1) Given the recent statutory change which creates an enhanced credit for businesses operating or sponsoring child care services for their employees while undertaking Excelsior eligible economic development projects, the regulation adds two important definitions -- “child care services” and “net new child care services expenditures.”

2) Next, the regulation states that a participant must operate in one of the existing Excelsior eligible strategic industries and operate or sponsor child care services to be eligible for these enhanced benefits. The regulation clarifies that existing Excelsior participants may be able to claim these new benefits if they meet the requisite criteria in the regulation.

The regulation next makes clear that a participant with a project which includes child care services will now be eligible for an enhanced investment tax credit of up to 5% on its child care qualified investments. Additionally, a participant engaging in an Excelsior jobs program project will now be eligible to claim the excelsior child cares services tax credit component on its net new child care services expenditures for its operation, sponsorship or direct financial support of a child care services program. The amount of this credit shall be up to 6% of net new child care services expenditures.

3) The regulation also updates cross references throughout the regulations as needed and updates the reporting requirements of the program to include reporting on child care services.

The full text of the regulation is available at the Department’s website at www.esd.ny.gov/excelsior-jobs-program.

STATUTORY AUTHORITY:

Section 356 of the Economic Development Law authorizes the Commissioner of Economic Development to promulgate regulations to implement the Excelsior Jobs Program.

Chapter 59 of the Laws of 2021 provide the statutory amendments which provide the basis for this regulatory update.

LEGISLATIVE OBJECTIVES:

The rulemaking accords with the public policy objectives the Legislature sought to advance in creating competitive financial incentives for businesses to create jobs and invest in the new economy. The Excelsior Jobs Program is created to support the growth of the State’s traditional economic pillars, including the manufacturing and financial industries, and to ensure that New York emerges as the leader in the knowledge, technology and innovation-based economy. The Program encourages the expansion in and relocation to New York of businesses in growth industries such as clean-tech, broadband, information systems, renewable energy and biotechnology.

NEEDS AND BENEFITS:

This rule making updates the regulations for the continued administration of the Excelsior Jobs Program, which is one of the State’s key economic development tools for ensuring that businesses in the new economy choose to expand or locate in New York State. It is imperative that the administration of this Program continues so that New York remains competitive with other States, regions, and even countries as businesses make their investment and location decisions.

Specifically, to further promote and incentivize the goal of providing child care services during these difficult pandemic times, the rulemaking updates the Excelsior regulations to include two important definitions -- “child care services” and “net new child care services expenditures” and makes it clear that 1) a participant with a new or existing excelsior project which includes child care services will now be eligible for an enhanced investment tax credit of up to 5% on its child care capital expenses; and 2) a participant engaging in a new or existing Excelsior project will now be eligible to claim the child care services tax credit on its net new child care services expenditures for its operation, sponsorship or direct financial support of a child care services program. The amount of this credit shall be up to 6% of net new child care services expenditures.

The regulation also updates cross references throughout the regulations as needed and updates the reporting requirements of the program to include reporting on child care services.

COSTS:

A. Costs to private regulated parties: None. There are no regulated parties in the Excelsior Jobs Program, only voluntary participants.

B. Costs to the agency, the state, and local governments: The Department of Economic Development does not anticipate any significant costs with respect to implementation of this program. There is no additional cost to local governments.

C. Costs to the State government: None. There will be no additional costs to New York State as a result of the rule making.

LOCAL GOVERNMENT MANDATES:

None. There are no mandates on local governments with respect to the Excelsior Jobs Program. This rule does not impose any costs to local governments for administration of the Excelsior Jobs Program.

PAPERWORK:

The rule requires businesses choosing to participate in the Excelsior Jobs Program to establish and maintain complete and accurate books relating to their participation in the Excelsior Jobs Program for a period of three years beyond their participation in the Program. However, this requirement does not impose significant additional paperwork burdens on businesses choosing to participate in the Program but instead simply requires that information currently established and maintained be shared with the Department in order to verify that the business has met its job creation and investment commitments.

DUPLICATION:

The rule does not duplicate any state or federal statutes or regulations.

ALTERNATIVES:

No alternatives were considered with regard to amending the regulations in response to statutory revisions.

FEDERAL STANDARDS:

There are no federal standards in regard to the Excelsior Jobs Program. Therefore, the rule does not exceed any federal standard.

COMPLIANCE SCHEDULE:

The period of time the state needs to assure compliance is negligible, and the Department of Economic Development expects to be compliant upon publication of the Notice of Adoption.

The Excelsior Jobs Program is a statewide tax credit program. Although there are small businesses in New York State that are eligible to participate in the program, participation by the businesses is entirely at their discretion. The proposed rule will not have a substantial adverse economic impact on small businesses and local governments. On the contrary, because the rule updates a tax credit program designed to attract business and jobs to New York State, it will have a positive economic impact on the State. Accordingly, a regulatory flexibility analysis for small business and local governments is not required and one has not been prepared.

The Excelsior Jobs Program is a statewide business assistance program. Strategic businesses in rural areas of New York State are eligible to apply to participate in the program entirely at their discretion. Municipalities are not eligible to participate in the Program. The rule does not impose any special reporting, recordkeeping or other compliance requirements on private entities in rural areas. Therefore, the rule will not have a substantial adverse economic impact on rural areas nor on the reporting, recordkeeping or other compliance requirements on public or private entities in such rural areas. Accordingly, a rural area flexibility analysis is not required and one has not been prepared.

The rule relates to the Excelsior Jobs Program. The Excelsior Jobs Program will enable New York State to provide financial incentives to businesses in strategic industries that commit to create new jobs and/or to make significant capital investment. The rule updates the regulations and provides new definitions for this program. This program, given its design and purpose, will have a substantial positive impact on job creation and employment opportunities. Accordingly, a job impact statement is not required, and one has not been prepared.