Bill Text: NY S04139 | 2023-2024 | General Assembly | Introduced


Bill Title: Relates to establishing the manufacturing development zone program and tax credits related thereto.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced) 2024-01-03 - REFERRED TO COMMERCE, ECONOMIC DEVELOPMENT AND SMALL BUSINESS [S04139 Detail]

Download: New_York-2023-S04139-Introduced.html



                STATE OF NEW YORK
        ________________________________________________________________________

                                          4139

                               2023-2024 Regular Sessions

                    IN SENATE

                                    February 3, 2023
                                       ___________

        Introduced  by  Sen. SANDERS -- 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, the real property tax law
          and the tax law, in relation to  the  manufacturing  development  zone
          program and tax credits related thereto

          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 23 to read as follows:
     3                                  ARTICLE 23
     4                   MANUFACTURING DEVELOPMENT ZONE PROGRAM
     5  Section 450. Definitions.
     6          451. Purpose.
     7          452. Eligibility and application process.
     8          453. Tax credit incentives.
     9    § 450. Definitions. As used in this article, the following terms shall
    10  have the following meanings:
    11    1.  "Area"  means  a geographic area in one or more political subdivi-
    12  sions in the state described by a closed perimeter boundary.
    13    2. "Business entity" means a person that operates or conducts a  trade
    14  or business that is engaged in heavy manufacturing.
    15    3.  "Heavy  manufacturing" means a manufacturing process that involves
    16  large scale projects.  It includes construction, mining, and metal proc-
    17  essing, but does not include the processing,  fabricating,  assembly  or
    18  disassembly  of  apparel,  decorations,  electronic  devices, food, home
    19  accessories, instruments, jewelry, leather, paper, or textiles.
    20    4. "Manufacturing development zone" means  an  area  designated  as  a
    21  manufacturing  development  zone  by  the commissioner under subdivision
    22  four of section four hundred fifty-two of this article.
    23    5. "Political subdivision" means a county or municipal corporation.

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD08579-01-3

        S. 4139                             2

     1    6. "Submission date" means April fifteenth or October fifteenth.
     2    §  451.  Purpose.  The  purpose  of the manufacturing development zone
     3  program is to  encourage  business  entities  engaged  in  manufacturing
     4  outside the state to invest in manufacturing facilities in manufacturing
     5  development zones.
     6    § 452. Eligibility and application process. 1. The following political
     7  subdivisions may apply to designate a manufacturing development zone:
     8    (a)  a  political  subdivision for an area within a political subdivi-
     9  sion;
    10    (b) with the prior consent of the municipal corporation, a  county  on
    11  behalf  of  a  municipal corporation for an area in the municipal corpo-
    12  ration; or
    13    (c) two or more political subdivisions jointly  for  an  area  astride
    14  their common boundaries;
    15    2. The application shall:
    16    (a)  be  in  the  form and manner and contain the information that the
    17  commissioner requires by regulation;
    18    (b) be submitted for a political  subdivision  by  its  chief  elected
    19  officer or, if none, its governing body;
    20    (c) state whether the political subdivision has examined the feasibil-
    21  ity  of creating educational or training opportunities for employers and
    22  employees of business entities located or to be located in the  proposed
    23  manufacturing development zone;
    24    (d)  state the standards established by the political subdivision that
    25  a business entity shall meet before receiving the incentives and  initi-
    26  atives under section four hundred fifty-three of this article; and
    27    (e)  state  the  methods  that  the political subdivisions will use to
    28  target and attract business entities.
    29    3. (a) The commissioner shall submit each application to  the  depart-
    30  ment.
    31    (b)  Within  thirty  days  of receiving an application, the department
    32  shall approve or reject an application.
    33    4. (a) Within sixty days after a submission date, the commissioner may
    34  designate one or more manufacturing development  zones  from  among  the
    35  areas described in the applications and approved by the department under
    36  subdivision three of this section.
    37    (b)  The designation of an area as a manufacturing development zone is
    38  effective for ten years.
    39    (c) The commissioner may not designate  more  than  six  manufacturing
    40  development zones in a calendar year.
    41    (d)  A  county may not receive more than two manufacturing development
    42  zones in a calendar year.
    43    5. The designation of the commissioner is final.
    44    6. At any time, a political subdivision may reapply to the commission-
    45  er to designate as a manufacturing development zone an area that is  not
    46  designated.
    47    7. (a) A political subdivision may apply to the commissioner to expand
    48  an  existing  manufacturing  development  zone in the same manner as the
    49  political subdivision would  apply  to  designate  a  new  manufacturing
    50  development zone.
    51    (b)  The commissioner may grant an expansion of a manufacturing devel-
    52  opment zone into an area.
    53    (c) For purposes of subdivisions four, five and six of  this  section,
    54  an  expansion  of  a manufacturing development zone that does not exceed
    55  fifty percent of the  geographic  area  of  the  existing  manufacturing
    56  development  zone  does not count towards the limit on the number of the

