The Legislature and the Governor have undertaken to adopt the budget in a piecemeal fashion.  On Friday, the Assembly adopted the Transportation, Economic Development & Environmental Conservation (“TED”) budget appropriations and the Public Protection and General Government (“PPGG”) budget appropriations.  It is anticipated that the Senate will pass these bills this week.

MUNICIPAL DEPOSITS

The PPGG Article VII legislation that the Governor initially introduced included authority for local governments to make deposits in credit unions and thrifts.  This provision was not included in the bill that the Governor submitted to the Legislature on Friday, and which was passed by the Assembly.

FEES

The PPGG Article VII legislation did include the following new fees to support the Office of Indigent Legal Services and the Judiciary:

A $95 fee to be paid by banks and credit card companies in actions arising out of consumer credit transactions.  For claims filed before September 1, 2010, the fee would be paid when the plaintiff files the judgment, if the fee was not paid at the inception.

A $190 fee paid at the time the index fee is paid in a foreclosure action.

Part K of the PPGG Article VII legislation is attached.

SMALL BUSINESS REVOLVING LOAN FUND PROGRAM

The TED Article VII budget bill contains a small business revolving loan fund program.  This program is targeted to MWBE enterprises and small businesses which have difficulty accessing credit markets.  This program would provide low interest loans including micro loans of less than $25,000 and regular loans not less than $25,000.

This program would work through community development financial institutions unless their use is not practicable, in which case the following entities would be eligible to participate: small business lending consortia, certified development companies, providers of U.S. Department of Agriculture business and industrial guaranteed loans, U.S. Small Business Administration loan providers, credit unions and community banks.

A copy of the budget language (Part N) is attached.

EXCELSIOR JOBS PROGRAM ACT

The TED Article VII budget bill also creates the Excelsior Jobs Program Act which replaces the Empire Zones program.  Eligible businesses under this program may qualify for the following tax credits: a jobs tax credit of between $2,500 and $5,000 per job to cover a portion of associated payroll costs; an investment tax credit valued at 2% of total qualified investments; a real property tax credit of 50% in the first year, decreasing to 10 % in the fifth year, for regionally significant projects or targeted industries located in distressed areas; and, a research and development tax credit which provides a 10% credit for new investments based on the federal research and development credit.  The annual expenditure by the Empire State Development Corporation for tax credits is capped at $50 million per year for new participants.

A copy of the budget language outlining the new program (Part MM) is attached.

CORPORATE TAX REFORM

The Department of Taxation and Finance just released another revised draft of their Corporate Tax Reform legislation.  This proposal will not be incorporated in current budget negotiations.  The Department is requesting input on this revised draft by August 15.

DURBIN PROPOSAL ON INTERCHANGE RATES

John Buhrmaster has discussed the negative impacts of the Federal Reserve setting interchange rates with Banking Superintendent Richard Neiman.  The Superintendent is weighing in on this issue with the Director of the Governor’s Washington office.

ART K (“PPGG”)

Section 1. Paragraph 2 of subdivision (a) of section 1911 of the uniform district court act, as amended by section 33 of part J of chapter 62 of the laws of 2003, is amended and two new paragraphs 2-a and 10 are added to read as follows:

(2) Upon filing the first paper in an action or proceeding, including a special proceeding for the settlement of a claim of an infant or incompetent, forty-five dollars, unless there has been paid a fee of forty-five dollars for the issuance of a summons, order of arrest or attachment, requisition or warrant of seizure, or a notice of petition or order to show cause in lieu thereof in a summary proceeding, as provided for by [subparagraph (1) hereof] paragraph one of this subdivision.

(2-a) Upon filing the first paper in an action or proceeding arising out of a consumer credit transaction as defined in subdivision (f) of section one hundred five of the civil practice law and rules, an additional ninety-five dollars.

(10) Upon the filing of a judgment by a plaintiff on or after September first, two thousand ten in an action or proceeding arising out of a consumer credit transaction as defined in subdivision (f) of section one hundred five of the civil practice law and rules, ninety-five dollars; provided such action or proceeding was commenced prior to such date and no additional fee was paid therein pursuant to paragraph two-a of this subdivision.

§ 2. Paragraph 1 of subdivision (a) of section 1911 of the uniform city court act, as amended by section 5 of part B of chapter 686 of the laws of 2003, is amended and two new paragraphs 1-a and 12 are added to read as follows:

(1) Upon the filing of the first paper in any action or proceeding, forty-five dollars, unless there has already been paid a fee of forty-five dollars as provided for by paragraph [(11) hereof] eleven of this subdivision.

(1-a) Upon filing the first paper in an action or proceeding arising out of a consumer credit transaction as defined in subdivision (f) of section one hundred five of the civil practice law and rules, an addition ninety-five dollars.

(12) Upon the filing of a judgment by a plaintiff on or after September first, two thousand ten in an action or proceeding arising out of a consumer credit transaction as defined in subdivision (f) of section one hundred five of the civil practice law and rules, ninety-five dollars, provided such action or proceeding was commenced prior to such date and no additional fee was paid therein pursuant to paragraph (one-a) of this subdivision.

§ 3. Subdivision (b) of section 1911 of the New York city civil court act, as amended by section 36 of part J of chapter 62 of the laws of 2003, is amended and two new subdivisions (b-1) and (n) are added to read as follows:

(b) Upon filing summons with proof of service thereof, or upon filing of the first paper in that county in any action or proceeding, forty-five dollars, unless there has been paid in that county a fee of forty-five dollars pursuant to subdivision (a) [hereof] of this section.

(b-1) Upon filing the first paper in an action or proceeding arising out of a consumer credit transaction as defined in subdivision (f) of section one hundred five of the civil practice law and rules, an additional ninety-five dollars.

