§ 16-c. Minority- and women-owned business development and lending
program.

(1) Minority- and women-owned business development and lending
program. (a) There is hereby created a minority- and women-owned
business development and lending program for the purpose of providing
financial and technical assistance to minority and women-entrepreneurs.

(b) For the purposes of this section the following words or terms
shall mean as follows:

(i) "minority-owned business enterprise" or "minority-owned business"
shall mean the same as "minority business enterprise" as defined in
subdivision three of section two hundred ten of the economic development
law.

(ii) "women-owned business enterprise" or "women-owned business" shall
mean the same as "women-owned business enterprise" as defined in
subdivision five of section two hundred ten of the economic development
law.

(iii) "incubator" shall mean a facility providing low-cost space,
technical assistance and support services, including, but not limited
to, central services shared by tenants of the facility, to minority- and
women-owned business enterprises.

(c) Assistance shall not be provided under this section for:

(i) the purchase or rehabilitation of real property for speculative
purposes;

(ii) payment of any tax or employee benefit arrearage;

(iii) residential construction, renovation or development
construction, except for assistance to minority and women contractors
under subdivision four of this section;

(iv) educational institutions and proprietary education firms, except
licensed child care facilities;

(v) hospitals or residential health care facilities;

(vi) overnight lodging facilities;

(vii) refinancing of commercial or business related debt or equity
invested in a commercial or business related enterprise or commercial or
business related project, unless the corporation finds the terms of the
original debt to be unreasonable as provided in subparagraph (ix) of
paragraph (d) of this subdivision.

(d) The corporation is authorized to:

(i) establish programs in conjunction with locally, and community
based entities to decentralize lending for small loans and loans to
start up minority- and women-owned businesses;

(ii) establish a comprehensive program for minority and women
contractors, which may include assistance through loans, bonding
assistance and technical assistance;

(iii) establish a program to provide loans to established minority-
and women-owned businesses and for minority- and women-owned businesses,
including loans to such businesses seeking to acquire or expand a
franchise;

(iv) provide loan guarantees to financial institutions and make linked
deposits into federally and state chartered credit unions for the
purpose of encouraging private financial institutions to make loans to
minority- and women-owned businesses;

(v) establish a program to create incubators to assist small and high
risk minority- and women-owned businesses to grow and prosper;

(vi) promote equity investment in minority- and women-owned
businesses;

(vii) establish a comprehensive technical assistance program in
cooperation with the department of economic development to assist
minority- and women-owned businesses and potential minority and
women-entrepreneurs;

(viii) notwithstanding any provision of law to the contrary, establish
a minority- and women-owned business investment fund to provide critical
financial support to foster the development of new and emerging ideas
and products of minority- and women-owned business enterprises as well
as to promote the long-term financial performance and success of early
stage enterprises that are minority- and women-owned start-ups. The
selection of an eligible applicant and beneficiary companies for the
minority- and women-owned business investment fund shall be selected by
the process established pursuant to subdivisions two through four of
section sixteen-u of this act. Minority- or women-owned business
enterprises who participate in such minority- and women-owned business
investment fund under this subdivision shall not be precluded from
qualifying for any other assistance, grant or loan made available from
the state; and

(ix) provide for the refinancing of commercial or business related
debt or equity invested in an enterprise or project, provided that the
corporation determines the terms of the original debt to be
unreasonable. The applicant must submit a written justification to the
corporation for each loan explaining why the current loan is not on
reasonable terms. Unreasonable terms of debt may include but are not
limited to:

(1) a demand or balloon maturity feature in the existing note;

(2) the current maturity is not appropriate for the original purpose
of the loan;

(3) the existing debt being refinanced is on a revolving line or a
credit card;

(4) the interest rate is deemed unreasonable by the corporation; or

(5) the loan is over-collateralized.

