|Sheldon Silver, Speaker Robin Schimminger, Chairman August 2002|
New Legislation Will Strengthen Economy, Promote Job Development
Linked Deposit Program Expanded
New York’s award-winning Linked Deposit Program — an innovative partnership between the state and participating lenders that provides cost-effective financing assistance to the small business community — was expanded this year as part of the 2002-03 state budget.
By allowing the deposit of state funds in banks and other lending institutions at below-market rates of return, the Linked Deposit Program, or LDP, leverages affordable financing for productivity and performance improvements that create or retain jobs. The deposits are used by lenders to make loans at correspondingly reduced interest rates to small and medium-sized businesses.
A provision in the state budget increases the amount of linked deposits the State Comptroller and state public authorities are authorized to make. Additional state funds totaling $150 million will be allocated to LDP, with the Comptroller now authorized to dedicate up to $250 million and public authorities now able to provide another $100 million. Because the funds are made available on a revolving basis, the amount available for new loans is replenished as existing deposits mature.
Since Assemblyman Schimminger authored the program in 1993, LDP has leveraged more than $1.05 billion in new capital investment by businesses throughout the state, with over 1,400 businesses having received linked loans in excess of $480 million. The result has been the creation and retention of some 27,000 jobs in New York State.
Power For Jobs Continues Its Record of Success
Legislation was approved this year to continue the highly successful Power for Jobs program.
Power for Jobs offers commercial consumers 10 to 25 percent savings on electricity bills in exchange for a pledge from employers to meet predetermined job levels. Employers participating in the program are required to submit employment data annually to ensure that they are meeting their commitments. Overall, Power for Jobs customers have achieved an average of about 105 percent of their total job commitments.
An additional 183 megawatts of Power for Jobs will be made available through enactment of this year’s legislation, and the extension of the program will enable employers with expiring Power for Jobs contracts to apply for new allocations.
The legislation will also further develop the competitive marketplace for electricity. The Power Authority will purchase the wholesale electricity for the program from private energy suppliers. Power for Jobs customers will also be offered the option of choosing an alternative retail supplier of their electricity.
The program, which is administered by the New York Power Authority (NYPA), has far exceeded original expectations. Instead of the 40,000 jobs it was expected to protect, it has helped create or retain approximately 300,000 jobs throughout New York State since 1997.Click here to view additional new legislation
Improving the Upstate Economy. Assemblyman Schimminger presides at a public hearing in Albany on the condition of the upstate economy, one of a series of sessions he held across the state earlier this year. Input on ways to improve the upstate economy was gained at hearings in Buffalo, Rochester, Syracuse and Utica, as well. Also pictured is Assemblyman Darryl Towns, who was named chairman of the Assembly Committee on Small Business in January.
|2002-03 State Budget Highlights|
|State Budget Aims At Stimulating New York’s Economy|
The recent economic downturn, along with the devastating aftermath of September 11, has severely weakened New York State’s economy. The Assembly’s primary goal in negotiating this year’s budget was to find an effective strategy to revitalize our state economy and provide funding for the regional economic development programs New York needs to get back on track. Below are some programs funded in the budget.
RESTORE New York Funding will be available to localities and nonprofit organizations for economic development, tourism, agriculture, cultural and other capital projects through the RESTORE New York capital program. ($100 million)
Centers of Excellence The final Budget includes capital funding for regional Centers of Excellence that will bring together university researchers and businesses to develop new technologies and create jobs. ($250 million)
Minority and Women-Owned Business Development and Lending Program Funding was suballocated for the Community Development Financial Institutions Program, the Entrepreneurial Assistance Program, and for linked deposits in federal and state-chartered credit unions for loans to minority and women-owned businesses. ($2.8 million)
Empire Zones Four new Empire Zones were designated in Franklin County, the City of Mount Vernon in Westchester County, the Village of Laurens in Otsego County, and Schuyler County. The Legislature also authorized the establishment of six new Empire Zones, applications for which are due by August 30, 2002.