        S. 4139                             3

     1  manufacturing development zones that the commissioner may designate in a
     2  calendar year or a county may receive in a calendar year.
     3    8.  (a)  The  commissioner  may grant one extraordinary expansion of a
     4  manufacturing development zone in the state each calendar  year  for  an
     5  area  that,  in  the  determination  of the commissioner, has suffered a
     6  significant loss of economic base.
     7    (b) For purposes of subdivisions four, five and six of  this  section,
     8  an  extraordinary expansion of a manufacturing development zone does not
     9  count towards the limit on the number of manufacturing development zones
    10  that the commissioner may designate in a calendar year or a  county  may
    11  receive in a calendar year.
    12    §  453.  Tax  credit incentives. 1. To the extent provided for in this
    13  section, a business entity is entitled to:
    14    (a) The property tax credit provided for in section four hundred twen-
    15  ty-three-a of the real property tax law;
    16    (b) The income tax credit provided for in subsection (ooo) of  section
    17  six hundred six of the tax law;
    18    2.  A  business  entity  that moves into or locates in a manufacturing
    19  development zone on or after the date that the manufacturing development
    20  zone is designated under subdivisions four, five and six of section four
    21  hundred fifty-two of this article may benefit from the  incentive  under
    22  this section if:
    23    (a)  The  business  entity meets the statutory requirements and condi-
    24  tions applicable to each incentive or initiative;
    25    (b) The respective political subdivision certifies that  the  business
    26  entity  has  complied with the standards that the subdivisions submitted
    27  under paragraph (d) of subdivision two of section four hundred fifty-two
    28  of this article;
    29    (c) The business entity creates new or  additional  jobs  or  makes  a
    30  capital  investment to qualify for the property tax credit under section
    31  four hundred twenty-three-a of the real property tax law and the  income
    32  tax  credit under subsection (ooo) of section six hundred six of the tax
    33  law;
    34    (d) The business entity is engaged in a manufacturing trade  or  busi-
    35  ness on real property within the manufacturing development zone that the
    36  business entity owns; and
    37    (e) The commissioner determines that the business entity does not have
    38  an economic presence in the state prior to locating in the manufacturing
    39  development zone and is engaged in a manufacturing trade or business.
    40    3. The incentives and initiatives provided for in this section are not
    41  available  to  a  business  entity  that  was located in a manufacturing
    42  development zone before the date that the manufacturing development zone
    43  is designated, except for a capital investment or an  expansion  of  its
    44  labor  force  that occurs on or after the manufacturing development zone
    45  is designated.
    46    4. (a) Except as provided in section four  hundred  twenty-three-a  of
    47  the  real  property tax law, the incentives and initiatives set forth in
    48  this section are available for ten years after the date that an area  is
    49  designated a manufacturing development zone.
    50    (b) A law enacted after the effective date of this section that elimi-
    51  nates  or reduces the benefits available to a business entity under this
    52  section does not apply to a business entity that was in a  manufacturing
    53  development zone before the effective date of this section.
    54    5. Notwithstanding subdivision four of this section, a business entity
    55  located  in  a manufacturing development zone may not receive the incen-
    56  tives and initiatives set forth in subdivision one of  this  section  if

