New York Codes, Rules and Regulations
Title 5 - DEPARTMENT OF ECONOMIC DEVELOPMENT
Chapter XXII - Start-Up NY Program
Part 220 - Suny Tax-free Areas To Revitalize And Transform Upstate New York (start-up Ny) Program
Section 220.2 - Definitions

Current through Register Vol. 44, No. 38, September 21, 2022

As used in this regulation, the following terms shall have the following meanings:

(a) Academic mission means any official academic mission announced and adopted by any university or college seeking approval as a sponsor of a designated tax-free NY area. Such academic mission may consider, among other things, the institution's comprehensive undergraduate, graduate education and/or professional education curriculum; research; leadership role in the community; diversity and culture; regional economic development; internship and training opportunities; direct job opportunities for graduates; international outreach; specific area specialization within the university or college; and any other factors which the university or college deems to be appropriate in defining academic mission for purposes of the START-UP NY Program.

(b) Affiliated means connected, related, or associated with.

(c) Application means a submission from an eligible business for approval to participate in the START-UP NY Program.

(d) Bona fide affiliation means a relationship between a New York State incubator or a hot spot sponsored or administered by a university or college, documented by a certificate of incorporation, by-laws, memorandum of understanding or similar document detailing the relationship between the parties and the rights, responsibilities and expectations of the parties, including but not limited to financial commitments, shared use of staff, facilities or resources.

(e) Business in the formative stage means a company in the start-up or early stage of development with a product, service, software, or research that is not yet in the commercial marketplace, but which can show continued and steady maturity towards commercialization and profitability either by product development, external funding or product sales.

(f) Campus means any real property in New York State owned or leased by a university or college, held in trust for a university or college, or owned or leased by an affiliated not-for-profit entity on behalf of a university or college or for the benefit of a university or college, and can include any such additional real property acquired, established, operated or contracted to be operated for or on behalf of the university or college. Real property owned or leased by a not-for-profit entity on behalf of a university or college or for the benefit of a university or college must be utilized by the university or college in furtherance of any stated academic mission of that university or college.

(g) City University or CUNY means the City University of New York as described in section 6202(2) of the Education Law, including each senior college and each community college.

(h) Commissioner means the Commissioner of Economic Development.

(i) Community means the census tract or tracts containing an approved tax-free NY area and the census tracts immediately contiguous to such census tract or tracts.

(j) Community college means a college established pursuant to the provisions of article 126 of the Education Law, and providing two-year or four-year post-secondary programs in general and technical educational subjects and receiving financial assistance from the State other than a community college of CUNY.

(k) Competitor means a business that produces, manufactures, or sells the same or substantially similar product or provides the same services, and competes for the same customers or clients as an applicant for the START-UP NY Program.

(l) College means a not-for-profit educational institution given the power to confer associate, baccalaureate or higher degrees in this State by the Legislature or under the Education Law.

(m) Contract can mean any agreement, including but not limited to a subcontract, lease, grant, bond, or covenant between two or more entities.

(n) Correctional facility shall have the same meaning as defined in section 431 of the EDL, and designation of which shall be provided in accordance with section 435 of the EDL.

(o) Department means the New York State Department of Economic Development.

(p) Directly adjacent means next to, adjoining or sharing a common border or boundary.

(q) Downstate New York means Nassau, Suffolk, and Westchester counties, and the counties of New York City (New York, Queens, Kings, Richmond, and Bronx).

(r) Economically distressed community means a community identified as having such criteria indicative of economic distress, including but not limited to rates of poverty, receipt of public assistance, or unemployment as the commissioner deems appropriate to demonstrate that a community is in need of economic assistance.

(s) EDL means the Economic Development Law.

(t) Eligible land means vacant land or space that is eligible for designation as a tax-free NY area.

(u) High tech business means a business engaged in the design, development, and introduction of new biotechnology, information technology, remanufacturing, advanced materials, processing, engineering or electronic technology products and/or innovative manufacturing processes, and meet such other requirements for a high-tech business as the commissioner shall develop.

(v) Incubator graduate means a business which has been certified as having successfully completed residency in a New York State incubator or innovation hot spot after having met the milestone or benchmark requirements established by the incubator or hot spot management for business growth including such factors as growth in employment, sales, profitability and physical space.

(w) Lease means any contract or agreement that provides terms and conditions for occupancy of land or space.

(x) Local economic development entity means a public agency or affiliated not-for-profit corporation including, but not limited to, an economic development or industrial development agency, local development corporation, local planning or development council, and all other such entities concerned with the economic development of the municipality or county within which the tax-free NY area is designated or is proposed for designation.

(y) Municipality means a city, town or village for all counties excluding those of Bronx, Kings, New York, Queens and Richmond counties. For the counties of Bronx, Kings, New York, Queens and Richmond, municipality means the City of New York.

(z) A net new job means a job created by a business participating in the START-UP NY Program during its period of certification in a tax-free NY area that satisfies all of the following criteria:

(1) is new to the State;

(2) has not been transferred from employment with another business located in this State, through an acquisition, merger, consolidation or other reorganization of businesses or the acquisition of assets of another business, or except as provided in section 431(6)(d) of the EDL and section 220.6(c) of this Part, has not been transferred from employment with a related person in this State;

(3) is not filled by an individual employed within the State within the immediately preceding 60 months by a related person;

(4) is either a full-time wage-paying job or equivalent to a full-time wage-paying job requiring at least 35 hours per week; and

(5) is located in a tax-free NY area and filled for more than six months during each year for which the tax benefits are being granted.

