Bill Text: NY A10507 | 2021-2022 | General Assembly | Introduced
Bill Title: Allows for eligibility of green CHIPS projects in the Excelsior tax credit program.
Spectrum: Partisan Bill (Democrat 11-0)
Status: (Introduced - Dead) 2022-06-03 - substituted by s9467 [A10507 Detail]
Download: New_York-2021-A10507-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 10507 IN ASSEMBLY May 31, 2022 ___________ Introduced by COMMITTEE ON RULES -- (at request of M. of A. Stirpe, Bronson, Woerner, Buttenschon, Lunsford, Cahill) -- read once and referred to the Committee on Ways and Means AN ACT to amend the economic development law, in relation to allowing for eligibility of Green CHIPS projects in the Excelsior tax credit program The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Subdivision 16 of section 352 of the economic development 2 law, as amended by section 1 of part K of chapter 59 of the laws of 3 2017, is amended and two new subdivisions 3-a and 24 are added to read 4 as follows: 5 3-a. "Green CHIPS benefit-cost ratio" means the following calculation 6 with respect to Green CHIPS projects: the ratio where the numerator is 7 the sum of: (a) the value of all remuneration projected to be paid for 8 all net new jobs during the period of participation in the program; (b) 9 the value of capital investments to be made by the business enterprise 10 during the period of participation in the program; and (c) all research 11 and development expenditures by the participant in New York State during 12 the period of participation in the program; and the denominator is the 13 amount of total tax benefits under this article that will be used and 14 refunded as well as any state grants provided to the participant. 15 16. "Preliminary schedule of benefits" means the maximum aggregate 16 amount of each component of the tax credit that a participant in the 17 excelsior jobs program is eligible to receive pursuant to this article. 18 The schedule shall indicate the annual amount of each component of the 19 credit a participant may claim in each of its ten years of eligibility. 20 The preliminary schedule of benefits shall be issued by the department 21 when the department approves the application for admission into the 22 program. The commissioner may amend that schedule, provided that the 23 commissioner complies with the credit caps in section three hundred 24 fifty-nine of this article as applicable. 25 24. "Green CHIPS project" means a project meeting all of the following 26 criteria: (a) is within the semiconductor manufacturing and related EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD16022-01-2A. 10507 2 1 equipment and material supplier sector; (b) includes sustainability 2 measures to mitigate the project's greenhouse gas emissions impact over 3 its lifetime; (c) provides for the payment of not less than federal 4 prevailing wage rates for its project construction; (d) makes commit- 5 ments to worker and community investment, including through training and 6 education benefits paid by the participant and programs to expand 7 employment opportunity for economically disadvantaged individuals; (e) 8 will create at least five hundred net new jobs and make at least three 9 billion dollars in qualified investment; and (f) the participant under- 10 taking a Green CHIPS project shall maintain a Green CHIPS benefit-cost 11 ratio of at least fifteen to one. Such projects are eligible to enter 12 into a phase one of a Green CHIPS project ten-year benefit term. Such 13 projects, provided they are in good standing with all requirements of 14 this chapter, are also eligible to enter into a phase two of a Green 15 CHIPS project, and therefore to initiate a new and separate ten-year 16 schedule related to phase two, provided that phase two will create at 17 least five hundred net new jobs beyond those created in phase one, and 18 that phase two will make at least three billion dollars in qualified 19 investment beyond the investment total associated with phase one. For 20 Green CHIPS projects, phase one and phase two terms may overlap, depend- 21 ing on the time of initiation for both projects. In no event shall cred- 22 its be awarded for a Green CHIPS project beyond two thousand fifty. 