BILL NUMBER: S1067

SPONSOR: GALLIVAN
 
TITLE OF BILL:

An act to amend the general municipal law, in relation to the powers of
the New York state industrial development agency

 
PURPOSE OR GENERAL IDEA OF BILL:

This bill would provide the necessary authority to Industrial Develop-
ment Agencies to provide loans, grants or early-stage equity funding to
public or private entities.

 
SUMMARY OF SPECIFIC PROVISIONS:

Section 1 amends subdivision (14) of Section 854 of the General Munici-
pal Law by changing the definition of the term "Financial assistance" to
include the proceeds of a loan, the proceeds of a grant, with certain
exceptions, and equity funding, thus making funds held for an IDA's own
use and account available for IDA corporate purposes.
              

Section 2 amends the general municipal law to authorize IDAs to provide
loans, grants and seed and early-stage equity funding

Section 3 establishes the effective date.

 
JUSTIFICATION:

Industrial Development Agencies (IDAs) are local governments' most
important economic development tool. Staff of these IDAs work predomi-
nately to help incumbent employers expand, invest and create jobs in
their communities.

The primary financial incentives that IDAs provide to businesses are
real property, sales and mortgage recording tax exemptions. Through a
Payment-in-Lieu-of-Tax (PILOT) agreement, IDAs generate significant
additional revenue for local taxing jurisdictions.

IDAs could be even more helpful, however, if they were given clear
authority to make loans or grants as well as to make equity investments
in seed stage or start-up businesses that meet the corporate purposes of
their economic development mission. This bill would afford IDAs the
ability to deploy tens of millions of dollars for economic development.

This version incorporates within the definition of "Financial assist-
ance" the proceeds of a loan, grant and equity funding. By doing so,
such proceeds will now be applicable to: (i) already existing prohibi-
tions of the use of financial assistance, (ii) already existing purposes
of an IDA, (iii) already existing and required reporting requirements to
the comptroller, (iv) already existing and required application, public
notice, public hearing, and required IDA resolution adoption require-
ments, (v) already existing uniform criteria use and application of same
with respect to an IDAs consideration of whether to provide financial
assistance, (vi) already existing requirements for use of a uniform
agency project agreement and such related terms and conditions, (vii)
already existing restrictions on the use of the funds of an IDA, and
(viii) already existing requirements related to an IDAs Uniform Tax

Exemption Policy and an IDAs policies for the suspension, discontinuance
and/or return of financial assistance.

 
LEGISLATIVE HISTORY:

2017-18: S.6230a Referred to Local Government

 
FISCAL IMPLICATIONS:

None to the state.

 
EFFECTIVE DATE:
This act shall take effect on the ninetieth day after it shall have
become law.