S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  4434

                       2015-2016 Regular Sessions

                          I N  A S S E M B L Y

                            January 30, 2015
                               ___________

Introduced  by  M.  of  A.  SILVER,  SCHIMMINGER,  LUPARDO, SCARBOROUGH,
  MAGNARELLI, GALEF, ZEBROWSKI, JAFFEE, SCHIMEL -- Multi-Sponsored by --
  M. of A. BRENNAN, COLTON, CYMBROWITZ, MARKEY -- read once and referred
  to the Committee on Ways and Means

AN ACT to amend the tax law, in relation to program six certified  capi-
  tal companies; and to repeal section 84 of part A of chapter 62 of the
  laws of 2011 relating to constituting chapter 18-A of the consolidated
  laws  relating  to  financial  services, relating to certain reporting
  requirements

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1. The opening paragraph of paragraph 7 of subdivision (a) of
section 11 of the tax law, as amended by section 19 of part A of chapter
63 of the laws of 2005, is amended to read as follows:
  "Qualified business" - A QUALIFIED SEED FUND OR an independently owned
and operated business that meets all of the following conditions  as  of
the time of the first investment in the business:
  S  2. Paragraph 10 of subdivision (a) of section 11 of the tax law, as
amended by section 19 of part A of chapter 63 of the laws  of  2005,  is
amended to read as follows:
  (10)  "Qualified  investment"  - the investment of cash by a certified
capital company in a qualified business for the purchase  of  any  debt,
equity  or  hybrid  security,  of  any  nature and description whatever,
including a debt instrument or security which has the characteristics of
debt but which provides for conversion into  equity  or  equity  partic-
ipation  instruments  such  as options or warrants, provided however, in
the case of certified capital programs three, four  [and],  five[,]  AND
SIX  that  any  such debt instrument have a maturity of at least twenty-
four months from the date such debt is incurred;  and  further  provided
that a certified capital company, after the investment and assuming full
conversion  and  exercise of any equity participation instruments, shall

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD06781-01-5
              

A. 4434                             2

not own more than fifty percent of the voting equity  of  the  qualified
business,  except in the case of a follow-on investment where a specific
exemption is granted by the department under subparagraph (D)  of  para-
graph one of subdivision (c) of this section OR AN INVESTMENT IN A QUAL-
IFIED  SEED  FUND  BY A PROGRAM SIX CERTIFIED CAPITAL COMPANY.  Further-
more, except in the case of  a  follow-on  investment,  if  a  certified
capital company owns more than fifteen percent of the equity in a compa-
ny  or  has  a  seat  on  the board of directors of such company, then a
certified capital company cannot  invest  in  such  company  unless  the
following conditions are met: (i) at least one other investor who is not
an  affiliate  of the certified capital company participates in the same
round of investment on the same terms and conditions  as  the  certified
capital  company;  and (ii) the certified capital company and its affil-
iates invest no more than fifty percent of the total investment made  in
that round of investment.
  S 3. Subdivision (a) of section 11 of the tax law is amended by adding
two new paragraphs 17 and 18 to read as follows:
  17. "QUALIFIED SEED FUND" - IS ANY FUND THAT HAS BEEN CERTIFIED BY THE
SUPERINTENDENT  AS  SUCH  BY  RULE OR REGULATION. THE SUPERINTENDENT MAY
CERTIFY PARTNERSHIPS, CORPORATIONS, TRUSTS, OR LIMITED LIABILITY  COMPA-
NIES  ORGANIZED  ON  A  FOR-PROFIT BASIS, OR NOT-FOR-PROFIT FUNDS, WHICH
SUBMIT AN APPLICATION TO BE DESIGNATED AS A QUALIFIED SEED FUND OPERATOR
IF SUCH APPLICANT IS LOCATED, HEADQUARTERED AND LICENSED  OR  REGISTERED
TO  CONDUCT  BUSINESS  IN  NEW YORK. QUALIFIED SEED FUNDS SHALL BE UNDER
EXPERIENCED PROFESSIONAL MANAGEMENT FAMILIAR WITH SEED  CAPITAL  INVEST-
MENT,  APPROPRIATE  BUSINESS  PRACTICES AND TECHNOLOGY-ORIENTED PRODUCTS
AND SERVICES, AND FORMED FOR THE PURPOSE OF PROVIDING PRIVATE EQUITY  TO
TECHNOLOGY-BASED COMPANIES IN THEIR FORMATIVE STAGES AND INVEST IN QUAL-
IFIED  ENTERPRISES  LOCATED  WITHIN NEW YORK STATE. QUALIFIED SEED FUNDS
MUST DEMONSTRATE (A) CAPACITY TO PERFORM DUE DILIGENCE IN MAKING INVEST-
MENT DECISIONS AND TO PROVIDE MANAGEMENT EXPERTISE AND OTHER VALUE-ADDED
SERVICES;  (B)  FINANCIAL  RESOURCES  FOR  IDENTIFYING   AND   INVESTING
SEED-STAGE  COMPANIES;  AND  (C) ABILITY TO EVALUATE EMERGING TECHNOLOGY
COMMERCIALIZATION.
  18. "MATCH" - A CASH INVESTMENT IN OR LOAN  TO  A  QUALIFIED  BUSINESS
MADE  NO MORE THAN THREE MONTHS BEFORE OR SIX MONTHS AFTER AN INVESTMENT
OF CERTIFIED CAPITAL BY A CERTIFIED CAPITAL COMPANY PROGRAM SIX IN  SUCH
QUALIFIED  BUSINESS,  OTHER THAN AN INVESTMENT MADE WITH CERTIFIED CAPI-
TAL. THE TERM SHALL ALSO INCLUDE CASH INVESTED IN OR LENT TO A QUALIFIED
BUSINESS BY A CERTIFIED CAPITAL COMPANY THAT HAS  INVESTED  ONE  HUNDRED
PERCENT OF ITS CERTIFIED CAPITAL IN QUALIFIED BUSINESSES.
  S  4.  Paragraph 9 of subdivision (b) of section 11 of the tax law, as
amended by section 19 of part A of chapter 63 of the laws  of  2005,  is
amended to read as follows:
  (9)  The superintendent shall start accepting applications to become a
certified capital company in certified capital company  program  two  by
November  first, nineteen hundred ninety-nine, and shall start accepting
applications to become a certified capital company in certified  capital
company  program  three  by  August first, two thousand, and shall begin
accepting applications to become a certified capital company  in  certi-
fied  capital  company  program  four  by the later of August first, two
thousand four or not more than sixty days after the  effective  date  of
section  one of part D of chapter fifty-nine of the laws of two thousand
four and shall begin accepting applications to become a certified  capi-
tal  company  in  certified capital company program five by the later of
July first, two thousand five or not more  than  sixty  days  after  the

