S T A T E   O F   N E W   Y O R K
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                                   5133
 
                        2019-2020 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             February 7, 2019
                                ___________
 
 Introduced  by  M.  of  A.  BLAKE, COLTON, COOK, CRESPO, JOYNER, MOSLEY,
   ORTIZ, PEOPLES-STOKES, RODRIGUEZ, VANEL -- Multi-Sponsored by -- M. of
   A.  CROUCH, THIELE -- read once and referred to the Committee on Small
   Business
 
 AN ACT to amend the New York state urban development corporation act, in
   relation to enacting the HIRE NY act

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. This act shall be known and may be cited as the "hire indi-
 viduals in the real economy New York (HIRE NY) act".
   §  2.  Section  1 of chapter 174 of the laws of 1968, constituting the
 New York state urban development corporation act, is amended by adding a
 new section 16-bb to read as follows:
   § 16-BB. THE HIRE NEW YORK PROGRAM. 1. LEGISLATIVE INTENT. THE  LEGIS-
 LATURE HEREBY FINDS THAT MICRO-BUSINESSES ARE THE ENGINES OF OUR ECONOMY
 AND  ARE  VITAL  TO  THE REVITALIZATION OF COMMUNITIES AND NEIGHBORHOODS
 THROUGHOUT THE STATE. THE LEGISLATURE FURTHER  FINDS  THAT  CURRENT  LAW
 FAILS  TO MOTIVATE PEOPLE TO START OR EXPAND BUSINESSES. THE LEGISLATURE
 FINDS THAT IT IS IMPORTANT TO SPUR START-UP MICRO-BUSINESSES  THAT  HAVE
 THE  POTENTIAL  TO  BECOME  THE  JOB ENGINES FOR TOMORROW'S ECONOMY. THE
 LEGISLATURE FURTHER FINDS INVESTMENTS IN ECONOMIC  DEVELOPMENT  FAIL  TO
 PROVIDE  ANY  FUNDING TO MICRO-BUSINESSES. THE LEGISLATURE FURTHER FINDS
 THAT SMALL MICRO-BUSINESSES WITH THE PROPER  INCENTIVES  ARE  POISED  TO
 PROVIDE SIGNIFICANT LOCAL JOB CREATION ACROSS THE STATE. THE LEGISLATURE
 FURTHER  FINDS THAT TAX CREDITS ARE NOT AN EFFECTIVE JOB CREATION INCEN-
 TIVE FOR MICRO-BUSINESSES BECAUSE MANY  OF  THESE  BUSINESSES  LACK  THE
 INCOME THAT MAKES A TAX CREDIT MEANINGFUL. THE LEGISLATURE FURTHER FINDS
 THAT  CREATION OF A STATEWIDE HIRE NEW YORK FUND WILL PROVIDE THE NEEDED
 CAPITAL FOR THE BUSINESSES OF TOMORROW TO GROW AND EMPLOY MORE NEW YORK-
 ERS.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD08784-01-9
              