(2) Minority and women revolving loan trust fund. For the purpose of
establishing programs in conjunction with locally and community based
entities to decentralize lending for small loans and loans to start up
minority- and women-owned businesses, the corporation shall establish
minority and women revolving loan trust fund accounts and related
administrative expenses trust fund accounts.

(a) Each minority and women revolving loan trust fund account shall be
administered by one or more of the following types of entities that
provide services to community businesses and have as one of their
primary purposes the provision of services and assistance to minority-
and women-owned businesses:

(i) empire zone capital corporations established pursuant to section
nine hundred sixty-four of the general municipal law;

(ii) community-based local development corporations or industrial
development agencies that serve a municipality in which an empire zone
has been established pursuant to article eighteen-B of the general
municipal law and have as their primary purpose assistance to minority-
and women-owned businesses located or to be located in such empire zone;
or

(iii) local and community development corporations, industrial
development agencies, or other not-for-profit entities, representative
of the community.

(b) To be eligible to administer a minority and women revolving loan
trust fund account, the entity must also: (i) have staff with sufficient
expertise to analyze applications for financial assistance, to regularly
monitor financial assistance to clients, and to provide management or
technical assistance to clients; and (ii) have established a loan
committee composed of six or more persons experienced in business
management, commercial lending or in the operation of a for-profit
business, at least one-half of whom shall be experienced in commercial
lending, at least one-third of whom shall be minority persons and at
least one-third of whom shall be women. Such loan committee shall review
every application, determine the feasibility of the proposed project and
the likelihood of repayment of the requested financing and shall
recommend to the governing body of the entity such action on the
application as the loan committee deems appropriate. The corporation
shall identify entities eligible to administer minority and women
revolving loan trust fund accounts through a competitive statewide
request for proposal process.

(c) Any entity selected to administer a minority and women revolving
loan trust fund account shall be eligible to draw funds from the account
as needed to provide the following types of financial assistance to
minority- and women-owned businesses upon certification to and
acceptance by the corporation that such assistance complies with rules
and regulations promulgated by the corporation: (i) working capital
loans, provided that the amount of the loan does not exceed thirty-five
thousand dollars and the term of the loan does not exceed five years;
and (ii) loans for the acquisition and/or improvement of real property
and for the acquisition of machinery and equipment provided that the
amount of the loan does not exceed fifty thousand dollars and the term
of the loan does not exceed the useful life of the equipment or
property.

(d) (i) Notwithstanding any provision of law to the contrary, the
corporation may establish an administrative expenses trust fund account
for the benefit of each entity selected to administer a minority and
women revolving loan trust fund account. The initial deposit of funds to
an administrative expenses trust fund account shall be an amount
determined by the corporation but shall not exceed twenty-five thousand
dollars.

(ii) An entity selected to administer a minority and women revolving
loan trust fund account may use the funds in the administrative expenses
trust fund account for costs incurred by it in the start up and
administration of the financial assistance program authorized pursuant
to this subdivision.

(iii) The corporation shall deposit into each administrative expenses
trust fund account:

(A) all income earned from the moneys on deposit in the corresponding
minority and women revolving loan trust fund account during the first
year of the entity's administration of said account; and

(B) beginning with its second year in administering a minority and
women revolving loan trust fund account, said amounts may be used for
costs incurred by the entity in administering the minority and women
revolving loan trust fund account; and

(C) repayments of interest on loans made from the corresponding
minority and women revolving loan trust fund account.

(iv) Funds from the administrative expenses trust fund account may be
used for costs incurred at any time by an administering entity in its
administration of a minority and women revolving loan trust fund account
pursuant to this section.

(v) Funds deposited in an administrative expenses trust fund account
shall be disbursed by the corporation to the entity that administers the
corresponding minority and women revolving loan trust fund account on a
periodic basis and shall be expended by the entity in accordance with an
annual budget and any updates of same, approved by the corporation.