A. 4434                             3

effective  date  of  the  chapter of the laws of two thousand five which
amended this paragraph, AND SHALL BEGIN ACCEPTING APPLICATIONS TO BECOME
A CERTIFIED CAPITAL COMPANY IN PROGRAM SIX BY JULY FIRST,  TWO  THOUSAND
FIFTEEN  OR  NOT  MORE  THAN  SIXTY DAYS AFTER THE EFFECTIVE DATE OF THE
CHAPTER  OF  THE  LAWS  OF  TWO  THOUSAND  FIFTEEN  WHICH  AMENDED  THIS
PARAGRAPH.
  S  5. Subparagraph (A) of paragraph 1 of subdivision (c) of section 11
of the tax law, as amended by section 19 of part A of chapter 63 of  the
laws of 2005, is amended to read as follows:
  (A)  Within  two years after the starting date of a specific certified
capital company program of a certified capital company, at  least  twen-
ty-five  percent  of  its  certified capital allocable to such certified
capital company program must be placed in qualified investments  AND  IN
THE  CASE  OF PROGRAM SIX, AT LEAST TEN PERCENT OF ITS CERTIFIED CAPITAL
MUST HAVE BEEN PLACED IN QUALIFIED SEED FUNDS. ALL QUALIFIED INVESTMENTS
MADE IN QUALIFIED SEED FUNDS UNDER PROGRAM SIX SHALL COUNT  TOWARDS  THE
TWENTY-FIVE PERCENT INVESTMENT REQUIREMENT OF THIS SUBPARAGRAPH.
  S  6. Subparagraph (C) of paragraph 1 of subdivision (c) of section 11
of the tax law, as amended by section 19 of part A of chapter 63 of  the
laws of 2005, is amended to read as follows:
  (C)  Within four years after the starting date of a specific certified
capital company program of a certified capital company, at  least  fifty
percent  of  its  certified  capital allocable to such certified capital
company program must be placed in qualified investments, at least  fifty
percent of which must have been placed in early stage businesses, except
that  in  the  case of program four and any subsequent program, at least
twenty-five percent of which must have been placed in early stage  busi-
nesses  and  an  additional  twenty-five percent of which must have been
placed in start-up businesses, and except that in the case of  qualified
investments  made in qualified businesses located in empire zones estab-
lished pursuant to article eighteen-B of the general municipal law under
the provisions of certified capital company program three, program  four
and program five from allocations of certified capital made specifically
for  such targeted investments in such zones, the requirement for quali-
fied investments in early stage and start-up businesses shall not apply.
AN INVESTMENT IN A QUALIFIED SEED FUND SHALL COUNT TOWARDS THE  REQUIRE-
MENT  UNDER  PROGRAM  SIX FOR QUALIFIED INVESTMENTS IN EARLY STAGE BUSI-
NESSES.
  S 7. Subparagraph (D) of paragraph 1 of subdivision (c) of section  11
of  the tax law, as amended by section 19 of part A of chapter 63 of the
laws of 2005, is amended to read as follows:
  (D) A certified capital company, at least fifteen working  days  prior
to making a proposed investment in a specific business, shall certify in
writing to the superintendent that (i) the business in which it proposes
to  invest  meets the definition of a qualified business as set forth in
subdivision (a) of this section or, in the case of a  follow-on  invest-
ment, that such business continues to meet the requirements set forth in
subparagraphs  (A) and (C) of paragraph seven of subdivision (a) of this
section and, in either case, an explanation of  its  determination  that
the  business meets such requirements, [and] (ii) with respect to certi-
fied capital company program  three,  program  four  and  program  five,
whether  or  not  such business is located in an empire zone established
pursuant to article eighteen-B of the general municipal  law  or  in  an
underserved area outside an empire zone AND (III) WITH RESPECT TO CERTI-
FIED CAPITAL COMPANY PROGRAM SIX, WHETHER OR NOT SUCH INVESTMENT IS IN A
QUALIFIED  SEED  FUND.    The  certification to the superintendent shall