 A. 5133                             2
 
   2. DEFINITIONS. AS USED IN THIS SECTION,  THE  FOLLOWING  TERMS  SHALL
 HAVE THE MEANINGS INDICATED:
   (A)  "FUND" MEANS THE HIRE NEW YORK FUND AS ESTABLISHED BY SUBDIVISION
 THREE OF THIS SECTION.
   (B) "LOCAL JOB" MEANS A JOB FILLED BY AN EMPLOYEE THAT RESIDES  WITHIN
 THE  SAME  OR  AN  ADJACENT COUNTY AS THE APPLICANT'S PLACE OF BUSINESS.
 FOR THE PURPOSES OF THIS PARAGRAPH, FOR THE CITY OF NEW YORK, THE  ADJA-
 CENT  COUNTIES SHALL BE DEEMED TO BE NASSAU, SUFFOLK, ROCKLAND AND WEST-
 CHESTER.
   (C) "MICRO-BUSINESS" MEANS A BUSINESS WITH FEWER THAN FIVE  EMPLOYEES.
 A BUSINESS THAT IS OWNED IN ANY PORTION BY ANOTHER BUSINESS ENTITY SHALL
 NOT QUALIFY AS A "MICRO-BUSINESS."
   (D)  "MICRO-BUSINESS QUALIFYING NEW HIRE" MEANS EITHER A NEW FULL-TIME
 WAGE-PAYING LOCAL JOB OR THE EQUIVALENT OF A FULL-TIME WAGE-PAYING LOCAL
 JOB REQUIRING AT LEAST THIRTY-FIVE HOURS PER WEEK AND IS FILLED FOR  ONE
 YEAR. A MICRO-BUSINESS QUALIFYING NEW HIRE SHALL NOT BE:
   (I)  AN EMPLOYEE WHO HAS BEEN TRANSFERRED FROM EMPLOYMENT WITH ANOTHER
 BUSINESS LOCATED IN THIS STATE, THROUGH AN ACQUISITION, MERGER,  CONSOL-
 IDATION  OR  OTHER  REORGANIZATION  OF  BUSINESSES OR THE ACQUISITION OF
 ASSETS OF ANOTHER BUSINESS, OR
   (II) AN EMPLOYEE WHO HAS  BEEN  TRANSFERRED  FROM  EMPLOYMENT  WITH  A
 RELATED PERSON OR BUSINESS ENTITY, OR
   (III)  AN  EMPLOYEE WHO IS HIRED TO FILL A CURRENTLY EXISTING POSITION
 THAT RESULTS FROM A TERMINATION OR DEPARTURE OF A PREVIOUS EMPLOYEE, OR
   (IV) A TEMPORARY OR PART-TIME EMPLOYEE.
   3. ESTABLISHMENT AND PURPOSES. THE CORPORATION SHALL ESTABLISH A  FUND
 TO BE KNOWN AS THE "HIRE NEW YORK FUND" AND SHALL PAY INTO SUCH FUND ANY
 MONIES  MADE AVAILABLE TO THE CORPORATION FOR SUCH FUND FROM ANY SOURCE.
 THE FUND SHALL CONSIST OF SUCH  AMOUNTS  AS  MAY  BE  APPROPRIATED,  ANY
 REPAYMENT  OF  THE  PRINCIPAL AMOUNT OF ANY LOAN MADE FROM THE FUND, AND
 ANY INTEREST EARNED BY THE CORPORATION FROM THE INVESTMENT OF MONEYS  OF
 THE  FUND.  THE  CORPORATION  IS  AUTHORIZED  TO ACCEPT, AS AGENT OF THE
 STATE, ANY GIFT, GRANT, DEVISE OR BEQUEST, WHETHER CONDITIONAL OR UNCON-
 DITIONAL, INCLUDING BUT NOT LIMITED TO FEDERAL GRANTS, AND TO USE MONIES
 MADE AVAILABLE FOR THE PROGRAM FROM ANY PUBLIC OR  PRIVATE  SOURCE,  FOR
 THE  PURPOSE OF IMPLEMENTING THE PROGRAM. THE CORPORATION SHALL BE ENTI-
 TLED TO RECOVER FROM THE MONIES MADE AVAILABLE FOR THE PROGRAM  ITS  OWN
 NECESSARY AND DOCUMENTED COSTS INCURRED IN ADMINISTERING THE PROGRAM AND
 EVALUATING  THE EFFECTIVENESS OF THE PROGRAM; PROVIDED, HOWEVER, THE SUM
 THAT MAY BE RECOVERED FOR THE CORPORATION'S ADMINISTRATIVE  COSTS  SHALL
 NOT  EXCEED  FIVE  PERCENT OF THE MONIES MADE AVAILABLE FOR THE PROGRAM,
 AND THE SUM THAT MAY BE RECOVERED FOR THE CORPORATION'S EVALUATION COSTS
 SHALL NOT EXCEED THREE PERCENT OF THE  MONIES  MADE  AVAILABLE  FOR  THE
 PROGRAM.    THE MONIES HELD IN OR CREDITED TO THE FUND SHALL BE EXPENDED
 SOLELY FOR THE PURPOSES SET FORTH IN THIS SECTION. THE CORPORATION SHALL
 NOT COMMINGLE THE MONIES OF SUCH FUND  WITH  ANY  OTHER  MONIES  OF  THE
 CORPORATION  OR  ANY MONIES HELD IN TRUST BY THE CORPORATION. THE CORPO-
 RATION IS AUTHORIZED, WITHIN AVAILABLE APPROPRIATIONS  AND  LOAN  REPAY-
 MENTS  TO  PROVIDE  ZERO  INTEREST LOANS TO MICRO-BUSINESSES TO HIRE NEW
 EMPLOYEES.
   4. APPLICATIONS FOR LOAN. AN APPLICATION FOR A LOAN SHALL BE SUBMITTED
 IN SUCH FORM AND IN ACCORDANCE WITH SUCH PROCEDURES AS  THE  CORPORATION
 SHALL  ESTABLISH.  APPLICATIONS  SUBMITTED  TO  THE FUND MAY INCLUDE BUT
 SHALL NOT BE LIMITED TO:
   (A) A BUSINESS PLAN;
   (B) A JOB DESCRIPTION AND REQUIRED EMPLOYEE QUALIFICATIONS;

