Repeals certain provisions relating to the assessment and reimbursement of state expenditures and requires reimbursement of monies previously paid

5 Co-sponsors

• Jack M. Martins
• George D. Maziarz
• Thomas F. O'Mara
• Stephen M. Saland
• David J. Valesky

BILL NUMBER:S2682

Title of bill

An act to repeal section 2975-a of the public authorities law, relating to the assessment and reimbursement of state expenditures

Purpose or general idea of bill

An act to repeal part UU of Chapter 59 of the Laws of 2009; relating to the cost recovery assessment placed on IDAs. The 2009-2010 State Budget contained a maximum $5 million statewide "cost recovery" assessment on IDAs to be calculated by multiplying the gross revenues of each IDA for 2008 by 4.7 percent.

Summary of specific provisions

This legislation will repeal certain provisions relating to the assessment and reimbursement of state expenditures and requires reimbursement of monies previously paid. All monies paid by or on behalf of any industrial agency or authority as of the effective date of this act to reimburse to New York state an allocable share of state governmental costs attributable to the provision of services to industrial development agencies as determined in section 2975-a of the public authorities law shall be reimbursed to the paying entity within ninety days of the effective date of this act.

Justification

IDA fee-based income is used to support important local job creation initiatives, including paying for the operation of the IDA; paying for infrastructure of economic development projects; building industrial and technology parks; administering business marketing programs; and conducting job fairs. The IDA tax is arbitrary, unfair and severely flawed. The tax is applied against 200B revenue for 2009-2010 services provided to IDAs and there is no conceivable way an IDA could have budgeted for this charge. The fee is being imposed upon revenues statutorily, or agreed upon as "pass-through" revenues and do not reflect real revenue of the IDA. IDAs are required to pay the Bond Insurance Charge, enacted as a cost recovery source of revenue, thereby making the subject tax duplicative in purpose and excessive in application furthermore the $5 million collected from the "cost recovery" charge is more than 300 percent greater than the total budget of the Authority Budget Office and the charge does not reflect any rational basis for actual costs incurred by the state for providing services to IDAs. This tax is an unfunded mandate which will require municipalities to make larger contributions in support of their economic development organization.

Prior legislative history

2010 - S.7073/A.10099 -- CORPS/Corps

Fiscal implications

This bill will result in the loss of $5 million to the General Fund annually.

Effective date

This act shall take effect immediately and shall be deemed to have be in full force and effect on and after April 1, 2009.