N.Y. Comp. Codes R. & Regs. tit. 5 § 190.2

Current through Register Vol. 46, No. 51, December 18, 2024

Section 190.2 - Definitions

As used in this regulation, the following terms shall have the following meanings:

(a) "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, shearing, animal and plant fiber processing, and management, on a contract or fee basis).

(b) "Applicant" means a business enterprise that is operating in New York State or is planning to operate in the State.

(c) "Application" means the form that the department determines must be submitted by an applicant in order to be considered for acceptance into the program.

(d) "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.

(e) "Benefit-cost ratio" means the following calculation: the numerator is the sum of:

(1) the value of all remuneration projected to be paid for all net new jobs during the period of participation in the program; and

(2) the value of capital investments to be made by the business enterprise during the period of anticipated participation in the program, and the denominator is the amount of total tax credits that will be used and refunded pursuant to article 17 of the Economic Development Law.

(f) "Business services" for the purposes of this regulation, shall only refer to the provision of professional services licensed by the State or by the courts of this State.

(g) "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 eligibility to claim the tax credit.

(h) "Certificate of tax credit" means the document issued to a participant by the department that entities a participant to claim the tax credit pursuant to section 355 of the Economic Development Law. The certificate specifies the exact amount of each of the tax credit components and the taxable year in which such credit may be claimed. The certificate of tax credit shall be issued annually only after the department has verified that the participant has met all applicable eligibility criteria. The certificate may also include such information as the commissioner deems necessary.

(i) "Child care services" means those services undertaken or sponsored by a participant in this program which are proximate and convenient to the project location and meet the requirements of child day care as defined in paragraph (a) of subdivision one of section 390 of the Social Services Law or any child care services in the city of New York whereby a permit to operate such child care services is required pursuant to the health code of the city of New York.

(j) "Commissioner" means Commissioner of the Department of Economic Development.

(k) "Department" means the Department of Economic Development.

(l) "Make products or develop technologies that are primarily aimed at reducing greenhouse gas emissions or supporting the use of clean energy in accordance with goals described in chapter 106 of the laws of 2019" means the creation of products or the development of proven technologies that are commercialized or ready to be commercialized and moved into market and are aimed at reducing greenhouse gas emissions or supporting the deployment or adoption of clean energy.

(m) "Distribution center" means a large scale facility involving processing, repackaging and/or movement of finished or semi-finished goods to retail locations or other end users across a multi-state area. "Retail locations" includes delivery of goods directly to consumers.

(n) "Eligible real property taxes" has the same meaning as in section 15 (e) of the Tax Law, provided that the definition in subdivision (e) shall be read as if it specifically referenced the Excelsior Jobs Program and participants in that program.

(o) "Entertainment company" means a corporation, partnership, limited partnership, or other entity principally engaged in the production or post production of:

(i) motion pictures, which shall include feature-length films and television films;

(ii) instructional videos;

(iii) televised commercial advertisements;

(iv) animated films or cartoons;

(v) music videos;

(vi) television programs, which shall include but not be limited to, television series, television pilots, and single television episodes; or

(vii) programs primarily intended for radio broadcast. Entertainment company shall not include an entity:

(i) principally engaged in the live performance of events, including but not limited to, theatrical productions, concerts, circuses, and sporting events;

(ii) principally engaged in the production of content intended primarily for industrial, corporate or institutional end-users;

(iii) principally engaged in the production of fundraising films or programs; or

(iv) engaged in the production of content for which records are required under section 2257 of Title 18, United States Code, to be maintained with respect to any performer in such production.

(p) "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.

(q) "Green CHIPS benefit-cost ratio" means the following calculation with respect to Green CHIPS projects: the ratio for which the numerator is the sum of:

(1) the value of all remuneration projected to be paid for all net new jobs during the period of participation in the program;

(2) the value of capital investments projected to be made by the business enterprise during the period of participation in the program; and

(3) the projected increase in research and development expenditures by the participant in New York State 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 as well as any state grants provided directly to the participant.

(r) "Green CHIPS community plan" shall mean a plan submitted by the participant in a manner and form prescribed by the Department and approved at the sole discretion of the Department. The Department may consult with one or more host municipalities regarding such plan to ensure that the areas of investment included in the plan are aligned with local needs. Such plan shall include milestones and specific, actionable commitments for worker and community investments. Such specific, actionable commitments may include, but need not be limited to, those training and education benefits paid by the participant to support local workforce development and employment opportunities for local residents, including economically disadvantaged individuals.