Jobs Now Program The Legislature provided a Local Assistance appropriation of $19.6 million, and a Capital Projects appropriation of $14.3 million to assist companies that create or retain 300 or more jobs. ($33.9 million)
Urban and Community Development Program This program, which addresses the needs of main street areas, was awarded $2.8 million, with a suballocation of $2 million for Downtown Development initiatives. ($2.8 million)
N.Y.S. Office of Science, Technology and Academic Research (NYSTAR) The Legislature provided a total of $68.1 million to NYSTAR, including continued funding for the Centers for Advanced Technologies ($15 million), regional Technology Development Organizations ($1.5 million), the Industrial Technology Extension Service ($1 million), the Manufacturing Extension Partnership Program ($5 million) and High Technology Matching Grants Program ($4.25 million). Also, funding was provided to establish the College Centers for Applied Research and Technology Training ($5.2 million).
|Western New York Economy Will Benefit From Budget Initiatives|
The 2002-03 state budget contains funding for a number of economic development initiatives for Western New York. A wide range of projects aimed at stimulating business investment are designed to help create and preserve jobs.
Center of Excellence in Bioinformatics at Buffalo The Buffalo Center — whose partners include the University at Buffalo, Roswell Park Cancer Institute, Hauptman-Woodward Medical Research Institute and several national computer and bio-pharmaceutical companies — will focus on developing new drugs that would be produced by existing or new spin-off companies in Western New York. ($110 million)
Buffalo Niagara Enterprise Additional funding was made available for the BNE’s regional business marketing initiative, which is designed to expose the Buffalo Niagara region to site selection professionals and corporate decision makers as a desirable location for new or expanding businesses. ($300,000)
American Axle & Manufacturing Tonawanda Forge AAM/Tonawanda continues its training program — jointly developed by labor and management — to address a nearly 80 percent turnover in the facility’s work force in the wake of AAM’s 1994 purchase of the plant from General Motors. ($600,000)
WNY Works This semiannual survey is utilized to ensure that area training programs are tailored to meet the current and projected needs of area workers and employees. ($41,000)
IAmBuffaloNiagaraJobs.com This regional job search Web site links job applicants with local employment opportunities. Employers can list local job openings on a central Web site, while job seekers in the area and those seeking to return home to the region can post their resumes. ($25,000)
Canada-U.S. BorderNet Alliance This network of industry, business organizations, local governments and education institutions in Southern Ontario and Western and Central New York promotes cross-border trade, tourism and investment — making the region from Toronto to Buffalo to Syracuse more globally competitive. ($20,000)
InfoTech Niagara An association of information technology companies in Western New York, InfoTech Niagara is promoting the growth of computer hardware and software, telecommunications, Web-based and Internet service businesses in the area . ($15,000)
Western Erie Canal Planning Commission The commission’s goal is to transform the Erie Canal into a local, national and international destination and attract increased tourism, recreational and economic development opportunities for the region from the Tonawandas to Wayne County. ($50,000)
National Tooling and Machining Association The Buffalo Chapter of the Association will expand its ISO certification program for local machine shops. ISO 9002 is a documented quality system required by the auto industry and in the European market; comprehensive training will allow additional NTMA member companies to become more competitive nationally and internationally. ($35,000)
|$1 Billion in New Tax Cuts Enacted|
New Tax Cuts
In addition to providing funding for a number of programs that will foster economic development and job creation even in these difficult times, this year’s state budget includes more than $1 billion in new tax cuts. For example:
Post 9-11 Business Investments Companies that make investments in their businesses will be eligible for a new 30 percent bonus depreciation, a measure that is expected to help create new jobs by providing $700 million in state tax savings for New York businesses during the next three years.
Extension of the Investment Tax Credit (ITC) Financial services companies struggling to recover from September 11 will benefit from extension of the ITC for an additional five years, until October 1, 2008. This tax credit provides taxpayers $75 million in annual savings.
Real Estate Transfer Tax Extends for three years, until September 1, 2005, the rate reductions for conveyances of real property to and from existing Real Estate Investment Trusts (REITs).
Tax Relief For 9-11 Victims’ Families State income taxes for 2000 and 2001 will be waived for the families of those New Yorkers who perished on September 11. It is expected that this provision will save victims’ families an average of $10,000 over a two-year period.
New Fire Prevention and Building Code Adopted
Development in New York State got a boost this year with the adoption of the new Uniform Fire Prevention and Building Code, which will make it easier both to build new structures and to renovate older ones.
The new building code reflects current national and international model codes. It modernizes New York’s existing building codes, allowing developers to use less costly modern building materials and methods for ensuring the safety of homes and workplaces. The old fire prevention and building code, adopted in 1984, had begun to hinder development, and was adding as much as 5 to 15 percent to building costs.
In addition to helping spur development and create new jobs, adoption of the new building code will give New York State a voice in the code development process at the national level. As the first state in the nation to adopt all eight of the International Building Codes, New York will have several seats on the National Building Code Council, which reviews and modernizes the International Building Code every three years.
