§ 964. Empire zone capital corporations. (a) No more than three empire
zone capital corporations may be established in each zone for the
purpose of raising funds through private and public grants, donations or
investments, to be used in making investments in, and loans to, business
firms certified pursuant to subdivision (a) of section nine hundred
fifty-nine of this article for the purpose of encouraging the
establishment or expansion of businesses and the provision of additional
job opportunities within such area. A zone capital corporation may serve
one or more zones within an economic development region or zones within
two or more regions. Prior to the establishment of a zone capital
corporation, the zone board and the commissioner of the department of
economic development shall approve the formation of the proposed zone
capital corporation, its board of directors and management, and its
procedures for making, servicing and monitoring investments. In no
event, however, shall an empire zone capital corporation acquire an
ownership interest in any certified business firm which amounts to more
than twenty-five percent of the ownership interest of such certified
business firm. No loan to or investment in any business firm shall be
made by an empire zone capital corporation located in a zone within a
town with a population of more than twenty-five thousand, until such
corporation has accumulated at least two hundred thousand dollars in
capital stock. No loan or investment in any business firm shall be made
by an empire zone capital corporation located in a zone within a town
with a population of less than twenty-five thousand until such
corporation has accumulated at least one hundred thousand dollars in
capital stock. A zone capital corporation shall submit to the zone board
an annual report on its activities.

(b) Each zone capital corporation shall establish an investment
committee for the purpose of evaluating applications for loans and
equity investments. Each committee shall be comprised of members who
possess the requisite business and financial expertise necessary to
evaluate applications for loans and/or equity investments.

(c) Each empire zone capital corporation shall, to the maximum extent
feasible, undertake measures and procedures to ensure meaningful
participation by minority-owned and women-owned business enterprises in
the activities and investments of such corporation. Each such
corporation shall additionally, to the maximum extent feasible,
undertake measures and procedures to ensure meaningful participation by
locally owned business enterprises in the activities and investments of
such corporation.

(d) The total amount of tax credits available to each zone pursuant to
subdivision twenty of section two hundred ten, subsection (l) of section
six hundred six, subsection (d) of section fourteen hundred fifty-six
and subdivision (h) of section fifteen hundred eleven of the tax law,
shall be two million five hundred thousand dollars, (provided, however,
that in no event shall the credits available in any zone exceed five
hundred thousand dollars in the case of qualified investments in
certified zone businesses as described in such subdivisions and
subsections). Apportionment of credits within a zone between capital
investments in and contributions to zone capital corporations, direct
investments in certified zone businesses or contributions to community
development projects will be determined and accounted for by the local
zone administrative board in consultation with the zone administrative
entity, subject to regulations promulgated by the commissioner of the
department of economic development. Credits not used by a zone within
four years of their apportionment may, after a public hearing, be
reallocated pursuant to regulations promulgated by the commissioner.
Certifications under subdivision twenty of section two hundred ten,
subsection (l) of section six hundred six, subsection (d) of section
fourteen fifty-six and subdivision (h) of section fifteen hundred eleven
of the tax law shall be consistent with the provisions of this
subdivision.

(e) The commissioner shall promulgate regulations governing the
criteria of eligibility for the tax credits, referred to in subdivision
(d) of this section, applicable to direct equity investments in
certified zone businesses and to contributions to community development
projects provided for in this section. Such regulations shall establish
requirements including, but not limited to: (i) a demonstration that the
direct equity investment in a certified zone business will contribute,
significantly, to an activity having tangible economic benefits, such as
start-up, expansion or industrial modernization of such zone business;
(ii) a demonstration that the certified zone business has the potential
to create jobs; and (iii) a demonstration that the direct equity
investment is necessary to increase the amount of capital available to
the certified zone business, provided, however, that such investment is
not intended nor shall it be used to refinance existing debt or replace
existing equity in such zone business.

(f) In addition to the duties set forth in subdivision (b) of section
nine hundred sixty-three of this article, the zone administrative board
shall, consistent with the regulations promulgated by the commissioner,
determine the eligibility of direct equity investments in certified zone
businesses and contributions to community development projects for the
tax credits, described in subdivision (d) of this section, that are
available to such zone. Such determination by the zone administrative
board shall be subject to review by the commissioner in his or her
discretion. The commissioner, upon review of a zone board determination
made pursuant to this subdivision, shall accept or reject such
determination as may be deemed appropriate.