(e) Any entity selected to administer a minority and women revolving
loan trust fund account shall pay to the corporation for deposit any
repayments received in connection with financial assistance provided
from its account. Payments consisting of the repayment of the principal
amount of a loan shall be deposited by the corporation into the minority
and women revolving loan trust fund account from which the loan was
made. The interest earned by the corporation from the investment of
moneys in each minority and women revolving loan trust fund account
during and after the second year of a selected entity's administration
of said account shall be deposited by the corporation into the
corresponding minority and women revolving loan trust fund account and
used to provide the financial assistance to minority- and women-owned
businesses as authorized pursuant to this section.

(f) The provisions of subdivisions eight, nine, and fourteen through
nineteen of section sixteen-a of this act pertaining to the regional
revolving loan trust fund shall also be applicable to the minority and
women revolving loan trust fund, provided that: where the term "regional
corporation" appears therein it shall be interpreted to mean an entity
selected to administer a minority and women revolving loan trust fund
account, and "regional revolving loans trust fund" shall mean a minority
and women revolving loan trust fund, and where the term "this section"
appears therein it shall mean this section sixteen-c.

(g) The corporation may provide funds from an appropriation for the
minority- and women-owned business development and lending program to
any entity selected to administer a minority and women revolving loan
trust fund for the purposes of recapitalizing such account and the
entity's corresponding administrative expenses trust fund account
following an evaluation by the corporation of the entity's
administration and use of such accounts.

(h) Notwithstanding any provision of law to the contrary, the
corporation shall establish a minority and women revolving loan trust
fund to pay into such fund any moneys made available to the corporation
for such fund from any source, including moneys appropriated by the
state and any income earned by, or increment to, the account due to the
investment thereof, or any repayment of moneys advanced from the fund.
The corporation shall not commingle the moneys of such fund with any
moneys held in trust by the corporation, except for investment purposes.

(i) Notwithstanding any other provisions of this subdivision, where
applicable, the corporation is authorized to enter into agreements as
may be necessary for the administration and reporting of funds repaid,
received, expended or collected in a manner consistent with the
provisions in section sixteen-t of this act. The use of such funds by
the corporation shall be consistent with the terms, conditions and
restrictions set forth under this subdivision, to provide financial
assistance to eligible businesses as defined in subdivisions three and
five of section two hundred ten of the economic development law.
Outstanding expenses, loans and other obligations executed prior to the
effective date of this paragraph shall be subject to the terms and
conditions of the original contract or contracts.

(i) The lending organization shall submit to the corporation annual
reports stating: the number of program loans made; the amount of program
funding used for loans; the use of loan proceeds by the borrower; the
number of jobs created or retained; the status of each outstanding
program loan, including fund balance; and such other information as the
corporation may require.

(ii) Beginning April 1, 2019, the corporation shall publish on its
website the information contained in the annual reports required under
subparagraph (i) of this paragraph in aggregate form omitting borrower
identifiable information.

(3) Micro-loan program. (a) For the purposes of this subdivision
"micro-loan" shall mean a loan of under seven thousand five hundred
dollars.

(b) The corporation shall, pursuant to requests for proposals, enter
into agreements for other types of locally, community or regionally
administered loan programs than those set forth in subdivision two of
this section, including micro-loan programs to be administered by local
development corporations, local industrial development organizations,
municipalities and not-for-profit organizations, to provide micro-loans
to small and high risk minority- and women-owned businesses located
within their respective service areas, provided that loan review
committees are established by such administering entity, including women
and minority persons experienced in business management, business
development, commercial lending, entrepreneurship, or in the operation
of a for-profit business.

(c) Agreements entered into pursuant to paragraph (b) of this
subdivision shall be governed by paragraphs (d) through (h) of
subdivision two of this section, and minority and women revolving loan
trust fund accounts and administrative expenses trust fund accounts
shall be established in a similar fashion for entities selected to
administer micro-loan funds pursuant to this subdivision.