(n) Upon the filing of a judgment by a plaintiff on or after September first, two thousand ten in an action or proceeding arising out of a consumer credit transaction as defined in subdivision (f) of section one hundred five of the civil practice law and rules, ninety-five dollars, provided such action or proceeding was commenced prior to such date and no additional fee was paid therein pursuant to subdivision (b-1) of this section.

§ 4. Paragraph (e) of subdivision 2 of section 39 of the judiciary law, as amended by section 22 of part J of chapter 62 of the laws of 2003, is amended to read as follows:

(e) All fees collected pursuant to sections eighteen hundred three, eighteen hundred three-A and nineteen hundred eleven of the New York city civil court act, all fees collected pursuant to state law by the county clerks in the city of New York, except as otherwise provided herein with respect to fees collected pursuant to subdivision (a) of section eight thousand eighteen of the civil practice law and rules and except those fees collected by the clerk of Richmond county which in the other counties of the city of New York are collected by the city registers, all fees collected pursuant to section eight thousand eighteen of the civil practice law and rules except only to the extent of one hundred sixty-five dollars of any fee collected pursuant to subparagraph (i) of paragraph one of subdivision (a) of such section and except for those collected pursuant to subparagraph (ii) of paragraph one of paragraph three of such subdivision (a), all fees collected pursuant to section eight thousand twenty of the civil practice law and rules except for those collected pursuant to subdivisions (f), (g) and (h) of said section, all fees collected pursuant to section eight thousand twenty-two of the civil practice law and rules, all fees collected pursuant to section twenty-four hundred two of the surrogate's court procedure act, all fees collected pursuant to section eighteen hundred three, eighteen hundred three-A and subdivision (a) of section nineteen hundred eleven of the uniform district court act, all fees collected pursuant to section eighteen hundred three, eighteen hundred three-A and subdivision (a) of section nineteen hundred eleven of the uniform city court act and all fines, penalties and forfeitures collected pursuant to subdivision eight of section eighteen hundred three of the vehicle and traffic law, except such fines, penalties and forfeitures collected by the Nassau county traffic and parking violations agency, section 71-0211 of the environmental conservation law, section two hundred one of the navigation law and subdivision one of section 27.13 of the parks, recreation and historic preservation law shall be paid to the state commissioner of taxation and finance on a monthly basis no later than ten days after the last day of each month. The additional fee of five dollars collected by county clerks in New York city pursuant to paragraph three of subdivision (a) of section eight thousand eighteen of the civil practice law and rules shall be distributed monthly by the county clerks as follows: four dollars and seventy-five cents to the commissioner of education for deposit into the local government records management improvement funds; and twenty-five cents to the city of New York.

§ 5. Paragraph 1 of subdivision (a) of section 8018 of the civil practice law and rules, as amended by section 23 of part J of chapter 62 of the laws of 2003, is amended to read as follows:

1. A county clerk is entitled, for the assignment of an index number to an action pending in a court of which he or she is clerk, to a fee of: (i) one hundred ninety dollars[, payable in advance]; and (ii) in an action to foreclose pursuant to article thirteen of the real property actions and proceedings law, such clerk is entitled to collect an additional fee of one hundred ninety dollars. Such fees are payable in advance.

§ 6. Subdivision 1 of section 465 of the judiciary law, as amended by chapter 166 of the laws of 1991, is amended to read as follows:

1. Every person applying for examination for admission to practice as an attorney and [counsellor] counselor at law shall pay a fee of two hundred fifty dollars, or seven hundred fifty dollars if, to qualify to take the bar examination, the person must satisfy the rules of the court of appeals for the admission of attorneys and counselors at law governing the study of law in a foreign country, for each taking or retaking of the examination, or if dispensation has been received from the taking of the examination, four hundred dollars for credential review for admission on motion. All such fees shall be paid into the state treasury in the manner provided by section one hundred twenty-one of the state finance law.

§ 7. Section 14 of part J of chapter 62 of the laws of 2003 amending the county law and other laws relating to fees collected, as amended by section 1 of part CC of chapter 56 of the laws of 2008, is amended to read as follows:

§ 14. Notwithstanding the provisions of any other law: (a) the fee collected by the office of court administration for the provision of criminal history searches and other searches for data kept electronically by the unified court system shall be [fifty-five] sixty-five dollars; (b) [twenty-seven] thirty-five dollars of each such fee collected shall be deposited in the indigent legal services fund established by section 98-b of the state finance law, as added by section twelve of this act, (c) nine dollars of each such fee collected shall be deposited in the legal services assistance fund established by section 98-c of the state finance law, as added by section nineteen of this act, (d) sixteen dollars of each such fee collected shall be deposited to the judiciary data processing offset fund established by section 94-b of the state finance law, and (e) the remainder shall be deposited in the general fund.

§ 8. Notwithstanding any other provision of law, the monies collected from the imposition of fees charged pursuant to paragraphs (2-a) and (10) of subdivision (a) of section 1911 of the uniform district court act, paragraphs (1-a) and (12) of subdivision (a) of section 1911 of the uniform city court act, and subdivisions (b-1) and (n) of the New York city civil court act shall be deposited to the credit of the general fund.

§ 9. Subdivision 4 of section 468-a of the judiciary law, as amended by section 17 of part J of chapter 62 of the laws of 2003, is amended to read as follows:

4. The biennial registration fee shall be three hundred [fifty] seventy-five dollars, sixty dollars of which shall be allocated to and be deposited in a fund established pursuant to the provisions of section ninety-seven-t of the state finance law, fifty dollars of which shall be allocated to and shall be deposited in a fund established pursuant to the provisions of section ninety-eight-b of the state finance law, twenty-five dollars of which shall be allocated to be deposited in a fund established pursuant to the provisions of section ninety-eight-c of the state finance law, and the remainder of which shall be deposited in the attorney licensing fund. Such fee shall be required of every attorney who is admitted and licensed to practice law in this state, whether or not the attorney is engaged in the practice of law in this state or elsewhere, except attorneys who certify to the chief administrator of the courts that they have retired from the practice of law.

