S T A T E   O F   N E W   Y O R K
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    S. 7094                                                  A. 9636

                      S E N A T E - A S S E M B L Y

                             March 24, 2016
                               ___________

IN  SENATE -- Introduced by Sen. SEWARD -- read twice and ordered print-
  ed, and when printed to be committed  to  the  Committee  on  Investi-
  gations and Government Operations

IN  ASSEMBLY  -- Introduced by M. of A. WOERNER -- Multi-Sponsored by --
  M. of A. MAGEE -- read once and referred to the Committee on Ways  and
  Means

AN  ACT  to amend the tax law, in relation to providing insurance corpo-
  rations with a tax credit  for  investments  made  in  rural  business
  growth  funds;  and  to  amend  the  state finance law, in relation to
  establishing the New York agriculture and rural jobs fund

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.  The tax law is amended by adding a new section 42 to read
as follows:
  S 42. NEW YORK AGRICULTURE AND RURAL JOBS CREDIT. (A) DEFINITIONS. FOR
THE PURPOSE OF THIS SECTION THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING
MEANINGS:
  (1) "AFFILIATE" MEANS A PERSON THAT DIRECTLY,  OR  INDIRECTLY  THROUGH
ONE  OR  MORE  INTERMEDIARIES,  CONTROLS,  IS CONTROLLED BY, OR IS UNDER
COMMON CONTROL WITH ANOTHER PERSON. FOR THE PURPOSES OF THIS DIVISION, A
PERSON IS "CONTROLLED BY"  ANOTHER  PERSON  IF  THE  CONTROLLING  PERSON
HOLDS, DIRECTLY OR INDIRECTLY, THE MAJORITY VOTING OR OWNERSHIP INTEREST
IN  THE  CONTROLLED PERSON OR HAS CONTROL OVER THE DAY-TO-DAY OPERATIONS
OF THE CONTROLLED PERSON BY CONTRACT OR BY LAW.
  (2) "CLOSING DATE" MEANS THE DATE ON WHICH  A  RURAL  BUSINESS  GROWTH
FUND HAS COLLECTED ALL OF THE AMOUNTS SPECIFIED BY SUBPARAGRAPHS (A) AND
(B) OF PARAGRAPH SEVEN OF SUBDIVISION (B) OF THIS SECTION.
  (3) "CREDIT-ELIGIBLE CAPITAL CONTRIBUTION" MEANS AN INVESTMENT OF CASH
BY A PERSON IN A RURAL BUSINESS GROWTH FUND THAT EQUALS THE AMOUNT SPEC-
IFIED ON A TAX CREDIT CERTIFICATE ISSUED BY THE DEPARTMENT UNDER SUBPAR-
AGRAPH  (B)  OF  PARAGRAPH  SIX OF SUBDIVISION (B) OF THIS SECTION.  THE
INVESTMENT SHALL PURCHASE AN  EQUITY  INTEREST  IN  THE  RURAL  BUSINESS
GROWTH  FUND  OR  PURCHASE,  AT  PAR VALUE OR PREMIUM, A DEBT INSTRUMENT