Under a program administered by the state Workforce Investment Board — of which Committee Chair Robin Schimminger is a member — businesses will now have the opportunity to apply on-line for grants of up to $100,000 to help develop and enhance the skills of their work force.
The training program — Building Skills in New York State (BUSINYS) — was developed with employer input, and has been allocated $20 million. The grants will provide employers with a skilled work force ready to compete in a global economy, and enable workers to gain valuable industry-recognized certifications or credentials.
Contact the Workforce New York website: www.workforcenewyork.org.
Small Business Health Insurance Made More Affordable
Agreement was reached this session on a bill that will make more affordable health insurance available to small businesses run by sole proprietors, creating a new premium rate for sole proprietors that is significantly lower than the individual rates they are now paying.
The legislation amends the Insurance Law and requires health insurers that offer group coverage through New York’s chambers of commerce or association groups to offer the same policies to sole proprietors. It also caps any rate differential at 20 percent.
The Assembly has long fought to ensure that every New Yorker has access to quality health care. It is expected that — by giving sole proprietors access to the same coverage available to other small businesses — this measure will make affordable health care available to 250,000 people across the state.
The bill is currently awaiting the Governor’s signature into law.
Rail Infrastructure Investment Act Will Expand NY Rail Lines
By reducing local property taxes on railroad companies that own property in New York State, the Rail Infrastructure Investment Act will encourage the expansion of new rail lines throughout the state — a key factor in economic growth. With a 45 percent tax reduction over seven years, the rail companies will have the resources to improve services, safety and access. The proposal also includes transition aid to local governments to offset the loss of revenue.
Assisting Rural Communities: the Rural Revitalization Program
Revitalization of the state’s rural economy is essential to New York’s economic health. To provide sustained assistance to rural communities seeking to implement new economic development initiatives and take full advantage of indigenous resources, the Legislature created a rural revitalization program — to be administered by the Urban Development Corporation — to provide financial assistance for the state’s rural economy.
Ongoing Legislative Priorities for the Economic Development Committee
The following economic development measures passed the Assembly only this legislative session. Securing Senate and gubernatorial approvals will be priorities in the 2003 session.
Hi-Tech Working Capital Loan Guarantees Creates a program within the New York State Urban Development Corporation (UDC) to provide hi-tech working capital loan guarantees to high-technology businesses developing or offering a product or services using leading technology or research. (A. 869)
Skills Training Program Consolidates the Strategic Training Alliance Program within the Department of Economic Development to fund regional skills training programs within specific areas or industries to enhance employer access to a skilled work force. (A. 1002)
Matching Funds for Regional Marketing Programs Authorizes the Commissioner of Economic Development to grant matching funds for implementation of regional marketing programs — highlighting the natural resources, infrastructure, business alliances and other attractions of a region — in order to attract new businesses. (A. 1103)
Strategic Network Partnerships Program Establishes the Strategic Network Partnerships Program to organize, integrate and coordinate state programs designed to assist associations or clusters of manufacturing industries to become more competitive and productive. (A. 1005)
Preferences for Small Businesses and Entrepreneurs Requires the Department of Economic Development, the Job Development Authority (JDA), the Office of Science, Technology and Academic Research (NYSTAR) and the UDC to provide preferences to small businesses and entrepreneurs in the administration of their economic development assistance programs. (A. 1960)
"Technology Commercialization Program" Authorizes NYSTAR to establish a "technology commercialization program" to provide grants to foster the commercialization of technologies from not-for-profit research universities, colleges, medical colleges, laboratories and hospitals. (A. 2284)
High-Technology Business Start-Ups Directs NYSTAR to establish a high-technology incubator program to provide financial support for high-technology incubators, which make low-cost space, technical assistance and support services available to small, new high-technology businesses. (A. 3124)
Businesses Affected By Absence of Reservists Creates a program authorizing loans by the UDC to small and medium-sized businesses that have suffered economic injury as a result of the absence of the owner, manager or key employee who is or was an eligible reservist being ordered to active duty with the armed forces during a period of military conflict. (A.9630-A)
Statewide Patent Fair Authorizes NYSTAR and the Science and Technology Law Center to sponsor an annual statewide patent fair for the purpose of promoting and marketing new technology developed at New York state universities. (A.11131)
For more information, contact:
Assemblyman Robin Schimminger, Chair
Committee on Economic Development Room 847 LOB Albany, New York 12248
(518) 455-4767 e-mail: email@example.com