§ 10. This act shall take effect July 1, 2010; provided that sections one, two, three, four, five, eight and nine of this act shall take effect September 1, 2010.

PART N (“TED”)

Section 1. Section 1 of chapter 174 of the laws of 1968, constituting the New York state urban development corporation act, is amended by adding a new section 16-t to read as follows:

§ 16-t. Small business revolving loan fund. 1. The small business revolving loan fund program is hereby created. The corporation is authorized, within available appropriations, to provide low interest loans to community development financial institutions, in order to provide funding for those lending organizations' loans to small businesses, located within New York state, that generate economic growth and job creation within New York state but that are unable to obtain adequate credit or adequate terms for such credit. If in the discretion of the corporation the use of a community development financial institution is not practicable based upon the application of rules and regulations developed by the corporation, including, but not limited to, assessments of geographic and administrative capacity, then the corporation is authorized, within available appropriations, to provide low interest loans to the following other local community based lending organizations: small business lending consortia, certified development companies, providers of United States department of agriculture business and industrial guaranteed loans, United States small business administration loan providers, credit unions and community banks. As used in this section "small business" means a business that is resident in New York state, independently owned and operated, not dominant in its field, and employs one hundred or fewer persons.

2. In order for a lending organization to be eligible to receive program funds, it must have established sufficient expertise to analyze small business applications for program loans, evaluate the creditworthiness of small businesses, and regularly monitor program loans. The lending organization shall review every program loan application in order to determine, among other things, the feasibility of the proposed use of the requested financing by the small business applicant, the likelihood of repayment and the potential that the loan will generate economic development and jobs within New York state. The corporation shall identify eligible lending organizations through one or more competitive statewide or local solicitations.

3. Program loans to small businesses shall be targeted and marketed to minority and women-owned enterprises and other small businesses that are having difficulty accessing traditional credit markets. Program loans to small businesses shall be used for the creation and retention of jobs, as defined by the corporation, including: (a) working capital; (b) the acquisition and/or improvement of real property; (c) the acquisition of machinery and equipment, property or improvement; or (d) the refinancing of debt obligations. There shall be two categories of loans to small businesses: a micro loan that shall have a principal amount that is less than twenty-five thousand dollars and a regular loan that shall have a principal amount not less than twenty-five thousand dollars. Prior to receiving program funds, the lending organization must certify to the corporation that such loan complies with this section and rules and regulations promulgated for the program and that the lending organization has performed its obligations pursuant to and is in compliance with this section, the program rules and regulations and all agreements entered into between the corporation and the lending organization. The program funds amount used by the lending organization to fund a program applicant loan shall not be more than fifty percent of the principal amount of such loan. The program funds amount used by the lending organization to fund a program applicant loan shall not be greater than one hundred and twenty-five thousand dollars.

4. Program funds shall not be used for: (a) projects that would result in the relocation of any business operation from one municipality within the state to another, except under one of the following conditions: (i) when a business is relocating within a municipality with a population of at least one million where the governing body of such municipality approves such relocation; or (ii) the lending organization notifies each municipality from which such business operation will be relocated and each municipality agrees to such relocation; (b) projects of newspapers, broadcasting or other news media; medical facilities, libraries, community or civic centers; or public infrastructure improvements; and (c) providing funds, directly or indirectly, for payment, distribution, or as a loan, to owners, members, partners or shareholders of the applicant business, except as ordinary income for services rendered.

5. With respect to its program loans, the lending organization may charge application, commitment and loan guarantee fees pursuant to a schedule of fees adopted by the lending organization and approved by the corporation.

6. Program funds shall be disbursed to a lending organization by the corporation in the form of a loan to the lending organization. The term of the loan shall commence upon disbursement of the program funds by the corporation to the lending organization. The loan shall carry a low interest rate determined by the corporation based on then prevailing interest rates and the circumstances of the lending organization. Notwithstanding the performance of the loans made by the lending organization using program funds, the lending organization shall remain liable to the corporation with respect to any unpaid amounts due from the lending organization pursuant to the terms of the corporation's loans to the lending organization. In addition, a portion of program funds may be disbursed to a lending organization in the form of a grant or forgivable loan, provided those funds are used by the lending organization for administrative expenses associated with the fund, loan-loss reserves, or other eligible expenses as determined by the corporation.

7. Notwithstanding anything to the contrary in this section, the corporation shall provide at least five hundred thousand dollars in program funds pursuant to this section to lending organizations for the purpose of making loans to small business located in Niagara county.

8. Notwithstanding anything to the contrary in this section, the corporation shall provide at least five hundred thousand dollars in program funds pursuant to this section to lending organizations for the purpose of making loans to small business located in St. Lawrence county.

9. Notwithstanding anything to the contrary in this section, the corporation shall provide at least five hundred thousand dollars in program funds pursuant to this section to lending organizations for the purpose of making loans to small business located in Erie county.

10. Notwithstanding anything to the contrary in this section, the corporation shall provide at least five hundred thousand dollars in program funds pursuant to this section to lending organizations for the purpose of making loans to small business located in Jefferson county.

11. Notwithstanding any provision of law to the contrary, the corporation may establish a program fund for program use and pay into such fund any funds available to the corporation from any source that are eligible for program use, including moneys appropriated by the state.

