NEW YORK STATE
INSURANCE DEPARTMENT

SECOND AMENDMENT TO REGULATION NO. 156
(11 NYCRR 400)

CERTIFIED CAPITAL COMPANIES UNDER SECTION 11 OF THE TAX LAW

I, GREGORY V. SERIO, Superintendent of Insurance of the State of New York, pursuant to the authority granted by Sections 201 and 301 of the Insurance Law, Sections 11 and 1511 of the Tax Law, Section 89 of the Public Officers Law, Chapter 389 of the Laws of 1997, Chapter 544 of the Laws of 1998, Chapter 407 (Part S) of the Laws of 1999, and Chapter 63 (Part FF) of the Laws of 2000, do hereby promulgate the following Second Amendment to Part 400 of Title 11 of the Official Compilation of Codes, Rules and Regulations (Regulation No. 156) to take effect upon publication in the State Register.

(NEW MATTER UNDERSCORED, MATTER IN BRACKETS DELETED)

Section 400.1 of Part 400 is amended to read as follows:

400.1 Purpose

        (a) This Part implements section 11 of the Tax Law, as added by section 144 of chapter 389 of the Laws of 1997, which provides for the establishment of certified capital companies and confers authority on the Insurance Department (the department) to certify and regulate such companies. Section 11 of the Tax Law creates a tax credit incentive mechanism to increase investment of financial resources of insurers into the State's venture capital markets. Section 1511(k) of the Tax Law, as added by section 143 of chapter 389, describes the operation of the tax credit. In section 142 of chapter 389, the Legislature made a finding that, in order to promote the growth of the State economy, a need exists to further encourage the investment of private financial resources into the State's venture capital markets, emphasizing viable smaller business enterprises which traditionally have had difficulty in attracting institutional venture capital. In addition, the legislation and this Part implement the legislative goal of promoting the formation and expansion of new and existing businesses, thereby creating jobs and resulting in growth in the State's economy.

        (b) This Part does not reflect legislative amendments to section 11 of the Tax Law enacted subsequent to October 28, 1998, with respect to the dates for acceptance of certified capital company certification and tax credit allocation applications and to the maximum tax credits allocated and allowed under any subsequent certified capital program(s) established by such legislation.

Subdivisions (a) and (b) of Section 400.6 are amended to read as follows:

        (a) A certified capital company, in order to continue its certification pursuant to section 11(c) of the Tax Law, shall abide by the investment schedule contained in section 11(c)(1). In the event that the certified capital company fails to abide by the investment schedule contained in section 11(c)(1), the certified capital company shall be subject to decertification and the certified investor shall, pursuant to section 1511(k)(5) of the Tax Law, be subject to disallowance and recapture of the credit allowed under section 1511(k)(1). If a certified capital company's certification from a certified capital company program is revoked on the grounds set forth in section 11(f) of the Tax Law before the later of (i) the third anniversary of the certified capital company's certification date or (ii) the date on which the certified capital company satisfies the requirements of 11(c)(1)(C) of the Tax Law, there shall be disallowance of 100 percent of the credit allowed under section 1511(k)(1) of the Tax Law with respect to such certified capital company program and the recapture of any portion of such credit that was previously taken.

        (b) Once a certified capital company has attained the investment level required by section [11(e)(4)] 11(e)(5), the certified capital company shall file with the superintendent an audited financial statement, within 90 days of the close of the fiscal year in which it has met such investment level, which shall contain information sufficient to enable the superintendent to verify attainment of such investment level. The superintendent shall conduct a review of the certified capital company, at its expense, to verify attainment of such investment level. Upon the superintendent's determination that such investment level has been met and the certified capital company has met all the other requirements under section 11(e), the certified capital company shall no longer be subject to regulation by the superintendent and shall no longer be subject to the requirements of section 11(c) of the Tax Law with respect to such program. The certified capital company shall remain subject to section 400.10 of this Part.

 

I, Gregory V. Serio, Superintendent of Insurance of the State of New York, do hereby certify that the foregoing is the Second Amendment to Part 400 of Title 11 of the Official Compilation of Codes, Rules and Regulations of the State of New York (Regulation No. 156), promulgated by me on August 1, 2003, pursuant to the authority granted by Sections 201 and 301 of the Insurance Law, Sections 11 and 1511 of the Tax Law, Section 89 of the Public Officers Law, Chapter 389 of the Laws of 1997, Chapter 544 of the Laws of 1998, Chapter 407 (Part S) of the Laws of 1999, and Chapter 63 (Part FF) of the Laws of 2000.

Pursuant to the provisions of the State Administrative Procedure Act, prior notice of the proposed regulation was published in the State Register on June 4, 2003. No other publication or prior notice is required by statute. 

__________________________________

Gregory V. Serio
Superintendent of Insurance

 

August 1, 2003