A. 4434                             4

include a sworn statement from the business in which the certified capi-
tal company proposes to  invest,  which  statement  shall  evidence  the
intention  of  the business to maintain its headquarters in New York and
conduct  its  primary business operations in the state of New York after
its receipt of the investment by the certified capital company.  If  the
superintendent determines that the business does not meet the definition
of a qualified business, or, in the case of a follow-on investment, that
such  business does not meet the requirements set forth in subparagraphs
(A) and (C) of paragraph seven of subdivision (a) of this section,  then
it  shall,  within the fifteen working day period prior to the making of
the proposed investment, notify the certified  capital  company  of  its
determination  and  provide  an  explanation thereof, provided, however,
that the department may, upon written request  of  a  certified  capital
company  and  at the discretion of the department, grant, in writing, an
exemption to the percentage limitations of paragraph ten of  subdivision
(a) of this section.
  S  8. Subparagraph (F) of paragraph 1 of subdivision (c) of section 11
of the tax law, as amended by section 19 of part A of chapter 63 of  the
laws of 2005, is amended to read as follows:
  (F)  If  within ten years after the starting date of certified capital
company program four [or], program  five  OR  PROGRAM  SIX,  and  within
twelve  years  after  the  starting  date  of  certified capital company
programs one, two, and three, one hundred percent of the certified capi-
tal allocable to a certified capital  company  participating  in  [such]
program  ONE,  TWO, THREE, FOUR OR FIVE has not been placed in qualified
investments AND, WITH RESPECT TO PROGRAM SIX, ONE HUNDRED PERCENT OF THE
CERTIFIED CAPITAL HAS NOT BEEN PLACED IN QUALIFIED INVESTMENTS WITH  TEN
PERCENT OF SUCH AMOUNT BEING PLACED IN QUALIFIED SEED FUNDS, the specif-
ic  certified  capital  company  shall no longer be permitted to receive
management fees; provided that such restriction shall not apply (i) with
respect to certified capital company programs one, two,  and  three,  to
any  certified  capital  company  that has not, prior to October thirty-
first, two thousand four, received, as opposed to accrued,  any  manage-
ment  fees,  or  (ii)  with  respect  to  any  certified capital company
program, to a certified capital company in which at least fifty  percent
of  the voting stock, capital, membership interests, or other beneficial
ownership interests, as the case may be, are owned by an entity that  is
managed, directly or indirectly, by a non-profit corporation.
  S  9.   Paragraph 1 of subdivision (c) of section 11 of the tax law is
amended by adding a new subparagraph (G) to read as follows:
  (G) IF WITHIN ONE YEAR OF  THE  STARTING  DATE  OF  CERTIFIED  CAPITAL
COMPANY  PROGRAM  SIX,  THE CERTIFIED CAPITAL COMPANY HAS NOT ACHIEVED A
MATCH OF AT LEAST ONE HUNDRED PERCENT OF THE AMOUNT OF QUALIFIED INVEST-
MENTS MADE BY SUCH CERTIFIED CAPITAL COMPANY WITH PROGRAM SIX  CERTIFIED
CAPITAL  AS  OF  SUCH DATE, THE SPECIFIC CERTIFIED CAPITAL COMPANY SHALL
NOT BE PERMITTED TO RECEIVE MANAGEMENT FEES UNTIL IT HAS  ACHIEVED  SUCH
MATCH.  IF  WITHIN THREE YEARS OF THE STARTING DATE OF CERTIFIED CAPITAL
COMPANY PROGRAM SIX, THE CERTIFIED CAPITAL COMPANY HAS  NOT  ACHIEVED  A
MATCH OF AT LEAST ONE HUNDRED PERCENT OF THE AMOUNT OF QUALIFIED INVEST-
MENTS  MADE BY SUCH CERTIFIED CAPITAL COMPANY WITH PROGRAM SIX CERTIFIED
CAPITAL COMPANY AS OF SUCH DATE, THE SPECIFIC CERTIFIED CAPITAL  COMPANY
SHALL  NOT BE PERMITTED TO RECEIVE MANAGEMENT FEES UNTIL IT HAS ACHIEVED
SUCH MATCH. IF WITHIN FIVE YEARS OF THE STARTING DATE OF CERTIFIED CAPI-
TAL COMPANY PROGRAM SIX, THE CERTIFIED CAPITAL COMPANY HAS NOT  ACHIEVED
A  MATCH  OF  AT  LEAST  ONE  HUNDRED PERCENT OF THE AMOUNT OF QUALIFIED
INVESTMENTS MADE BY SUCH CERTIFIED  CAPITAL  COMPANY  WITH  PROGRAM  SIX

