§ 16-l. Rural revitalization program. 1. Statement of legislative
intent. The legislature finds that vast areas of rural New York state
show signs of severe economic distress and lag behind the rest of the
state in employment growth and income, with the gap widening with
passing years. Poverty in many rural areas is pervasive, with the poor
often outnumbering the affluent.

The legislature further finds that rural communities in New York state
need immediate assistance to develop the capacity to plan and organize
for economic development, to undertake new economic development
initiatives, to overcome obstacles to economic development and to fully
utilize indigenous resources to provide rural residents with economic
opportunities.

The legislature further finds that, to begin to address these needs, a
catalyst is needed to stimulate and encourage innovative economic
development alternatives to declining employment in the agricultural and
manufacturing sectors.

The legislature further finds that, while agriculture is considered to
be a major New York industry, state economic development financing
programs do not treat agriculture as an industrial sector, and financing
is not available to provide farmers with assistance to become more
competitive in national and international markets.

Therefore, the legislature declares that the revitalization of the
state's rural economy is essential to New York's economic health and
that state assistance in this regard is necessary and proper for
achieving this public purpose.

2. Rural revitalization assistance grants. (a) The corporation is
authorized, within available appropriations in the empire state economic
development fund established pursuant to section 16-i of this act, to
award grants or enter into contracts for services, on a competitive
basis in response to requests for proposals, to eligible entities and
organizations as set forth in this subdivision to support community
economic development programs and activities which increase or retain
employment opportunities in rural New York state and otherwise
contribute to the revitalization of local rural areas which are
economically distressed through innovative activities designed to
generate economic alternatives and opportunities in rural areas.

(b) Grants and contracts made by the corporation pursuant to this
subdivision shall be subject to the following limitations:

(i) no such grant shall exceed one hundred thousand dollars per year,
except that for the purpose of paragraph (f) of this subdivision, no
such grant shall exceed fifty thousand dollars.

(ii) the corporation shall enter into no more than one grant per year
per application under this subdivision.

(c) Preference shall be given to programs which meet highly distressed
area criteria or which support empire zones established pursuant to
article 18-B of the general municipal law; provide a local match; meet a
substantial local or regional need; complement local programs or provide
services not readily available from units of local government or the
private sector.

(d) For the purposes of this subdivision, "rural area" shall mean a
rural area as defined in subdivision 7 of section 481 of the executive
law.

(e) Not-for-profit corporations, agricultural cooperative
corporations, public benefit corporations and educational institutions
serving rural areas, shall be eligible to apply for support under this
subdivision for the following activities, provided, however, that the
sum total of grants received by any one eligible entity does not exceed
two hundred fifty thousand dollars in any one year:

(i) innovative activities and programs designed to encourage
value-added small business development and growth in rural areas,
including cottage and crafts industries; group marketing of local
products; women-owned industries; natural resources development; and
tourism. Such activities and programs shall also include projects
pertaining to agriculture and agribusiness development to stimulate the
development and implementation of new and alternative production,
processing, storage, distribution and marketing technologies and
improvements for New York food, agricultural and forest products.
Projects promoting strengthened farm management practices shall also be
eligible for assistance;

(ii) in-depth analysis within rural areas to support local efforts to
identify new business opportunities, and to organize industry-wide
collaborative efforts designed to create jobs and to develop growth
strategies;

(iii) support for the operation of programs designed to generate and
leverage equity-type or working capital financing for new and small
business enterprises in rural areas, or to meet other critical financing
needs of existing rural businesses;

(iv) support for multi-county activities designed to provide small
business development and financial packaging assistance to new and small
rural business enterprises to assure the continuation and growth of such
enterprises; and

(v) provide, or cause to be provided, technical assistance to small
businesses to help such businesses comply with applicable federal, state
and local rules and regulations, including, but not limited to,
assistance to applicants for permits required by such rules and
regulations.

(f) Any vocational education agency offering technical assistance
services to small business, any small business development center
located at a post-secondary educational institution, any county
cooperative extension service, any agricultural cooperative corporation
offering technical assistance services to farmers and non-farm
agricultural businesses or any not-for-profit corporation offering
technical assistance, shall be eligible to apply under this paragraph to
establish rural enterprise extension services designed to provide
technical assistance and services to entrepreneurs who are seeking to
establish or who are operating small business ventures in rural areas
where, for reasons of distance, population dispersal, or scale of
business venture, conventional business incubation and assistance
programs are not feasible, such extension services to sponsor, employ
and support technical assistance specialists as circuit riders to serve
the rural area served by the sponsoring entity.

