S T A T E O F N E W Y O R K
________________________________________________________________________
4727--B
2017-2018 Regular Sessions
I N S E N A T E
February 24, 2017
___________
Introduced by Sens. SEWARD, AKSHAR, AMEDORE, BONACIC, CROCI, FUNKE,
GALLIVAN, GRIFFO, HELMING, LITTLE, MARCHIONE, O'MARA, ORTT, RANZENHOF-
ER, RITCHIE, ROBACH, SAVINO, SERINO, TEDISCO, VALESKY -- read twice
and ordered printed, and when printed to be committed to the Committee
on Investigations and Government Operations -- recommitted to the
Committee on Investigations and Government Operations in accordance
with Senate Rule 6, sec. 8 -- committee discharged, bill amended,
ordered reprinted as amended and recommitted to said committee --
committee discharged, bill amended, ordered reprinted as amended and
recommitted to said committee
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 44 to read
as follows:
§ 44. 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.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD08845-09-8
S. 4727--B 2
(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
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 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. AT LEAST
SIXTY-FIVE PERCENT OF A RURAL BUSINESS GROWTH FUND'S ELIGIBLE INVESTMENT
AUTHORITY SHALL BE COMPRISED OF CREDIT-ELIGIBLE CAPITAL CONTRIBUTIONS.
(5) 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.
(6) "RURAL AREA" SHALL HAVE THE SAME MEANING AS DEFINED IN SUBDIVISION
SEVEN OF SECTION FOUR HUNDRED EIGHTY-ONE OF THE EXECUTIVE LAW.
(7) "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 ONE HUNDRED FIFTY EMPLOYEES OR NOT MORE THAN TEN 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
(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, PROVIDED
THAT SUCH BUSINESS IS NOT LOCATED IN A MUNICIPALITY WITH A POPULATION OF
MORE THAN FIFTY THOUSAND. 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. ANY BUSINESS WHICH IS CLASSIFIED AS A RURAL
BUSINESS CONCERN AT THE TIME OF THE INITIAL INVESTMENT IN SAID BUSINESS
BY A RURAL BUSINESS GROWTH FUND SHALL REMAIN CLASSIFIED AS A RURAL BUSI-
NESS CONCERN AND MAY RECEIVE FOLLOW-ON INVESTMENTS FROM ANY RURAL BUSI-
NESS GROWTH FUND, AND SUCH FOLLOW-ON INVESTMENTS SHALL BE RURAL GROWTH
INVESTMENTS EVEN THOUGH SUCH BUSINESS MAY NOT MEET THE DEFINITION OF A
RURAL BUSINESS CONCERN AT THE TIME OF SUCH FOLLOW-ON INVESTMENTS.
(8) "RURAL BUSINESS GROWTH FUND" MEANS AN ENTITY CERTIFIED BY THE
DEPARTMENT UNDER THIS SECTION.
S. 4727--B 3
(9) "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.
(10) "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 EIGH-
TEEN, AN APPLICANT 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 FOUR OF SUBDIVISION (C) OF
THIS SECTION, THE DEPARTMENT SHALL NOT APPROVE MORE THAN ONE HUNDRED
MILLION DOLLARS IN ELIGIBLE INVESTMENT AUTHORITY OR MORE THAN SIXTY-FIVE
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.
S. 4727--B 4
(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 CREDIT ELIGIBLE CAPITAL
CONTRIBUTIONS 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 SIXTY-FIVE 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 THIS PARAGRAPH.
(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
S. 4727--B 5
AT LEAST FIVE YEARS FROM THE CLOSING DATE THAT, WHEN ADDED TO THE
CONTRIBUTIONS COLLECTED UNDER SUBPARAGRAPH (A) OF THIS PARAGRAPH, 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 THIS PARAGRAPH 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-EE 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 EXITS THE PROGRAM UNDER PARAGRAPH FIVE OF THIS SUBDIVI-
SION.
(A) THE RURAL BUSINESS GROWTH FUND IN WHICH THE CREDIT-ELIGIBLE CAPI-
TAL CONTRIBUTION WAS MADE DOES NOT INVEST SIXTY PERCENT OF ITS ELIGIBLE
INVESTMENT AUTHORITY IN RURAL GROWTH INVESTMENTS IN THIS STATE WITHIN
TWO YEARS OF THE CLOSING DATE AND ONE HUNDRED PERCENT OF ITS ELIGIBLE
INVESTMENT AUTHORITY IN RURAL GROWTH INVESTMENTS IN THIS STATE WITHIN
THREE YEARS OF THE CLOSING DATE.