12. With respect to a lending organization program loan applicants, no person who is a member of the board or other governing body, officer, employee, or member of a loan committee, or a family member of any such lending organization shall participate in any decision on such application if such person is a party to or has a financial or personal interest in such loan. Any person who cannot participate in a loan application decision for such reasons shall not be counted as a member of the loan committee, board or other governing body for purposes of determining the number of members required for approval of such application.

13. The lending organization shall submit to the corporation annual reports stating: the number of program loans made; the amount of program funding used for loans; the use of loan proceeds by the borrower; the number of jobs created or retained; a description of the economic development generated; the status of each outstanding program loan; and such other information as the corporation may require.

14. The corporation may conduct audits of the lending organization in order to ensure compliance with the provisions of this section, any regulations promulgated with respect thereto and agreements between the lending organization and the corporation of all aspects of the use of program funds and program loan transactions. In the event that the corporation finds substantive noncompliance, the corporation may terminate the lending organization's participation in the program.

15. Upon termination of a lending organization's participation in the program, the lending organization shall return to the corporation, promptly after its demand therefor, all program fund proceeds held by the lending organization; and provide to the corporation, promptly after its demand therefor, an accounting of all program funds received by the lending organization, including all currently outstanding loans that were made using program funds. Notwithstanding such termination, the lending organization shall remain liable to the corporation with respect to any unpaid amounts due from the lending organization pursuant to the terms of the corporation's loans to the lending organization.

§ 2. This act shall take effect immediately and shall be deemed to have been in full force and effect on and after April 1, 2010.

PART MM (“TED”)

Section 1. The economic development law is amended by adding a new article 17 to read as follows:

ARTICLE 17

EXCELSIOR JOBS PROGRAM ACT Section 350. Short title.

351. Statement of legislative findings and declaration.

352. Definitions.

353. Eligibility criteria.

354. Application and approval process.

355. Excelsior jobs program credit.

356. Powers and duties of the commissioner.

357. Maintenance of records.

358. Reporting.

359. Cap on tax credit.

§ 350. Short title. This article shall be known and may be cited as the "excelsior jobs program act".

§ 351. Statement of legislative findings and declaration. It is hereby found and declared that New York state needs, as a matter of public policy, to create competitive financial incentives for businesses to create jobs and invest in the new economy. The excelsior jobs program act is created to support the growth of the state's traditional economic pillars including the manufacturing and financial industries and to ensure that New York emerges as the leader in the knowledge, technology and innovation based economy. The program will encourage the expansion in and relocation to New York of businesses in growth industries such as clean-tech, broadband, information systems, renewable energy and biotechnology.

This legislation creates the excelsior jobs program, which has four components: the excelsior jobs tax credit, the excelsior investment tax credit, the excelsior research and development tax credit and the excelsior real property tax credit. These credits are designed to promote business expansion in New York state and increase jobs in the new economy. At the same time, the program protects state taxpayers' dollars by ensuring that New York provides tax benefits only to businesses that have created the promised jobs and made the promised investments.

§ 352. Definitions. For the purposes of this article:

1. "Agriculture" means both agricultural production (establishments performing the complete farm or ranch operation, such as farm owner-operators, tenant farm operators, and sharecroppers) and agricultural support (establishments that perform one or more activities associated with farm operation, such as soil preparation, planting, harvesting, and management, on a contract or fee basis).

2. "Back office operations" means a business function that may include one or more of the following activities: customer service, information technology and data processing, human resources, accounting and related administrative functions.

3. "Benefit-cost ratio" means the following calculation: the numerator is the sum of (i) the value of all remuneration projected to be paid for all net new jobs during the period of participation in the program, and (ii) the value of capital investments to be made by the business enterprise during the period of participation in the program, and the denominator is the amount of total tax benefits under this article that will be used and refunded.

4. "Certificate of eligibility" means the document issued by the department to an applicant that has completed an application to be admitted into the excelsior jobs program and has been accepted into the program by the department. Possession of a certificate of eligibility does not by itself guarantee the eligibility to claim the tax credit.

5. "Certificate of tax credit" means the document issued to a participant by the department, after the department has verified that the participant has met all applicable eligibility criteria in this article. The certificate shall be issued annually if such criteria are satisfied and shall specify the exact amount of each of the tax credit components under this article that a participant may claim, pursuant to section three hundred fifty-five of this article, and shall specify the taxable year in which such credit may be claimed.

6. "Distribution center" means a large scale facility involving processing, repackaging and/or movement of finished or semi-finished goods to retail locations across a multi-state area.

7. "Financial services data centers or financial services customer back office operations" means operations that manage the data or accounts of existing customers or provide product or service information and support to customers of financial services companies, including banks, other lenders, securities and commodities brokers and dealers, investment banks, portfolio managers, trust offices, and insurance companies.

8. "Investment zone" shall mean an area within the state that had been designated under paragraph (i) of subdivision (a) and subdivision (d) of section nine hundred fifty-eight of the general municipal law that was wholly contained within up to four distinct and separate contiguous areas as of the date immediately preceding the date the designation of such area expired pursuant to section nine hundred sixty-nine of the general municipal law.

9. "Manufacturing" means the process of working raw materials into products suitable for use or which gives new shapes, new quality or new combinations to matter which has already gone through some artificial process by the use of machinery, tools, appliances, or other similar equipment. "Manufacturing" does not include an operation that involves only the assembly of components, provided, however, the assembly of motor vehicles or other high value-added products shall be considered manufacturing.

10. "Net new jobs" means jobs created in this state that:

(a) are new to the state;

(b) have not been transferred from employment with another business located in this state including from a related person in this state;

(c) are either full-time wage-paying jobs or equivalent to a full-time wage-paying job requiring at least thirty-five hours per week; and

(d) are filled for more than six months.