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

                                                           LBD14662-02-6

S. 7094                             2                            A. 9636

ISSUED BY THE RURAL GROWTH FUND THAT MEETS ALL OF THE  FOLLOWING  CRITE-
RIA:
  (A) THE DEBT INSTRUMENT HAS AN ORIGINAL MATURITY DATE OF AT LEAST FIVE
YEARS AFTER THE DATE OF ISSUANCE.
  (B)  THE  DEBT  INSTRUMENT HAS A REPAYMENT SCHEDULE THAT IS NOT FASTER
THAN A LEVEL PRINCIPAL AMORTIZATION OVER FIVE YEARS.
  (C) THE DEBT INSTRUMENT HAS  NO  INTEREST,  DISTRIBUTION,  OR  PAYMENT
FEATURES  DEPENDENT ON THE RURAL BUSINESS GROWTH FUND'S PROFITABILITY OR
THE SUCCESS OF THE RURAL GROWTH INVESTMENTS.
  (4) "ELIGIBLE DISTRIBUTION" MEANS ANY OF THE FOLLOWING:
  (A) A DISTRIBUTION OF CASH TO ONE OR MORE EQUITY OWNERS OF  THE  RURAL
BUSINESS  GROWTH  FUND TO FULLY OR PARTIALLY OFFSET A PROJECTED INCREASE
IN THE OWNER'S FEDERAL OR STATE TAX LIABILITY, INCLUDING  ANY  PENALTIES
AND INTEREST, RELATED TO THE OWNER'S OWNERSHIP, MANAGEMENT, OR OPERATION
OF THE RURAL BUSINESS GROWTH FUND;
  (B)  A  DISTRIBUTION OF CASH AS PAYMENT OF INTEREST AND PRINCIPAL ON A
DEBT OF THE RURAL BUSINESS GROWTH FUND EXCEPT TO THE EXTENT THE  PAYMENT
RESULTS  IN  THE RURAL BUSINESS GROWTH FUND HAVING LESS THAN ONE HUNDRED
PERCENT OF ITS ELIGIBLE INVESTMENT AUTHORITY INVESTED  IN  RURAL  GROWTH
INVESTMENTS  IN  THIS STATE OR HELD IN CASH AND OTHER MARKETABLE SECURI-
TIES AWAITING INVESTMENT IN RURAL GROWTH INVESTMENTS IN THIS STATE;
  (C) A DISTRIBUTION  OF  CASH  RELATED  TO  THE  REASONABLE  COSTS  AND
EXPENSES  OF  FORMING,  SYNDICATING,  MANAGING,  AND OPERATING THE RURAL
BUSINESS GROWTH FUND. SUCH  DISTRIBUTIONS  MAY  INCLUDE  REASONABLE  AND
NECESSARY  FEES  PAID  FOR  PROFESSIONAL  SERVICES,  INCLUDING LEGAL AND
ACCOUNTING SERVICES, RELATED TO THE FORMATION AND OPERATION OF THE RURAL
BUSINESS GROWTH FUND AND AN ANNUAL MANAGEMENT FEE TO THE EXTENT IT  DOES
NOT  EXCEED  TWO  PERCENT  OF  THE RURAL BUSINESS GROWTH FUND'S ELIGIBLE
INVESTMENT AUTHORITY. FOR PURPOSES OF THIS SECTION,  "ELIGIBLE  DISTRIB-
UTION"  DOES  NOT  INCLUDE  SUCH  A DISTRIBUTION TO A PERSON THAT MADE A
CREDIT-ELIGIBLE CAPITAL CONTRIBUTION TO THE RURAL BUSINESS GROWTH FUND.
  (5) "ELIGIBLE INVESTMENT AUTHORITY" MEANS THE  AMOUNT  STATED  ON  THE
NOTICE ISSUED UNDER SUBPARAGRAPH (A) OF PARAGRAPH SIX OF SUBDIVISION (B)
OF  THIS  SECTION  CERTIFYING  THE  RURAL  BUSINESS GROWTH FUND. SEVENTY
PERCENT OF A RURAL BUSINESS GROWTH FUND'S ELIGIBLE INVESTMENT  AUTHORITY
SHALL BE COMPRISED OF CREDIT-ELIGIBLE CAPITAL CONTRIBUTIONS.
  (6)  A BUSINESS'S "PRINCIPAL BUSINESS OPERATIONS" ARE IN THIS STATE IF
AT LEAST EIGHTY PERCENT OF  THE  BUSINESS'S  EMPLOYEES  RESIDE  IN  THIS
STATE,  THE  INDIVIDUALS  WHO  RECEIVE  EIGHTY PERCENT OF THE BUSINESS'S
PAYROLL RESIDE IN THIS STATE, OR THE BUSINESS  HAS  AGREED  TO  USE  THE
PROCEEDS  OF  A  RURAL  GROWTH  INVESTMENT  TO  RELOCATE AT LEAST EIGHTY
PERCENT OF ITS EMPLOYEES TO THIS STATE OR PAY AT LEAST EIGHTY PERCENT OF
ITS PAYROLL TO INDIVIDUALS RESIDING IN THIS STATE.
  (7) "RURAL AREA" MEANS EITHER OF THE FOLLOWING:
  (A) A TOWN HAVING A POPULATION DENSITY OF LESS THAN ONE HUNDRED  FIFTY
PERSONS PER SQUARE MILE;
  (B) A COUNTY HAVING A POPULATION OF TWO HUNDRED FIFTY THOUSAND OR LESS
AS REFLECTED IN THE LATEST FEDERAL DECENNIAL CENSUS.
  (8)  "RURAL  BUSINESS CONCERN" MEANS AN OPERATING COMPANY THAT, AT THE
TIME IF THE INITIAL INVESTMENT IN THE COMPANY BY A RURAL BUSINESS GROWTH
FUND, HAS ITS PRINCIPAL BUSINESS OPERATIONS IN  THIS  STATE,  HAS  FEWER
THAN  TWO  HUNDRED  FIFTY  EMPLOYEES  OR  NOT  MORE THAN FIFTEEN MILLION
DOLLARS IN NET INCOME FOR THE PRECEDING TAXABLE YEAR, AND  MEETS  EITHER
OF THE FOLLOWING CRITERIA:
  (A)  THE  BUSINESS'S  PRINCIPAL  BUSINESS  OPERATIONS ARE LOCATED IN A
RURAL AREA; OR

