NY State Senate Bill 2019-S9022

Senate Bill S9022

2019-2020 Legislative Session

Relates to establishing a temporary state assistance fund to provide legal counsel in certain bankruptcy proceedings and providing for the administration thereof

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Archive: Last Bill Status - In Senate Committee Rules Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Oct 02, 2020	referred to rules

co-Sponsors

2019-S9022 (ACTIVE) - Details

See Assembly Version of this Bill:: A11084
Current Committee:: Senate Rules
Law Section:: Executive Law
Laws Affected:: Add §94-d, Exec L
Versions Introduced in Other Legislative Sessions:: 2021-2022: S1142, S8111, A5922
2023-2024: S3033, A368

2019-S9022 (ACTIVE) - Summary

Establishes a temporary state assistance fund to provide legal counsel for bankruptcy proceedings under chapter eleven of the federal bankruptcy code and provides for the administration thereof.

2019-S9022 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S9022

SPONSOR: BENJAMIN
 
TITLE OF BILL:

An act to amend the executive law, in relation to establishing a tempo-
rary state assistance fund to provide legal counsel in certain bankrupt-
cy proceedings and providing for the administration thereof

 
PURPOSE OF BILL:

To provide free legal counsel for small businesses adversely affected by
the COVID-19 so that they may take advantage of recently expanded feder-
al bankruptcy protections. Such fund is necessary to ensure that small
businesses reorganize debt and get a fresh start before the timeline
closes on a greater debt threshold permitted under the federal CARES
Act.

 
SUMMARY OF SPECIFIC PROVISIONS:

Section (1) provides this act shall be known as may be cited as the

SMART ("Save Merchants and Retail Tenants") Act.

§ 2 amends the Executive law by adding new section 94-d; Subdivision

(1) provides relevant definitions

Subdivision (2) provides that all eligible businesses shall have access
to legal services in certain small business bankruptcy cases.  The
subsection further provides for the creation of a legal services fund
and details program limitations.

-Subdivision (3) provides guidelines for administration and oversight of
the legal fund including competent representation, targeting of

grants, and general administration over the program.

-Subdivision (4) provides the requirements for the legal fund to fully
comply with the intent of the legislation.

Section (3) sets the effective date.

 
JUSTIFICATION:

Small businesses are essential to maintaining a vibrant and diverse
community. COVID-19 has brought great strain upon small business, forc-
ing many to either temporarily shut down or scale back their operations.
The federal CARES Act gave struggling small business an opportunity to
take advantage of the more efficient and cost-effective Subchapter 5 of
Chapter 11 of the Bankruptcy Code by increasing the debt limit for
eligible debtors from about $2.7 million to $7.5 million. This provision
also permits a debt cramdown in cases where a Chapter 11 plan does not
discriminate unfairly and is "fair and equitable" to each impaired non-
accepting class.  Unfortunately, the debt limit reverts to the $2.7
million threshold on March 28, 2021, and many small businesses are not
aware of this limited opportunity. We are faced with a limited budget to
assist with the financial recovery of small businesses in response to
COVID-19 and government forced shutdowns, this temporary fund to provide
legal assistance will provide the best possible return on investment to
protect our Main Street businesses. It's a SMART investment for New York
to rebuild small businesses, protect the character of our communities,
and prevent the spread of vacant neighborhood storefronts.

 
PRIOR LEGISLATIVE HISTORY:

This is a new bill.

 
FISCAL IMPLICATIONS:

To be determined.

 
EFFECTIVE DATE:
This act shall take effect immediately.