11. "Participant" means a business entity that:

(a) has completed an application prescribed by the department to be admitted into the program;

(b) has been issued a certificate of eligibility by the department;

(c) has demonstrated that it meets the eligibility criteria in section three hundred fifty-three and subdivision two of section three hundred fifty-four of this article; and

(d) has been certified as a participant by the commissioner.

12. "Preliminary schedule of benefits" means the maximum aggregate amount of each component of the tax credit that a participant in the excelsior jobs program is eligible to receive pursuant to this article. The schedule shall indicate the annual amount of each component of the credit a participant may claim in each of its five years of eligibility. The preliminary schedule of benefits shall be issued by the department when the department approves the application for admission into the program. The commissioner may amend that schedule, provided that the commissioner complies with the credit caps in section three hundred fifty-nine of this article.

13. "Qualified investment" means an investment in tangible property (including a building or a structural component of a building) owned by a business enterprise which:

(a) is depreciable pursuant to section one hundred sixty-seven of the internal revenue code;

(b) has a useful life of four years or more;

(c) is acquired by purchase as defined in section one hundred seventy-nine (d) of the internal revenue code;

(d) has a situs in this state; and

(e) is placed in service in the state on or after the date the certificate of eligibility is issued to the business enterprise.

14. "Regionally significant project" means (a) a manufacturer creating at least fifty net new jobs in the state and making significant capital investment in the state; (b) a business creating at least twenty net new jobs in agriculture in the state and making significant capital investment in the state, (c) a financial services firm, distribution center, or back office operation creating at least three hundred net new jobs in the state and making significant capital investment in the state, or (d) a scientific research and development firm creating at least twenty net new jobs in the state, and making significant capital investment in the state. Other businesses creating three hundred or more net new jobs in the state and making significant capital investment in the state may be considered eligible as a regionally significant project by the commissioner as well. The commissioner shall promulgate regulations pursuant to section three hundred fifty-six of this article to determine what constitutes significant capital investment for each of the project categories indicated in this subdivision and what additional criteria a business must meet to be eligible as a regionally significant project, including, but not limited to, whether a business exports a substantial portion of its products or services outside of the state or outside of a metropolitan statistical area or county within the state.

15. "Related person" means a "related person" pursuant to subparagraph (c) of paragraph three of subsection (b) of section four hundred sixty-five of the internal revenue code.

16. "Remuneration" means wages and benefits paid to an employee by a participant in the excelsior jobs program.

17. "Research and development expenditures" mean the expenses of the business enterprise that are qualified research expenses under the federal research and development credit under section forty-one of the internal revenue code and are attributable to activities conducted in the state. If the federal research and development credit has expired, then the research and development expenditures shall be calculated as if the federal research and development credit structure and definition in effect in federal tax year two thousand nine were still in effect.

18. "Scientific research and development" means conducting research and experimental development in the physical, engineering, and life sciences, including but not limited to agriculture, electronics, environmental, biology, botany, biotechnology, computers, chemistry, food, fisheries, forests, geology, health, mathematics, medicine, oceanography, pharmacy, physics, veterinary, and other allied subjects. For the purposes of this article, scientific research and development does not include medical or veterinary laboratory testing facilities.

19. "Software development" means the creation of coded computer instructions and includes new media as defined by the commissioner in regulations.

§ 353. Eligibility criteria. 1. To be a participant in the excelsior jobs program, a business entity shall operate in New York state predominantly:

(a) as a financial services data center or a financial services back office operation;

(b) in manufacturing;

(c) in software development and new media;

(d) in scientific research and development;

(e) in agriculture;

(f) in the creation or expansion of back office operations in the state;

(g) in a distribution center; or

(h) in an industry with significant potential for private-sector economic growth and development in this state as established by the commissioner in regulations promulgated pursuant to this article. In promulgating such regulations the commissioner shall include job and investment criteria.

2. For the purposes of this article, in order to participate in the excelsior jobs program, a business entity operating predominantly in manufacturing must create at least twenty-five net new jobs; a business entity operating predominately in agriculture must create at least ten net new jobs; a business entity operating predominantly as a financial service data center or financial services customer back office operation must create at least one hundred net new jobs; a business entity operating predominantly in scientific research and development must create at least ten net new jobs; a business entity operating predominantly in software development must create at least ten net new jobs; a business entity creating or expanding back office operations or a distribution center in the state must create at least one hundred fifty net new jobs, notwithstanding subdivision four of this section; or a business entity must be a regionally significant project as defined in this article; or

3. A business entity operating predominantly in one of the industries referenced in paragraphs (a) through (h) of subdivision one of this section but which does not meet the job requirements of subdivision two of this section must have at least fifty full-time job equivalents and must demonstrate that its benefit-cost ratio is at least ten to one.

4. A not-for-profit business entity, a business entity whose primary function is the provision of services including personal services, business services, or the provision of utilities, and a business entity engaged predominantly in the retail or entertainment industry, and a company engaged in the generation or distribution of electricity, the distribution of natural gas, or the production of steam associated with the generation of electricity are not eligible to receive the tax credit described in this article.

5. A business entity must be in compliance with all worker protection and environmental laws and regulations. In addition, a business entity may not owe past due state taxes or local property taxes.

§ 354. Application and approval process. 1. A business enterprise must submit a completed application as prescribed by the commissioner. An application may be recommended by entities, including but not limited to, those created pursuant to subdivision (e) of section nine hundred fifty-seven of the general municipal law.

2. As part of such application, each business enterprise must:

(a) Agree to allow the department of taxation and finance to share its tax information with the department. However, any information shared as a result of this agreement shall not be available for disclosure or inspection under the state freedom of information law.

(b) Agree to allow the department of labor to share its tax and employer information with the department. However, any information shared as a result of this agreement shall not be available for disclosure or inspection under the state freedom of information law.