S. 7094                             3                            A. 9636

  (B) THE BUSINESS PRODUCES OR PROVIDES ANY GOODS OR  SERVICES  NORMALLY
USED  BY  FARMERS,  RANCHERS,  OR  PRODUCERS  AND  HARVESTERS OF AQUATIC
PRODUCTS IN THEIR BUSINESS OPERATIONS, OR  TO  IMPROVE  THE  WELFARE  OR
LIVELIHOOD OF SUCH PERSONS, OR IS INVOLVED IN THE PROCESSING AND MARKET-
ING OF AGRICULTURAL PRODUCTS, FARM SUPPLY, AND INPUT SUPPLIERS.  FOR THE
PURPOSES  OF  THIS  SECTION,  "NET  INCOME" MEANS FEDERAL ADJUSTED GROSS
INCOME AS REQUIRED TO BE REPORTED UNDER THE INTERNAL REVENUE  CODE  LESS
FEDERAL AND STATE TAXES IMPOSED ON OR MEASURED BY INCOME.
  (9)  "RURAL  BUSINESS  GROWTH  FUND"  MEANS AN ENTITY CERTIFIED BY THE
DEPARTMENT UNDER THIS SECTION.
  (10) "RURAL GROWTH INVESTMENT" MEANS ANY CAPITAL OR EQUITY  INVESTMENT
IN A RURAL BUSINESS CONCERN OR ANY LOAN TO A RURAL BUSINESS CONCERN WITH
A TERM OF AT LEAST ONE YEAR.
  (11)  "TAXABLE  YEAR"  WHEN  USED IN REFERENCE TO AN INSURANCE COMPANY
MEANS THE CALENDAR YEAR ENDING ON THE THIRTY-FIRST DAY OF DECEMBER  NEXT
PRECEDING  THE  DAY  THE  ANNUAL REPORT IS REQUIRED TO BE RETURNED UNDER
SUBDIVISION (D) OF THIS SECTION.
  (B) CERTIFICATION.  (1)  ON  AND  AFTER  AUGUST  FIRST,  TWO  THOUSAND
SIXTEEN,  A PERSON THAT HAS DEVELOPED A BUSINESS PLAN TO INVEST IN RURAL
BUSINESS CONCERNS IN THIS STATE AND HAS SUCCESSFULLY  SOLICITED  PRIVATE
INVESTORS TO MAKE CAPITAL CONTRIBUTIONS IN SUPPORT OF THE PLAN MAY APPLY
TO THE DEPARTMENT FOR CERTIFICATION AS A RURAL BUSINESS GROWTH FUND. THE
APPLICATION SHALL INCLUDE ALL OF THE FOLLOWING:
  (A)  THE  TOTAL  ELIGIBLE INVESTMENT AUTHORITY SOUGHT BY THE APPLICANT
UNDER THE BUSINESS PLAN;
  (B) DOCUMENTS AND OTHER EVIDENCE SUFFICIENT TO PROVE, TO THE SATISFAC-
TION OF THE DEPARTMENT, THAT THE APPLICANT MEETS ALL  OF  THE  FOLLOWING
CRITERIA: (I) THE APPLICANT OR AN AFFILIATE OF THE APPLICANT IS LICENSED
AS  A  RURAL  BUSINESS INVESTMENT COMPANY UNDER 7 U.S.C. 2009CC, OR AS A
SMALL BUSINESS INVESTMENT COMPANY UNDER 15 U.S.C. 681.
  (II) AS OF THE DATE THE APPLICATION IS SUBMITTED,  THE  APPLICANT  HAS
INVESTED  MORE  THAN ONE HUNDRED MILLION DOLLARS IN OPERATING COMPANIES,
INCLUDING AT LEAST FIFTY MILLION DOLLARS IN OPERATING COMPANIES  LOCATED
IN RURAL AREAS. IN COMPUTING INVESTMENTS UNDER THIS DIVISION, THE APPLI-
CANT MAY INCLUDE INVESTMENTS MADE BY AFFILIATES OF THE APPLICANT.
  (C) AN ESTIMATE OF THE NUMBER OF JOBS THAT WILL BE CREATED OR RETAINED
IN THIS STATE AS A RESULT OF THE APPLICANT'S RURAL GROWTH INVESTMENTS;
  (D)  A  REVENUE  IMPACT  ASSESSMENT FOR THE APPLICANT'S PROPOSED RURAL
GROWTH INVESTMENTS PREPARED BY A NATIONALLY RECOGNIZED THIRD-PARTY INDE-
PENDENT ECONOMIC FORECASTING FIRM USING A DYNAMIC  ECONOMIC  FORECASTING
MODEL.    THE  REVENUE  IMPACT  ASSESSMENT SHALL ANALYZE THE APPLICANT'S
BUSINESS PLAN OVER THE TEN YEARS FOLLOWING THE DATE THE  APPLICATION  IS
SUBMITTED TO THE DEPARTMENT.
  (E)  A  SIGNED  AFFIDAVIT FROM EACH INVESTOR SUCCESSFULLY SOLICITED BY
THE APPLICANT TO MAKE A CREDIT ELIGIBLE CAPITAL CONTRIBUTION IN  SUPPORT
OF  THE  BUSINESS  PLAN. EACH AFFIDAVIT SHALL INCLUDE INFORMATION SUFFI-
CIENT FOR THE TAX COMMISSIONER TO IDENTIFY THE INVESTOR AND SHALL  STATE
THE AMOUNT OF THE INVESTOR'S CREDIT-ELIGIBLE CAPITAL CONTRIBUTION.
  (F) A NONREFUNDABLE APPLICATION FEE OF FIVE THOUSAND DOLLARS.
  (2)  THE DEPARTMENT SHALL REVIEW AND MAKE A DETERMINATION WITH RESPECT
TO EACH APPLICATION SUBMITTED UNDER PARAGRAPH ONE  OF  THIS  SUBDIVISION
WITHIN  THIRTY  DAYS  OF  RECEIPT.  THE DEPARTMENT SHALL REVIEW AND MAKE
DETERMINATIONS ON THE APPLICATIONS IN THE ORDER IN  WHICH  THE  APPLICA-
TIONS  ARE  RECEIVED  BY  THE  DEPARTMENT.  APPLICATIONS RECEIVED BY THE
DEPARTMENT ON THE SAME DAY SHALL BE DEEMED TO HAVE BEEN RECEIVED  SIMUL-
TANEOUSLY.  EXCEPT  AS  PROVIDED IN PARAGRAPH FIVE OF SUBDIVISION (C) OF

