2023 New York Laws › GMU - General Municipal › Article 18-B - New York State Empire Zones › 964 - Empire Zone Capital Corporations.

§ 964. Empire zone capital corporations. (a) No more than three empire
zone  capital  corporations  may  be  established  in  each zone for the
purpose of raising funds through private and public grants, donations or
investments, to be used in making investments in, and loans to, business
firms certified pursuant to subdivision  (a)  of  section  nine  hundred
fifty-nine   of   this  article  for  the  purpose  of  encouraging  the
establishment or expansion of businesses and the provision of additional
job opportunities within such area. A zone capital corporation may serve
one or more zones within an economic development region or zones  within
two  or  more  regions.  Prior  to  the  establishment of a zone capital
corporation, the zone board and the commissioner of  the  department  of
economic  development  shall  approve the formation of the proposed zone
capital corporation, its board of  directors  and  management,  and  its
procedures  for  making,  servicing  and  monitoring  investments. In no
event, however, shall an empire  zone  capital  corporation  acquire  an
ownership  interest in any certified business firm which amounts to more
than twenty-five percent of the ownership  interest  of  such  certified
business  firm.  No  loan to or investment in any business firm shall be
made by an empire zone capital corporation located in a  zone  within  a
town  with  a  population  of more than twenty-five thousand, until such
corporation has accumulated at least two  hundred  thousand  dollars  in
capital  stock. No loan or investment in any business firm shall be made
by an empire zone capital corporation located in a zone  within  a  town
with   a  population  of  less  than  twenty-five  thousand  until  such
corporation has accumulated at least one  hundred  thousand  dollars  in
capital stock. A zone capital corporation shall submit to the zone board
an annual report on its activities.
(b)  Each  zone  capital  corporation  shall  establish  an investment
committee for the purpose  of  evaluating  applications  for  loans  and
equity  investments.  Each  committee  shall be comprised of members who
possess the requisite business  and  financial  expertise  necessary  to
evaluate applications for loans and/or equity investments.
(c)  Each empire zone capital corporation shall, to the maximum extent
feasible,  undertake  measures  and  procedures  to  ensure   meaningful
participation  by minority-owned and women-owned business enterprises in
the  activities  and  investments  of  such   corporation.   Each   such
corporation   shall   additionally,  to  the  maximum  extent  feasible,
undertake measures and procedures to ensure meaningful participation  by
locally  owned business enterprises in the activities and investments of
such corporation.
(d) The total amount of tax credits available to each zone pursuant to
subdivision twenty of section two hundred ten, subsection (l) of section
six hundred six, subsection (d) of section  fourteen  hundred  fifty-six
and  subdivision  (h)  of section fifteen hundred eleven of the tax law,
shall be two million five hundred thousand dollars, (provided,  however,
that  in  no  event  shall the credits available in any zone exceed five
hundred thousand  dollars  in  the  case  of  qualified  investments  in
certified   zone  businesses  as  described  in  such  subdivisions  and
subsections). Apportionment of credits within  a  zone  between  capital
investments  in  and  contributions to zone capital corporations, direct
investments in certified zone businesses or contributions  to  community
development  projects  will be determined and accounted for by the local
zone administrative board in consultation with the  zone  administrative
entity,  subject  to  regulations promulgated by the commissioner of the
department of economic development. Credits not used by  a  zone  within
four  years  of  their  apportionment  may,  after  a public hearing, be
reallocated pursuant to regulations  promulgated  by  the  commissioner.
Certifications  under  subdivision  twenty  of  section two hundred ten,

subsection (l) of section six hundred six,  subsection  (d)  of  section
fourteen fifty-six and subdivision (h) of section fifteen hundred eleven
of  the  tax  law  shall  be  consistent  with  the  provisions  of this
subdivision.
(e)  The  commissioner  shall  promulgate  regulations  governing  the
criteria of eligibility for the tax credits, referred to in  subdivision
(d)  of  this  section,  applicable  to  direct  equity  investments  in
certified zone businesses and to contributions to community  development
projects  provided for in this section. Such regulations shall establish
requirements including, but not limited to: (i) a demonstration that the
direct equity investment in a certified zone business  will  contribute,
significantly, to an activity having tangible economic benefits, such as
start-up,  expansion  or industrial modernization of such zone business;
(ii) a demonstration that the certified zone business has the  potential
to  create  jobs;  and  (iii)  a  demonstration  that  the direct equity
investment is necessary to increase the amount of capital  available  to
the  certified zone business, provided, however, that such investment is
not intended nor shall it be used to refinance existing debt or  replace
existing equity in such zone business.
(f)  In addition to the duties set forth in subdivision (b) of section
nine hundred sixty-three of this article, the zone administrative  board
shall,  consistent with the regulations promulgated by the commissioner,
determine the eligibility of direct equity investments in certified zone
businesses and contributions to community development projects  for  the
tax  credits,  described  in  subdivision  (d) of this section, that are
available to such zone. Such determination by  the  zone  administrative
board  shall  be  subject  to  review  by the commissioner in his or her
discretion. The commissioner, upon review of a zone board  determination
made   pursuant  to  this  subdivision,  shall  accept  or  reject  such
determination as may be deemed appropriate.