23 § 2. Subdivisions 1 and 3 of section 353 of the economic development 24 law, subdivision 1 as amended by section 2 of part L of chapter 59 of 25 the laws of 2020, paragraphs (k) and (l) of subdivision 1 as amended and 26 paragraph (m) as added by section 2 of part D of chapter 59 of the laws 27 of 2021, and subdivision 3 as separately amended by section 2 of part K 28 and section 2 of part ZZ of chapter 59 of the laws of 2017, are amended 29 and a new subdivision 7 is added to read as follows: 30 1. To be a participant in the excelsior jobs program, a business enti- 31 ty shall operate in New York state predominantly: 32 (a) as a financial services data center or a financial services back 33 office operation; 34 (b) in manufacturing; 35 (c) in software development and new media; 36 (d) in scientific research and development; 37 (e) in agriculture; 38 (f) in the creation or expansion of back office operations in the 39 state; 40 (g) in a distribution center; 41 (h) in an industry with significant potential for private-sector 42 economic growth and development in this state as established by the 43 commissioner in regulations promulgated pursuant to this article. In 44 promulgating such regulations the commissioner shall include job and 45 investment criteria; 46 (i) as an entertainment company; 47 (j) in music production; 48 (k) as a life sciences company; 49 (l) as a company operating in one of the industries listed in para- 50 graphs (b) through (e) of this subdivision and engaging in a green 51 project as defined in section three hundred fifty-two of this article; 52 [or] 53 (m) as a participant operating in one of the industries listed in 54 paragraphs (a) through (k) of this subdivision and operating or sponsor- 55 ing child care services to its employees as defined in section three 56 hundred fifty-two of this article; orA. 10507 3 1 (n) as a Green CHIPS project. 2 3. For the purposes of this article, in order to participate in the 3 excelsior jobs program, a business entity operating predominantly in 4 manufacturing must create at least five net new jobs; a business entity 5 operating predominately in agriculture must create at least five net new 6 jobs; a business entity operating predominantly as a financial service 7 data center or financial services customer back office operation must 8 create at least twenty-five net new jobs; a business entity operating 9 predominantly in scientific research and development must create at 10 least five net new jobs; a business entity operating predominantly in 11 software development must create at least five net new jobs; a business 12 entity creating or expanding back office operations must create at least 13 twenty-five net new jobs; a business entity operating predominately in 14 music production must create at least five net new jobs; a business 15 entity operating predominantly as an entertainment company must create 16 or obtain at least one hundred net new jobs; or a business entity oper- 17 ating predominantly as a distribution center in the state must create at 18 least fifty net new jobs, notwithstanding subdivision five of this 19 section; or a business entity operating predominately as a life sciences 20 company must create at least five net new jobs; or a business entity 21 must be a regionally significant project or Green CHIPS project as 22 defined in this article; or 23 7. Notwithstanding subdivision sixteen of section three hundred 24 fifty-two of this article, the department is hereby authorized to allow 25 phase two of a Green CHIPS project to enter into a new and separate 26 schedule of benefits which may overlap with the phase one of a Green 27 CHIPS project schedule of benefits, for a new ten-year benefit term. 28 Notwithstanding paragraph three of subdivision a of section three 29 hundred fifty-four of this article, such phase two of a Green CHIPS 30 project shall be admitted into the program. Provided however, for such 31 phase two of a Green CHIPS project, the new benefit term shall exclu- 32 sively be provided for net new investments, new research and development 33 expenditures, and net new job creation above the commitments outlined in 34 the schedule of benefits for a business' phase one of a Green CHIPS 35 project with the department. Assuming the requirements of this article 36 have been met, both a Green CHIPS project and any phase two of such 37 project shall be eligible for benefits under section three hundred 38 fifty-five of this article. 