A. 4434                             5

CERTIFIED  CAPITAL COMPANY AS OF SUCH DATE, THE SPECIFIC CERTIFIED CAPI-
TAL COMPANY SHALL NOT BE PERMITTED TO RECEIVE MANAGEMENT FEES  UNTIL  IT
HAS ACHIEVED SUCH MATCH.
  S  10.   Subparagraph (A) of paragraph 6 of subdivision (c) of section
11 of the tax law, as amended by section 19 of part A of chapter  63  of
the laws of 2005, is amended to read as follows:
  (A)  As  soon as practicable after the receipt of certified capital or
an irrevocable funding commitment subject only  to  the  receipt  of  an
allocation  pursuant to subdivision (h) of this section, (i) the name of
each certified investor from which the certified capital  was  received,
including such certified investor's insurance tax identification number;
(ii)  the  amount  of  each certified investor's investment of certified
capital; and (iii) the date on which the certified capital was received.
Provided, however, that requests for  allocation  of  tax  credits  with
respect  to  certified  capital company program two by certified capital
companies on behalf of their certified investors which are  received  by
the  superintendent  on  or  before  March  first, two thousand shall be
treated as having been received on March first,  two  thousand  for  tax
credits  to  be utilized in two thousand one, and if satisfactory, shall
be given equal priority for  allocation,  and  provided,  however,  that
requests for allocation of tax credits with respect to certified capital
company  program three by certified capital companies on behalf of their
certified investors which are  received  by  the  superintendent  on  or
before  December  first,  two  thousand  shall be treated as having been
received on December first, two thousand for tax credits to be  utilized
in  two thousand two, and if satisfactory, shall be given equal priority
for allocation, and provided, however, that requests for  allocation  of
tax  credits  with  respect to certified capital company program four by
certified capital companies on behalf of their certified investors which
are received by the superintendent on  or  before  December  first,  two
thousand  four  shall  be  treated  as  having been received on December
first, two thousand four for tax credits to be utilized in two  thousand
six,  and if satisfactory, shall be given equal priority for allocation,
and provided, however, that requests for allocation of tax credits  with
respect  to  certified capital company program five by certified capital
companies on behalf of their certified investors which are  received  by
the  superintendent  on  or  before the later of (i) November first, two
thousand five and (ii) the one hundred twentieth day after the  date  on
which  the superintendent began accepting applications for certification
in connection with certified capital company program  five  pursuant  to
paragraph  nine  of  subdivision (b) of this section shall be treated as
having been received on such later date for tax credits to  be  utilized
in two thousand seven, and if satisfactory, shall be given equal priori-
ty  for  allocation, AND PROVIDED, HOWEVER, THAT REQUESTS FOR ALLOCATION
OF TAX CREDITS WITH RESPECT TO CERTIFIED CAPITAL COMPANY PROGRAM SIX  BY
CERTIFIED CAPITAL COMPANIES ON BEHALF OF THEIR CERTIFIED INVESTORS WHICH
ARE  RECEIVED BY THE SUPERINTENDENT ON OR BEFORE THE LATER OF (I) NOVEM-
BER FIRST, TWO THOUSAND FIFTEEN AND (II) THE ONE HUNDRED  TWENTIETH  DAY
AFTER  THE DATE ON WHICH THE SUPERINTENDENT BEGAN ACCEPTING APPLICATIONS
FOR CERTIFICATION IN  CONNECTION  WITH  CERTIFIED  CAPITAL  PROGRAM  SIX
PURSUANT  TO  PARAGRAPH NINE OF SUBDIVISION (B) OF THIS SECTION SHALL BE
TREATED AS HAVING BEEN RECEIVED ON SUCH LATER DATE FOR TAX CREDITS TO BE
UTILIZED IN TWO THOUSAND NINETEEN, AND IF SATISFACTORY, SHALL  BE  GIVEN
EQUAL PRIORITY FOR ALLOCATION.