2019-S9022 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   9022
 
                             I N  S E N A T E
 
                              October 2, 2020
                                ___________
 
 Introduced  by Sen. BENJAMIN -- read twice and ordered printed, and when
   printed to be committed to the Committee on Rules
 
 AN ACT to amend the executive law, in relation to establishing a  tempo-
   rary  state  assistance fund to provide legal counsel in certain bank-
   ruptcy proceedings and providing for the administration thereof

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Short  title. This act shall be known and may be cited as
 the "save merchants and retail tenants (SMART) act".
   § 2. The executive law is amended by adding a new section 94-d to read
 as follows:
   § 94-D. TEMPORARY STATE ASSISTANCE TO FUND LEGAL SERVICES  IN  CERTAIN
 BANKRUPTCY PROCEEDINGS. 1. DEFINITIONS. AS USED IN THIS SECTION:
   (A) "ADMINISTRATOR" MEANS THE NEW YORK OFFICE OF COURT ADMINISTRATION.
   (B) "COVERED BUSINESS" MEANS ANY SMALL BUSINESS, NOT-FOR-PROFIT CORPO-
 RATION,  LIMITED PARTNERSHIP, LIMITED LIABILITY COMPANY, LIMITED LIABIL-
 ITY PARTNERSHIP,  AS  WELL  AS  OTHER  MISCELLANEOUS  BUSINESSES,  WHICH
 CONDUCTS  A  MAJORITY  OF  ITS  BUSINESS  IN THE STATE AND WAS ADVERSELY
 AFFECTED BY COVID-19 OR PUBLIC HEALTH RESTRICTIONS ENFORCED BY THE STATE
 DURING THE COVID-19 PANDEMIC, WHICH ARE ELIGIBLE FOR  RELIEF  UNDER  THE
 FEDERAL SMALL BUSINESS REORGANIZATION ACT, AS AMENDED BY THE CORONAVIRUS
 AID,  RELIEF,  AND  ECONOMIC SECURITY (CARES) ACT OF 2020, AND FILES FOR
 BANKRUPTCY PROTECTION UNDER SUCH ACT PRIOR TO MARCH TWENTY-SEVENTH,  TWO
 THOUSAND TWENTY-ONE.
   (C)  "BANKRUPTCY  COURT"  MEANS THE UNITED STATES BANKRUPTCY COURT FOR
 THE NORTHERN, SOUTHERN, EASTERN OR WESTERN DISTRICT OF THE STATE.
   (D) "LEGAL SERVICES" MEANS INDIVIDUALIZED LEGAL ASSISTANCE IN A SINGLE
 CONSULTATION AND/OR ONGOING LEGAL REPRESENTATION, PROVIDED  BY  A  LEGAL
 SERVICES PROVIDER TO A COVERED BUSINESS, AND ALL LEGAL ADVICE, ADVOCACY,
 AND ASSISTANCE ASSOCIATED WITH SUCH SERVICE.
   (E)  "LEGAL  SERVICES  PROVIDER" MEANS AN INDIVIDUAL, ORGANIZATION, OR
 ASSOCIATION THAT HAS THE AUTHORITY TO  PROVIDE  LEGAL  SERVICES  AND  IS
 DESIGNATED BY THE ADMINISTRATOR TO PROVIDE SUCH SERVICES.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD17046-03-0