(c) Allow the department and its agents access to any and all books and records the department may require to monitor compliance.

(d) Agree to be permanently decertified from the empire zones program if admitted into the excelsior jobs program, effective for the first taxable year that the business enterprise may claim the excelsior jobs program credit and for all subsequent taxable years.

(e) Provide the following information to the department upon request:

(i) a plan outlining the schedule for meeting the job and investment requirements as set forth in subdivisions two and three of section three hundred fifty-three of this article. Such plan must include details on job titles and expected salaries;

(ii) the prior three years of federal and state income or franchise tax returns, unemployment insurance quarterly returns, real property tax bills and audited financial statements;

(iii) the amount and description of projected qualified investments for which it plans to claim the excelsior investment tax credit;

(iv) an estimate of the portion of any federal research and development tax credits, attributable to research and development activities conducted in New York state, that it anticipates claiming for the years it expects to claim the excelsior research and development credit; and

(v) the employer identification or social security numbers for all related persons to the applicant, including those of any members of a limited liability company or partners in a partnership.

(f) Provide a clear and detailed presentation of all related persons to the applicant to assure the department that jobs are not being shifted within the state.

(g) Certify, under penalty of perjury, that it is in substantial compliance with all environmental, worker protection, and local, state, and federal tax laws.

3. After reviewing a business enterprise's completed application and determining that the business enterprise will meet the conditions set forth in subdivisions two and three of section three hundred fifty-three of this article, the department may admit the applicant into the program and provide the applicant with a certificate of eligibility and a preliminary schedule of benefits by year based on the applicant's projections as set forth in its application. This preliminary schedule of benefits delineates the maximum possible benefits an applicant may receive.

4. In order to become a participant in the program, an applicant must submit evidence of achieving job and investment requirements in such form as the commissioner may prescribe. After reviewing such evidence and finding it sufficient, the department shall certify the applicant as a participant and issue to that participant a certificate of tax credit for one taxable year. To receive a certificate of tax credit for subsequent taxable years, the participant must submit to the department a performance report. A participant's increase in employment, qualified investment, or federal research and development tax credit attributable to research and development activities in New York state above its projections listed in its application shall not result in an increase in tax benefits under this article. However, if the participant's expenditures are less than the estimated amounts, the credit shall be less than the estimate.

5. A participant may claim tax benefits commencing in the first taxable year that the business enterprise receives a certificate of tax credit or the first taxable year listed on its preliminary schedule of benefits, whichever is later. A participant may claim such benefits for the next four consecutive taxable years, provided that the participant demonstrates to the department that it continues to satisfy the eligibility criteria specified in section three hundred fifty-three of this article and subdivision two of this section in each of those taxable years.

§ 355. Excelsior jobs program credit. 1. Excelsior jobs tax credit component. A participant in the excelsior jobs program shall be eligible to claim a credit for each net new job it creates in New York state. The amount of such credit per job shall be equal to the sum of the following: five percent of the amount of remuneration equal to or less than fifty thousand dollars; four percent of the amount of remuneration in excess of fifty thousand dollars and equal to or less than seventy-five thousand dollars; and 1.33 percent of the amount of remuneration in excess of seventy-five thousand dollars. However, the amount of the credit for each net new job shall not exceed five thousand dollars.

2. Excelsior investment tax credit component. A participant in the excelsior jobs program shall be eligible to claim a credit on qualified investments. The credit shall be equal to two percent of the cost or other basis for federal income tax purposes of the qualified investment. A participant may not claim both the excelsior investment tax credit component and the investment tax credit set forth in subdivision twelve of section two hundred ten, subsection (a) of section six hundred six, or subsection (i) of section fourteen hundred fifty-six of the tax law for the same property in any taxable year. In addition, a taxpayer who or which is qualified to claim the excelsior investment tax credit component and is also qualified to claim the brownfield tangible property credit component under section twenty-one of the tax law may claim either the excelsior investment tax credit component or such tangible property credit component, but not both with regard to a particular piece of property. A credit may not be claimed until a business enterprise has received a certificate of tax credit, provided that qualified investments made on or after the issuance of the certificate of eligibility but before the issuance of the certificate of tax credit to the business enterprise, may be claimed in the first taxable year for which the business enterprise is allowed to claim the credit. Expenses incurred prior to the date the certificate of eligibility is issued are not eligible to be included in the calculation of the credit.

3. Excelsior research and development tax credit component. A participant in the excelsior jobs program shall be eligible to claim a credit equal to ten percent of the portion of the participant's federal research and development tax credit that relates to the participant's research and development expenditures in New York state during the taxable year. If the federal research and development credit has expired, then the research and development expenditures relating to the federal research and development credit shall be calculated as if the federal research and development credit structure and definition in effect in two thousand nine were still in effect.

4. Excelsior real property tax credit. A participant in the excelsior jobs program who either qualified as a regionally significant project or is located in an investment zone shall be eligible to claim a credit for a period of five years. The credit shall be equal to fifty percent of the eligible real property taxes on the real property comprising the regionally significant project or located in the investment zone that were assessed and paid in the year immediately prior to application. In the remaining years the credit shall be computed according to the following schedule:

Year two: forty percent of eligible real property taxes on the real property comprising the regionally significant project or located in the investment zone that were assessed and paid in the year immediately prior to application;

Year three: thirty percent of eligible real property taxes on the real property comprising the regionally significant project or located in the investment zone that were assessed and paid in the year immediately prior to application;

Year four: twenty percent of eligible real property taxes on real property comprising the regionally significant project or located in the investment zone that were assessed and paid in the year immediately prior to application; and

Year five: ten percent of eligible real property taxes on the real property comprising the regionally significant project or located in the investment zone that were assessed and paid in the year immediately prior to application.