S. 7094                             4                            A. 9636

THIS SECTION, THE DEPARTMENT SHALL NOT APPROVE  MORE  THAN  ONE  HUNDRED
MILLION  DOLLARS  IN  ELIGIBLE INVESTMENT AUTHORITY OR MORE THAN SEVENTY
MILLION DOLLARS IN CREDIT-ELIGIBLE CAPITAL CONTRIBUTIONS.
  (3)  THE  DEPARTMENT  SHALL  DENY  AN APPLICATION SUBMITTED UNDER THIS
SECTION IF ANY OF THE FOLLOWING ARE TRUE: (A) THE APPLICATION IS  INCOM-
PLETE.
  (B) THE APPLICATION FEE IS NOT PAID IN FULL.
  (C)  THE  APPLICANT  DOES  NOT  SATISFY  ALL THE CRITERIA DESCRIBED IN
SUBPARAGRAPH (B) OF PARAGRAPH ONE OF THIS SUBDIVISION.
  (D) THE REVENUE IMPACT ASSESSMENT SUBMITTED UNDER SUBPARAGRAPH (D)  OF
PARAGRAPH  ONE  OF THIS SUBDIVISION DOES NOT DEMONSTRATE THAT THE APPLI-
CANT'S BUSINESS PLAN WILL RESULT IN A POSITIVE ECONOMIC IMPACT  ON  THIS
STATE  OVER  A  TEN-YEAR  PERIOD  THAT  EXCEEDS  THE ELIGIBLE INVESTMENT
AUTHORITY SOUGHT BY THE APPLICANT.
  (E) THE CREDIT-ELIGIBLE CAPITAL CONTRIBUTIONS DESCRIBED IN  AFFIDAVITS
SUBMITTED UNDER SUBPARAGRAPH (E) OF PARAGRAPH ONE OF THIS SUBDIVISION DO
NOT  EQUAL  SEVENTY  PERCENT  OF THE TOTAL AMOUNT OF ELIGIBLE INVESTMENT
AUTHORITY SOUGHT UNDER THE APPLICANT'S BUSINESS PLAN.
  (F) THE DEPARTMENT HAS ALREADY APPROVED THE MAXIMUM AMOUNT OF ELIGIBLE
INVESTMENT AUTHORITY AND CREDIT-ELIGIBLE CAPITAL  CONTRIBUTIONS  ALLOWED
UNDER PARAGRAPH TWO OF THIS SUBDIVISION.
  (4)  IF  THE DEPARTMENT DENIES AN APPLICATION UNDER PARAGRAPH THREE OF
THIS SUBDIVISION, THE DEPARTMENT SHALL SEND NOTICE OF ITS  DETERMINATION
OF THE APPLICANT. THE NOTICE SHALL INCLUDE THE REASONS THAT THE APPLICA-
TION WAS DENIED. IF THE APPLICATION WAS DENIED FOR ANY REASON OTHER THAN
THE  REASON  SPECIFIED  IN  SUBPARAGRAPH  (F) OF PARAGRAPH THREE OF THIS
SUBDIVISION, THE APPLICANT MAY PROVIDE  ADDITIONAL  INFORMATION  TO  THE
DEPARTMENT  TO  COMPLETE,  CLARIFY,  OR CURE DEFECTS IN THE APPLICATION.
THE ADDITIONAL INFORMATION MUST BE SUBMITTED WITHIN  THIRTY  DAYS  AFTER
THE  DATE THE NOTICE OF DENIAL WAS SENT BY THE DEPARTMENT. IF THE PERSON
OR ENTITY SUBMITS ADDITIONAL INFORMATION WITHIN THIRTY DAYS, THE DEPART-
MENT SHALL RECONSIDER THE APPLICATION WITHIN THIRTY DAYS AFTER RECEIVING
SUCH ADDITIONAL INFORMATION. IF AFTER SUBMISSION OF ADDITIONAL  INFORMA-
TION,  THE DEPARTMENT APPROVES THE APPLICATION, THEN THE SUBMISSION DATE
SHALL BE THE DATE OF THE ORIGINAL SUBMISSION OF THE APPLICATION. IF  THE
PERSON  OR  ENTITY  DOES NOT SUBMIT ADDITIONAL INFORMATION WITHIN THIRTY
DAYS AFTER THE NOTICE OF DENIAL WAS SENT, THE APPLICANT MAY SUBMIT A NEW
APPLICATION WITH A NEW SUBMISSION DATE AT ANY TIME.
  (5) OF APPROVING MULTIPLE SIMULTANEOUSLY SUBMITTED APPLICATIONS  WOULD
RESULT  IN EXCEEDING THE OVERALL ELIGIBLE INVESTMENT LIMIT PRESCRIBED BY
PARAGRAPH TWO OF THIS SUBDIVISION, THE DEPARTMENT  SHALL  PROPORTIONALLY
REDUCE THE ELIGIBLE INVESTMENT AUTHORITY AND THE CREDIT-ELIGIBLE CAPITAL
CONTRIBUTIONS  FOR  EACH  APPROVED  APPLICATION  AS  NECESSARY  TO AVOID
EXCEEDING THE LIMIT.
  (6) THE DEPARTMENT SHALL NOT DENY A RURAL BUSINESS GROWTH FUND  APPLI-
CATION OR REDUCE THE REQUESTED ELIGIBLE INVESTMENT AUTHORITY FOR REASONS
OTHER THAN THOSE DESCRIBED IN PARAGRAPHS THREE AND FIVE OF THIS SUBDIVI-
SION.  IF THE DEPARTMENT APPROVES SUCH APPLICATION, THE DEPARTMENT SHALL
ISSUE ALL OF THE FOLLOWING NOTICES: (A)  TO  THE  APPLICANT,  A  WRITTEN
NOTICE  CERTIFYING  THAT  THE  APPLICANT  QUALIFIES  AS A RURAL BUSINESS
GROWTH FUND AND  SPECIFYING  THE  AMOUNT  OF  THE  APPLICANT'S  ELIGIBLE
INVESTMENT  AUTHORITY; (B) TO EACH INVESTOR WHOSE AFFIDAVIT WAS INCLUDED
IN THE APPLICATION, A TAX CREDIT CERTIFICATE SPECIFYING  THE  AMOUNT  OF
THE  INVESTOR'S CREDIT-ELIGIBLE CAPITAL CONTRIBUTION; (C) TO THE COMMIS-
SIONER, A COPY OF EACH TAX CREDIT CERTIFICATE ISSUED UNDER  SUBPARAGRAPH
(B) OF PARAGRAPH SIX OF THIS SUBDIVISION.

