N.Y. General Municipal Law § 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.