N.Y. Workers' Compensation Law § 135: Premium credits for safety investment

§ 135. Premium credits for safety investment. 1. An employer insured

by a licensed insurer or the state insurance fund for workers'

compensation insurance may apply for a credit against the premiums for

such coverage provided such employer is not currently receiving any

statutory safety incentive or sanction authorized under this chapter for

amounts invested by such employer in the creation of a safer work

environment which meets the requirements of this section. The credit may

be applied for a renewable period not to exceed three years. For any one

year, the credit shall equal, if actuarially appropriate, an amount up

to five percent of the total amount invested as calculated under the

provisions of this section but shall not exceed fifteen percent of such

employer's annual earned premium for that year in accordance with

workers' compensation rating board manual rates. An employer applying

for such credit must provide evidence required by rules or regulations

promulgated by the superintendent of financial services that the

investment would result in a safer work environment, with such evidence

to include a written opinion by a certified safety professional, a

certified industrial hygienist or a licensed professional engineer

describing the items included in the investment and an analysis of how

they will substantially enhance the safety of the work environment.

2. It shall be the sole responsibility of the superintendent of

financial services, with the assistance of a committee, to determine

whether an employer who has made an application is eligible for a

premium credit and the extent of any such credit, and to otherwise

assist in the administration of the premium credit program, including

the promulgation of department of financial services rules and

regulations for the implementation of the program.

In addition to the superintendent of financial services, the committee

shall consist of:

(a) a representative from the department of labor;

(b) a representative from the department of economic development;

(c) a representative from the state insurance fund;

(d) an individual with an actuarial background and experience in the

field of workers' compensation;

(e) an individual with a background in safety engineering appointed by

the governor upon recommendation by the New York State American

Federation of Labor-Congress of Industrial Organizations;

(f) an individual with a background in safety engineering appointed by

the governor upon recommendation of the Business Council of the State of

New York;

(g) an individual with a background in safety engineering appointed by

the governor upon recommendation of the insurance industry; and

(h) an additional member of the committee with respect to any given

application for a premium credit shall be the current insurer of the

applicant.

All departments, divisions, boards, offices, and public corporations

of the state, and the workers' compensation rating board, shall provide

such data, information or other assistance as the committee may require

to fulfill its purposes.

The committee shall serve at the pleasure of the governor and shall

receive no compensation except for reasonable and necessary expenses

incurred in the course of performing the official duties of the

committee. Such expenses shall be paid from application fees paid in

accordance with rules and regulations promulgated by the superintendent

of financial services.

3. Premium credit calculations with respect to investments for safety

shall be based only upon tangible personal property and other tangible

property, including buildings and structural components of buildings

which make for a safer work environment, which are depreciable pursuant

to section one hundred sixty-seven of the internal revenue code, have a

useful life of four years or more, are acquired by purchase as defined

in section one hundred seventy-nine(d) of the internal revenue code,

have a situs in this state and are:

(a) principally used by the premium payer in the production of goods

by manufacturing, processing, assembling, refining, mining, extracting,

farming, agriculture, horticulture, floriculture, viticulture or

commercial fishing,

(b) industrial waste treatment facilities or air pollution control

facilities, used in the premium payer's trade or business, or

(c) research and development property.

For purposes of this section, the term "goods" shall not include

electricity.

4. For purposes of this section, the following definitions shall

apply:

(a) Manufacturing shall mean the process of working raw materials into

wares suitable for use or which gives new shapes, new quality or new

combinations to matter which already has gone through some artificial

process by the use of machinery, tools, appliances and other similar

equipment. Property used in the sale of goods at retail or the

production of goods shall include machinery, equipment or other tangible

property which is principally used in the repair and service of other

machinery, equipment or other tangible property used principally in the

production of goods and shall include all facilities used in the

production operation, including storage of material to be used in

production and of the products that are produced.

(b) Research and development property shall mean property which is

used for purposes of research and development in the experimental or

laboratory sense. Such purposes shall not be deemed to include the

ordinary testing or inspection of materials or products for quality

control, efficiency surveys, management studies, consumer surveys,

advertising, promotions, or research in connection with literary,

historical or similar projects.