 A. 5133                             3
 
   (C) A GUARANTOR;
   (D)  THE GUARANTOR'S NAME AND ADDRESS, AUDITED FINANCIAL STATEMENTS OR
 TAX RECORDS FOR THE PREVIOUS THREE YEARS, AND OTHER FINANCIAL DOCUMENTA-
 TION THE CORPORATION SHALL DEEM APPROPRIATE;
   (E) A DESCRIPTION OF HOW THE APPLICANT ANTICIPATES THE  BUSINESS  WILL
 GROW AS A RESULT OF THE ADDITIONAL WORKFORCE;
   (F) A LIST OF CURRENT EMPLOYEES AND JOB DESCRIPTION FOR EACH EMPLOYEE;
 AND
   (G) ANY ADDITIONAL INFORMATION THAT THE CORPORATION SHALL REQUIRE.
   ALL INFORMATION COLLECTED BY THE CORPORATION SHALL BE CONFIDENTIAL AND
 SHALL BE USED EXCLUSIVELY FOR PURPOSES OF THIS SECTION.
   5.  APPLICATION FEE. EACH APPLICATION MUST BE ACCOMPANIED BY A MINIMUM
 ONE HUNDRED-DOLLAR APPLICATION  FEE.  THIS  APPLICATION  FEE  IS  TO  BE
 APPLIED  TO  THE CORPORATION'S ADMINISTRATIVE EXPENSES. APPLICATION FEES
 ARE TO BE REFUNDED TO ALL SUCCESSFUL APPLICANTS WITHIN  THIRTY  DAYS  OF
 RECEIPT  OF THE FINAL PAYMENT OF PRINCIPAL. THE PURPOSE OF THIS APPLICA-
 TION FEE IS TO ENSURE THAT APPLICATIONS ARE MADE IN GOOD  FAITH  AND  TO
 AVOID WASTED ADMINISTRATIVE FEES THAT OCCUR FROM BAD FAITH APPLICATIONS.
 THE  CORPORATION MAY REFUND ALL APPLICATION FEES, EVEN IF APPLICATION IS
 DENIED WHEN IT BELIEVED THAT THE APPLICANT IN GOOD FAITH BELIEVED IT WAS
 ENTITLED TO RECEIVE A LOAN UNDER THIS SECTION.
   6. LOAN TERMS. (A) THE CORPORATION SHALL PROVIDE FUNDS FOR EACH OF THE
 FIRST THREE YEARS OF THE MICRO-BUSINESS QUALIFYING  NEW  HIRE'S  EMPLOY-
 MENT.
   (B)  IN  EACH OF THOSE YEARS THE CORPORATION WILL PROVIDE NO MORE THAN
 TWENTY PERCENT OF THE MICRO-BUSINESS QUALIFYING NEW HIRE'S ANNUAL  SALA-
 RY.
   (C)  IN  EACH  YEAR  THE  CORPORATION WILL PROVIDE NO MORE THAN TWENTY
 THOUSAND DOLLARS PER MICRO-BUSINESS QUALIFYING NEW HIRE.
   (D) LOAN PAYMENTS TO THE CORPORATION FROM THE  BUSINESS  ARE  DEFERRED
 UNTIL THREE YEARS FROM MICRO-BUSINESS QUALIFYING NEW HIRE'S START DATE.
   (E)  PRINCIPAL  IS  TO  BE PAID TO THE CORPORATION IN MONTHLY INSTALL-
 MENTS.
   (F) NO INTEREST SHALL BE CHARGED ON ANY LOAN PROVIDED PURSUANT TO THIS
 SECTION.
   (G) THE LOAN WILL BE PAID BY THE CORPORATION IN THREE INSTALLMENTS  AS
 FOLLOWS:
   (I) THE FIRST INSTALLMENT WILL BE PROVIDED BY THE CORPORATION NO LATER
 THAN  TEN DAYS AFTER RECEIPT OF THE MICRO-BUSINESS QUALIFYING NEW HIRE'S
 W-2 AND PROOF OF RESIDENCE; AND
   (II) THE PAYMENTS FOR EACH ADDITIONAL INSTALLMENT SHALL BE MADE WITHIN
 TEN DAYS OF THE DATE OF THE MICRO-BUSINESS QUALIFYING NEW  HIRE'S  ANNI-
 VERSARY OF EMPLOYMENT.
   (H)  NO FEES OR PENALTIES SHALL BE CHARGED OR COLLECTED FOR PREPAYMENT
 OF ANY SUCH LOAN.
   7. LOAN APPROVAL. IN AWARDING THE LOAN, THE CORPORATION  SHALL  SELECT
 FROM ELIGIBLE BUSINESS APPLICANTS BASED ON THE FOLLOWING CRITERIA:
   (A) THE LIKELIHOOD OF SUCCESS OF THE APPLICANT IN MEETING THE GOALS OF
 ITS STRATEGIC PLAN;
   (B)  THE  EXTENT OF NEED FOR LOANS AND DEVELOPMENT SERVICES WITHIN THE
 INVESTMENT AREAS OR TARGETED POPULATIONS;
   (C) THE CREDIT SCORE OF THE APPLICANT;
   (D) THE CREDIT SCORE OF THE GUARANTOR;
   (E) GOOD STANDING ON OTHER LOAN OBLIGATIONS; AND
   (F) OTHER FACTORS DEEMED TO BE APPROPRIATE BY THE CORPORATION.

