Senate Bill S7073

                                 BILL NUMBER:  S7073

 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 2008 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 :
None.

 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.