A. 4434                             6

  S 11. Subparagraph (B) of paragraph 6 of subdivision (c) of section 11
of  the tax law, as amended by section 19 of part A of chapter 63 of the
laws of 2005, is amended to read as follows:
  (B)  On  an  annual  basis,  on or before January thirty-first of each
year, (i) the amount of the certified capital company's certified  capi-
tal  at  the  end of the immediately preceding year; (ii) whether or not
the certified capital company has invested more than fifteen percent  of
its  total  certified  capital  in any one business; (iii) all qualified
investments that the certified capital company made during the  previous
calendar year, including the number of employees of each qualified busi-
ness in which it has made investments at the time of such investment and
as  of  December first of the preceding calendar year. For any qualified
business where the certified capital company no longer  has  an  invest-
ment, the certified capital company shall provide employment figures for
such  company  as  of the last day before the investment was terminated.
Such report shall provide a separate accounting by each certified  capi-
tal company program; [and] (iv) all qualified investments made in empire
zones  and underserved areas outside such empire zones as required under
certified capital  company  program  three,  certified  capital  company
program  four  and  certified capital company program five; AND (V) WITH
RESPECT TO CERTIFIED CAPITAL COMPANY PROGRAM SIX, ALL QUALIFIED  INVEST-
MENTS MADE IN UNDERSERVED AREAS, ALL QUALIFIED INVESTMENTS MADE IN QUAL-
IFIED  SEED FUNDS, INCLUDING THE NUMBER OF EMPLOYEES OF EACH BUSINESS IN
WHICH A QUALIFIED SEED FUND HAS MADE INVESTMENTS AT  THE  TIME  OF  SUCH
INVESTMENT  AND  AS OF DECEMBER FIRST OF THE PRECEDING CALENDAR YEAR AND
THE MATCH ACHIEVED BY THE CERTIFIED CAPITAL COMPANY.   FOR ANY  BUSINESS
WHERE THE QUALIFIED SEED FUND NO LONGER HAS AN INVESTMENT, THE CERTIFIED
CAPITAL  COMPANY SHALL PROVIDE EMPLOYMENT FIGURES FOR SUCH COMPANY AS OF
THE LAST DAY BEFORE THE INVESTMENT WAS TERMINATED.
  S 12. Paragraph 1 of subdivision (d) of section 11 of the tax law,  as
amended  by  section  19 of part A of chapter 63 of the laws of 2005, is
amended to read as follows:
  (1) A certified capital company may make  qualified  distributions  at
any  time.  In  order for a certified capital company to make a distrib-
ution other than a  qualified  distribution  from  a  certified  capital
company program, to its equity holders, either (A) the aggregate cumula-
tive  amount of all qualified investments for such program must equal or
exceed one hundred percent of its certified capital  allocable  to  such
certified  capital  company program AND WITH RESPECT TO PROGRAM SIX, THE
CERTIFIED CAPITAL COMPANY MUST HAVE ACHIEVED A MATCH OF AT LEAST  NINETY
PERCENT  OF  THE  CERTIFIED  CAPITAL ALLOCABLE TO SUCH CERTIFIED CAPITAL
COMPANY, or (B) it must have received written authorization to make such
distribution from the superintendent.  In no event, however,  shall  any
such distribution to its equity holders, other than a qualified distrib-
ution,  be  made by a certified capital company from a certified capital
company program unless an amount equal cumulatively to at  least  ninety
percent  of  its certified capital of such program is invested in compa-
nies that conduct their principal business operations in New York state.
  S 13. Paragraph 5 of subdivision (e) of section 11 of the tax law,  as
amended  by  section  19 of part A of chapter 63 of the laws of 2005, is
amended to read as follows:
  (5) Once a certified capital company has invested  an  amount  cumula-
tively  equal  to  one  hundred  percent  of  its certified capital with
respect to a particular certified capital company program  in  qualified
investments  and  has met all other requirements under this subdivision,
INCLUDING THE REQUIREMENT THAT A PROGRAM SIX CERTIFIED  CAPITAL  COMPANY