(aa) A new business means a business that satisfies the following conditions:

(1) the business must not be operating or located within the State as of the date it submits its application to participate in the START-UP NY Program;

(2) the business must not be moving existing jobs into the tax-free NY area from another area in the State;

(3) the business is not substantially similar in operation and in ownership to a business entity (or entities) taxable, or previously taxable within the last five taxable years, under section 183, 184, 185 or 186 of the Tax Law; article 9-A, 32 or 33 of the Tax Law; article 23 of the Tax Law or which would have been subject to tax under article 23 of the Tax Law (as such article was in effect on January 1, 1980), or the income or losses of which is or was includable under article 22 of the Tax Law; and

(4) the business must not have caused individuals to transfer from existing employment with a related person located in the State to similar employment with the business, unless such business has received approval for such transfers from the commissioner after demonstrating that the related person has not eliminated those existing positions.

(ab) New York State incubator or incubator means a business incubator program which also provides physical space that has been designated according to the requirements of section 16-v of the Urban Development Corporation Act.

(ac) New York State innovation hot spot or hot spot means an incubator that has been designated as a hot spot according to the requirements of section 16-v of the Urban Development Corporation Act.

(ad) Plan means a submission from eligible colleges or universities for approval of eligible land or vacant space for designation as a tax-free NY area pursuant to section 220.7, 220.8, or 220.9 of this Part.

(ae) Private university or college means a not-for-profit two- or four-year university or college given the power to confer associate, baccalaureate or higher degrees in this State by the Legislature or by the Regents under article 5 of the Education Law.

(af) Program means the START-UP NY Program, unless otherwise indicated.

(ag) A related person means a related person as defined in 26 U.S.C. section 465(b)(3)(C). At the time of this rulemaking, the Internal Revenue Service has interpreted related person to include the following:

(1) members of a family, but only an individual's brothers and sisters, half-brothers and half-sisters, a spouse, ancestors (parents, grandparents, etc.), and lineal descendants (children, grandchildren, etc.);

(2) two corporations that are members of the same controlled group of corporations determined by applying a 10 percent ownership test;

(3) the fiduciaries of two different trusts, or the fiduciary and beneficiary of two different trusts, if the same person is the grantor of both trusts;

(4) a tax-exempt educational or charitable organization and a person who directly or indirectly controls it (or a member of whose family controls it);

(5) a corporation and an individual who owns directly or indirectly more than 10 percent of the value of the outstanding stock of the corporation;

(6) a trust fiduciary and a corporation of which more than 10 percent in value of the outstanding stock is owned directly or indirectly by or for the trust or by or for the grantor of the trust;

(7) the grantor and fiduciary, or the fiduciary and beneficiary, of any trust;

(8) a corporation and a partnership if the same persons own over 10 percent in value of the outstanding stock of the corporation and more than 10 percent of the capital interest or the profits interest in the partnership;

(9) two S corporations if the same persons own more than 10 percent in value of the outstanding stock of each corporation;

(10) an S corporation and a regular corporation if the same persons own more than 10 percent in value of the outstanding stock of each corporation;

(11) a partnership and a person who owns directly or indirectly more than 10 percent of the capital or profits of the partnership;

(12) two partnerships if the same persons directly or indirectly own more than 10 percent of the capital or profits of each;

(13) two persons who are engaged in business under common control;

(14) an executor of an estate and a beneficiary of that estate.

(ah) A sponsor or sponsoring university or college means a university or college that has received approval to sponsor a tax-free NY area or is affiliated with a strategic State asset as designated by the START-UP NY Approval Board pursuant to section 220.5, 220.7, 220.8, or 220.9 of this Part.

(ai) The START-UP NY Approval Board or board means a board consisting of three members, one each appointed by the Governor, the Speaker of the Assembly and the temporary President of the Senate. Each member of the START-UP NY Approval Board must have significant expertise and experience in academic-based economic development and may not have a personal interest in any project that comes before the board.

(aj) START-UP NY airport facility means vacant land or space owned by the State of New York on the premises of Stewart Airport or Republic Airport.

(ak) State University or SUNY means the State University of New York as described in section 352 of the Education Law.

(al) Strategic State asset means land or a building or group of buildings owned by the State of New York that is closed, vacant, or for which notice of closure has been given pursuant to any statutory notice requirement or which is otherwise authorized to be closed pursuant to any chapter of the laws of New York.

(am) Tax-free NY area means the land or vacant space of a university or college and designated area of a New York State incubator that meets the eligibility criteria specified in article 21 of the EDL and has been approved as a tax-free NY area pursuant to section 220.5, 220.7, 220.8, or 220.9 of this Part. It also means a strategic State asset that has been approved by the START-UP NY Approval Board.

(an) An underutilized property means vacant or abandoned land or space in an existing industrial park, manufacturing facility, a brownfield site as defined in article 27 of the Environmental Conservation Law, or a distressed or abandoned property, which shall be determined by factors including poverty, identified by the county or the town, village or city that contains such distressed or abandoned property, as of June 20, 2013. A university or college shall work with local municipalities or local economic development entities to identify underutilized properties.

(ao) University means a not-for-profit educational institution given the power to confer associate, baccalaureate or higher degrees in this State by the Legislature or under the Education Law.

(ap) Upstate New York means all counties in New York State except Nassau, Suffolk, and Westchester counties, and the counties of New York City (New York, Queens, Kings, Richmond and Bronx).

Amended New York State Register November 20, 2019/Volume XLI, Issue 47, eff. 11/20/2019

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