STATE OF NEW YORK
________________________________________________________________________
9467
IN SENATE
May 31, 2022
___________
Introduced by Sen. COONEY -- 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, 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.
LBD16022-01-2
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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; or
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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 living
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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-
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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.
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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.