A. 4434                             7

INVEST  TEN PERCENT OF ITS CERTIFIED CAPITAL IN QUALIFIED SEED FUNDS AND
ACHIEVE A MATCH OF AT LEAST NINETY  PERCENT  OF  THE  CERTIFIED  CAPITAL
ALLOCABLE  TO  SUCH  CERTIFIED  CAPITAL  COMPANY,  the certified capital
company  shall  no longer be subject to regulation by the superintendent
and shall no longer be subject to the requirements of subdivision (c) of
this section with respect to such  program.  Upon  receiving  documented
certification  by a certified capital company that it has invested, WITH
RESPECT TO PROGRAMS ONE, TWO, THREE, FOUR AND FIVE, an amount  equal  to
one  hundred  percent  of  its  certified  capital  AND, WITH RESPECT TO
PROGRAM SIX, AN AMOUNT EQUAL TO ONE HUNDRED  PERCENT  OF  ITS  CERTIFIED
CAPITAL WITH TEN PERCENT OF SUCH CERTIFIED CAPITAL INVESTED IN QUALIFIED
SEED  FUNDS  AND,  WITH  RESPECT  TO PROGRAM SIX, ACHIEVED A MATCH OF AT
LEAST NINETY PERCENT OF THE CERTIFIED CAPITAL ALLOCABLE TO  SUCH  CERTI-
FIED  CAPITAL  COMPANY,  the  department shall have sixty days to notify
such certified capital company that it has or has not met such  require-
ment with a reason for such determination if it has not, in the judgment
of  the  department,  met  such  requirement. If the department does not
provide such notification  within  sixty  days,  the  certified  capital
company shall then be deemed to have met such requirement.
  S  14.  Subdivision  (h)  of  section  11 of the tax law is amended by
adding a new paragraph 6 to read as follows:
  (6) CERTIFIED CAPITAL COMPANY PROGRAM SIX.  THE  AGGREGATE  AMOUNT  OF
CERTIFIED  CAPITAL  FOR WHICH TAXPAYERS MAY BE ALLOCATED AND ALLOWED TAX
CREDITS PURSUANT TO  THIS  PARAGRAPH  AND  SUBDIVISION  (K)  OF  SECTION
FIFTEEN  HUNDRED ELEVEN OF THIS CHAPTER MAY NOT EXCEED ONE HUNDRED FIFTY
MILLION DOLLARS FOR CALENDAR YEAR TWO THOUSAND NINETEEN, WHICH CERTIFIED
CAPITAL MAY BE INVESTED IN  CERTIFIED  CAPITAL  COMPANIES  BEGINNING  IN
CALENDAR YEAR TWO THOUSAND FIFTEEN.
  DURING  ANY  CALENDAR  YEAR  IN WHICH THE LIMITATION DESCRIBED IN THIS
PARAGRAPH WILL LIMIT THE AMOUNT OF CERTIFIED CAPITAL, CERTIFIED  CAPITAL
WILL  BE ALLOCATED IN ORDER OF PRIORITY BASED UPON THE DATE OF FILING OF
INFORMATION DESCRIBED IN SUBPARAGRAPH (A) OF PARAGRAPH SIX  OF  SUBDIVI-
SION  (C) OF THIS SECTION. THE SUPERINTENDENT SHALL ADVISE ANY CERTIFIED
CAPITAL COMPANY IN WRITING, WITHIN FIFTEEN  DAYS  AFTER  RECEIVING  SUCH
FILING, WHETHER THE LIMITATIONS OF THIS PARAGRAPH THEN IN EFFECT WILL BE
APPLICABLE WITH RESPECT TO THE INVESTMENTS AND CREDITS DESCRIBED IN SUCH
FILING WITH THE SUPERINTENDENT.
  CERTIFIED CAPITAL MAY BE RAISED BY EACH CERTIFIED CAPITAL COMPANY WITH
RESPECT  TO CERTIFIED CAPITAL COMPANY PROGRAM SIX AT ANY TIME SUBSEQUENT
TO ITS CERTIFICATION DATE, AND CREDITS SHALL BE ALLOCATED TO AND IRREVO-
CABLY VESTED BY THE STATE IN CERTIFIED INVESTORS AT  THE  TIME  OF  EACH
SUCH  INVESTMENT  AS  PROVIDED  IN THIS PARAGRAPH, ALTHOUGH SUCH CREDITS
SHALL NOT BE FIRST ALLOWED OR INCURRED FOR STATE TAX PURPOSES, UNTIL, AT
THE EARLIEST, TAX YEARS BEGINNING IN TWO THOUSAND NINETEEN.  IN ORDER TO
SATISFY THE REQUIREMENTS OF PARAGRAPH FIVE OF SUBDIVISION  (E)  OF  THIS
SECTION,  A  CERTIFIED  CAPITAL  COMPANY MUST HAVE MADE, ON A CUMULATIVE
BASIS, (A) AN AMOUNT OF QUALIFIED INVESTMENTS  IN  QUALIFIED  BUSINESSES
LOCATED  IN UNDERSERVED AREAS EQUAL TO AT LEAST TWO-THIRDS OF THE CERTI-
FIED CAPITAL RAISED BY SUCH CERTIFIED CAPITAL COMPANY  WITH  RESPECT  TO
CERTIFIED  CAPITAL  COMPANY  PROGRAM  SIX,  (B) QUALIFIED INVESTMENTS IN
QUALIFIED SEED FUNDS IN AN AMOUNT EQUAL TO AT LEAST TEN PERCENT  OF  THE
CERTIFIED  CAPITAL RAISED BY SUCH CERTIFIED CAPITAL COMPANY WITH RESPECT
TO CERTIFIED CAPITAL COMPANY PROGRAM SIX AND (C)  QUALIFIED  INVESTMENTS
IN  QUALIFIED  BUSINESSES  THAT ARE INVOLVED IN COMMERCE FOR THE PRIMARY
PURPOSE OF DEVELOPING AND MANUFACTURING PRODUCTS AND SYSTEMS COVERED  BY
THE  ACTIVITIES SET FORTH IN PARAGRAPH (B) OF SUBDIVISION ONE OF SECTION