(d) Notwithstanding any other provisions of this subdivision, where
applicable, the corporation is authorized to enter into agreements as
may be necessary for the administration and reporting of funds repaid,
received, expended or collected in a manner consistent with the
provisions in section sixteen-t of this act. The use of such funds by
the corporation shall be consistent with the terms, conditions and
restrictions set forth under this subdivision, to provide financial
assistance to eligible businesses as defined in subdivisions three and
five of section two hundred ten of the economic development law.
Outstanding expenses, loans and other obligations executed prior to the
effective date of this paragraph shall be subject to the terms and
conditions of the original contract or contracts.

(e)(i) The lending organization shall submit to the corporation annual
reports stating: the number of program loans made; the amount of program
funding used for loans; the use of loan proceeds by the borrower; the
number of jobs created or retained; the status of each outstanding
program loan, including fund balance; and such other information as the
corporation may require.

(ii) Beginning April 1, 2019, the corporation shall publish on its
website the information contained in the annual reports required under
subparagraph (i) of this paragraph in aggregate form omitting borrower
identifiable information.

(4) Minority and women contracting program. For the purpose of
establishing a comprehensive program to assist minority and women
contractors, the corporation may provide loans, loan guarantees,
technical assistance and bonding assistance, the corporation may enter
into cooperative agreements with cities, counties, municipalities,
authorities, agencies, federally and state chartered credit unions in
New York state and federally insured banking organizations and financial
institutions for such purposes.

(a) To be eligible for a contractor loan, the borrower must have
either (i) a construction contract with, or a contract to provide goods
or services to, a governmental entity or authority, (ii) a subcontract
on a government-sponsored construction contract, (iii) a contract or
subcontract on a government sponsored residential project, or (iv) a
contract or subcontract on a construction project previously approved by
the corporation pursuant to section ten of this act.

(b) The corporation shall provide technical assistance specifically
oriented to minority and women-owned government contractors as part of
its comprehensive technical assistance program.

(c) The corporation is authorized to provide assistance through the
creation of, or assistance to, a minority and women bonding guarantee
program to enable minority and women contractors and subcontractors to
meet payment or performance bonding requirements.

(i) Through such program, assistance in the form of working capital
loans and loan guarantees pursuant to subdivision six of this section
may also be provided to minority and women contractors and
subcontractors who have secured contracts by participating in the
program.

(ii) The corporation shall either establish criteria for the bonding
guarantee program and for any required escrow funds which shall include
detailed provisions for eligibility; or if the corporation is providing
assistance to a program other than one established by the corporation,
review and approve the criteria established for such other program.

(5) Direct financial assistance for minority- and women-owned
businesses. For the purpose of establishing a program to provide direct
financial assistance to minority- and women-owned businesses, the
corporation is authorized to provide assistance in the form of:

(a) Business development loans and loan guarantees pursuant to
subdivision six of this section to eligible enterprises for the
acquisition or improvement of real property, machinery, equipment or
working capital, provided that to be eligible for a business development
loan, the borrowers must have been in business for at least three years
and provided that the loans must be in an amount equal to or in excess
of fifty thousand dollars;

(b) Franchise loans to eligible enterprises seeking to acquire or
expand franchises of nationally recognized corporations, provided that
disbursements by the corporation of such loans shall be conditioned on
obtaining such franchises;

(c) Equity assistance for eligible minority and women-owned
enterprises to match equity contributions to such enterprises by
financial institutions and community development equity capital funds,
provided, however, that such assistance shall be targeted to start-up
and early stage enterprises in the manufacturing, retail and service
sectors located in economically distressed areas.