(i) Such specialists shall be the outreach arm of the technical
assistance program and shall:

(A) provide technical and management assistance to entrepreneurs
seeking to establish a new small business, including but not limited to,
agribusinesses, part-time businesses, crafts-related businesses,
tourism-related businesses, and other new businesses that are started in
areas distant from other existing programs and sources of technical
assistance;

(B) regularly visit outlying areas of the region or areas served by
the entity sponsoring the rural enterprise extension service program to
provide both short-term and ongoing technical assistance and services to
clients;

(C) arrange, when needed, for supplemental assistance to be provided
by the sponsoring entity;

(D) conduct, with assistance from both local sources of expertise and
the sponsoring entity local seminars in outlying regions on various
aspects of entrepreneurship and new enterprise development; and

(E) provide information on other sources and programs of assistance,
services and support, including financial sources, to entrepreneurs and
small business operators.

(ii) Applications for support under this paragraph shall be required
to demonstrate a need for a rural enterprise extension service program
in the area to be served; the ability and willingness of the applicant
to support technical assistance specialists employed as circuit riders
with additional resources to provide intensive, long-term technical
assistance or specialized technical assistance to client entrepreneurs
and small business operators when necessary; and the ability to assist
entrepreneurs and small business operators in locating appropriate
sources of financial assistance.

(iii) For the purposes of this subdivision "vocational education
agency" shall mean a community college or board of cooperative
educational services operating within the state.

3. Agricultural job training assistance. The corporation is
authorized, within available appropriations in the empire state economic
development fund established pursuant to section 16-i of this act, to
contract with the commissioner of agriculture and markets, in
consultation with the commissioner of labor, to administer a program of
job training for workers engaged in or to be engaged in the production,
harvesting and processing of farm or aquatic products.

4. Farmers' market grant program. (a) The corporation is authorized,
within available appropriations in the empire state economic development
fund established pursuant to section 16-i of this act, to award grants,
on a competitive basis in response to requests for proposals, to
municipal corporations, local development corporations, business
improvement districts, not-for-profit corporations, regional marketing
authorities and agricultural cooperatives organized pursuant to the
cooperative corporations law, for the construction, reconstruction,
improvement, expansion or rehabilitation of farmers' markets. The
corporation is further authorized to contract with the commissioner of
agriculture and markets, and such commissioner is authorized to contract
with the corporation, to prepare and issue requests for proposals,
accept grant applications, recommend those applications which best meet
established criteria and to administer grants awarded under this
subdivision.

(b) Grants made by the corporation pursuant to this subdivision shall:

(i) not exceed fifty thousand dollars per year; and

(ii) be limited to fifty percent of the total proposed farmers' market
start-up or expansion costs, not including any capital expenditures
except as set forth in paragraph (a) of this subdivision.

(c) The corporation shall enter into no more than one grant per year
per application under this subdivision.

(d) The corporation shall consult with the department of agriculture
and markets in order to establish such criteria governing the award of
grants as authorized herein, as the corporation and such department deem
necessary. Such criteria shall include, but not be limited to:

(i) the relative impact of the proposed farmers' market project on the
economy of the area to be served;

(ii) the anticipated level of municipal support and local
participation in the project by farmers and others;

(iii) the extent to which New York farmers would benefit, through the
direct sale of farm and food products;

(iv) the equitable distribution of monies awarded for state assistance
for farmers' markets among urban and rural areas; and

(v) the anticipated quantity of non-farm jobs which would be created
and retained due to the proposed project.

(e) Preference shall be given to: applicants located in highly
distressed areas and providing services not readily available from units
of local government or the private sector and to applicants who are
proposing to start a new farmers' market.

5. Rural single-tenant entrepreneurship and incubator facilities. The
corporation is authorized, within available appropriations in the empire
state economic development fund established pursuant to section 16-i of
this act, to award grants, loans and loan guarantees to vocational
education agencies for the development of single tenant entrepreneurship
and incubator facilities in rural areas as provided in this subdivision.
(a) For the purposes of this subdivision:

(i) "rural area" shall mean a rural area as defined in subdivision 7
of section 481 of the executive law;

(ii) "vocational education agency" shall mean a community college or
board of cooperative educational services operating within the state;
and

(iii) "entrepreneurship and incubator facility" shall mean a
single-tenant facility providing low-cost space, technical assistance
and support services, to new business enterprises.

(b) In sparsely populated rural areas where multi-tenant incubator
facilities are not feasible, assistance from the rural revitalization
program may be provided to vocational education agencies that have an
existing technical assistance capability that can be applied to the
incubation of new firms for the purpose of constructing a single-tenant
entrepreneurship and incubator facility or rehabilitating an existing
space for use as a single-tenant entrepreneurship and incubator
facility.

(c) Funds from the rural revitalization program pursuant to this
subdivision shall only be provided for construction or rehabilitation of
a facility. A vocational education agency receiving such assistance
shall be required to provide any machinery and equipment necessary for a
tenant to operate a start-up enterprise and shall be responsible for
operating the facility, such operation to include classroom training in
business principles and practices to the prospective owners of such
enterprises prior to entering into any tenancy agreement with such
prospective owners, and the provision of technical assistance and
services to a tenant.