(B) 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 INVESTMENT.
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 REAL-
IZED, 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 IN THE SIX MONTHS IMMEDIATELY PRECEDING
THE FIFTH ANNIVERSARY OF THE CLOSING DATE, AND SUCH RURAL GROWTH INVEST-
MENTS SHALL BE CONSIDERED HELD CONTINUOUSLY BY THE RURAL GROWTH FUND
THROUGH THE FIFTH ANNIVERSARY OF THE CLOSING DATE.
(C) THE RURAL BUSINESS GROWTH FUND INVESTS MORE THAN THE GREATER OF
SEVEN MILLION FIVE HUNDRED THOUSAND DOLLARS OR TWENTY PERCENT OF ITS
ELIGIBLE INVESTMENT AUTHORITY IN THE SAME RURAL BUSINESS CONCERN,
S. 4727--B 6
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
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) BEFORE TAKING ACTION UNDER PARAGRAPH ONE OF THIS SUBDIVISION, 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, OTHER THAN VIOLATIONS OF SUBPARAGRAPH (D) OF PARAGRAPH ONE
OF THIS SUBDIVISION, 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.
(3) 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.
(4) 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.
(5) (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 EXIT
THE PROGRAM AS A RURAL BUSINESS GROWTH FUND AND NO LONGER BE SUBJECT TO
REGULATION UNDER THIS SECTION. THE DEPARTMENT SHALL RESPOND TO THE
APPLICATION WITHIN THIRTY DAYS AFTER RECEIVING SUCH APPLICATION. IN
EVALUATING SUCH REQUEST 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 TO EXIT THE
PROGRAM. THE DEPARTMENT SHALL NOT UNREASONABLY DENY AN APPLICATION
SUBMITTED UNDER THIS SUBDIVISION.
(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 EXITING THE PROGRAM IS APPROVED UNDER SUBPAR-
AGRAPH (A) OF THIS PARAGRAPH.
S. 4727--B 7
(6) IF THE NUMBER OF JOBS CREATED OR RETAINED BY THE RURAL BUSINESS
CONCERN THAT RECEIVED RURAL GROWTH INVESTMENTS FROM THE RURAL BUSINESS
GROWTH FUND IS:
(A) LESS THAN SIXTY PERCENT OF THE NUMBER PROJECTED IN THE APPROVED
RURAL BUSINESS GROWTH FUND'S BUSINESS PLAN FILED AS PART OF ITS APPLICA-
TION FOR CERTIFICATION UNDER SUBDIVISION (B) OF THIS SECTION, THEN THE
STATE SHALL RECEIVE TWENTY PERCENT OF ANY DISTRIBUTION OR PAYMENT TO AN
EQUITY HOLDER IN AN APPROVED RURAL BUSINESS GROWTH FUND IN EXCESS OF THE
SUM OF THE AMOUNT OF EQUITY CAPITAL INVESTED IN THE FUND BY SUCH EQUITY
HOLDER AND AN AMOUNT EQUAL TO ANY PROJECTED INCREASE IN THE EQUITY HOLD-
ER'S FEDERAL OR STATE TAX LIABILITY, INCLUDING PENALTIES AND INTEREST,
RELATED TO THE EQUITY HOLDER'S OWNERSHIP, MANAGEMENT, OR OPERATION OF
THE FUND; OR
(B) GREATER THAN SIXTY PERCENT BUT LESS THAN EIGHTY PERCENT OF THE
NUMBER PROJECTED IN THE APPROVED RURAL BUSINESS GROWTH FUND'S BUSINESS
PLAN FILED AS PART OF ITS APPLICATION FOR CERTIFICATION UNDER SUBDIVI-
SION (B) OF THIS SECTION, THEN THE STATE SHALL RECEIVE TEN PERCENT OF
ANY DISTRIBUTION OR PAYMENT TO AN EQUITY HOLDER IN AN APPROVED RURAL
BUSINESS GROWTH FUND IN EXCESS OF THE SUM OF THE AMOUNT OF EQUITY CAPI-
TAL INVESTED IN THE FUND BY SUCH EQUITY HOLDER AND AN AMOUNT EQUAL TO
ANY PROJECTED INCREASE IN THE EQUITY HOLDER'S FEDERAL OR STATE TAX
LIABILITY, INCLUDING PENALTIES AND INTEREST, RELATED TO THE EQUITY HOLD-
ER'S OWNERSHIP, MANAGEMENT, OR OPERATION OF THE FUND.