39 § 3. Subdivisions 1, 2, 3, and 7 of section 355 of the economic devel- 40 opment law, subdivisions 1 and 3 as amended by section 4 of part L of 41 chapter 59 of the laws of 2020, subdivision 2 as amended by section 3 of 42 part D of chapter 59 of the laws of 2021, and subdivision 7 as added by 43 section 4 of part G of chapter 61 of the laws of 2011, are amended to 44 read as follows: 45 1. Excelsior jobs tax credit component. A participant in the excelsior 46 jobs program shall be eligible to claim a credit for each net new job it 47 creates in New York state. In a project that is not a green project, the 48 amount of such credit per job shall be equal to the product of the gross 49 wages paid and up to 6.85 percent. In a green project, or a Green CHIPS 50 project, the amount of such credit per job shall be equal to the product 51 of the gross wages paid and up to 7.5 percent. Provided, however, given 52 the transformational nature of Green CHIPS projects, only the first two 53 hundred thousand dollars of gross wages per job shall be eligible for 54 this credit. The maximum amount of gross wages per job for a Green CHIPS 55 project may be adjusted for inflation at an annual amount determined by 56 the commissioner in a manner substantially similar to the cost of livingA. 10507 4 1 adjustments calculated by the United States Social Security Adminis- 2 tration based on changes in consumer price indices or a rate of four 3 percent per year, whichever is higher. 4 2. Excelsior investment tax credit component. A participant in the 5 excelsior jobs program shall be eligible to claim a credit on qualified 6 investments. In a project that is not a green project, the credit shall 7 be equal to two percent of the cost or other basis for federal income 8 tax purposes of the qualified investment. In a green project, the credit 9 shall be equal to five percent of the cost or other basis for federal 10 income tax purposes of the qualified investment. In a project for child 11 care services or a Green CHIPS project, the credit shall be up to five 12 percent of the cost or other basis for federal income tax purposes of 13 the qualified investment in child care services or in the Green CHIPS 14 project as applicable. A participant may not claim both the excelsior 15 investment tax credit component and the investment tax credit set forth 16 in subdivision one of section two hundred ten-B, subsection (a) of 17 section six hundred six, the former subsection (i) of section fourteen 18 hundred fifty-six, or subdivision (q) of section fifteen hundred eleven 19 of the tax law for the same property in any taxable year, except that a 20 participant may claim both the excelsior investment tax credit component 21 and the investment tax credit for research and development property. In 22 addition, a taxpayer who or which is qualified to claim the excelsior 23 investment tax credit component and is also qualified to claim the 24 brownfield tangible property credit component under section twenty-one 25 of the tax law may claim either the excelsior investment tax credit 26 component or such tangible property credit component, but not both with 27 regard to a particular piece of property. A credit may not be claimed 28 until a business enterprise has received a certificate of tax credit, 29 provided that qualified investments made on or after the issuance of the 30 certificate of eligibility but before the issuance of the certificate of 31 tax credit to the business enterprise, may be claimed in the first taxa- 32 ble year for which the business enterprise is allowed to claim the cred- 33 it. Expenses incurred prior to the date the certificate of eligibility 34 is issued are not eligible to be included in the calculation of the 35 credit. 36 3. Excelsior research and development tax credit component. A partic- 37 ipant in the excelsior jobs program shall be eligible to claim a credit 38 equal to fifty percent of the portion of the participant's federal 39 research and development tax credit that relates to the participant's 40 research and development expenditures in New York state during the taxa- 41 ble year; provided however, if not a green project, the excelsior 42 research and development tax credit shall not exceed six percent of the 43 qualified research and development expenditures attributable to activ- 44 ities conducted in New York state, or, if a green project or a Green 45 CHIPS project, the excelsior research and development tax credit shall 46 not exceed eight percent of the research and development expenditures 47 attributable to activities conducted in New York state. If the federal 48 research and development credit has expired, then the research and 49 development expenditures relating to the federal research and develop- 50 ment credit shall be calculated as if the federal research and develop- 51 ment credit structure and definition in effect in two thousand nine were 52 still in effect. Notwithstanding any other provision of this chapter to 53 the contrary, research and development expenditures in this