 A. 5133                             4
 
   8. APPLICATION CRITERIA. THE CORPORATION SHALL DEVELOP AND USE A STAN-
 DARD APPLICATION FORM. IN ADDITION TO SUCH OTHER CRITERIA AS THE  CORPO-
 RATION  MAY  ADOPT  IN  RULES  AND  REGULATIONS FOR THE CONSIDERATION OF
 APPLICATIONS FOR LOANS OR LOAN GUARANTEES PURSUANT TO THIS SECTION,  THE
 CORPORATION SHALL:
   (A)  DETERMINE THAT THE COMPANY IS UNABLE TO OBTAIN SUFFICIENT FUNDING
 ON REASONABLE TERMS FROM OTHER PUBLIC OR PRIVATE SOURCES TO  PERMIT  THE
 COMPANY'S PLANNED HIRING;
   (B)  CONSIDER  WHETHER  THE  LOAN  OR  LOAN GUARANTEE WILL RESULT IN A
 REASONABLE LIKELIHOOD OF SUCCESS IN MEETING THE PURPOSES  FOR  WHICH  IT
 WAS SOUGHT BY THE APPLICANT COMPANY; AND
   (C) ASSESS THE DEMONSTRATED NEED FOR SUCH ASSISTANCE, ESTABLISHED BY A
 SHOWING  OF  A SHORT-TERM LACK OF LIQUIDITY OF AN EXISTING SOLVENT BUSI-
 NESS.
   9. USE OF LOAN. A MICRO-BUSINESS MAY UTILIZE FUNDS ONLY FOR SALARY  OF
 A MICRO-BUSINESS QUALIFYING NEW HIRE.
   10. ADVISORY COMMITTEE. THE CORPORATION MAY CREATE AN ADVISORY COMMIT-
 TEE,  CONSISTING  OF AT LEAST FIVE MEMBERS, TO ADVISE THE CORPORATION IN
 THE PROMOTION, IMPLEMENTATION AND ADMINISTRATION OF THE  HIRE  NEW  YORK
 PROGRAM.
   11.  REPORTING  REQUIREMENTS. THE CORPORATION SHALL SUBMIT A REPORT TO
 THE GOVERNOR, THE SPEAKER OF THE ASSEMBLY AND THE TEMPORARY PRESIDENT OF
 THE SENATE ON OR BEFORE THE FIRST OF OCTOBER, AND  ANNUALLY  THEREAFTER,
 DESCRIBING  THE  FINANCIAL AND TECHNICAL ASSISTANCE PROVIDED PURSUANT TO
 THIS SECTION, INCLUDING: THE  NUMBER  OF  LOAN  APPLICATIONS  FILED  AND
 ACCEPTED;  THE  AMOUNT AND TYPE OF ASSISTANCE PROVIDED; A DESCRIPTION OF
 BUSINESSES ASSISTED BY FUND MONIES; THE NUMBER  OF  LOCAL  JOBS  CREATED
 THROUGH  THE  LOANS  OF  FUND  MONIES; AND SUCH OTHER INFORMATION AS THE
 CORPORATION MAY DEEM APPROPRIATE.
   12. RULES AND REGULATIONS. THE CORPORATION  IS  HEREBY  AUTHORIZED  TO
 PROMULGATE  RULES  AND REGULATIONS IN ACCORDANCE WITH THE STATE ADMINIS-
 TRATIVE PROCEDURE ACT THAT ARE NECESSARY TO FULFILL THE PURPOSES OF THIS
 SECTION. SUCH RULES AND REGULATIONS MUST BE COMPLETED WITHIN ONE HUNDRED
 EIGHTY DAYS AFTER THE EFFECTIVE DATE OF THIS SECTION.
   § 3. The provisions of this act shall be eligible to  be  funded  from
 any  state  agency,  public authority, public benefit corporation or any
 other entity for which this act is consistent with the  mission  of  the
 state  agency, public authority, public benefit corporation or any other
 entity.
   § 4. This act shall take effect immediately.