§ 135. Premium credits for safety investment. 1. An employer insured
by a licensed insurer or the state insurance fund for workers'
compensation insurance may apply for a credit against the premiums for
such coverage provided such employer is not currently receiving any
statutory safety incentive or sanction authorized under this chapter for
amounts invested by such employer in the creation of a safer work
environment which meets the requirements of this section. The credit may
be applied for a renewable period not to exceed three years. For any one
year, the credit shall equal, if actuarially appropriate, an amount up
to five percent of the total amount invested as calculated under the
provisions of this section but shall not exceed fifteen percent of such
employer's annual earned premium for that year in accordance with
workers' compensation rating board manual rates. An employer applying
for such credit must provide evidence required by rules or regulations
promulgated by the superintendent of financial services that the
investment would result in a safer work environment, with such evidence
to include a written opinion by a certified safety professional, a
certified industrial hygienist or a licensed professional engineer
describing the items included in the investment and an analysis of how
they will substantially enhance the safety of the work environment.

2. It shall be the sole responsibility of the superintendent of
financial services, with the assistance of a committee, to determine
whether an employer who has made an application is eligible for a
premium credit and the extent of any such credit, and to otherwise
assist in the administration of the premium credit program, including
the promulgation of department of financial services rules and
regulations for the implementation of the program.

In addition to the superintendent of financial services, the committee
shall consist of:

(a) a representative from the department of labor;

(b) a representative from the department of economic development;

(c) a representative from the state insurance fund;

(d) an individual with an actuarial background and experience in the
field of workers' compensation;

(e) an individual with a background in safety engineering appointed by
the governor upon recommendation by the New York State American
Federation of Labor-Congress of Industrial Organizations;

(f) an individual with a background in safety engineering appointed by
the governor upon recommendation of the Business Council of the State of
New York;

(g) an individual with a background in safety engineering appointed by
the governor upon recommendation of the insurance industry; and

(h) an additional member of the committee with respect to any given
application for a premium credit shall be the current insurer of the
applicant.

All departments, divisions, boards, offices, and public corporations
of the state, and the workers' compensation rating board, shall provide
such data, information or other assistance as the committee may require
to fulfill its purposes.

The committee shall serve at the pleasure of the governor and shall
receive no compensation except for reasonable and necessary expenses
incurred in the course of performing the official duties of the
committee. Such expenses shall be paid from application fees paid in
accordance with rules and regulations promulgated by the superintendent
of financial services.

3. Premium credit calculations with respect to investments for safety
shall be based only upon tangible personal property and other tangible
property, including buildings and structural components of buildings
which make for a safer work environment, which are depreciable pursuant
to section one hundred sixty-seven of the internal revenue code, have a
useful life of four years or more, are acquired by purchase as defined
in section one hundred seventy-nine(d) of the internal revenue code,
have a situs in this state and are:

(a) principally used by the premium payer in the production of goods
by manufacturing, processing, assembling, refining, mining, extracting,
farming, agriculture, horticulture, floriculture, viticulture or
commercial fishing,

(b) industrial waste treatment facilities or air pollution control
facilities, used in the premium payer's trade or business, or

(c) research and development property.

For purposes of this section, the term "goods" shall not include
electricity.

4. For purposes of this section, the following definitions shall
apply:

(a) Manufacturing shall mean the process of working raw materials into
wares suitable for use or which gives new shapes, new quality or new
combinations to matter which already has gone through some artificial
process by the use of machinery, tools, appliances and other similar
equipment. Property used in the sale of goods at retail or the
production of goods shall include machinery, equipment or other tangible
property which is principally used in the repair and service of other
machinery, equipment or other tangible property used principally in the
production of goods and shall include all facilities used in the
production operation, including storage of material to be used in
production and of the products that are produced.

(b) Research and development property shall mean property which is
used for purposes of research and development in the experimental or
laboratory sense. Such purposes shall not be deemed to include the
ordinary testing or inspection of materials or products for quality
control, efficiency surveys, management studies, consumer surveys,
advertising, promotions, or research in connection with literary,
historical or similar projects.