S. 7094                             5                            A. 9636

  (7)  A  RURAL BUSINESS GROWTH FUND SHALL COMPLETE ALL OF THE FOLLOWING
WITHIN SIXTY DAYS OF RECEIVING THE CERTIFICATION ISSUED  UNDER  SUBPARA-
GRAPH (A) OF PARAGRAPH SIX OF THIS SUBDIVISION:
  (A) COLLECT THE CREDIT-ELIGIBLE CAPITAL CONTRIBUTIONS FROM EACH INVES-
TOR  ISSUED A TAX CREDIT CERTIFICATE UNDER SUBPARAGRAPH (B) OF PARAGRAPH
SIX OF THIS SUBDIVISION;
  (B) COLLECT ONE OR MORE INVESTMENTS OF CASH, WHICH SHALL  PURCHASE  AN
EQUITY  INTEREST IN THE RURAL GROWTH FUND OR A DEBT INSTRUMENT ISSUED BY
THE RURAL GROWTH FUND AT PAR VALUE OR PREMIUM, WITH A MATURITY  DATE  OF
AT  LEAST  FIVE  YEARS  FROM  THE  CLOSING  DATE THAT, WHEN ADDED TO THE
CONTRIBUTIONS COLLECTED UNDER SUBPARAGRAPH (A)  OF  PARAGRAPH  SEVEN  OF
THIS  SUBDIVISION,  EQUAL  THE  FUND'S ELIGIBLE INVESTMENT AUTHORITY. AT
LEAST TEN PERCENT OF THE FUND'S ELIGIBLE INVESTMENT AUTHORITY  SHALL  BE
COMPRISED  OF  EQUITY INVESTMENTS CONTRIBUTED BY AFFILIATES OF THE RURAL
BUSINESS GROWTH FUND, INCLUDING EMPLOYEES, OFFICERS,  AND  DIRECTORS  OF
SUCH AFFILIATES.
  (C)  SEND TO THE DEPARTMENT DOCUMENTATION SUFFICIENT TO PROVE THAT THE
AMOUNTS DESCRIBED IN SUBPARAGRAPHS (A) AND (B)  OF  PARAGRAPH  SEVEN  OF
THIS  SUBDIVISION HAVE BEEN COLLECTED. IF THE RURAL BUSINESS GROWTH FUND
FAILS TO FULLY COMPLY WITH  THIS  PARAGRAPH,  THE  FUND'S  CERTIFICATION
SHALL LAPSE.
  (8)  ELIGIBLE  INVESTMENT  AUTHORITY AND CORRESPONDING CREDIT-ELIGIBLE
CAPITAL CONTRIBUTIONS THAT LAPSE UNDER PARAGRAPH SEVEN OF THIS  SUBDIVI-
SION  DO  NOT COUNT TOWARD LIMITS ON TOTAL ELIGIBLE INVESTMENT AUTHORITY
AND CREDIT-ELIGIBLE CAPITAL CONTRIBUTIONS PRESCRIBED IN PARAGRAPH TWO OF
THIS SUBDIVISION. ONCE ELIGIBLE INVESTMENT  AUTHORITY  HAS  LAPSED,  THE
DEPARTMENT  SHALL  FIRST  AWARD  LAPSED AUTHORITY PRO RATA TO EACH RURAL
BUSINESS GROWTH FUND THAT WAS AWARDED LESS THAN THE  REQUESTED  ELIGIBLE
INVESTMENT  AUTHORITY  UNDER  PARAGRAPH  FIVE  OF  THIS SUBDIVISION. ANY
REMAINING ELIGIBLE INVESTMENT AUTHORITY MAY BE AWARDED BY THE DEPARTMENT
TO NEW APPLICANTS.
  (9) APPLICATION FEES SUBMITTED TO THE DEPARTMENT PURSUANT TO  SUBPARA-
GRAPH  (F) OF PARAGRAPH ONE OF THIS SUBDIVISION SHALL BE CREDITED TO THE
NEW  YORK  AGRICULTURE  AND  RURAL  JOBS  FUND,   CREATED   IN   SECTION
NINETY-NINE-Y OF THE STATE FINANCE LAW.
  (C) REVOCATION OF CERTIFICATION. (1) THE DEPARTMENT SHALL REVOKE A TAX
CREDIT  CERTIFICATE  ISSUED UNDER SUBDIVISION (B) OF THIS SECTION IF ANY
OF THE FOLLOWING OCCUR WITH RESPECT TO  A  RURAL  BUSINESS  GROWTH  FUND
BEFORE THE FUND IS DECERTIFIED UNDER PARAGRAPH SIX OF THIS SUBDIVISION.
  (A)  THE RURAL BUSINESS GROWTH FUND IN WHICH THE CREDIT-ELIGIBLE CAPI-
TAL CONTRIBUTION WAS MADE DOES NOT INVEST ONE  HUNDRED  PERCENT  OF  ITS
ELIGIBLE  INVESTMENT AUTHORITY IN RURAL GROWTH INVESTMENTS IN THIS STATE
WITHIN THREE YEARS OF THE CLOSING DATE.
  (B) THE RURAL BUSINESS GROWTH FUND MAKES  A  DISTRIBUTION  OR  PAYMENT
OTHER THAN AN ELIGIBLE DISTRIBUTION BEFORE THE FOURTH ANNIVERSARY OF THE
CLOSING DATE.
  (C) THE RURAL BUSINESS GROWTH FUND INVESTS MORE THAN TWENTY PERCENT OF
ITS  ELIGIBLE  INVESTMENT  AUTHORITY IN THE SAME RURAL BUSINESS CONCERN,
INCLUDING AMOUNTS INVESTED IN AFFILIATES OF THE RURAL  BUSINESS  CONCERN
BUT  EXCLUDING AMOUNTS REINVESTED IN THE RURAL BUSINESS GROWTH FUND WITH
REPAID OR REDEEMED RURAL  BUSINESS  GROWTH  INVESTMENTS,  PROVIDED  SUCH
REINVESTMENTS  SHALL  NOT  COUNT TOWARDS THE REQUIREMENT OF SUBPARAGRAPH
(A) OF THIS PARAGRAPH.
  (D) THE RURAL BUSINESS GROWTH FUND MAKES A RURAL GROWTH INVESTMENT  IN
A  RURAL  BUSINESS CONCERN THAT DIRECTLY OR INDIRECTLY THROUGH AN AFFIL-
IATE OWNS, HAS THE RIGHT TO ACQUIRE AN OWNERSHIP INTEREST, MAKE  A  LOAN