For purposes of this credit, the term "eligible real property taxes" shall have the same meaning as in subdivision (e) of section fifteen of the tax law, provided that such subdivision (e) shall be read as if it specifically referenced the excelsior jobs program and participants in that program.

5. Refundability of credits. The tax credit components established in this section shall be refundable as provided in the tax law. If a participant fails to satisfy the eligibility criteria in any one year, it will lose the ability to claim credit for that year. The event of such failure shall not extend the original five-year eligibility period.

6. Claim of tax credit. The business enterprise shall be allowed to claim the credit as prescribed in section thirty-one of the tax law.

§ 356. Powers and duties of the commissioner. 1. The commissioner shall promulgate regulations establishing an application process and eligibility criteria, that will be applied consistent with the purposes of this article, so as not to exceed the annual cap on tax credits set forth in section three hundred fifty-nine of this article which, notwithstanding any provisions to the contrary in the state administrative procedure act, may be adopted on an emergency basis.

2. The commissioner shall, in consultation with the department of taxation and finance, develop a certificate of tax credit that shall be issued by the commissioner to participants. Participants must include the certificate of tax credit with their tax return to receive any tax benefits under this article.

3. The commissioner shall solely determine the eligibility of any applicant applying for entry into the program and shall remove any participant from the program for failing to meet any of the requirements set forth in subdivision two of section three hundred fifty-four of this article, or for failing to meet the minimum job or investment requirements set forth in subdivisions two and three of section three hundred fifty-three of this article.

§ 357. Maintenance of records. Each participant shall keep all relevant records for their duration of program participation plus three years.

§ 358. Reporting. 1. Each participant must submit a performance report annually, in such form as the commissioner may require, within thirty days of the end of their taxable year.

2. The commissioner shall prepare on a quarterly basis a program report for posting on the department's website. The first report will be due June thirtieth, two thousand eleven, and every three months thereafter. Such report shall include, but not be limited to, the following: number of applicants; number of participants approved; names of participants; total amount of benefits certified; benefits received per participant; total number of net new jobs created; number of net new jobs created per participant; aggregate new investment in the state; new investment per participant; and such other information as the commissioner determines.

§ 359. Cap on tax credit. The total amount of tax credits listed on certificates of tax credit issued by the commissioner for any taxable year may not exceed the limitations set forth in this section. Any amount of tax credits not awarded for a particular taxable year may not be used by the commissioner to award tax credits in another taxable year.

Credit components in the aggregate With respect to shall not exceed: taxable years     beginning in:\

$ 50 million 2011

$ 100 million 2012

$ 150 million 2013

$ 200 million 2014

$ 250 million 2015

$ 200 million 2016

$ 150 million 2017

$ 100 million 2018

$ 50 million 2019

Twenty-five percent of tax credits shall be allocated to businesses accepted into the program under subdivision three of section three hundred fifty-three of this article and seventy-five percent of tax credits shall be allocated to businesses accepted into the program under subdivision two of section three hundred fifty-three of this article.

Provided, however, if by September thirtieth of a calendar year, the department has not allocated the full amount of credits available in that year to either: (i) businesses accepted into the program under subdivision three of section three hundred fifty-three of this article or (ii) businesses accepted into the program under subdivision two of section three hundred fifty-three of this article, the commissioner may allocate any remaining tax credits to businesses referenced in paragraphs (i) and (ii) of this section as needed; provided, however, that under no circumstances may the statutory cap be exceeded.

§ 2. The tax law is amended by adding a new section 31 to read as follows:

§ 31. Excelsior jobs program credit. (a) General. A taxpayer subject to tax under article nine-A, twenty-two, thirty-two or thirty-three of this chapter shall be allowed a credit against such tax, pursuant to the provisions referenced in subdivision (g) of this section. The amount of the credit, allowable for up to five consecutive taxable years, is the sum of the following four credit components:

(1) the excelsior jobs tax credit;

(2) the excelsior investment tax credit;

(3) the excelsior research and development tax credit; and

(4) the excelsior real property tax credit.

(b) To be eligible for the excelsior jobs program credit, the taxpayer shall have been issued a "certificate of tax credit" by the department of economic development pursuant to subdivision four of section three hundred fifty-four of the economic development law, which certificate shall set forth the amount of each credit component that may be claimed for the taxable year. A taxpayer may claim such credit for five consecutive taxable years commencing in the first taxable year that the taxpayer receives a certificate of tax credit or the first taxable year listed on its preliminary schedule of benefits, whichever is later. The taxpayer shall be allowed to claim only the amount listed on the certificate of tax credit for that taxable year. Such certificate should be attached to the taxpayer's return. No cost or expense paid or incurred by the taxpayer shall be the basis for more than one component of this credit or any other tax credit.

(c) Election of credit. A taxpayer who or which is qualified to claim the excelsior investment tax credit component and is also qualified to claim the investment tax credit provided for under subdivision twelve of section two hundred ten, subsection (a) of section six hundred six, or subsection (i) of section fourteen hundred fifty-six of this chapter, may claim either the excelsior investment tax credit component or the investment tax credit, but not both with regard to a particular piece of property. In addition, a taxpayer who or which is qualified to claim the excelsior investment tax credit component and is also qualified to claim the brownfield tangible property credit component under section twenty-one of this article, as added by chapter one of the laws of two thousand three, may claim either the excelsior investment tax credit component or such tangible property credit component, but not both with regard to a particular piece of property. The election to claim the excelsior investment tax credit component, the investment tax credit or the brownfield tangible property credit component, with regard to the same property, is irrevocable.

