NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A7315
SPONSOR: Thiele 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:
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-inLieu-of-Tax (PILOT) agreement, IDAs generate significant addi-
tional 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:
2021-22: S.1711
2019-20: S.1067/A.6763
2017-18: S.6230a
FISCAL IMPLICATIONS:
None to the state.
EFFECTIVE DATE:
This act shall take effect on the ninetieth day after it shall have
become law.
STATE OF NEW YORK
________________________________________________________________________
7315
2023-2024 Regular Sessions
IN ASSEMBLY
May 17, 2023
___________
Introduced by M. of A. THIELE -- read once and referred to the Committee
on Local Governments
AN ACT to amend the general municipal law, in relation to the powers of
the New York state industrial development agency
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision 19 of section 858 of the general municipal law,
2 as amended by chapter 109 of the laws of 2020, is renumbered subdivision
3 22 and three new subdivisions 19, 20 and 21 are added to read as
4 follows:
5 (19) To provide loans to any private or public corporation or any
6 legal entity provided said loan is memorialized in an appropriate loan
7 agreement and further provided that the loan proceeds are used in furth-
8 erance of the agency's corporate purposes;
9 (20) To provide grants to any private or public corporation or any
10 legal entity provided said grant is memorialized in an appropriate grant
11 agreement stipulating the services to be provided in furtherance of the
12 agency's corporate purposes;
13 (21) Notwithstanding any other law, to provide seed and early-stage
14 equity funding to any private corporation or any legal entity, in
15 accordance with a plan to be developed by the agency, located within, or
16 to be located within, the municipality for whose benefit the agency was
17 created and that is in the seed, early stage or venture stage of devel-
18 opment and that has the potential to generate additional economic activ-
19 ity in New York state provided, however, that funds received by the
20 beneficiary private corporation or legal entity shall be returned if the
21 beneficiary private corporation or legal entity leaves the municipality
22 for whose benefit the agency was created within a period of time to be
23 established by the agency;
24 § 2. This act shall take effect immediately; provided that the amend-
25 ments to subdivision 19 of section 858 of the general municipal law made
26 by section one of this act shall not affect the repeal of such subdivi-
27 sion and shall be deemed repealed therewith.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD00180-01-3