6. Agricultural industry competitiveness assistance. (a) For the
purposes of this subdivision, "project" shall mean an agricultural
project as set forth in paragraphs (b) and (b-1) of this subdivision.

(b) The corporation is authorized, within available appropriations in
the empire state economic development fund established pursuant to
section 16-m of this act, to provide financial assistance in the form of
loans, loan guarantees, and interest subsidy grants to subsidize loans
from federally chartered instrumentalities and state and private lending
institutions, including agricultural cooperative corporations, provided
that such assistance to state lending institutions shall not exceed
one-third of the total project cost or four hundred thousand dollars,
whichever is less, to agricultural enterprises seeking to implement the
following agricultural projects:

(i) making the transition from dairy farming to crop or livestock
farming or specialty wood productions, or using former dairy farms for
crop, livestock or specialty wood production, in order to keep farmland
in production by producing products in local, national or international
demand;

(ii) start-ups of new agribusinesses or expansions or upgrades of the
facilities, technologies and operations of existing agribusinesses.

(b-1) The corporation is authorized, within available appropriations
in the empire state economic development fund established pursuant to
section 16-m of this act, to provide financial assistance in the form of
loans, loan guarantees, working capital loans, and interest subsidy
grants to subsidize loans from federally chartered instrumentalities and
state and private lending institutions, including agricultural
cooperative corporations, provided that such assistance to state lending
institutions shall not exceed one-third of the total project cost or
four hundred thousand dollars, whichever is less, to agricultural
enterprises seeking to implement the projects listed in this paragraph.
Funds for such loans, grants, subsidies, or any other assistance
specified pursuant to this act may come from funds derived from the
financial assistance for small and medium-sized business assistance
projects established pursuant to section 9-a of this act, the regional
revolving loan trust fund established pursuant to section 16-a of this
act, the regional economic development partnership program established
pursuant to section 16-e of this act, the empire state economic
development fund established pursuant to section 16-m of this act, or
from any other funds, programs, or projects administered by the
corporation or by other state appropriations.

(i) the establishment or replanting of existing vineyards with other
varieties that are in greater demand in the national and international
marketplace and which will increase the national and international
competitiveness of New York state grape growers;

(ii) the establishment or replanting of fruit orchards or small fruit
acreages that have reached the end of their natural life cycles, with
preference to plantings in the more popular varieties which have
national and international markets;

(iii) the establishment, construction, retention, or expansion of
facilities, buildings, machinery, equipment, and other productive assets
used in the production, manufacture, processing, warehousing, research,
or distribution or sale of fresh fruits or the processing of such fruits
into juices, wines, or other food products. Such project costs may
include, but not be limited to, buildings, machinery, equipment, New
York raw fruits, New York unprocessed or partially processed fruits, or
other necessary working capital or operational funds or assistance
needed to ensure the success of such project.

(c) The corporation shall determine the terms and interest rates of
such loans; provided, however, in the case of financial assistance for
vineyards, orchards, small fruit acreages, wineries, or processing
plants, the corporation may defer repayment of principal and interest on
loans for up to five years.

(d) Funds may be used to undertake feasibility studies to determine
the projected local, national, and/or international demand for the
proposed crop or product to be financed and the suitability of the land
and climate for such production. In the case of a proposal to establish
or replant a vineyard, the corporation shall consult with the New York
state wine and grape foundation and the agricultural extension service
of Cornell University to determine the appropriateness and feasibility
of the proposed project.

(e) The provisions of section 10 and subdivision 2 of section 16 of
this act shall not apply to assistance provided under this subdivision.

7. Micro business revolving loan assistance grants. (a) The
corporation is authorized, within available appropriations in the empire
state economic development fund, to provide financial assistance in the
form of grants for the purpose of developing a statewide infrastructure
that delivers financing and technical assistance to micro businesses
across the state to stimulate new and existing micro business
development relating to the use of agricultural products, forest
products, cottage and crafts industries, tourism, and other businesses
as provided for in subparagraph (i) of paragraph (e) of subdivision 2 of
this section; provided such business employs five or fewer full-time
persons and is based on the production, processing, and/or marketing of
products grown or produced in this state. Assistance provided under this
subdivision shall be awarded through a competitive process initiated by
the corporation, in response to a request for proposals.