        S. 4139                             4

     1  the entity is located on land or within improvements owned by the feder-
     2  al  government,  the  state, a county, or a municipal corporation unless
     3  the business entity has  first  utilized  all  applicable  property  tax
     4  exemptions  under  the real property tax law including entering into any
     5  available payment in lieu of tax agreement.
     6    6. The department and the comptroller jointly shall assess  each  year
     7  the  effectiveness  of  the tax credits provided to business entities in
     8  manufacturing development zones, including:
     9    (a) The number and amounts of credits granted each year; and
    10    (b) The success of the tax credits in attracting and  retaining  busi-
    11  ness entities in manufacturing development zones.
    12    7.  On  or  before December fifteenth of each year, the department and
    13  the comptroller shall submit to the governor, the temporary president of
    14  the senate and the speaker of the assembly,  a  report  outlining  their
    15  findings  and  any  other information of value in determining the effec-
    16  tiveness of the tax credits provided under this section.
    17    § 2. The real property tax law is amended  by  adding  a  new  section
    18  423-a to read as follows:
    19    §  423-a. Exemption for business entities participating in manufactur-
    20  ing development zone program. 1. As used in this section, the  following
    21  words shall have the following meanings:
    22    (a)  "Base year" means the taxable year immediately before the taxable
    23  year in which a property tax credit under this section is to be granted.
    24    (b) "Base year value" means the value of the property used  to  deter-
    25  mine  the  assessment  on  which  the  property tax on real property was
    26  imposed for the base year.  Base year value does  not  include  any  new
    27  real property that was first assessed in the base year.
    28    (c) "Business entity" means a person that operates or conducts a trade
    29  or business that is engaged in manufacturing.
    30    (d)  (i)  "Eligible  assessment" means the difference between the base
    31  year value and the actual value as determined by the state board for the
    32  applicable taxable year in which the tax credit under this section is to
    33  be granted.
    34    (ii) For a business entity that is located on land or within  improve-
    35  ments  owned  by  the  federal,  state, county, or municipal government,
    36  "eligible assessment" means the difference between the base  year  value
    37  and the actual value reduced by the value of any property entitled to an
    38  exemption  under  this  chapter as determined by the state board for the
    39  applicable taxable year in which the tax credit under this section is to
    40  be granted.
    41    (e) "Qualified property" means real property that is (i) not used  for
    42  residential  purposes; (ii) used in a manufacturing trade or business by
    43  a business entity; and
    44    (iii) located in a manufacturing development zone that  is  designated
    45  under article twenty-three of the economic development law.
    46    2.  The governing body of a county or of a municipal corporation shall
    47  grant a tax credit under this section against the property  tax  imposed
    48  on the eligible assessment of a qualified property.
    49    3.  (a)  The  appropriate governing body shall calculate the amount of
    50  the credit under this section equal to one hundred percent of the amount
    51  of property tax imposed on the eligible assessment.
    52    (b) For purposes of calculating the amount of the credit allowed under
    53  this section, the amount of property tax imposed on the eligible assess-
    54  ment shall be calculated without reduction for any credits allowed under
    55  this chapter.

        S. 4139                             5

     1    4. (a) A tax credit under this section is  available  to  a  qualified
     2  property for no more than ten consecutive years beginning with the taxa-
     3  ble year following the calendar year in which the real property initial-
     4  ly becomes a qualified property.
     5    (b)  If  the  designation of a manufacturing development zone expires,
     6  the tax credit under this section continues to be available to a  quali-
     7  fied property.
     8    (c)  State  property  tax  imposed on real property is not affected by
     9  this section.
    10    5. When a manufacturing development zone is designated by the  commis-
    11  sioner  of  economic development, such commissioner shall certify to the
    12  state board:
    13    (a) The real properties in the zone that are qualified properties  for
    14  each  taxable  year for which the property tax credit under this section
    15  is to be granted; and
    16    (b) The date that the real properties became qualified properties.
    17    6. Before property tax bills are sent, the state board shall submit to
    18  the commissioner of economic development a list containing:
    19    (a) The location of each qualified property;
    20    (b) The amount of the base year value for each qualified property; and
    21    (c) The amount of the eligible assessment for each qualified property.
    22    § 3. Section 606 of the tax law is amended by adding a new  subsection
    23  (ooo) to read as follows:
    24    (ooo)  Tax credit. (1) A business entity that is located in a manufac-
    25  turing development zone and satisfies the requirements of  section  four
    26  hundred  fifty-three  of the economic development law may claim a credit
    27  against the state income tax in the  amount  of  the  state  income  tax
    28  imposed on qualified income.
    29    (2) A business entity shall mean an entity that is engaged in manufac-
    30  turing  trade  or business, operates a manufacturing facility in a manu-
    31  facturing development zone as designated by article twenty-three of  the
    32  economic  development  law  and  is eligible for the property tax credit
    33  under section four hundred twenty-three-a of the real property tax  law.
    34  Qualified  income  means income attributable to activities at a manufac-
    35  turing facility located in a manufacturing development zone.
    36    (3) The credit allowed under this subsection may not  be  claimed  for
    37  more  than ten consecutive years beginning with the taxable year follow-
    38  ing the calendar year in which the business entity becomes eligible  for
    39  the property tax credit under section four hundred twenty-three-a of the
    40  real property tax law.
    41    § 4. This act shall take effect immediately.
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