(s) "Green CHIPS sustainability plan" shall mean a plan submitted by the participant in a manner and form prescribed by the Department and approved at the sole discretion of the Department. The Department may consult with other state agencies and authorities regarding such plan. Such plan shall include annual participant milestones and specific and actionable commitments to mitigate the project's greenhouse gas emissions over its lifetime as a program participant.

(t) "Green CHIPS report" shall mean a report submitted to the Department not less than annually by the participant in a manner and form prescribed by the Department detailing the performance of the Green CHIPS project against the milestones and commitments of its Green CHIPS community plan and its Green CHIPS sustainability plan.

(u) "Green CHIPS project" means a project meeting all of the following criteria:

(1) is within the semiconductor manufacturing and related equipment and material supplier sector;

(2) includes sustainability measures to mitigate the project's greenhouse gas emissions over its lifetime under a Green CHIPS sustainability plan;

(3) provides for the payment of not less than federal prevailing wage rates for its project construction;

(4) makes specific and actionable commitments to worker and community investment under a Green CHIPS community plan;

(5) will create at least five hundred net new jobs and make at least three billion dollars in qualified investment prior to the conclusion of its preliminary schedule of benefits; and

(6) will maintain a Green CHIPS benefit-cost ratio of at least fifteen to one as calculated for the overall project term. Such projects are eligible to enter into a phase one of a Green CHIPS project ten-year benefit term. Such projects, provided they are in good standing with all requirements of this Part, are also eligible to enter into a phase two of a Green CHIPS project, and therefore to initiate a new and separate ten-year schedule related to phase two, provided that phase two will create at least five hundred net new jobs beyond those created in phase one, and that phase two will make at least three billion dollars in qualified investment beyond the investment total associated with phase one. For Green CHIPS projects, phase one and phase two terms may overlap, depending on the time of initiation for both projects. Green CHIPS projects may be allowed to claim credits for taxable years up to January first, two thousand fifty.

(v) "Green project" means a project deemed by the commissioner to make products or develop technologies that are primarily aimed at reducing greenhouse gas emissions or supporting the use of clean energy in accordance with goals described in chapter 106 of the laws of 2019. "Green project" shall include, but not be limited to, the manufacture or development of products or technologies or supply chain components primarily for renewable energy systems as defined in section 66-p of the Public Service Law, vehicles that use non-hydrocarbon fuels and produce zero or near zero emissions, heat pumps, energy efficiency, clean energy storage and other products that significantly reduce greenhouse gas emissions by minimizing the utilization of depletable resources or by improving industrial or agricultural efficiency. Green project shall not include a project primarily composed of:

(1) necessarily local activities such as retail, building construction, or the installation, deployment or adoption of a clean energy product or technology at an end user's site; or

(2) the production of products or development of technologies that would produce only marginal and incremental energy savings or environmental benefits ancillary to the core function of the product or technology.

(w) "High value-added products" means durable goods requiring assembly by skilled technicians, automation, or other advanced technology.

(x) "Improving industrial efficiency" means achieving significant reductions in the greenhouse gas emissions associated with an industrial process, through a variety of potential measures aimed at reducing onsite energy consumption and/or converting fuel sources to zero and low-emission fuels where the resulting product does not have a significant negative impact on State's clean energy goals as set forth in chapter 106 of the laws of 2019 and as determined by the department.

(y) "Industry with significant potential for private sector growth and economic development in the State" means any industry where it can be demonstrated that employment in the industry could grow to any of the following:

(1) 4,000 or more in a metropolitan statistical area or to one-half of one percent of the employed population in the metropolitan statistical area; or

(2) 500 or more in a labor market area, or to one percent of the employed population in the labor market area; or

(3) to a level that exceeds the percentage level that the industry employs on a national basis. Such demonstrated potential shall be on the basis of one or more key attributes of the metropolitan statistical area or labor market area that a business enterprise in the industry would consider essential in any decision to locate or expand within such metropolitan statistical area or labor market area. For a business in an industry that meets the criteria indicated above to be eligible as an applicant to the program, the business enterprise must create at least three hundred net new jobs and make significant capital investments of at least $30 million. Nothing in this section shall allow any business entity excluded under section 191.2(g) of this Title to become a participant in this program.

