NY lawmakers OK $10B in tax breaks to lure computer chip makers to Clay, other sites

Gov. Kathy Hochul asked Stirpe and state Sen. John Mannion, D-Geddes, to help shepherd the bill through the Assembly and Senate before the legislative session ended on Saturday.

Hochul told syracuse.com | The Post-Standard earlier this year that the state would offer a “very robust incentive package” for an undisclosed company to open a chip plant in Onondaga County that could employ up to 5,000 people. Hochul declined at the time to reveal details of the incentive package.

The bill that Stirpe carried for the governor will provide up to $500 million per year in job tax credits to semiconductor manufacturers that open new fabrication plants in New York.

The tax credit would be worth up to 7.5% of what a company pays in salaries and hourly wages. A company with $1 billion in salaries and wages, for example, would be eligible for a $75 million annual tax credit, Stirpe said.

To be eligible, companies would have to create at least 500 net new jobs and spend at least $3 billion in capital investments over 10 years.

In return, the chip makers would be required to build “green” plants that limit their greenhouse gas emissions and expand employment opportunities for economically disadvantaged individuals.

“We thought if we were going to give a business an incentive, which is what they want, let’s get something that we want in terms of a sustainable project,” Stirpe said, adding he spent the past two weeks negotiating the final deal with lawmakers.

The chip makers would also have to pay federal prevailing wages on their construction projects, and commit to investments in the workforce and community, he said.

The tax credits would be available in 10-year phases. Companies would be able to apply for new credits each time they expand by adding at least 500 jobs and spending at least $3 billion.

Three other sites in Upstate New York are trying to lure semiconductor chip manufacturers – Luther Forest Technology Campus in Saratoga County, Marcy Nanocenter in Oneida County and the Western New York Science & Technology Advanced Manufacturing Park (STAMP) in Genesee County

All three of those sites already house chip makers or other tech industries.

Stirpe said the undeveloped White Pine site off Route 31 in Clay could house up to eight different chip manufacturing plants, or fabs.

“At White Pine, the opportunities are bigger than the other three locations combined,” Stirpe said.

U.S. Sen. Charles Schumer has called White Pine Commerce Park “one of only a few locations in the world” that has the size and availability of large amounts of cheap, reliable power and water needed by major chip manufacturers.

Schumer, D-N.Y., the Senate majority leader, previously said he is involved in direct talks with the CEOs of several companies who are actively considering White Pine as a finalist for a new plant site.

Schumer is trying to push through Congress a bipartisan bill that would provide $52 billion in federal incentives for chip makers to open new plants in the United States.

A House-Senate conference committee is meeting to iron out differences between separate legislation on chip legislation passed by the two chambers.

Onondaga County Executive Ryan McMahon told syracuse.com | The Post-Standard that it’s important to have the state incentives in place before Congress acts on its own incentives.

Semiconductor manufacturers who apply for the federal incentives will be required to show the U.S. Commerce Department that they have already secured a site for their proposed plant with the backing of the state where they want to build, McMahon said.

McMahon and Stirpe said economic development officials are focusing their efforts on one “big fish” while keeping talks alive with other smaller chip makers.

McMahon has declined to disclose the name of the company. Stirpe said he has not been given that information.

Stirpe said he’s aware that some people will be critical of tax incentives for private corporations. But he said it’s necessary for New York to compete with other states.

“I believe the company’s position is that labor costs in New York are higher than they are in a lot of other places,” Stirpe said. “This (tax credit) was our answer to that.”

In the state Senate, Mannion worked with Sen. Jeremy Cooney of Monroe County to move the bill forward last week. The final vote was 61-2.