S. 7094                             6                            A. 9636

TO,  OR  MAKE AN INVESTMENT IN THE RURAL BUSINESS GROWTH FUND, AN AFFIL-
IATE OF THE RURAL BUSINESS GROWTH FUND, OR  AN  INVESTOR  IN  THE  RURAL
BUSINESS  GROWTH  FUND.  THIS PARAGRAPH DOES NOT APPLY TO INVESTMENTS IN
PUBLICLY  TRADED  SECURITIES  BY A RURAL BUSINESS CONCERN OR AN OWNER OR
AFFILIATE OF SUCH CONCERN.
  (2) IF, AFTER INVESTING ONE HUNDRED PERCENT OF ITS ELIGIBLE INVESTMENT
AUTHORITY IN RURAL GROWTH INVESTMENTS IN THIS STATE, THE RURAL  BUSINESS
GROWTH  FUND  FAILS TO MAINTAIN THAT INVESTMENT UNTIL THE FIFTH ANNIVER-
SARY OF THE CLOSING DATE, INCLUDING THE  REINVESTMENT  OF  SUCH  INVEST-
MENT,THE  DEPARTMENT SHALL LEVY A FINE AGAINST THE RURAL BUSINESS GROWTH
FUND OF UP TO THREE HUNDRED THOUSAND DOLLARS. FOR THE PURPOSES  OF  THIS
SECTION, AN INVESTMENT IS "MAINTAINED" EVEN IF THE INVESTMENT IS SOLD OR
REPAID  SO  LONG  AS  THE RURAL BUSINESS GROWTH FUND REINVESTS AN AMOUNT
EQUAL TO THE CAPITAL RETURNED OR RECOVERED BY THE FUND FROM THE ORIGINAL
INVESTMENT, EXCLUSIVE OF ANY PROFITS REALIZED,  IN  OTHER  RURAL  GROWTH
INVESTMENTS  IN  THIS  STATE WITHIN TWELVE MONTHS OF THE RECEIPT OF SUCH
CAPITAL. AMOUNTS RECEIVED PERIODICALLY BY A RURAL BUSINESS  GROWTH  FUND
SHALL  BE TREATED AS CONTINUALLY INVESTED IN RURAL GROWTH INVESTMENTS IF
THE AMOUNTS ARE REINVESTED IN ONE OR MORE RURAL  GROWTH  INVESTMENTS  BY
THE  END OF THE FOLLOWING CALENDAR YEAR. A RURAL BUSINESS GROWTH FUND IS
NOT REQUIRED TO REINVEST CAPITAL RETURNED FROM RURAL GROWTH  INVESTMENTS
AFTER  THE FOURTH ANNIVERSARY OF THE CLOSING DATE, AND SUCH RURAL GROWTH
INVESTMENTS SHALL BE CONSIDERED HELD CONTINUOUSLY BY  THE  RURAL  GROWTH
FUND THROUGH THE FIFTH ANNIVERSARY OF THE CLOSING DATE.
  (3) BEFORE TAKING ACTION UNDER PARAGRAPHS ONE AND TWO OF THIS SUBDIVI-
SION,  THE DEPARTMENT SHALL NOTIFY THE RURAL BUSINESS GROWTH FUND OF THE
REASONS FOR THE PENDING  ACTION.  IF  THE  RURAL  BUSINESS  GROWTH  FUND
CORRECTS  THE  VIOLATIONS  OUTLINED IN THE NOTICE TO THE SATISFACTION OF
THE DEPARTMENT WITHIN ONE HUNDRED EIGHTY DAYS OF THE DATE OF THE  NOTICE
WAS SENT, THE DEPARTMENT SHALL NOT REVOKE THE TAX CREDIT CERTIFICATES OR
LEVY A FINE.
  (4) IF THE DEPARTMENT REVOKES A TAX CREDIT CERTIFICATE UNDER PARAGRAPH
ONE  OF  THIS SUBDIVISION, THE COMMISSIONER SHALL MAKE AN ASSESSMENT FOR
THE AMOUNT OF THE CREDIT CLAIMED BY THE CERTIFICATE  HOLDER  BEFORE  THE
CERTIFICATE  WAS  REVOKED.  THE  COMMISSIONER  SHALL MAKE THE ASSESSMENT
WITHIN ONE YEAR AFTER THE CERTIFICATE HAS BEEN REVOKED.
  (5) IF TAX CREDIT CERTIFICATES ARE REVOKED UNDER PARAGRAPH ONE OF THIS
SUBDIVISION, THE ASSOCIATED ELIGIBLE INVESTMENT AUTHORITY AND CREDIT-EL-
IGIBLE CAPITAL CONTRIBUTIONS DO NOT COUNT  TOWARD  THE  LIMIT  ON  TOTAL
ELIGIBLE  INVESTMENT AUTHORITY AND CREDIT-ELIGIBLE CAPITAL CONTRIBUTIONS
DESCRIBED BY PARAGRAPH TWO OF  SUBDIVISION  (B)  OF  THIS  SECTION.  THE
DEPARTMENT  SHALL  FIRST AWARD REVERTED AUTHORITY PRO RATA TO EACH RURAL
BUSINESS GROWTH FUND THAT WAS AWARDED LESS THAN THE  REQUESTED  ELIGIBLE
INVESTMENT  AUTHORITY  UNDER  PARAGRAPH  FIVE OF SUBDIVISION (B) OF THIS
SECTION. ANY REMAINING ELIGIBLE INVESTMENT AUTHORITY MAY BE  AWARDED  BY
THE DEPARTMENT TO NEW APPLICANTS.
  (6) (A) ON OR AFTER THE FIFTH ANNIVERSARY OF THE CLOSING DATE, A RURAL
BUSINESS GROWTH FUND THAT HAS NOT COMMITTED ANY OF THE ACTS DESCRIBED IN
PARAGRAPH  ONE OF THIS SUBDIVISION MAY APPLY TO THE DEPARTMENT TO DECER-
TIFY AS A RURAL BUSINESS GROWTH FUND. THE DEPARTMENT  SHALL  RESPOND  TO
THE APPLICATION WITHIN THIRTY DAYS AFTER RECEIVING SUCH APPLICATION.  IN
EVALUATING  THE  FACT  THAT NO TAX CREDIT CERTIFICATES HAVE BEEN REVOKED
WITH RESPECT TO THE RURAL  BUSINESS  GROWTH  FUND  SHALL  BE  SUFFICIENT
EVIDENCE  TO  PROVE  THAT  THE FUND IS ELIGIBLE FOR DECERTIFICATION. THE
DEPARTMENT SHALL NOT UNREASONABLY DENY AN  APPLICATION  SUBMITTED  UNDER
THIS SUBDIVISION.