 S. 9022                             2
 
   2.  TEMPORARY ACCESS TO LEGAL SERVICES FOR SMALL BUSINESSES IN CERTAIN
 BANKRUPTCY PROCEEDINGS. ALL COVERED  BUSINESSES  SHALL  HAVE  ACCESS  TO
 LEGAL  SERVICES  AS PROVIDED IN THIS SUBDIVISION AND MADE AVAILABLE IN A
 FUND MAINTAINED BY THE ADMINISTRATOR PURSUANT  TO  SUBDIVISION  FOUR  OF
 THIS SECTION.
   (A)   COVERED   BUSINESSES  AFFECTED  BY  COVID-19  OR  PUBLIC  HEALTH
 RESTRICTIONS ENFORCED BY THE STATE DURING THE COVID-19  PANDEMIC,  WHICH
 FILE  FOR RELIEF UNDER THE FEDERAL SMALL BUSINESS REORGANIZATION ACT, AS
 AMENDED BY THE CORONAVIRUS AID, RELIEF, AND  ECONOMIC  SECURITY  (CARES)
 ACT,  PRIOR TO MARCH TWENTY-SEVENTH, TWO THOUSAND TWENTY-ONE, SHALL HAVE
 ACCESS TO LEGAL SERVICES IN CONNECTION WITH THE FILING  AND  PROSECUTION
 UNDER CHAPTER ELEVEN OF THE FEDERAL BANKRUPTCY CODE.
   (B)  IN  ALL  CASES, ACCESS TO LEGAL SERVICES ESTABLISHED IN PARAGRAPH
 (A) OF THIS SUBDIVISION SHALL TERMINATE:
   (I) UPON THE TERMINATION OR DISMISSAL OF THE BANKRUPTCY PROCEEDING;
   (II) AT THE RECOMMENDATION OF THE UNITED STATES TRUSTEE; OR
   (III) AT THE RECOMMENDATION OF THE ASSIGNED UNITED  STATES  BANKRUPTCY
 JUDGE.
   (C) IN ALL CASES, THE RIGHT TO COUNSEL ESTABLISHED IN PARAGRAPH (A) OF
 THIS SUBDIVISION SHALL NOT EXTEND TO APPEALS.
   3.  POWERS  AND  DUTIES  OF  THE  ADMINISTRATOR.  THE ADMINISTRATOR IS
 CHARGED WITH IMPLEMENTING THE REQUIREMENTS OF THIS SECTION NO LATER THAN
 OCTOBER FIRST, TWO THOUSAND TWENTY, AND MAY PROMULGATE SUCH RULES, POLI-
 CIES, AND PROCEDURES AS MAY BE NECESSARY AND APPROPRIATE  TO  ACCOMPLISH
 SUCH  IMPLEMENTATION. THE ADMINISTRATOR SHALL HAVE THE POWER AND RESPON-
 SIBILITY TO:
   (A) ENSURE  INDEPENDENT,  COMPETENT,  AND  ZEALOUS  REPRESENTATION  OF
 COVERED  BUSINESSES  RECEIVING  LEGAL SERVICES PROVIDED PURSUANT TO THIS
 SECTION;
   (B) EXAMINE, EVALUATE, AND MONITOR LEGAL SERVICES PROVIDED PURSUANT TO
 THIS SECTION;
   (C) ESTABLISH MEASURES OF PERFORMANCE TO MONITOR THE QUALITY OF  LEGAL
 SERVICES AND THE OVERALL EFFECTIVENESS OF SUCH LEGAL SERVICES;
   (D)   TARGET  GRANTS  IN  SUPPORT  OF  INNOVATIVE  AND  COST-EFFECTIVE
 SOLUTIONS THAT ENHANCE THE PROVISION OF LEGAL SERVICES; AND
   (E)  INVESTIGATE  AND  MONITOR  ANY  OTHER  MATTERS  RELEVANT  TO  THE
 PROVISION OF LEGAL SERVICES WHICH THE ADMINISTRATOR DEEMS IMPORTANT.
   4.  FUNDING.  (A) THE STATE SHALL ESTABLISH A DEDICATED FUND AND SHALL
 APPROPRIATE SUFFICIENT SUMS INTO  SUCH  FUND  TO  FULLY  CARRY  OUT  THE
 REQUIREMENTS  OF  THIS  SECTION.  FUNDS NECESSARY TO FULLY CARRY OUT THE
 REQUIREMENTS OF THIS SECTION SHALL BE DETERMINED BY  THE  ADMINISTRATOR,
 IN CONSULTATION WITH THE DIRECTOR OF THE DIVISION OF THE BUDGET.
   (B) THE ADMINISTRATOR SHALL BE CHARGED WITH ENSURING THAT APPROPRIATED
 FUNDS  ARE  TIMELY  DISTRIBUTED  TO  LEGAL  SERVICES  PROVIDERS  FOR THE
 PROVISION OF LEGAL SERVICES.
   § 3. This act shall take effect immediately.

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Senate Bill S9022

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Sponsored By

Brian Benjamin