What's happening
This bill requires agencies to reclaim financial assistance from projects that fail to meet job creation or agreement terms.
Why it matters
Increases accountability for public funds. By requiring agencies to actually enforce the return of financial assistance when projects fail to meet job creation or contract terms, the bill ensures that public resources are not wasted on underperforming or non-compliant projects.
Protects local tax bases. The returned tax exemptions must be redistributed to the appropriate local tax jurisdictions, helping to restore funding to schools, towns, and other local services that may have lost revenue due to previously granted exemptions.
Creates stronger incentives for businesses to honor commitments. Knowing that financial assistance will be reclaimed if they do not deliver on job creation or other agreement terms, companies may be more likely to fulfill their promises, leading to better outcomes for communities.
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Who cares
Headline styles
Claw Back Aid From Failures
Plain English, a few words. Used as the page title.
Sponsors
Senator · Senate District 39
3 Co-sponsors
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.
Claw Back Failed Project Aid
In Assembly Committee · Local Governments · Sponsor Fred Thiele
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
4675
2019-2020 Regular Sessions
IN SENATE
March 20, 2019
Introduced by Sens. SKOUFIS, MAYER -- 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 requiring the return of all or a part of the financial assistance provided for a project where the project has material shortfalls or material violations
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subdivision 11 of section 874 of the general municipal law, as added by chapter 563 of the laws of 2015, is amended to read as follows:
(11) Each agency shall develop policies for the return of all or a part of the financial assistance provided for the project, including all or part of the amount of any tax exemptions, as specified in the policy, which may include but shall not be limited to material shortfalls in job creation and retention projections or material violations of the terms and conditions of project agreements. The agency shall implement such policies created in accordance with this subdivision to return all or part of the financial assistance provided for any project where the agency's annual assessment of a project shows material shortfalls in job creation and retention projections or material violations of the terms and conditions of project agreements. All such returned amounts of tax exemptions shall be redistributed to the appropriate affected tax jurisdiction, unless agreed to otherwise by any local taxing jurisdiction.
§ 2. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD10674-01-9
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 requiring the return of all or a part of the financial assistance provided for a project where the project has material shortfalls or material violations
Purpose or general idea of bill
Local industrial development agencies (IDAs) are already required to develop policies for the return of payments or incentives given to projects that fail to deliver on their job or other commitments, and are required to annually evaluate whether projects are meeting their commit- ments. However, IDAs are not-required to use the results of their analy- sis to seek the return of incentives from under-performing projects. This bill would require that local IDAs seek the return of incentives or financial assistance.
Summary of provisions
Section 1: Amends subdivision 11 of section 874 of the general municipal law to require that local industrial development agencies implement their policies for return of financial assistance or tax incentives provided to a project whenever the agency's annual assessment shows material shortfalls in job creation and retention projections or materi- al violations of the terms and conditions of the project agreement.
Section 2: Effective Date.
Justification
Each year, local industrial development agencies grant millions of dollars of financial assistance in the form of tax incentives, payment in lieu of taxes (PILOT) agreements, and others, to projects seeking assistance. These projects generally promise to create or retain jobs and deliver other economic benefits to the community. Agencies are required to annually evaluate the success of each project at meeting the job and economic benefit metrics agreed to as a condition of assistance and are also required to develop policies for the return of all or part of the financial assistance provided for the project in the event that a project has material shortfalls in job creation and retention or materi- al violations of the terms and conditions of the project agreements. However, the implementation of these policies to compel the return of taxpayer financial assistance given to projects is purely at the discretion of the IDA board. Too often, IDAs fail to implement their policies to demand the return of taxpayer assistance from projects that have completely failed to live up to their promises to create jobs or benefit the local economy. This bill addresses that loophole by requir- ing IDA boards to seek the return of taxpayer-funded incentives given to underperforming businesses.
Prior legislative history
None.
Fiscal implications
None to the state. The return of financial assistance granted by indus- trial development agencies to underperforming projects will benefit local taxpayers.
Effective date
This act shall take effect immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.