PROGRAM SIX CERTIFIED CAPITAL COMPANIES; THE CLASSIFICATION OF
7 COMPANIES IN WHICH EACH QUALIFIED SEED FUND HAS INVESTED ACCORDING TO
8 INDUSTRIAL SECTOR AND SIZE OF COMPANY; THE TOTAL GROSS NUMBER OF JOBS
9 CREATED BY INVESTMENTS MADE BY EACH QUALIFIED SEED FUND USING THE NUMBER
10 OF JOBS RETAINED.
11 S 17. Paragraph 2 of subdivision (k) of section 1511 of the tax law,
12 as amended by section 2 of part S of chapter 407 of the laws of 1999, is
13 amended to read as follows:
14 (2) Ten percent of such credit shall be allowed in the taxable year to
15 which such investment is allocated pursuant to PARAGRAPHS ONE THROUGH
16 FIVE OF subdivision (h) of section eleven of this chapter and in each of
17 the nine following taxable years. TWENTY-FIVE PERCENT OF SUCH CREDIT
18 SHALL BE ALLOWED IN THE TAXABLE YEAR TO WHICH SUCH INVESTMENT IS ALLO-
19 CATED PURSUANT TO PARAGRAPH SIX OF SUBDIVISION (H) OF SECTION ELEVEN OF
20 THIS CHAPTER AND IN EACH OF THE THREE FOLLOWING TAXABLE YEARS. In addi-
21 tion, in any taxable year subsequent to the taxable year for which
22 [such] ANY investment is so allocated UNDER SUBDIVISION (H), any amount
23 carried forward under paragraphs three and four of this subdivision may
24 be carried forward indefinitely until such credits are utilized.
25 S 18. This act shall take effect immediately; provided that the amend-
26 ments to subdivision (j) of section 11 of the tax law made by section
27 sixteen of this act shall not affect the repeal of such subdivision and
28 shall be deemed repealed therewith.