S. 7094                             7                            A. 9636

  (B) THE DEPARTMENT SHALL SEND NOTICE OF ITS DETERMINATION WITH RESPECT
TO  AN APPLICATION SUBMITTED UNDER SUBPARAGRAPH (A) OF THIS PARAGRAPH TO
THE RURAL BUSINESS GROWTH FUND. IF THE APPLICATION IS DENIED, THE NOTICE
SHALL INCLUDE THE REASONS FOR THE DETERMINATION.
  (C)  THE  DEPARTMENT  SHALL NOT REVOKE A TAX CREDIT CERTIFICATE DUE TO
ANY ACTIONS OF A RURAL BUSINESS GROWTH FUND THAT OCCUR  AFTER  THE  DATE
THE  FUND'S  APPLICATION  FOR DECERTIFICATION IS APPROVED UNDER SUBPARA-
GRAPH (A) OF THIS PARAGRAPH.
  (D) REPORTS. (1) EACH RURAL BUSINESS GROWTH FUND SHALL SUBMIT A REPORT
TO THE DEPARTMENT ON OR BEFORE THE FIFTH BUSINESS DAY AFTER  THE  SECOND
ANNIVERSARY  OF THE CLOSING DATE. THE REPORT SHALL PROVIDE DOCUMENTATION
AS TO THE INVESTMENT OF THE  FUND'S  ELIGIBLE  INVESTMENT  AUTHORITY  IN
RURAL  GROWTH  INVESTMENTS. SUCH DOCUMENTATION SHALL INCLUDE THE FOLLOW-
ING:
  (A) A BANK STATEMENT OF THE RURAL BUSINESS GROWTH FUND DISPLAYING EACH
RURAL GROWTH INVESTMENT;
  (B) THE NAME AND LOCATION OF EACH BUSINESS IN WHICH THE RURAL BUSINESS
GROWTH FUND HAS MADE A RURAL GROWTH INVESTMENT, INCLUDING EVIDENCE  THAT
THE  BUSINESS  QUALIFIED  AS  A  RURAL  BUSINESS CONCERN AT THE TIME THE
INVESTMENT WAS MADE.
  (2) ON OR BEFORE THE LAST DAY OF FEBRUARY OF EACH YEAR  FOLLOWING  THE
YEAR  IN  WHICH THE REPORT REQUIRED UNDER PARAGRAPH ONE OF THIS SUBDIVI-
SION IS DUE, THE RURAL BUSINESS  GROWTH  FUND  SHALL  SUBMIT  AN  ANNUAL
REPORT TO THE DEPARTMENT INCLUDING THE FOLLOWING:
  (A) THE NUMBER OF EMPLOYMENT POSITIONS CREATED OR RETAINED AS A RESULT
OF THE FUND'S RURAL GROWTH INVESTMENTS AS OF THE LAST DAY OF THE PRECED-
ING CALENDAR YEAR;
  (B)  THE  AVERAGE ANNUAL SALARY OF THE POSITIONS DESCRIBED IN SUBPARA-
GRAPH (A) OF THIS PARAGRAPH;
  (C) ANY OTHER INFORMATION REQUIRED BY THE DEPARTMENT.
  (3) THE DEPARTMENT SHALL  ADOPT  RULES  NECESSARY  TO  IMPLEMENT  THIS
SUBDIVISION.
  S  2.  Section 1511 of the tax law is amended by adding a new subdivi-
sion (dd) to read as follows:
  (DD) CREDIT FOR CERTAIN INVESTMENTS TO A RURAL BUSINESS  GROWTH  FUND.
(1)  THERE  IS  HEREBY  ALLOWED A NONREFUNDABLE TAX CREDIT FOR TAXPAYERS
THAT MADE A CREDIT-ELIGIBLE CAPITAL CONTRIBUTION  TO  A  RURAL  BUSINESS
GROWTH  FUND AND WERE ISSUED A TAX CREDIT CERTIFICATE UNDER SUBPARAGRAPH
(B) OF PARAGRAPH SIX OF SUBDIVISION (B) OF  SECTION  FORTY-TWO  OF  THIS
CHAPTER. THE CREDIT MAY BE CLAIMED AGAINST THE TAX IMPOSED BY THIS ARTI-