(7) A RURAL BUSINESS GROWTH FUND MAY, PRIOR TO MAKING A RURAL GROWTH
INVESTMENT, REQUEST FROM THE DEPARTMENT A WRITTEN DETERMINATION AS TO
WHETHER THE BUSINESS ENTITY IN WHICH IT PROPOSES TO INVEST QUALIFIES AS
A RURAL BUSINESS CONCERN. THE DEPARTMENT, NOT LATER THAN THE TWENTIETH
BUSINESS DAY AFTER THE DATE OF RECEIPT OF SUCH REQUEST, SHALL NOTIFY THE
RURAL BUSINESS GROWTH FUND OF ITS DETERMINATION. IF THE DEPARTMENT FAILS
TO NOTIFY THE RURAL FUND OF ITS DETERMINATION BY THE TWENTIETH BUSINESS
DAY, THE BUSINESS IN WHICH THE RURAL BUSINESS GROWTH FUND PROPOSES TO
INVEST SHALL BE CONSIDERED AN ELIGIBLE RURAL BUSINESS CONCERN.
(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
AND THIRD ANNIVERSARIES OF THE CLOSING DATE. THE REPORT SHALL PROVIDE
DOCUMENTATION AS TO THE RURAL GROWTH INVESTMENTS MADE BY THE RURAL BUSI-
NESS GROWTH FUND. SUCH DOCUMENTATION SHALL INCLUDE THE FOLLOWING:
(A) A BANK STATEMENT OF THE RURAL BUSINESS GROWTH FUND DISPLAYING EACH
RURAL GROWTH INVESTMENT;
(B) THE NAME AND LOCATION OF EACH RURAL BUSINESS CONCERN IN WHICH THE
RURAL BUSINESS GROWTH FUND HAS MADE A RURAL GROWTH INVESTMENT, INCLUDING
EVIDENCE THAT THE BUSINESS CONCERN WAS QUALIFIED AT THE TIME THE INVEST-
MENT 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. 4727--B 8
§ 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-FOUR OF THIS
CHAPTER. THE CREDIT MAY BE CLAIMED AGAINST THE TAX IMPOSED BY THIS ARTI-
CLE AND SECTION ONE THOUSAND ONE HUNDRED TWELVE OF THE INSURANCE LAW.
THE CREDIT MAY NOT BE SOLD, TRANSFERRED, OR ALLOCATED TO ANY ENTITY
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 TWO THOUSAND TWENTY-THREE TAXABLE YEAR AND
UP TO TWENTY PERCENT OF THE ELIGIBLE INVESTMENT AUTHORITY FOR THE TWO
THOUSAND TWENTY-FOUR AND TWO THOUSAND TWENTY-FIVE TAXABLE YEARS, EXCLU-
SIVE 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
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.
§ 3. The tax law is amended by adding a new section 187-q to read as
follows:
§ 187-Q. CREDIT FOR CERTAIN INVESTMENTS TO A RURAL BUSINESS GROWTH
FUND. 1. THERE IS HEREBY ALLOWED A NONREFUNDABLE TAX CREDIT FOR TAXPAY-
ERS 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-FOUR 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 ENTITY
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 TWO THOUSAND TWENTY-THREE TAXABLE YEAR AND
UP TO TWENTY PERCENT OF THE ELIGIBLE INVESTMENT AUTHORITY FOR THE TWO
THOUSAND TWENTY-FOUR AND TWO THOUSAND TWENTY-FIVE TAXABLE YEARS, EXCLU-
SIVE OF AMOUNTS CARRIED FORWARD PURSUANT TO SUBDIVISION THREE OF THIS
SECTION.
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
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.
§ 4. Section 210-B of the tax law is amended by adding a new subdivi-
sion 53 to read as follows:
53. 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
S. 4727--B 9
GROWTH FUND AND WERE ISSUED A TAX CREDIT CERTIFICATE UNDER SUBPARAGRAPH
(B) OF PARAGRAPH SIX OF SUBDIVISION (B) OF SECTION FORTY-FOUR 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 ENTITY
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 TWO THOUSAND TWENTY-THREE TAXABLE YEAR AND
UP TO TWENTY PERCENT OF THE ELIGIBLE INVESTMENT AUTHORITY FOR THE TWO
THOUSAND TWENTY-FOUR AND TWO THOUSAND TWENTY-FIVE TAXABLE YEARS, EXCLU-
SIVE 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
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.
§ 5. The state finance law is amended by adding a new section 99-ee to
read as follows:
§ 99-EE. 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-FOUR 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-FOUR
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.
§ 6. This act shall take effect July 1, 2018.