(z) "Investment zone" shall mean an area within the State that had been designated under section 958 (a)(i) and (d) 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 969 of the General Municipal Law. Investment zones are the designated distinct and separate contiguous areas of the municipality that qualified for investment zone status as those areas existed on June 29, 2010.

(aa) "Life sciences" means agricultural biotechnology, biogenerics, bioinformatics, biomedical engineering, biopharmaceuticals, academic medical centers, biotechnology, chemical synthesis, chemistry technology, medical diagnostics, genomics, medical image analysis, marine biology, medical devices, medical nanotechnology, natural product pharmaceuticals, proteomics, regenerative medicine, RNA interference, stem cell research, medical and neurological clinical trials, health robotics and veterinary science.

(ab) "Life sciences company" means a business entity or an organization or institution that devotes the majority of its efforts in the various stages of research, development, technology transfer and commercialization related to any life sciences field.

(ac) "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.

(1) "Animal and plant fiber textile manufacturing" means the processes of harvesting, cleaning, spinning, knitting, weaving, dyeing and finishing textiles containing animal and plant fiber grown or produced predominantly in New York state.

(ad) "Music production" means the process of creating sound recordings of at least eight minutes, recorded in professional sound studios, intended for commercial release. Music production does not include recording of live concerts, or recordings that are primarily spoken word or wildlife or nature sounds, or produced for instructional use or advertising or promotional purposes.

(ae) "Net new jobs" means jobs created in this State that:

(i) are new to the State;

(ii) have not been transferred from employment with another business located in this State including from a related person in this State or through an acquisition, merger, consolidation, or other reorganization of businesses or the acquisition of assets of another business;

(iii) are either full-time wage-paying jobs or equivalent to a full-time wage-paying job requiring at least 35 hours per week;

(iv) are filled for more than six months; and

(v) are in excess of the applicant's employment at the project location as of the date the applicant is admitted into the Excelsior Jobs Program, provided that applicant's employment in New York State during each of their benefit years exceeds its employment base which shall be calculated as the average of the applicant's employment in New York State for each of the four quarters immediately prior to the date set forth in the certificate of eligibility, or, if the applicant was not in business in New York State during all four quarters, the employment base shall be calculated as the average of the applicant's employment in New York State for each of those quarters immediately prior to the date set forth in the certificate of eligibility in which the applicant was in business in New York State.

(af) "New media" means the application of information technology to traditional communications outlets, particularly through interactive modes such as the Internet, including video games, web search portals, interactive web-based content, and interactive advertising. New media also includes the post production process for film and television projects which involves the following activities: picture, sound and music editing; rerecording and mixing; visual effects, graphic design, original scoring, animation and musical composition.

(ag) "Net new child care services expenditures" means the calculation of new, annual participant expenditures on child care services whether internal or provided by a third party (including coverage for full or partial discount of employee rates), minus any revenues received by the participant through a third-party operator (i.e. rent paid to the participant by the child care provider) or employees. Such expenditures must be incurred by a participant or third-party operator and must be proximate and convenient to the project location. For the purposes of this definition, expenditures for child care services that a participant has incurred prior to admission to this program shall not be eligible for the credit.

(ah) "Participant" means a business entity that:

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

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

(3) has demonstrated that it meets the eligibility criteria in section 353 and section 354 (2) of the Economic Development Law as further defined in sections 191.1 and 191.2 of this Title; and

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

(ai) "Preliminary schedule of benefits" means the maximum aggregate amount of each component of the tax credit that a participant in the program is eligible to receive pursuant to this regulation. The preliminary schedule of benefits shall indicate the annual amount of each component of the credit a participant may claim in each of its 10 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 359 of the Economic Development Law.

(aj) "Program" means the Excelsior Jobs Program.

(ak) "Qualified investment" means an investment in tangible property (including, a building or a structural component of a building) owned by a business entity that:

(1) is depreciable pursuant to section 167 of the Internal Revenue Code;

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

(3) is acquired by purchase as defined in section 179(d) of the Internal Revenue Code;

(4) has a situs in this State; and

(5) is placed in service in the State on or after the date the certificate of eligibility is issued to the business entity.

