135. Premium credits for safety investment. 1. An employer insured by a licensed insurer or the state insurance fund for workers' compensation insurance may apply for a credit against the premiums for such coverage provided such employer is not currently receiving any statutory safety incentive or sanction authorized under this chapter for amounts invested by such employer in the creation of a safer work environment which meets the requirements of this section. The credit may be applied for a renewable period not to exceed three years. For any one year, the credit shall equal, if actuarially appropriate, an amount up to five percent of the total amount invested as calculated under the provisions of this section but shall not exceed fifteen percent of such employer's annual earned premium for that year in accordance with workers' compensation rating board manual rates. An employer applying for such credit must provide evidence required by rules or regulations promulgated by the superintendent of financial services that the investment would result in a safer work environment, with such evidence to include a written opinion by a certified safety professional, a certified industrial hygienist or a licensed professional engineer describing the items included in the investment and an analysis of how they will substantially enhance the safety of the work environment.
2. It shall be the sole responsibility of the superintendent of financial services, with the assistance of a committee, to determine whether an employer who has made an application is eligible for a premium credit and the extent of any such credit, and to otherwise assist in the administration of the premium credit program, including the promulgation of department of financial services rules and regulations for the implementation of the program.
In addition to the superintendent of financial services, the committee shall consist of:
(a) a representative from the department of labor;
(b) a representative from the department of economic development;
(c) a representative from the state insurance fund;
(d) an individual with an actuarial background and experience in the field of workers' compensation;
(e) an individual with a background in safety engineering appointed by the governor upon recommendation by the New York State American Federation of Labor-Congress of Industrial Organizations;
(f) an individual with a background in safety engineering appointed by the governor upon recommendation of the Business Council of the State of New York;
(g) an individual with a background in safety engineering appointed by the governor upon recommendation of the insurance industry; and
(h) an additional member of the committee with respect to any given application for a premium credit shall be the current insurer of the applicant.
All departments, divisions, boards, offices, and public corporations of the state, and the workers' compensation rating board, shall provide such data, information or other assistance as the committee may require to fulfill its purposes.
The committee shall serve at the pleasure of the governor and shall receive no compensation except for reasonable and necessary expenses incurred in the course of performing the official duties of the committee. Such expenses shall be paid from application fees paid in accordance with rules and regulations promulgated by the superintendent of financial services.
3. Premium credit calculations with respect to investments for safety shall be based only upon tangible personal property and other tangible property, including buildings and structural components of buildings which make for a safer work environment, which are depreciable pursuant to section one hundred sixty-seven of the internal revenue code, have a useful life of four years or more, are acquired by purchase as defined in section one hundred seventy-nine(d) of the internal revenue code, have a situs in this state and are:
(a) principally used by the premium payer in the production of goods by manufacturing, processing, assembling, refining, mining, extracting, farming, agriculture, horticulture, floriculture, viticulture or commercial fishing,
(b) industrial waste treatment facilities or air pollution control facilities, used in the premium payer's trade or business, or
(c) research and development property.
For purposes of this section, the term "goods" shall not include electricity.
4. For purposes of this section, the following definitions shall apply:
(a) Manufacturing shall mean the process of working raw materials into wares suitable for use or which gives new shapes, new quality or new combinations to matter which already has gone through some artificial process by the use of machinery, tools, appliances and other similar equipment. Property used in the sale of goods at retail or the production of goods shall include machinery, equipment or other tangible property which is principally used in the repair and service of other machinery, equipment or other tangible property used principally in the production of goods and shall include all facilities used in the production operation, including storage of material to be used in production and of the products that are produced.
(b) Research and development property shall mean property which is used for purposes of research and development in the experimental or laboratory sense. Such purposes shall not be deemed to include the ordinary testing or inspection of materials or products for quality control, efficiency surveys, management studies, consumer surveys, advertising, promotions, or research in connection with literary, historical or similar projects.
(c) Industrial waste treatment facilities shall mean property constituting facilities for the treatment, neutralization or stabilization of industrial waste and other wastes (as the terms "industrial waste" and "other wastes" are defined in section 17-0105 of the environmental conservation law) from a point immediately preceding the point of such treatment, neutralization or stabilization to the point of disposal, including the necessary pumping and transmitting facilities, but excluding such facilities installed for the primary purpose of salvaging materials which are usable in the manufacturing process or are marketable.
(d) Air pollution control facilities shall mean property constituting facilities which remove, reduce, or render less noxious air contaminants emitted from an air contamination source (as the terms "air contaminant" and "air contamination source" are defined in section 19-0107 of the environmental conservation law) from a point immediately preceding the point of such removal, reduction or rendering to the point of discharge of air meeting emission standards as established by the department of environmental conservation, but excluding such facilities installed for the primary purpose of salvaging materials which are usable in the manufacturing process or are marketable and excluding those facilities which rely for the efficacy on dilution, dispersion or assimilation of air contaminants in the ambient air after emission. Such term shall further include flue gas desulfurization equipment and attendant sludge disposal facilities, fluidized bed boilers, precombustion coal cleaning facilities or other facilities that conform with this section and which comply with the provisions of the state acid deposition control act set forth in title nine of article nineteen of the environmental conservation law.
5. A premium credit under this section shall be allowed with respect to industrial waste treatment facilities and air pollution control facilities only on condition that such facilities have been certified by the state commissioner of environmental conservation or his or her designated representative, pursuant to subdivision one of section 17-0707 or subdivision one of section 19-0309 of the environmental conservation law, as complying with applicable provisions of the environmental conservation law, the public health law and the state sanitary code and codes, rules, regulations, permits or orders issued pursuant thereto.
6. Tangible personal property and other tangible property, including buildings and structural components of buildings, which an employer leases to any other person or corporation are not to be considered as investments for safety in premium credit calculations. For purposes of the preceding sentence, any contract or agreement to lease or rent or for a license to use such property shall be considered a lease. Provided, however, in determining whether an employer shall be allowed a credit under this section with respect to such property, any election made with respect to such property pursuant to the provisions of paragraph eight of subsection (f) of section one hundred sixty-eight of the internal revenue code, as such paragraph was in effect for agreements entered into prior to January first, nineteen hundred eighty-four, shall be disregarded.
7. Subject to the limitations provided in subdivision one of this section, the amount of a premium credit shall be a percent of the investment credit base. The investment credit base is the cost or other basis for federal income tax purposes of tangible personal property and other tangible property, including buildings and structural components of buildings, as described in subdivision three of this section. The amount of the percent to be applied against such investment credit base shall be based upon the useful life of such tangible personal property and other tangible property, and the extent to which the investment would result in a safer work environment and upon such other actuarially appropriate evidence offered by the applicant that the investment would result in a safer work environment. The superintendent of financial services shall promulgate rules and regulations determining how the percentage to be applied against the investment credit base shall be calculated.
8. The superintendent of financial services shall promulgate rules and regulations for the purpose of determining how to calculate the period during which an applicant may receive a premium credit.
9. In the event an employer which applied for and received a premium credit pursuant to this section moves or relocates its business outside of this state during the period in which it receives the benefits of such credit, such employer shall be responsible for repaying to the insurer the entire amount of such credit already received.
10. An employer who is obligated to but does not comply with the requirements of section one hundred thirty-four of this article is not eligible to apply for premium credits under this section.
11. An employer shall be eligible for a credit against premiums for workers' compensation insurance coverage in an amount up to five percent of such premiums for such other safety measures that may be implemented by an employer and which meet the standard for such premium credit as established by the superintendent. Such safety measures shall not include those measures provided for in this section of this article, or apply to such industries provided for in this section.
Last modified: February 3, 2019