What's happening
This bill requires industrial development agencies to follow new procedures and approval processes before granting financial assistance, including clear job, wage, and repayment requirements.
Why it matters
Increases transparency and accountability. for recipients of public development funds by requiring detailed disclosure of the type, value, and prior history of financial assistance, as well as the public purpose and need for the subsidy—helping to ensure taxpayer money is spent with clear, measurable benefits.
Ties financial aid directly to job creation, wage, and retention goals. , and mandates a repayment (“clawback”) mechanism with interest if these goals are not met, aiming to prevent companies from receiving public aid without delivering promised economic outcomes.
Strengthens public and local government oversight. by requiring approval of development assistance agreements by relevant county or municipal fiscal bodies, and by necessitating public hearings for any extension of time to meet job/wage targets.
Discourages repeat non-compliance. by barring companies that fail to meet their development agreements from receiving additional assistance for up to five years or until they fulfill repayment obligations—potentially raising the stakes for businesses considering relocating or downsizing after receiving aid.
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Who cares
Headline styles
Tighten Development Loan Rules
Plain English, a few words. Used as the page title.
Sponsors
1 Co-sponsor
History
- Referred to local government
- Referred to local government
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Tighten Development Loan Rules
In Assembly Committee · Local Governments · Sponsor Michael Blake
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
4373
2019-2020 Regular Sessions
IN SENATE
March 11, 2019
Introduced by Sens. PARKER, SEPULVEDA -- read twice and ordered printed, and when printed to be committed to the Committee on Local Government
AN ACT to amend the general municipal law, in relation to industrial development agencies
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. The general municipal law is amended by adding a new section 859-c to read as follows:
§ 859-c. Additional procedures for financial assistance. 1. Prior to providing financial assistance, the agency shall follow certain procedures which must include at least all of the following:
(a) A description of the development assistance, including the amount and type. The description must include the fair market value of the development assistance to the recipient, including the value of conveying any property at less than a fair market price and including any other in-kind benefits to the person receiving the development assistance.
(b) A statement specifying the public purpose for the development assistance. The public purpose specified in the development assistance agreement may not be increasing the tax base. Job retention may be specified in the development assistance agreement as a public purpose only if job loss by the person receiving the development assistance is imminent and demonstrable.
(c) The general goals for the development assistance.
(d) Goals for the number of jobs to be created by the person receiving the development assistance during the two years following the date the development assistance is granted. The goals may include separate goals for the number of part-time jobs and full-time jobs, and in cases where job loss is imminent and demonstrable, separate goals for the number of jobs retained.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD08786-01-9
S. 4373 2
(e) Wage goals for the jobs to be created or retained by the person receiving the development assistance during the two years following the date the development assistance is granted.
(f) A description of the financial obligation of the person receiving the development assistance if the goals specified in the development assistance agreement are not met.
(g) A statement explaining why the development assistance is needed to achieve the public purpose specified in the development assistance agreement.
(h) A commitment by the person receiving the development assistance to continue operations at any site where the development assistance is used for at least five years after the date the development assistance is provided.
(i) The name and address of the parent corporation or other parent entity, if any, of the person receiving the development assistance.
(j) A list of all development assistance provided to the person receiving development assistance during the immediately preceding five years by other granting bodies.
2. A development agreement entered into under this article must be approved by the following:
(a) The fiscal body of the county where the development assistance will be used, if the development assistance will not be used solely within a municipality.
(b) The municipal fiscal body, if the development assistance will be used only within a municipality.
3. If development assistance provided by a granting body directly benefits more than one person, the granting body must assign a proportion of the development assistance to each person receiving development assistance. The proportion assigned by the granting body to each person must reflect a reasonable estimate of the person's share of the total benefits of the development assistance.
4. (a) The development assistance agreement must include provisions that specify the obligation of the person receiving the development assistance to repay the development assistance if the person does not meet the goals specified by the development assistance agreement. The development assistance agreement must require at least that a person failing to meet the goals must pay back the development assistance plus interest to the granting body. A repayment required by this section may be prorated to reflect partial fulfillment of goals. The interest rate used to calculate the repayment must equal the gross domestic product implicit price deflator for the applicable period.
(b) An agency may, after a public hearing, extend for not more than one year the period for meeting the goals specified by a development assistance agreement.
5. A person that fails to meet the terms of a development assistance agreement may not receive additional development assistance from a granting body until the earlier of the date:
(a) five years after the person's failure to meet the terms of a development assistance agreement; or
(b) the person satisfies its repayment obligation under subdivision four of this section.
§ 2. This act shall take effect on the first of November next succeeding the date on which it shall have become a law.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the general municipal law, in relation to industrial development agencies
Purpose
This bill establishes additional procedures to be followed by industrial development agencies prior to making industrial development loans.
Summary of provisions
The general municipal law is amended by adding a new section 859-c to provide additional procedures to be followed by an agency making indus- trial development loans which would include:
*Public purpose;
*Amount and type of assistance; *Specific goals for job creation;
*Wage goals for jobs created;
*The financial obligation of the applicant if the goals in the agreement are not met;
*A commitment by the applicant to continue operations on any site where the assistance is used for at least five years;
*The name and address of the parent corporation, if any, of the appli- cant, and;
*A list of all prior development assistance provided to the applicant by other granting bodies in the preceding five years. Additionally, the bill contains provisions related to which fiscal bodies shall approve a development agreement.
*This act shall take effect on November 1st succeeding the date on which it shall become law,
Justification
In certain instances, resources of the state which are distributed for economic development initiatives are implemented in a manner neither planned nor expected by the development agency issuing assistance. This legislation would put in place a safeguard to ensure that the intended purpose of the agreement, as consented to by both the applicant and the industrial development agency would remain intact.
Prior legislative history
2017-18: 53096 - Referred to Local Gov't 2015-2016 : S.1585 - Referred to Local Gov't 2013-2014 : S.3118 - Referred to Local Gov't 2011-2012 : S.3393 - Referred to Local Gov't 2009-2010 : S.1918 - Died in Local Gov't 2007-2008 : S.4505 - Died in Local Gov't 2005-2006 : S.705/A.3234 - Died in Local Gov't / Died in Local Gov't 2003-2004 : S.1768/A.378 - Died in Local Gov't / Died in Local Gov't 2001-2002 : S.523/A.530 - Died in Local Gov't / Died in Local Local Gov t 1999-2000 : S.7875/A.9849 - Died in Local Gov't / Died in Local Gov't
Fiscal implications
Minimal.
Effective date
This act shall take effect on the first of November next succeeding the date on which it shall have become law.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.