(d) Information sharing. Notwithstanding any provision of this chapter, employees and officers of the department of economic development and the department shall be allowed and are directed to share and exchange:

(1) information derived from tax returns or reports that is relevant to a taxpayer's eligibility to participate in the excelsior jobs program;

(2) information regarding the component or components of the credit applied for, allowed, or claimed pursuant to this section and taxpayers who are applying for the credit or who are claiming the credit; and

(3) information contained in or derived from credit claim forms submitted to the department and applications for admission into the excelsior jobs program.

Other than the information required to be contained in the report issued pursuant to subdivision (e) of this section, all information exchanged between the department of economic development and the department shall not be subject to disclosure or inspection under the state's freedom of information law.

(e) Excelsior jobs program credit report. (1) The commissioner must publish an excelsior jobs program tax credit report annually by June thirtieth. The first report must be published by June thirtieth, two thousand twelve.

(2) The credit report must contain the following information about the excelsior jobs program tax credit claimed under this chapter during the previous calendar year:

(i) the name of each taxpayer claiming a credit; provided however, if the taxpayer claims a credit because the taxpayer is a member of a limited liability company, a partner in a partnership or a shareholder in a subchapter S corporation, the name of each limited liability company, partnership or subchapter S corporation earning any of the credit must be included in the report instead of information about the taxpayer claiming the credit; and

(ii) the amount of each credit component earned by each taxpayer; provided however, if the taxpayer claims a credit because the taxpayer is a member of a limited liability company, a partner in a partnership or a shareholder in a subchapter S corporation, the amount of credit earned by each entity must be included in the report instead of information about the taxpayer claiming the credit.

(3) The credit report may also contain any other information received by the commissioner with regard to the excelsior jobs program credit that the commissioner deems to be useful in evaluating the use of the credit. The information included in the credit report will be based on the information filed with the department during the previous calendar year, to the extent that it is practicable to use that information.

(f) Credit recapture. If a certificate of eligibility or a certificate of tax credit issued by the department of economic development under article seventeen of the economic development law is revoked by such department, the amount of credit described in this section and claimed by the taxpayer prior to that revocation shall be added back to income in the taxable year in which any such revocation becomes final.

(g) Cross-references. For application of the credit provided for in this section, see the following provisions of this chapter:

(1) article 9-A: section 210: subdivision 41.

(2) article 22: section 606: subsection (qq).

(3) article 32: section 1456: subsection (u).

(4) article 33: section 1511: subdivision (y).

§ 3. Section 210 of the tax law is amended by adding a new subdivision 41 to read as follows:

41. Excelsior jobs program credit. (a) Allowance of credit. A taxpayer will be allowed a credit, to be computed as provided in section thirty-one of this chapter, against the tax imposed by this article.

(b) Application of credit. The credit allowed under this subdivision for any taxable year may not reduce the tax due for such year to less than the higher of the amounts prescribed in paragraphs (c) and (d) of subdivision one of this section. However, if the amount of credit allowed under this subdivision for any taxable year reduces the tax to such amount, any amount of credit thus not deductible in such taxable year will be treated as an overpayment of tax to be credited or refunded in accordance with the provisions of section one thousand eighty-six of this chapter. Provided, however, the provisions of subsection

(c) of section one thousand eighty-eight of this chapter notwithstanding, no interest will be paid thereon.

§ 4. Section 606 of the tax law is amended by adding a new subsection (qq) to read as follows:

(qq) Excelsior jobs program credit. (1) A taxpayer will be allowed a credit, to the extent allowed under section thirty-one of this chapter, against the tax imposed by this article.

(2) Application of credit. If the amount of the credit allowed under this subsection for any taxable year exceeds the taxpayer's tax for such year, the excess will be treated as an overpayment of tax to be credited or refunded in accordance with the provisions of section six hundred eighty-six of this article, provided, however, that no interest will be paid thereon.

§ 5. Subparagraph (B) of paragraph 1 of subsection (i) of section 606 of the tax law is amended by adding a new clause (xxxi) to read as follows:

(xxxi) Excelsior jobs program tax Amount of credit under subdivision credit under subsection (qq) forty-one of section two hundred ten or under subdivision (u) of section     fourteen hundred fifty-six

§ 6. Section 1456 of the tax law is amended by adding a new subsection (u) to read as follows:

(u) Excelsior jobs program tax credit. (1) Allowance of credit. A taxpayer will be allowed a credit, to be computed as provided in section thirty-one of this chapter, against the tax imposed by this article.

(2) The credit allowed under this subsection for any taxable year will not reduce the tax due for such year to less than the minimum tax fixed by paragraph three of subsection (b) of section fourteen hundred fifty-five of this article. However, if the amount of credit allowed under this subsection for any taxable year reduces the tax to such amount, any amount of credit thus not deductible in such taxable year will be treated as an overpayment of tax to be credited or refunded in accordance with the provisions of section one thousand eighty-six of this chapter. Provided, however, the provisions of subsection (c) of section one thousand eighty-eight of this chapter notwithstanding, no interest will be paid thereon.

§ 7. Section 1511 of the tax law is amended by adding a new subdivision (y) to read as follows:

(y) Excelsior jobs program tax credit. (1) Allowance of credit. A taxpayer will be allowed a credit, to be computed as provided in section thirty-one of this chapter, against the taxes imposed by this article.

(2) Application of credit. The credit allowed under this subdivision for any taxable year will not reduce the tax due for such year to less than the minimum tax fixed by this article. However, if the amount of credit allowed under this subdivision for any taxable year reduces the tax to such amount, any amount of credit thus not deductible in such taxable year will be treated as an overpayment of tax to be credited or refunded in accordance with the provisions of section one thousand eighty-six of this chapter. Provided, however, the provisions of subsection (c) of section one thousand eighty-eight of this chapter notwithstanding, no interest will be paid thereon.

§ 8. This act shall take effect July 1, 2010.