(al) "Regionally significant project" means:

(1) a manufacturer creating at least 10 net new jobs in the State and making a significant capital investment in the State;

(2) a business creating at least 10 net new jobs in agriculture in the State and making a significant capital investment in the State;

(3) a financial services firm or back office operation creating at least 100 net new jobs in the State and making a significant capital investment in the State;

(4) a distribution center creating at least 100 net new jobs in the State and making a significant capital investment;

(5) a scientific research and development firm creating at least 10 net new jobs in the State and making a significant capital investment in the State;

(6) an entertainment company creating or obtaining at least 200 net new jobs in the State and making significant capital investment in the State;

(7) a life sciences company creating at least 20 net new jobs in the State and making significant capital investment in the State. Other businesses creating 150 or more net new jobs in the State and making a significant capital investment in the State also may be considered eligible as a regionally significant project by the commissioner. In order to be a regionally significant project under this subdivision a business must export a substantial portion of its products or services outside of the State or outside of a metropolitan statistical area or county within the State.

(am) "Related person" means a related person pursuant to section 465(b)(3)(c) of the Internal Revenue Code.

(an) "Remuneration" means wages and benefits paid to an employee by a participant in the program. Under no circumstances shall remuneration include mandated benefits including, but not limited to, Federal Insurance Contributions Act (FICA), Medicare tax, unemployment insurance or workers' compensation insurance.

(ao) "Research and development expenditures" mean the expenses of the business entity that are qualified research expenses under the Federal research and development credit under section 41 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 2009 were still in effect.

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

(aq) "Semiconductor manufacturing and related equipment and material supplier sector" means:

(1) The semiconductor and related device manufacturing industry; or

(2) The semiconductor machinery manufacturing industry; or

(3) Establishments primarily engaged as chemical, gas or other material suppliers to the semiconductor and related device manufacturing industry and/or the semiconductor machinery manufacturing industry; or

(4) Research, development and prototyping establishments primarily engaged in the support of the semiconductor and related device manufacturing industry and/or the semiconductor machinery manufacturing industry; or

(5) Other related semiconductor industries as determined by the Department

(ar) "Semiconductor and related device manufacturing industry" means establishments primarily engaged in manufacturing semiconductors and related solid-state devices. Examples of products made by these establishments are integrated circuits, memory chips, microprocessors, diodes, transistors, solar cells, and other optoelectronic devices.

(as) "Semiconductor machinery manufacturing industry" means establishments primarily engaged in manufacturing wafer processing equipment, semiconductor assembly and packaging equipment, and other semiconductor making machinery.

(at) "Significant capital investment" means a project which will be either a newly constructed facility or a newly constructed addition to, expansion of or improvement of a facility, consisting of tangible personal property and other tangible property, including buildings and structural components of buildings, that are depreciable pursuant to section 167 of the Internal Revenue Code, have a useful life of four years or more, are acquired by purchase as defined in section 179 (d) of the Internal Revenue Code, and that is equal to or exceeds:

(a) $1 million for a manufacturer;

(b) $250,000 for an agriculture business;

(c) $3 million for a financial services firm or back office operation;

(d) $15 million for a distribution center;

(e) $3 million for a scientific research and development firm; or

(f) $3 million for other businesses.

(au) "Software development" means the creation of coded computer instructions or production or post production of video games, as defined in subdivision 1-a of section 611 of the General Business Law, other than those embedded and used exclusively in advertising, promotional websites or microsites, and also includes new media.

(av) "Smart growth" means the sensible, planned, efficient growth that integrates economic development and job creation with community quality-of-life by preserving and enhancing the built and natural environments. Smart growth encourages growth in developed areas with existing infrastructure to sustain it, particularly municipal centers, downtowns, urban cores, historic districts and older first-tier suburbs.

N.Y. Comp. Codes R. & Regs. Tit. 5 § 190.2

Amended New York State Register June 27, 2018/Volume XL, Issue 26, eff. 6/27/2018

Amended New York State Register December 16, 2020/Volume XLII, Issue 50, eff. 12/16/2020

Amended New York State Register May 3, 2023/Volume XLV, Issue 18, eff. 5/3/2023