N.Y. Economic Development Law § 436: Businesses locating in tax-free NY areas

§ 436. Businesses locating in tax-free NY areas. 1. A campus,

university or college that has sponsored a tax-free NY area (including

any strategic state asset affiliated with the campus, university or

college) shall solicit and accept applications from businesses to locate

in such area that are consistent with the plan of such campus,

university or college or strategic state asset that has been approved

pursuant to section four hundred thirty-five of this article. Any

business that wants to locate in a tax-free NY area must submit an

application to the campus, university or college which is sponsoring the

tax-free NY area by December thirty-first, two thousand twenty-five.

Prior to such date, the commissioner shall prepare an evaluation on the

effectiveness of the START-UP NY program and deliver it to the governor

and the legislature to determine continued eligibility for application

submissions.

2. (a) The sponsoring campus, university or college shall provide the

application and all supporting documentation of any business it decides

to accept into its tax-free NY area to the commissioner for review. Such

application shall be in a form prescribed by the commissioner and shall

contain all information the commissioner determines is necessary to

properly evaluate the business's application, including, but not limited

to, the name, address, and employer identification number of the

business; a description of the land or space the business will use, the

terms of the lease agreement, if applicable, between the sponsoring

campus, university or college and the business, and whether or not the

land or space being used by the business is being transferred or sublet

to the business from some other business. The application must include a

certification by the business that it meets the eligibility criteria

specified in section four hundred thirty-three of this article and will

align with or further the academic mission of the sponsoring campus,

college or university, and that the business's participation in the

START-UP NY program will have positive community and economic benefits.

The application must also describe whether or not the business competes

with other businesses in the same community but outside the tax-free NY

area. In addition, the application must include a description of how the

business plans to recruit employees from the local workforce.

(b) The commissioner shall review such application and documentation

within sixty days and may reject such application upon a determination

that the business does not meet the eligibility criteria in section four

hundred thirty-three of this article, has submitted an incomplete

application, has failed to comply with subdivision three of this

section, or has failed to demonstrate that the business's participation

in the START-UP NY program will have positive community and economic

benefits, which shall be evaluated based on factors including but not

limited to whether or not the business competes with other businesses in

the same community but outside the tax-free NY area as prohibited by

section four hundred forty of this article. If the commissioner rejects

such application, it shall provide notice of such rejection to the

sponsoring campus, university or college and business. If the

commissioner does not reject such application within sixty days, such

business is accepted to locate in such tax-free NY area, and the

application of such business shall constitute a contract between such

business and the sponsoring campus, university or college. The

sponsoring campus, university or college must provide accepted

businesses with documentation of their acceptances in such form as

prescribed by the commissioner of taxation and finance which will be

used to demonstrate such business's eligibility for the tax benefits

specified in section thirty-nine of the tax law.

(c) If a state university campus proposes to enter into a lease with a

business for eligible land in a tax-free NY area with a term greater

than forty years, including any options to renew, or for eligible land

in a tax-free NY area of one million or more square feet, the state

university campus, at the same time as the application is provided to

the commissioner, also must submit the lease for review to the START-UP

NY approval board. If the board does not disapprove of the lease terms

within thirty days, the lease is deemed approved. If the board

disapproves the lease terms, the state university campus must submit

modified lease terms to the commissioner for review. The commissioner's

sixty day review period is suspended while the board is reviewing the

lease and during the time it takes for the state university campus to

modify the lease terms.

(d) Except as otherwise provided in this article, proprietary

information or supporting documentation submitted by a business to a

sponsoring campus, university or college shall only be utilized for the

purpose of evaluating such business's application or compliance with the

provisions of this article and shall not be otherwise disclosed. Any

person who willfully discloses such information to a third party for any

other purpose whatsoever shall be guilty of a misdemeanor.

3. The business submitting the application, as part of the

application, must:

(a) agree to allow the department of taxation and finance to share its

tax information with the department and the sponsoring campus,

university or college;

(b) agree to allow the department of labor to share its tax and

employer information with the department and the sponsoring campus,

university or college;

(c) allow the department and its agents and the sponsoring campus,

university or college access to any and all books and records the

department or sponsoring campus, university or college may require to

monitor compliance;

(d) include performance benchmarks, including the number of net new

jobs that must be created, the schedule for creating those jobs, and

details on job titles and expected salaries. The application must

specify the consequences for failure to meet such benchmarks, as

determined by the business and the sponsoring campus, university or

college: (i) suspension of such business's participation in the START-UP

NY program for one or more tax years as specified in such application;

(ii) termination of such business's participation in the START-UP NY

program; and/or (iii) proportional recovery of tax benefits awarded

under the START-UP NY program as specified in section thirty-nine of the

tax law;

(e) provide the following information to the department and sponsoring

campus, university or college upon request:

(i) 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;

(ii) the employer identification or social security numbers for all

related persons to the business, 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 business to assure the department that jobs are not being shifted

within the state; and

(g) certify, under penalty of perjury, that it is in substantial

compliance with all environmental, worker protection, and local, state,

and federal tax laws, and that it satisfies all the eligibility

requirements to participate in the START-UP NY program.

4. (a) At the conclusion of the lease term of a lease by the

sponsoring campus, university or college to a business of land or space

in a tax-free NY area owned by the sponsoring campus, university or

college, the leased land or space and any improvements thereon shall

revert to the sponsoring campus, university or college, unless the lease

is renewed.

(b) If, at any time, the sponsoring campus, university or college or

the commissioner determines that a business no longer satisfies any of

the eligibility criteria specified in section four hundred thirty-three

of this article, the sponsoring campus, university or college shall

recommend to the commissioner that the commissioner terminate or the

commissioner on his or her own initiative shall immediately terminate

such business's participation in the START-UP NY program. Such business

shall be notified of such termination by a method which allows for

verification of receipt of such termination notice. A copy of such

termination notice shall be sent to the commissioner of taxation and

finance. Upon such termination, such business shall not be eligible for

the tax benefits specified in section thirty-nine of the tax law for

that or any future taxable year, calendar quarter or sales tax quarter,

although employees of such business may continue to claim the tax

benefit for their wages during the remainder of that taxable year.

Further, such lease or contract between the sponsoring campus,

university or college and such business shall be rescinded, effective on

the thirtieth day after the commissioner mailed such termination notice

to such business and the land or space and any improvements thereon

shall revert to the sponsoring campus, university or college.

5. The commissioner shall promulgate regulations to effectuate the

purposes of this section, including, but not limited to, establishing

the process for the evaluation and possible rejection of applications,

the eligibility criteria that will be applied in evaluating those

applications, and the process for terminations from the START-UP NY

program and administrative appeals of such terminations.