(b) Not-for-profit corporations and public benefit corporations
located in the state shall be eligible to apply to the corporation, in
response to a request for proposals, for a grant, not to exceed two
hundred thousand dollars in any one calendar year, to create a micro
business revolving loan fund to be administered by the entity applying
for such grant, hereafter referred to in this subdivision as "micro loan
administrators", who shall be selected by the corporation from among
eligible applicants. The corporation shall show preference in its
awarding of grants to micro loan administrators whose service area meets
the provisions of paragraph (c) of subdivision 2 of this section. All
grant funds shall be dedicated to being re-lent to individual micro
business borrowers, except that ten percent of such funds as are awarded
may be used by micro loan administrators to provide training and
technical assistance for such borrowers. Micro business loans shall be
limited to twenty-five thousand dollars per borrower. Borrowers shall
provide ten percent equity for loans up to ten thousand dollars. Loans
above ten thousand dollars shall be matched on a one to one basis by
including other loans, equity capital and in some circumstances,
leveraged capital. The interest rate and the terms on such loans shall
be determined by the micro loan administrators. The term of any loan
shall not exceed five years. All loans shall be secured by lien
positions on collateral at the highest level of priority that can
accommodate the borrower's ability to raise sufficient debt and equity
capital for the project. Any interest earned on micro business loans
shall be retained in a special account for the purpose of paying
expenses of the loan administrator associated with administering the
micro loan program.

(c) An eligible micro loan administrator applicant shall:

(i) serve one or more rural counties;

(ii) have established a loan committee comprised of five or more
persons experienced in commercial lending in rural areas or in the
operation of a for-profit small business and a staff person of the
regional office of the department of economic development. Such loan
committee shall review every application for micro loan assistance
pursuant to this subdivision, shall determine the feasibility of the
transaction proposed in the application and shall recommend to the board
of directors or other governing body of the micro loan administrator
such action as the committee deems appropriate;

(iii) have available to its staff sufficient expertise to analyze
applications for micro loan assistance, provide technical assistance to
borrowers and to regularly monitor micro loan assistance to clients; and

(iv) have an acceptable plan to market its services to potential
borrowers through such entities as chambers of commerce, industry trade
associations, banks, local development corporations, community based
organizations and industrial development agencies.

(d) Applications to the corporation for certification or
recertification as a micro loan administrator shall:

(i) describe the organization, membership, loan committee, staff and
sources of other funds, if any;

(ii) identify the geographic area to be served;

(iii) explain the method and criteria to be used in determining
businesses eligible for micro loan assistance;

(iv) describe the means for coordination of micro loan assistance with
other funding sources within the geographic area to be served for the
purposes of leveraging project financing;

(v) include a proposal to reconfigure the geographic area served by
the micro loan administrator, if applicable; and

(vi) contain such other information as the corporation deems
appropriate.

(e) The corporation shall, every five years, recertify that each micro
loan administrator has complied with the terms and conditions of this
subdivision. In the event a micro loan administrator is not recertified,
or its certification is withdrawn, then the corporation shall give
written notice to such micro loan administrator which shall thereafter
neither make new loans under this subdivision nor undertake new
obligations except upon written approval of the corporation. The
corporation may thereafter certify another micro loan administrator in
the manner provided in this subdivision for the selection of micro loan
administrators. Upon the certification of a successor micro loan
administrator, all remaining micro business loan funds, records and
accounts of the micro loan administrator not recertified shall be
transferred to the corporation, and the micro loan administrator not
recertified shall cease to function pursuant to this subdivision. The
corporation shall transfer returned funds to a successor micro loan
administrator, or in the event no successor micro loan administrator is
certified, equally to other existing micro loan administrators.

8. Cluster based industry and agribusiness development grants. (a) The
corporation is authorized, within available appropriations in the empire
state economic development fund, pursuant to section sixteen-m of this
act, to award matching grants, on a competitive basis in response to
requests for proposals, to eligible entities and organizations as set
forth in this subdivision to support cluster based industry and
agribusiness development activities which increase or retain employment
opportunities and otherwise contribute to the growth or revitalization
of rural areas.

(b) Cluster based industry and agribusiness development grants shall
provide financial assistance for the purpose of establishing a program
to support cluster based economic development efforts in rural areas.
Such grants shall be used to:

(i) Assess industry and agribusiness needs and develop methods of
identifying industry and agribusiness clusters in a region; and

(ii) Promote cluster based industry and agribusiness development
initiatives targeted at businesses that would benefit from joint
activities, marketing, and problem solving.

(c) Grant assistance provided under this subdivision shall be awarded
through a competitive process initiated by the corporation, in
consultation with the commissioner of agriculture and markets and local
development agencies, in response to a request for proposals. To be
eligible for a grant award, recipients shall provide matching funds in
the form of cash, in-kind services or other resources as defined by the
corporation.

(d) Not-for-profit corporations and public benefit corporations
located in the state shall be eligible to apply to the corporation, in
response to a request for proposals, for a matching grant, not to exceed
25,000 dollars in any one calendar year.