However, recent projections now suggest that, due to the COVID-19 pandemic, New York State’s economy will lose $243 billion over the course of the recovery. It appears the COVID-19 recession will be deeper, and its subsequent recovery longer, than the 2008 Great Recession or the recession that followed the terrorist attacks of September 11, 2001.

In this context, several of ESD’s dedicated partners — communities, non-profits, entrepreneurs and businesses — have reached out to ESD expressing their grave concerns over their ability to meet their original commitments that were made in good faith. In such times, it is imperative that ESD take no action that would exacerbate the tremendous economic damage that has already been inflicted, nor create artificial pressure for businesses to return employees to work in the midst of a parallel public health crisis—particularly when the State has ordered these same businesses to close for the greater public good.

This emergency rule is necessary because it provides the Program with the discretion to allow affected businesses to have their 2020 benefit year and commensurate commitments deferred to 2021 if the business provided the Commissioner information sufficient to determine that they have been negatively impacted by the state of emergency. This practically has the effect of extending the preliminary schedule of benefits for one additional year for a business affected by a state of emergency such as the COVID-19 emergency. It is imperative that the administration of this Program remains flexible during a State declared emergency as businesses affected by an emergency such as COVID-19 may not be able to meet their commitments in 2020 because of the severe economic impact of the emergency. This rule is important so that New York remains business friendly and competitive with other States, regions, and even countries as businesses make their investment and location decisions.

Emergency adoption of this rule will enable the State to act to provide this relief to Excelsior participants immediately. Section 356 of the Economic Development Law expressly authorizes the Commissioner of Economic Development to promulgate regulations on an emergency basis.

STATUTORY AUTHORITY:

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

LEGISLATIVE OBJECTIVES:

This 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. This rulemaking provides certain discretion to the Program as further discussed below.

NEEDS AND BENEFITS:

This rule making amends the regulations for 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.

Specifically, the rule provides the Program with the discretion to allow affected businesses to have their 2020 benefit year and commensurate commitments deferred to 2021 if the business provided the Commissioner information sufficient to determine that they have been negatively impacted by a state of emergency. This practically has the effect of extending the preliminary schedule of benefits for one additional year for a business affected by a state of emergency such as the COVID-19 emergency. It is imperative that the administration of this Program remains flexible during a State declared emergency as businesses affected by an emergency such as COVID-19 may not be able to meet their commitments in 2020 because of the severe economic impact of the emergency. This rule is important so that New York remains business friendly and competitive with other states, regions, and even countries as businesses make their investment and location decisions.

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:

Consideration was given to not taking such relief action, but it was determined that due to the economic downturn caused by COVID-19, the flexibility created by the regulation was needed at this time.

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 immediately upon the effective date of filing.

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 emergency rule will not have a substantial adverse economic impact on small businesses and local governments. On the contrary, because the rule involves 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 emergency rule does not impose any special reporting, recordkeeping or other compliance requirements on private entities in rural areas. Therefore, the emergency 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 emergency 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 provides discretion and flexibility to the Program during State declared emergencies. 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.