(c) Industrial waste treatment facilities shall mean property

constituting facilities for the treatment, neutralization or

stabilization of industrial waste and other wastes (as the terms

"industrial waste" and "other wastes" are defined in section 17-0105 of

the environmental conservation law) from a point immediately preceding

the point of such treatment, neutralization or stabilization to the

point of disposal, including the necessary pumping and transmitting

facilities, but excluding such facilities installed for the primary

purpose of salvaging materials which are usable in the manufacturing

process or are marketable.

(d) Air pollution control facilities shall mean property constituting

facilities which remove, reduce, or render less noxious air contaminants

emitted from an air contamination source (as the terms "air contaminant"

and "air contamination source" are defined in section 19-0107 of the

environmental conservation law) from a point immediately preceding the

point of such removal, reduction or rendering to the point of discharge

of air meeting emission standards as established by the department of

environmental conservation, but excluding such facilities installed for

the primary purpose of salvaging materials which are usable in the

manufacturing process or are marketable and excluding those facilities

which rely for the efficacy on dilution, dispersion or assimilation of

air contaminants in the ambient air after emission. Such term shall

further include flue gas desulfurization equipment and attendant sludge

disposal facilities, fluidized bed boilers, precombustion coal cleaning

facilities or other facilities that conform with this section and which

comply with the provisions of the state acid deposition control act set

forth in title nine of article nineteen of the environmental

conservation law.

5. A premium credit under this section shall be allowed with respect

to industrial waste treatment facilities and air pollution control

facilities only on condition that such facilities have been certified by

the state commissioner of environmental conservation or his or her

designated representative, pursuant to subdivision one of section

17-0707 or subdivision one of section 19-0309 of the environmental

conservation law, as complying with applicable provisions of the

environmental conservation law, the public health law and the state

sanitary code and codes, rules, regulations, permits or orders issued

pursuant thereto.

6. Tangible personal property and other tangible property, including

buildings and structural components of buildings, which an employer

leases to any other person or corporation are not to be considered as

investments for safety in premium credit calculations. For purposes of

the preceding sentence, any contract or agreement to lease or rent or

for a license to use such property shall be considered a lease.

Provided, however, in determining whether an employer shall be allowed a

credit under this section with respect to such property, any election

made with respect to such property pursuant to the provisions of

paragraph eight of subsection (f) of section one hundred sixty-eight of

the internal revenue code, as such paragraph was in effect for

agreements entered into prior to January first, nineteen hundred

eighty-four, shall be disregarded.

7. Subject to the limitations provided in subdivision one of this

section, the amount of a premium credit shall be a percent of the

investment credit base. The investment credit base is the cost or other

basis for federal income tax purposes of tangible personal property and

other tangible property, including buildings and structural components

of buildings, as described in subdivision three of this section. The

amount of the percent to be applied against such investment credit base

shall be based upon the useful life of such tangible personal property

and other tangible property, and the extent to which the investment

would result in a safer work environment and upon such other actuarially

appropriate evidence offered by the applicant that the investment would

result in a safer work environment. The superintendent of financial

services shall promulgate rules and regulations determining how the

percentage to be applied against the investment credit base shall be

calculated.

8. The superintendent of financial services shall promulgate rules and

regulations for the purpose of determining how to calculate the period

during which an applicant may receive a premium credit.

9. In the event an employer which applied for and received a premium

credit pursuant to this section moves or relocates its business outside

of this state during the period in which it receives the benefits of

such credit, such employer shall be responsible for repaying to the

insurer the entire amount of such credit already received.

10. An employer who is obligated to but does not comply with the

requirements of section one hundred thirty-four of this article is not

eligible to apply for premium credits under this section.

11. An employer shall be eligible for a credit against premiums for

workers' compensation insurance coverage in an amount up to five percent

of such premiums for such other safety measures that may be implemented

by an employer and which meet the standard for such premium credit as

established by the superintendent. Such safety measures shall not

include those measures provided for in this section of this article, or

apply to such industries provided for in this section.