(c) Industrial waste treatment facilities shall mean property
constituting facilities for the treatment, neutralization or
stabilization of industrial waste and other wastes (as the terms
"industrial waste" and "other wastes" are defined in section 17-0105 of
the environmental conservation law) from a point immediately preceding
the point of such treatment, neutralization or stabilization to the
point of disposal, including the necessary pumping and transmitting
facilities, but excluding such facilities installed for the primary
purpose of salvaging materials which are usable in the manufacturing
process or are marketable.

(d) Air pollution control facilities shall mean property constituting
facilities which remove, reduce, or render less noxious air contaminants
emitted from an air contamination source (as the terms "air contaminant"
and "air contamination source" are defined in section 19-0107 of the
environmental conservation law) from a point immediately preceding the
point of such removal, reduction or rendering to the point of discharge
of air meeting emission standards as established by the department of
environmental conservation, but excluding such facilities installed for
the primary purpose of salvaging materials which are usable in the
manufacturing process or are marketable and excluding those facilities
which rely for the efficacy on dilution, dispersion or assimilation of
air contaminants in the ambient air after emission. Such term shall
further include flue gas desulfurization equipment and attendant sludge
disposal facilities, fluidized bed boilers, precombustion coal cleaning
facilities or other facilities that conform with this section and which
comply with the provisions of the state acid deposition control act set
forth in title nine of article nineteen of the environmental
conservation law.

5. A premium credit under this section shall be allowed with respect
to industrial waste treatment facilities and air pollution control
facilities only on condition that such facilities have been certified by
the state commissioner of environmental conservation or his or her
designated representative, pursuant to subdivision one of section
17-0707 or subdivision one of section 19-0309 of the environmental
conservation law, as complying with applicable provisions of the
environmental conservation law, the public health law and the state
sanitary code and codes, rules, regulations, permits or orders issued
pursuant thereto.

6. Tangible personal property and other tangible property, including
buildings and structural components of buildings, which an employer
leases to any other person or corporation are not to be considered as
investments for safety in premium credit calculations. For purposes of
the preceding sentence, any contract or agreement to lease or rent or
for a license to use such property shall be considered a lease.
Provided, however, in determining whether an employer shall be allowed a
credit under this section with respect to such property, any election
made with respect to such property pursuant to the provisions of
paragraph eight of subsection (f) of section one hundred sixty-eight of
the internal revenue code, as such paragraph was in effect for
agreements entered into prior to January first, nineteen hundred
eighty-four, shall be disregarded.

7. Subject to the limitations provided in subdivision one of this
section, the amount of a premium credit shall be a percent of the
investment credit base. The investment credit base is the cost or other
basis for federal income tax purposes of tangible personal property and
other tangible property, including buildings and structural components
of buildings, as described in subdivision three of this section. The
amount of the percent to be applied against such investment credit base
shall be based upon the useful life of such tangible personal property
and other tangible property, and the extent to which the investment
would result in a safer work environment and upon such other actuarially
appropriate evidence offered by the applicant that the investment would
result in a safer work environment. The superintendent of financial
services shall promulgate rules and regulations determining how the
percentage to be applied against the investment credit base shall be
calculated.

8. The superintendent of financial services shall promulgate rules and
regulations for the purpose of determining how to calculate the period
during which an applicant may receive a premium credit.

9. In the event an employer which applied for and received a premium
credit pursuant to this section moves or relocates its business outside
of this state during the period in which it receives the benefits of
such credit, such employer shall be responsible for repaying to the
insurer the entire amount of such credit already received.

10. An employer who is obligated to but does not comply with the
requirements of section one hundred thirty-four of this article is not
eligible to apply for premium credits under this section.

11. An employer shall be eligible for a credit against premiums for
workers' compensation insurance coverage in an amount up to five percent
of such premiums for such other safety measures that may be implemented
by an employer and which meet the standard for such premium credit as
established by the superintendent. Such safety measures shall not
include those measures provided for in this section of this article, or
apply to such industries provided for in this section.