CLE.  THE CREDIT MAY NOT BE SOLD, TRANSFERRED, OR ALLOCATED TO ANY ENTI-
TY OTHER THAN AN AFFILIATE OF THE TAXPAYER.
  (2) ON THE CLOSING DATE, THE TAXPAYER SHALL EARN A VESTED CREDIT EQUAL
TO  THE AMOUNT OF THE TAXPAYER'S CREDIT-ELIGIBLE CAPITAL CONTRIBUTION TO
THE RURAL BUSINESS GROWTH FUND, AS SPECIFIED ON THE TAX  CREDIT  CERTIF-
ICATE.  THE TAXPAYER MAY CLAIM UP TO TWENTY-FIVE PERCENT OF THE ELIGIBLE
INVESTMENT AUTHORITY FOR THE TAXABLE YEAR OF THE THIRD ANNIVERSARY  DATE
OF  THE  CLOSING  DATE, EXCLUSIVE OF AMOUNTS CARRIED FORWARD PURSUANT TO
PARAGRAPH THREE OF THIS SUBDIVISION. THE TAXPAYER MAY CLAIM UP TO TWENTY
PERCENT OF THE ELIGIBLE INVESTMENT AUTHORITY FOR THE TAXABLE YEARS  THAT
INCLUDE  THE  FOURTH  AND  FIFTH  ANNIVERSARY DATES OF THE CLOSING DATE,
EXCLUSIVE OF AMOUNTS CARRIED FORWARD PURSUANT TO PARAGRAPH THREE OF THIS
SUBDIVISION.
  (3) IF THE AMOUNT OF THE CREDIT FOR A TAXABLE  YEAR  EXCEEDS  THE  TAX
OTHERWISE  DUE  FOR  THAT  YEAR,  THE EXCESS SHALL BE CARRIED FORWARD TO
ENSUING TAXABLE YEARS UNTIL FULLY USED. A  TAXPAYER  CLAIMING  A  CREDIT

S. 7094                             8                            A. 9636

UNDER  THIS  SECTION  SHALL  SUBMIT A COPY OF THE TAX CREDIT CERTIFICATE
WITH THE TAXPAYER'S RETURN FOR EACH TAXABLE YEAR FOR WHICH THE CREDIT IS
CLAIMED.
  S  3. The state finance law is amended by adding a new section 99-y to
read as follows:
  S 99-Y. NEW YORK AGRICULTURE AND RURAL JOBS FUND. 1. THERE  IS  HEREBY
ESTABLISHED  IN  THE  JOINT  CUSTODY  OF  THE  STATE COMPTROLLER AND THE
COMMISSIONER OF TAXATION AND FINANCE A SPECIAL FUND TO BE KNOWN  AS  THE
"NEW YORK AGRICULTURE AND RURAL JOBS FUND".
  2.  SUCH FUND SHALL CONSIST OF ALL APPLICATION FEES SUBMITTED PURSUANT
TO SUBPARAGRAPH (F) OF PARAGRAPH  ONE  OF  SUBDIVISION  (B)  OF  SECTION
FORTY-TWO  OF  THE TAX LAW, AND ALL OTHER MONEYS APPROPRIATED, CREDITED,
OR TRANSFERRED THERETO FROM ANY OTHER FUND OR SOURCE PURSUANT TO LAW.
  3. MONEYS OF THE FUND,  FOLLOWING  APPROPRIATION  BY  THE  LEGISLATURE
SHALL BE EXPENDED ONLY FOR THE PURPOSES OF PROVIDING FUNDING FOR THE NEW
YORK AGRICULTURE AND RURAL JOBS CREDIT SET FORTH IN SECTION FORTY-TWO OF
THE  TAX  LAW.  MONEYS  SHALL  BE  PAID OUT OF THE FUND ON THE AUDIT AND
WARRANT OF THE STATE COMPTROLLER ON VOUCHERS APPROVED AND  CERTIFIED  BY
THE  COMMISSIONER  OF TAXATION AND FINANCE. ANY INTEREST RECEIVED BY THE
COMPTROLLER ON MONEYS ON DEPOSIT IN THE NEW YORK AGRICULTURE  AND  RURAL
JOBS FUND SHALL BE RETAINED IN AND BECOME PART OF SUCH FUND.
  S 4. This act shall take effect January 1, 2017.