(6) Deposits and loan guarantees. For the purpose of encouraging
private financial institutions to make loans to eligible enterprises
pursuant to this section for any of the eligible projects pursuant to
subdivisions four and five of this section, the corporation is
authorized to:

(a) Make linked deposits of funds into federally and state chartered
credit unions in New York state, in order to encourage such
organizations to make small loans to minority and women-owned
businesses; and

(b) Provide loan guarantees to private financial institutions for
loans made to eligible minority- and women-owned businesses pursuant to
this subdivision for eligible projects, provided that the guarantee
shall be at least fifty percent backed by funds of the corporation. Any
such loan guaranteed by the corporation shall be made to borrowers that
are approved by the corporation and substantially meet the underwriting
criteria the credit union or financial institution customarily applies
to similar borrowers for similar loans supported by similar guarantees,
and no guaranteed loan funds shall be disbursed until the corporation
has received, reviewed and concurred, in writing, with the
recommendation of the credit union or banking or financial institution
to make a loan.

(7) Minority and women small business incubator program. (a) The
corporation shall establish a minority and women small business
incubator program for the purpose of providing financial support for the
creation of incubators to nurture minority and women-owned business
enterprises with growth potential.

(b) Under this subdivision the corporation is authorized to provide
low-interest loans and grants for construction financing and permanent
financing of up to seventy-five percent of project costs up to a maximum
of six hundred fifty thousand dollars per project, provided that the
total amount of grant assistance provided pursuant to this paragraph
shall not exceed twenty percent of an appropriation provided for the
purposes of this section.

(c) Incubator projects eligible for such assistance shall involve the
renovation or reconstruction of existing facilities or the acquisition
of equipment, except that construction shall be allowable in cases in
which an applicant can demonstrate to the satisfaction of the
corporation that an existing facility is unavailable in the area to be
served by the new incubator facility.

(d) Incubator projects are not eligible to receive loans for the
purpose of covering operating costs or supplying incubator support
services, except that incubators in their first eighteen months of
operation may receive one-time grants not to exceed forty thousand
dollars, which costs may include administrative costs of employing a
resident administrator/advisor to the incubator, provided that the
corporation shall not expend a sum greater than two hundred fifty
thousand dollars in any one state fiscal year, or so much as may be
specifically appropriated for this purpose.

(e) Eligible incubator projects shall be required to demonstrate to
the corporation's satisfaction:

(i) public or private support and involvement sufficient to complete
the renovation of existing facilities or the construction of new
facilities and the acquisition of equipment;

(ii) significant community support for the project;

(iii) the existence of prospective tenants for such incubator space;

(iv) demand for such incubator space, which may include evidence of
the unavailability of suitable space for prospective tenants at
appropriate rental or lease costs in the community in which such
prospective tenants are located; and

(v) the inability of the project to occur without financial assistance
from the corporation.

(f) The corporation shall establish criteria for eligibility for
funding for incubator projects, including but not limited to the
following:

(i) the project must be designed to provide low-cost space and support
services to incubator tenants, coordination with other sources of
assistance and flexible leasing arrangements for tenants;

(ii) the project sponsors must provide a management plan and a
business plan for operating the incubator satisfactory to the
corporation; and

(iii) the project gives preference for incubator space and assistance
to minority- and women-owned businesses which currently receive, or have
received, assistance from the corporation pursuant to this section and
to incubator projects proposed to be located in economically distressed
areas.

(8) Minority- and women-owned business technical assistance program.
(a) The corporation shall establish a comprehensive technical assistance
program within the minority and women business development office, in
cooperation with the department of economic development's division of
minority- and women-business development established pursuant to article
four-A of the economic development law, to provide technical assistance
to minority- and women-owned business enterprises and to prospective
minority- and women-business entrepreneurs through third party service
providers, which assistance shall include, but not be limited to: (i)
technical assistance in development and execution of business plans,
including the formation of, acquisition of, management of, or
diversification of a minority- or women-owned business enterprise; (ii)
technical assistance with applications for obtaining funds from public
and private financing sources; (iii) technical assistance in the
development of a working capital budget; (iv) referrals to other
providers of technical assistance to minority- and women-owned
businesses and minority and women entrepreneurs, where appropriate,
including the entrepreneurial assistance program established pursuant to
article nine of the economic development law; and (v) technical
assistance through education programs directed primarily at women and
minority entrepreneurs.