state, 54 including salary or wage expenses for jobs related to research and 55 development activities in this state, may be used as the basis for the 56 excelsior research and development tax credit component and the quali-A. 10507 5 1 fied emerging technology company facilities, operations and training 2 credit under the tax law. 3 7. For availability of special excelsior jobs program rates governing 4 the provision of gas or electric service, see subdivision twelve-d of 5 section sixty-six of the public service law. Such special excelsior jobs 6 program rates may remain available to participants as defined in this 7 article for a period of up to ten years commencing in the first taxable 8 year that the participant receives a certificate of tax credit, or the 9 first taxable year listed on its preliminary schedule of benefits, 10 whichever is later. Notwithstanding any other provision of this section, 11 such special excelsior job program rates shall remain available to a 12 Green CHIPS project which enters into a phase two of such project for 13 the entirety of both of its schedules of benefits. Provided however, if 14 a participant is removed from the excelsior jobs program pursuant to 15 this article, the excelsior jobs program rates may be denied. 16 § 4. Section 359 of the economic development law, as amended by 17 section 5 of part L of chapter 59 of the laws of 2020, is amended to 18 read as follows: 19 § 359. Cap on tax credit. [The] 1. Except with respect to tax credits 20 issued to Green CHIPS projects as articulated in subdivision four of 21 this section, the total amount of tax credits issued by the commissioner 22 for any taxable year may not exceed the limitations set forth in this 23 [section] subdivision. [One-half] Except with respect to tax credits 24 issued to Green CHIPS projects as articulated in subdivision four of 25 this section, one-half of any amount of tax credits not awarded for a 26 particular taxable year may be used by the commissioner to award tax 27 credits in another taxable year. 28 Credit components in the aggregate With respect to taxable 29 shall not exceed: years beginning in: 30 $ 50 million 2011 31 $ 100 million 2012 32 $ 150 million 2013 33 $ 200 million 2014 34 $ 250 million 2015 35 $ 183 million 2016 36 $ 183 million 2017 37 $ 183 million 2018 38 $ 183 million 2019 39 $ 183 million 2020 40 $ 183 million 2021 41 $ 133 million 2022 42 $ 83 million 2023 43 $ 36 million 2024 44 $ 200 million 2025 45 $ 200 million 2026 46 $ 200 million 2027 47 $ 200 million 2028 48 $ 200 million 2029 49 2. Twenty-five percent of tax credits shall be allocated to businesses 50 accepted into the program under subdivision four of section three 51 hundred fifty-three of this article and seventy-five percent of tax 52 credits shall be allocated to businesses accepted into the program under 53 subdivision three of section three hundred fifty-three of this article.A. 10507 6 1 3. Provided, however, if by September thirtieth of a calendar year, 2 the department has not allocated the full amount of credits available in 3 that year to either: (i) businesses accepted into the program under 4 subdivision four of section three hundred fifty-three of this article or 5 (ii) businesses accepted into the program under subdivision three of 6 section three hundred fifty-three of this article, the commissioner may 7 allocate any remaining tax credits to businesses referenced in this 8 paragraph as needed; provided, however, that under no circumstances may 9 the aggregate statutory cap for all program years be exceeded. One 10 hundred percent of the unawarded amounts remaining at the end of two 11 thousand twenty-nine may be allocated in subsequent years, notwithstand- 12 ing the fifty percent limitation on any amounts of tax credits not 13 awarded in taxable years two thousand eleven through two thousand twen- 14 ty-nine. Provided, however, no tax credits may be allowed for taxable 15 years beginning on or after January first, two thousand forty. 16 4. The total amount of tax credits issued by the commissioner for the 17 taxable years two thousand twenty-two to two thousand forty-one for 18 Green CHIPS projects shall not exceed five hundred million per year. One 19 hundred percent of any amount of tax credits not awarded for a partic- 20 ular taxable year may be used by the commissioner to award tax credits 21 in another taxable year. Notwithstanding the foregoing, Green CHIPS 22 projects may be allowed to claim credits for taxable years up to January 23 first, two thousand fifty. 24 § 5. The act shall take effect immediately.