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THIRTY-ONE HUNDRED TWO-E OF THE PUBLIC AUTHORITIES LAW AND HAVE A  RATIO
OF  RESEARCH  AND  DEVELOPMENT EXPENDITURES TO NET SALES WHICH EQUALS OR
EXCEEDS SIX PERCENT DURING THE FISCAL  YEAR  IMMEDIATELY  PRECEDING  THE
QUALIFIED INVESTMENT IN AN AMOUNT EQUAL TO AT LEAST THIRTY-THREE PERCENT
OF  THE  CERTIFIED CAPITAL RAISED BY SUCH CERTIFIED CAPITAL COMPANY WITH
RESPECT TO PROGRAM SIX; PROVIDED, HOWEVER, THAT  ALL  QUALIFIED  INVEST-
MENTS  IN QUALIFIED SEED FUNDS SHALL COUNT TOWARD THE AMOUNT REQUIRED BY
SUBPARAGRAPH (C) OF THIS PARAGRAPH.
  S 15. Subdivision (i) of section 11 of the  tax  law,  as  amended  by
section  19  of  part A of chapter 63 of the laws of 2005, is amended to
read as follows:
  (i) Maximum certified capital. The maximum amount of certified capital
per certified capital company program invested in one or more  certified
capital  companies allowed in any one year to any one certified investor
shall not exceed ten  million  dollars  for  certified  capital  company
programs  one and three, [and] eight million dollars for certified capi-
tal company programs two, four and five,  AND  FIFTEEN  MILLION  DOLLARS
FROM  CERTIFIED  CAPITAL  COMPANY  PROGRAM  SIX for such year, provided,
however, that if the aggregate amount  of  certified  capital  for  such
year,  as  set  forth  in  subdivision (h) of this section, has not been
reached sixty days prior to the end of the year to which such  aggregate
amount  applies, the provisions of this subdivision shall cease to apply
for the remainder of such year. In addition, the aggregate amount of tax
credits allowed in any taxable year to any affiliated group of taxpayers
in relation to certified capital may not  exceed  such  maximum  amount,
whether  or not such taxpayers file a combined return pursuant to subdi-
vision (f) of section fifteen  hundred  fifteen  of  this  chapter.  For
purposes  of  the  preceding sentence, the term "affiliated group" shall
have the same meaning as described  in  section  1504  of  the  internal
revenue code, except that the references to "at least eighty percent" in
such section 1504 shall be read as "more than fifty percent".
  S  16.  Subdivision  (j)  of  section 11 of the tax law, as amended by
section 19 of part A of chapter 63 of the laws of 2005,  is  amended  to
read as follows:
  (j)  Reports.  The  superintendent  shall  report to the governor, the
temporary president of the senate, and the speaker of the  assembly,  on
or  before  June  first of each year beginning in the year two thousand,
the number of certified capital companies holding certified capital; the
amount of certified capital invested in each certified capital  company;
the  cumulative  amount that each certified capital company has invested
as of January first of the year two thousand and  the  cumulative  total
each year thereafter; the cumulative amount that the investments of each
certified capital company have leveraged in terms of capital invested by
other  sources  of  capital  in qualified businesses at the same time or
subsequent to investments made by a certified capital  company  in  such
businesses;  the  total amount of tax credits granted under this section
each year that credits have been awarded under this section and subdivi-
sion (k) of section fifteen hundred eleven of this chapter; the perform-
ance of each certified capital company with regard to  the  requirements
for  recertification  set  forth in subdivision (c) of this section; the
classification of companies in which each certified capital company  has
invested  according  to industrial sector and size of company; the total
gross number of jobs created by investments made by each certified capi-
tal company using certified capital and the number of jobs retained; the
location of companies  in  which  each  certified  capital  company  has
invested  in  a  manner  to  indicate  if the requirements for qualified

