BILL NUMBER: S9249
SPONSOR: RYAN C
 
TITLE OF BILL:
An act to amend the tax law and the state finance law, in relation to
establishing the New York rural growth fund tax credit and the New York
rural growth fund
 
PURPOSE OR GENERAL IDEA OF THE BILL:
To create a perfoiiiiance-based tax credit to attract $250 million in
private capital into rural and upstate New York businesses that current-
ly lack access to growth financing
 
SUMMARY OF PROVISIONS:
Section 1 amends section 44 of the tax law to define "affiliate," "clos-
ing date," "credit-eligible capital contribution," "eligible investment
authority," "jobs created," "jobs retained," "principal business oper-
ations," "rural area," "rural business concern," "rural business growth
fund," "rural growth investment," "tax credit certificate," "taxable
year," "department," and the processes for granting and revoking certif-
ication for the tax credit and joining the rural growth fund and imple-
ments a system for reporting business progress.
Section 2 adds subdivision (ft) to section 1511 of the tax law, allowing
taxpayers to receive a tax credit for certain investments to a rural
business growth fund.
Section 3 amends section 187-s of the tax law to allow taxpayers to
receive a tax credit for certain investments made to a rural business
growth fund.
Section 4 amends section 99-uu of the finance law to establish and
define the rural growth fund.
Section 5 establishes the effective date.
 
JUSTIFICATION:
Data shows that businesses outside of New York's major metro areas have
trouble accessing capital. Some businesses have expansion and growth
opportunities; however, they can't meet stringent bank guidelines that
end up tilting towards metro-based businesses. Others sit in an awkward
middle ground: they're too large for traditional bank loans, but too
small, or too rural, to attract venture capital. These businesses are
looking for growth capital: the kind of investment that lets a manufac-
turer add a second shift, a food processor buy new equipment, or an
agricultural business expand into new markets. But without access to
that capital, these companies struggle to grow, hire, and stay compet-
itive in New York.
This bill creates a market-driven solution by authorizing $175 million
in tax credits designed to leverage $250 million in private investment.
Private investors contribute to state-certified Rural Growth Funds.
Those funds then invest directly into New York-based rural businesses
across job creating sectors like manufacturing, food production, fores-
try, agriculture, and other industries that form the backbone of many
upstate communities. To keep the program focused and accountable, the
funds must meet clear deployment benchmarks: at least 85% of capital
must be invested by Year 2, and 100% by Year 3. Once invested, that
capital must remain in place for seven years, ensuring this is long-term
growth funding, not short-teiiii speculation. The program includes
strong protections for taxpayers. If there's no investment, there's no
credit. If a fund fails to meet timelines or program requirements, cred-
its can be recaptured. To qualify, a business must be located in rural
or upstate New York, outside excluded metropolitan areas, and must have
its principal operations in the state. It must be an operating business,
not a startup or passive real estate project, and it must employ no more
than 250 full-time employees. Most importantly, it must be job-creating
or job-retraining and seeking growth capital, not short-term subsidies.
 
PRIOR LEGISLATIVE HISTORY:
2021-2022: S5153 (May)
 
FISCAL IMPLICATIONS:
TBD.
 
EFFECTIVE DATE:
This act shall take effect July 1, 2026, and shall apply to taxable
years beginning on and after such date.

Statutes affected:
S9249: 1511 tax law