(b) Technical assistance may be provided through direct corporate
support, through grants to or contracts with service providers or
governmental entities, and minority- and women-owned business
enterprises and individuals.

(9) Priorities. The corporation shall give priority to applications
for assistance pursuant to this section in which the business seeking
such assistance indicates a commitment to first consider persons
eligible to participate in federal job training partnership act (P.L.
97-300) programs.

(10) Non-application of certain provisions. The provisions of section
ten and subdivision two of section sixteen of this act shall not apply
to assistance or projects authorized pursuant to this section.

(11) Rules and regulations. The corporation shall, assisted by the
commissioner of economic development and in consultation with the
department of economic development, promulgate rules and regulations in
accordance with the state administrative procedure act. Such rules and
regulations shall be consistent with the program plan required by
subdivision nineteen of section one hundred of the economic development
law. No funds shall be disbursed under this program until such rules and
regulations have been reviewed and approved by the corporation. All
assistance and projects funded under this program shall be funded in
accordance with the rules and regulations in effect on the date the
completed application for such assistance shall be received by the
corporation.

(12) Minority and women business development and lending account.
Notwithstanding any provision of law to the contrary, the corporation
shall establish within the treasury of the corporation a minority and
women business development and lending account, and shall pay into such
account any moneys which may be made available to the corporation for
this purpose from any source including, but not limited to, moneys
appropriated by the state and any repayment of principal and interest on
loans made by the corporation pursuant to the minority- and women-owned
business development and lending program. Funds in the minority and
women business development and lending account, including funds from the
repayment of principal and interest on loans made by the corporation,
may be used for any form of assistance authorized hereunder. The amounts
deposited in the minority and women business development and lending
account may not be interchanged with any other account, but may be
commingled with any other account for investment purposes. All loans
disbursed by the corporation shall be repaid into the account. The
corporation shall enter into a written agreement with the director of
the budget for repayment, to the state comptroller to the credit of the
capital projects fund, of all moneys in the account after a period of
time to be determined by the corporation and the director of the budget.
The corporation shall transfer to the minority and women business
development and lending account: all moneys appropriated or
reappropriated by New York state for the minority and women revolving
loan trust fund that have not been committed prior to the effective date
of the appropriation for the program in the current fiscal year, or
become uncommitted subsequent to the effective date of the program's
appropriation for the current fiscal year; and all repayments of
principal and interest on loans made by the corporation which are
currently on deposit in, or payable to, the minority and women business
development and lending account.

(13) Standardization. The corporation shall streamline the review and
approval process for projects and wherever possible standardize all
relevant attendant documentation and legal documents.

(14) Approval cycle. The corporation shall approve eligible loans or
grants on at least a four-month cycle and shall give priority
consideration to the comparative degree of economic distress within the
areas in which the project is located. Other factors to be considered by
the corporation shall include the impact of the project on the
employment and economic condition of the community and the financial
feasibility of the project.

(15) Repayment. Notwithstanding the provisions of section forty-a of
the state finance law and any other general or special law, no written
agreement under this program shall require repayment at any time or on
any terms inconsistent with the provisions of this act or the New York
state project finance agency act; except, however, that the corporation
may make grants to projects using funds appropriated for this purpose
and that the repayment provision may not apply to such grants.

(16) Reports. The chairman of the corporation shall submit to the
director of the budget, the speaker of the assembly and the temporary
president of the senate an evaluation of the effectiveness of the
program prepared by an entity independent of the corporation. The
corporation shall select the program evaluator through a request for
proposal process. Such evaluation shall determine whether the assistance
provided has enhanced the economic condition of assisted companies or
communities, and shall make recommendation for improvements which would
make the program more effective. Such evaluation shall be submitted by
September first, nineteen hundred ninety-five and September first every
two years thereafter.