A. 4434                             9

investments in qualified businesses located in empire zones  established
pursuant  to  article  eighteen-B of the general municipal law set forth
for programs three, four and five and in underserved areas outside  such
empire  zones  have  been met; the total gross number of jobs created in
empire zones established pursuant to article eighteen-B of  the  general
municipal law and in underserved areas outside such empire zones made by
each  certified  capital  company  using  certified capital in certified
capital company programs three, four and five,  reported  by  geographic
location of each empire zone and underserved area and the number of jobs
retained;  and those certified capital companies that have been decerti-
fied, or have had their certifications revoked,  including  the  reasons
for  decertification  or  revocation; THE LOCATION OF COMPANIES IN WHICH
EACH CERTIFIED CAPITAL COMPANY HAS INVESTED IN A MANNER TO  INDICATE  IF
THE  REQUIREMENTS  FOR  QUALIFIED  INVESTMENTS  IN  QUALIFIED BUSINESSES
LOCATED IN UNDERSERVED AREAS AS SET FORTH  IN  PROGRAM  SIX;  THE  TOTAL
GROSS  NUMBER OF JOBS CREATED IN UNDERSERVED AREAS USING CERTIFIED CAPI-
TAL IN CERTIFIED CAPITAL COMPANY PROGRAM SIX  AND  THE  NUMBER  OF  JOBS
RETAINED;  THE  AMOUNT OF QUALIFIED INVESTMENTS MADE INTO QUALIFIED SEED
FUNDS FOR PROGRAM SIX CERTIFIED CAPITAL COMPANIES; THE CLASSIFICATION OF
COMPANIES IN WHICH EACH QUALIFIED SEED FUND HAS  INVESTED  ACCORDING  TO
INDUSTRIAL  SECTOR  AND  SIZE OF COMPANY; THE TOTAL GROSS NUMBER OF JOBS
CREATED BY INVESTMENTS MADE BY EACH QUALIFIED SEED FUND USING THE NUMBER
OF JOBS RETAINED.
  S 17.  Paragraph 2 of subdivision (k) of section 1511 of the tax  law,
as amended by section 2 of part S of chapter 407 of the laws of 1999, is
amended to read as follows:
  (2) Ten percent of such credit shall be allowed in the taxable year to
which  such  investment  is allocated pursuant to PARAGRAPHS ONE THROUGH
FIVE OF subdivision (h) of section eleven of this chapter and in each of
the nine following taxable years. TWENTY-FIVE  PERCENT  OF  SUCH  CREDIT
SHALL  BE  ALLOWED IN THE TAXABLE YEAR TO WHICH SUCH INVESTMENT IS ALLO-
CATED PURSUANT TO PARAGRAPH SIX OF SUBDIVISION (H) OF SECTION ELEVEN  OF
THIS  CHAPTER AND IN EACH OF THE THREE FOLLOWING TAXABLE YEARS. In addi-
tion, in any taxable year subsequent  to  the  taxable  year  for  which
[such]  ANY  investment  is so allocated UNDER SUCH SUBDIVISION (H), any
amount carried forward under paragraphs three and four of this  subdivi-
sion  may  be  carried  forward  indefinitely  until  such  credits  are
utilized.
  S 18. Section 84 of part A of chapter 62 of the laws of 2011  relating
to constituting chapter 18-A of the consolidated laws relating to finan-
cial services is REPEALED.
  S  19.  Notwithstanding  the  provisions  of  article 5 of the general
construction law, the provisions of subdivision (j) of section 11 of the
tax law, as repealed by section 84 of part A of chapter 62 of  the  laws
of  2011, are hereby revived and shall continue in full force and effect
as such provisions existed on March 30, 2011.
  S 20. This act shall take effect immediately.